Meriter Hospital, which considered closing its pediatric unit last year because of a drop in hospitalized children, is expanding its pediatric services.

The hospital hopes to regain patients it has lost, mostly to UW Hospital’s American Family Children’s Hospital.

Meriter will move its pediatric unit from an adult floor to near its emergency room, said Dr. Geoff Priest, the hospital’s chief medical officer. Children who enter the ER and need to be observed will occupy the eight-bed unit, to open in February, along with children who have been admitted, Priest said.

Meriter will spend $3.7 million to set up the new unit. The hospital will hire about five pediatric hospitalists, or doctors who specialize in inpatient care, to staff it.

In the most direct challenge to UW Health, Meriter also will hire pediatricians at its outpatient clinics for the first time.

Priest said six to eight pediatricians will be recruited for clinics, which are currently in Middleton and on Madison’s southwest side. Another clinic is planned Downtown.

The pediatricians will send children who need to be hospitalized to Meriter unless their conditions are serious enough to require specialized care at the children’s hospital, he said.

Pediatricians in the Madison area who care for children insured by Physicians Plus or Unity health plans generally have followed that rule. Most of the doctors work for UW Health, though some are at independent groups such as Associated Physicians and the Wildwood Family Clinic.

But when the children’s hospital moved from within UW Hospital to a new, adjacent facility in 2007, some doctors started admitting patients there who previously would have gone to Meriter, Priest said.

Improved outpatient care, such as tonsillectomies that don’t require hospital stays, also has reduced childhood hospitalizations at Meriter and around the country, he said.

The number of children hospitalized at Meriter dropped from 958 in 2004 to 555 in 2008.

The specialized staff at Meriter’s new pediatric unit should encourage pediatricians to send more patients to Meriter, and the Meriter clinic pediatricians will further increase referrals, Priest said. The goal is to return to about 900 children hospitalized a year.

"The hope is that it will increase access for the community," he said.

Children with relatively minor conditions — such as dehydration, mild asthma flare-ups or appendix removals — will go to Meriter, Priest said. Those with serious conditions like cystic fibrosis, burns or multiple injuries will go to the children’s hospital, he said.

The children’s hospital, which has 61 beds, had an average census of 43 the past year. 

UW Hospital and Meriter share Meriter’s birthing center and newborn intensive care unit. Meriter has about 3,600 births a year. Nearby St. Mary’s Hospital, which has a 12-bed pediatric unit, has about 3,400 births a year.

Meriter spokeswoman Mae Knowles said patients and families expect Meriter to provide pediatric care.

Robert Kraig, program director of the watchdog group Citizen Action of Wisconsin, said Meriter’s expansion could be an example of the duplication of services that drives up health-care costs.

"It gets built into the rates," Kraig said.

UW Health officials would not discuss Meriter’s expansion, saying in prepared statement that "we cannot speculate on Meriter’s plans."