Centennial Hills Hospital opens Occupational Health Center

Centennial Hills Hospital is taking on entrenched rivals as it tries to land new patients among the industrial parks of North Las Vegas.

On Wednesday, the hospital formally opened its $500,000 Occupational Health Center in a half-vacant office park near the intersection of North Martin Luther King Boulevard and West Craig Road, about 10 miles southeast of its main campus. The clinic will contain not only examination and therapy rooms for people injured on the job, but a separate entrance for people who need to take drug tests or other forms of screening and exams required by employers.

The 171-bed Centennial Hills, owned by King of Prussia, Pa.-based Universal Health Services, launched the expansion after posting operating losses in seven of the nine quarters since it opened in January 2008, according to state statistics. In this year's first quarter, the loss ran $1.2 million on $28.5 million in revenue.

The clinic's location puts Centennial Hills near the city's warehouses and light industrial plants, but also puts it in direct competition with Concentra for contracts. Addison, Texas-based Concentra operates the only other occupational health clinic in North Las Vegas. And, though hard numbers are unavailable, industry observers believe it has built the largest practice in the valley.

In general, Las Vegas hospitals have not entered occupational health except to take referrals for inpatient treatment or specialized therapy from the chain clinics, so individual practices have dominated the field for years.

Further, companies contract directly with clinics to handle their on-the-job injuries or go through third-party insurance administrators. Because payment rates are set by the state's Division of Industrial Relations, Dr. Amir Nicknam, the clinic's medical director, acknowledges that grabbing market share by undercutting others on price is not an option.

The clinics have pricing flexibility for testing, but several players have established stakes in the market.

As a further challenge, Centennial Hills opens with local unemployment at 14.5 percent.

To land workers' compensation business, Centennial Hills must convince employers that its occupational health system can lower their costs by healing workers and getting them back on the job more quickly than its rivals.

"We noticed the need for a multidisciplinary clinic in this area," Nicknam said. "For the very first time, we can use all the resources we have at Centennial Hills to deliver care in a cost-effective fashion."

The one-stop shop approach echoes the strategy followed by Concentra, where Nicknam practiced until a few months ago. This approach appeals to employers, said Sharon Almeida, claims manager at Leavitt Insurance Agency, because it can remove the need to refer patients to different specialists depending on the treatment needed.

But Paul Granstrom, executive vice president of Reno-based ARC Health & Wellness Centers, which has one location in Las Vegas, said referrals to different parts of the same company instead of to outsiders could raise questions about the necessity of some procedures.

The lack of price competition for workers' comp treatment places a premium on building relationships with corporate human resources departments and claims adjusters, said Marilyn Heenan, the business manager for the Center for Occupational Health & Wellness, a competing clinic. For that reason, she added, "I just don't see (Centennial Hills) making much of an impact."

The main hospital, which is near U.S. Highway 95 and the Las Vegas Beltway, opened just as the economy tipped into recession and brought the building boom in the northwest part of the valley to a halt. Although nearby MountainView Hospital had operated profitably in this market for more than a decade, having two hospitals in an area where development and population growth flattened has led to losses for both.

Contact reporter Tim O'Reiley at toreiley@lvbusinesspress.com or 702-387-5290.