Industry Pulse (April 2006)


INDEPENDENCE TOWNSHIP, Mich. – Providers have big plans for an area along Interstate 75 in northern Oakland County, about halfway between Detroit and Flint. Flint-based McLaren Health Care Corp. has proposed a $600 million medical care village on 80 to 90 acres. The first phase would include a medical office building (MOB) of up to 125,000 square feet, including an ambulatory surgery center (ASC). Later phases would include outpatient facilities and a 300-bed hospital. The plan has already been submitted to township officials and, if approved, completion could take place by 2008. Meanwhile, Royal Oak, Mich.-based William Beaumont Hospitals has plans for a project that could include a range of senior living and outpatient medical facilities, including an ASC, on 48 acres. No plans have been submitted at this point. Some observers have expressed doubt regarding the need for the new facilities, and any hospital project would need the approval of the Michigan Department of Community Health.

OCEANSIDE, Calif.Tri-City Medical Center’s board of directors voted March 8 to approve a replacement hospital plan and to put a $596 million bond issue on the June 6 ballot. The board made the decision when it learned that it could cost about as much – $425 million to $599 million – to retrofit existing buildings. The San Diego-area hospital needs the upgrade to comply with more stringent state seismic safety standards slated to take effect in 2013. But board members also saw the replacement plan as an opportunity to construct more modern facilities that would help to attract and retain physicians. The first phase would involve the construction of a $366 million, six-story tower. The second phase would involve the demolition of about 70 percent of the existing buildings at a cost of $9.9 million. The final phase would add a $266 million outpatient center. If the bond issue is approved, the board would move forward with the hiring of an architect. It would probably take about two years to secure state approval. Ground could be broken by 2008, and it would probably take until 2013 to complete all three phases.


LA MESA, Calif. – Voters in another community near San Diego will also decide in June whether to fund a major hospital project. The Grossmont Healthcare District voted March 6 to put a $247 million bond issue on the ballot. The bonds would help to finance $347 million in renovations and new construction at SharpGrossmont Hospital. Plans call for 90 new patient rooms, nine operating rooms, a parking structure, an MOB and renovations to the existing facilities. The work would be the second phase of a three-phase master plan. The $83.5 million first phase was completed in 2004. A $623.3 million third phase, including a new 108-bed patient tower, would happen after 2013.

ELGIN, Ill. – Officials of Sherman Hospital say they’re not ready to give up on plans for a 388,943 square foot, 263-bed replacement hospital that could cost up to $310 million. It would be built on 154 acres in this community near Chicago. On March 2, the Illinois State Facilities Planning Board agreed that a replacement facility is needed. But, the board’s staff said Sherman’s proposal was too large. They said the hospital needs only 216 beds now and 249 by 2012. Sherman officials asked the board to defer a vote to give them more time to answer questions. The proposal is likely to be back on the board’s agenda this month.

WEST CHESTER, OhioHealth Alliance plans to proceed with construction of a $220 million, 160-bed facility in this community north of Cincinnati despite a legal challenge that has blocked bond financing. The system will use cash reserves to get the ball rolling while waiting for the courts to resolve issues surrounding Christ Hospital’s decision to withdraw from the network. The move will keep construction on track to start this summer. Completion is scheduled for fall 2008. The hospital is planned for 29 acres of the 75-acre University Pointe campus, where UC Physicians, a 400-doctor group, already operates a surgery center and office building. Future expansion could bring total inpatient beds to 300.

MOUNT PLEASANT, S.C. – State regulators were expected to decide by March 27 whether East Cooper Regional Medical Center or Roper St. Francis Healthcare – or both, or neitherwill be permitted to build new hospitals in this area near Charleston, S.C. East Cooper, a unit of Tenet Healthcare Corp. (NYSE: THC), has proposed a $157 million replacement hospital. Roper has proposed a new $123 million, 85-bed facility.

MAPLE GROVE, Minn. – Ground is slated to be broken next spring for Minnesota’s first new standalone hospital in more than two decades. Gov. Tim Pawlenty signed legislation March 22 after more than a year of intense competition among several health systems vying for the opportunity to build a hospital of up to 300 beds in this fast-growing suburb northwest of Minneapolis. A joint proposal from North Memorial Health Care and Fairview Health Services won out. Plans call for a first phase of up to 120 beds costing up to $140 million. Phase one completion is slated for 2009. The plan required a legislative exemption because a moratorium on new hospital beds has been in effect in Minnesota since the mid-1980s. The legislature considered the plan last year, but didn’t take action. North Memorial and Fairview initially competed for the opportunity to build the hospital, but later joined forces and won the support of the Maple Grove City Council. The third bidder was Tri-Care, a consortium of Allina Hospitals & Clinics, Park Nicollet Health Services and Children’s Hospitals and Clinics of Minnesota.

MUNCIE, Ind. Ball Memorial Hospital announced March 16 its plans for a $120 million renovation and expansion project that is to include a transition to all private patient rooms and the construction of a new cardiac care center. Some interior remodeling work has already begun and the entire project is to be finished by 2008. The hospital, a unit of Cardinal Health System, plans to fund the project with a $70 million bond issue and $50 million in operating revenue.

SPRING HILL, Tenn.TriStar Health plans to apply for state certificate of need (CON) approval this month for a new $112 million hospital. TriStar is a unit of Nashville, Tenn.-based HCA Inc. (NYSE: HCA). Local leaders asked HCA to build a new hospital in the rapidly growing Spring Hill area near Nashville. Plans call for a 56-bed hospital and an MOB. A 90-day review process is expected to follow TriStar’s application to the Tennessee Health Services and Development Agency. If approved, the facilities could open by early 2009.

CEDAR PARK, Texas Triad Hospitals Inc. (NYSE: TRI) and Seton Healthcare Network announced Feb. 28 plans to build a $105 million, 151-bed joint venture hospital in this community north of Austin. Triad is a Plano, Texas-based for-profit company and Seton is an Austin-based not-for-profit and a unit of St. Louis-based Ascension Health. Seton previously announced plans for a $160 million, 160-bed hospital in nearby Round Rock.

PHOENIXVILLE, Pa. – Plans took another step forward March 23 for an $80 million to $90 million hospital renovation and expansion in this community northwest of Philadelphia. City officials approved a conditional use permit needed for Phoenixville Hospital’s proposal. The plan is tentatively scheduled to come before the Phoenixville City Council May 9. The five-phase, seven-year plan calls for extensive renovations, an expansion of current inpatient space, a new patient tower, a three-level parking garage, a new central plant and an MOB. Hospital officials hope to start construction this year. The hospital is owned by Community Health Systems Inc. (NYSE: CHS) of Brentwood, Tenn.

Also In the Works

A battle might be shaping up regarding MediCorp Health System’s proposal to build a 100-bed hospital in Stafford County, Va. Potomac Hospital in Woodbridge, about 18 miles from the proposed site, has written to the state health commissioner, saying that the MediCorp facility isn’t needed. Potomac just opened a $72 million expansion and renovation. MediCorp recently filed a CON application for the proposed hospital. HCA has also proposed a 126-bed hospital in the Massaponax area of Spotsylvania County. But Potomac Hospital isn’t publicly opposing that project; it would be about 36 miles away… Also in Virginia, the state health commissioner in mid-March unexpectedly denied Riverside Health System’s application to build an $82 million, 69-bed hospital on 26 acres in Williamsburg. The commissioner said the hospital would be duplicative and would negatively affect Sentara Healthcare’s new hospital in Lightfoot. Riverside officials said they planned to reapply in June… Washington Adventist Hospital of Takoma Park, Md., plans to relocate to another part of Montgomery County, Md. But, hospital officials say they don’t plan to submit a CON application to the Maryland Health Care Commission this year. The commission takes applications only once a year, and the deadline is April 14. The hospital has not yet secured a site for the planned 292-bed replacement hospital, and officials say they want to do that before submitting an application… Eastern Maine Healthcare Systems (EMHS), which runs Inland Hospital in Waterville, dropped plans for a 150-bed replacement hospital in Waterville. The system announced last month that it would not seek state approval for the facility, which would have cost up to $150 million. EMHS hoped to team with MaineGeneral Medical Center, which has two facilities in Waterville, to develop a single new hospital to replace the city’s three older facilities. But, those talks broke down and Maine General submitted plans for a $107 million expansion of one of its Waterville facilities. EMHS says it plans to focus on upgrading Inland Hospital… Western Missouri Medical Center recently voted to postpone a planned expansion project at its facility in Warrensburg, Mo. The board said that competitive pressures for physicians in the region led to the postponement… The Health Care District of Palm Beach County (Fla.) approved plans for a new $51.6 million, 70-bed hospital in the Belle Glade, Fla., area that would replace Glades General Hospital. The target date for completion is 2008… Kentuckiana Medical Center LLC officials say that Clarksville, Ind., is the provider’s preferred location for a planned 42-bed hospital… Wellmont Health System of Kingsport, Tenn., filed a CON application for a $94.4 million renovation of its 347-bed Wellmont Holston Valley Medical Center. It is anticipated that the Tennessee Health Services and Development Agency will hold hearings on the application in May. If approved, the project could be completed by May 2008… The U.S. Department of Veterans Affairs (VA) agreed to pay the Fitzsimons Redevelopment Authority about $17.2 million for a 24-acre parcel in Aurora, Colo., where it plans to build a new veterans hospital. The VA now needs to seek appropriations to fund the project and to complete preliminary analyses. That could be finished by August. The Fitzsimons project is the redevelopment of the former Fitzsimons Army Medical Center by the City of Aurora and the University of Colorado. In addition, the VA announced that it has signed a memorandum of understanding with Louisiana State University (LSU) to explore the feasibility of developing a joint teaching hospital and trauma center in downtown New Orleans. No further details were disclosed. Two VA hospitals and two LSU hospitals were severely damaged by Hurricane Katrina in September… LSU Health Sciences Center Shreveport Foundation received approval from LSU to build a new 61-bed children’s hospital connected to the Shriner’s Children’s Hospital in Baton Rouge, La…. Parkview Health purchased 42 acres in Whitley County, Ind., northwest of Fort Wayne, for the future construction of a replacement for its 37-bed Whitley County Memorial Hospital. The purchase price was not disclosed. No timeline or budget were announced, although local media reports say construction could cost $30 million and could begin by 2008 with completion by 2011… Boni Enterprises of Clifton Park, N.Y., which originally planned to develop an MOB in Halfmoon, N.Y., has revised those plans to call of a 120-bed hospital costing at least $50 million. Company officials say plans evolved during the past year as they studied healthcare demand in New York’s fast-growing southern Saratoga County. q

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