Industry Pulse (December 2006)

LOS ANGELES – University of California (UC) Regents recently approved an additional $308 million for the completion of two projects that are part of UCLA’s healthcare system. The funding will be used to complete the under-construction Ronald Reagan Medical Center on the UCLA campus in Westwood and to complete the future 172-bed Santa Monica-UCLA Medical Center. The total cost for the two facilities is now expected to top $1.3 billion. The cost of the Westwood facility has escalated from its initial $597.7 million to $829.3 million. The facility is two years behind schedule and is now slated for completion in fall 2007. Construction of the Santa Monica hospital is also behind schedule and costs have increased from an initial budget of $202.8 million to $377.9 million, according to officials. It is now slated for completion in winter 2009. The general contractor on the Westwood project is Tutor-Saliba-Perini, whose officials say that numerous design changes since the 1999 ground breaking have led to the delays.

BOONE, Mo. – Boone Hospital Center officials recently outlined a building plan for a $120 million expansion project that includes construction of a patient tower that would add 128 beds. The project includes a new 608-space parking garage. The plan leaves intact the provider’s original hospital building which was built in 1921.  Boone Hospital officials had explored the possibility of moving to another site. The target date for the start of construction is early 2008.

OAKLAND – Officials at Highland Hospital recently presented a plan to the Alameda County Commissioner that calls for about $500 million in renovations to meet California’s earthquake safety standards. The hospital currently has a deadline of 2013 to meet the standards, and the provider is also eligible to seek an additional two-year extension under a plan recently approved by Gov. Arnold Schwarzenegger.  The Highland plans call for a series of renovations and replacement buildings at its current campus to execute the needed upgrades.  County officials approved a $547.5 million cap for the renovation program but did not yet allocate funds to project. A number steps remain before the project moves closer of a construction phase. County officials indicated that a funding source would need to be found the project. Hospital officials must complete an environmental impact statement and then seek state approval, a process that generally takes more than a year.

SEATTLE – Harborview Medical Center officials are putting the finishing touches on plans for construction of a new 14-story, $180 million medical office building (MOB) on its campus in Seattle. The provider would like to begin construction of the project –which includes offices, retail space, laboratories and an underground parking garage – in 2007 with completion scheduled for 2008. That schedule is a departure from the original plans for the project, which had called for two buildings with less total space in two phases of construction. The latest plans outline a project that is larger, quicker and about $30 million more expensive than the original. But officials say the new plan is more cost effective in terms of the cost per square foot.  The medical center is waiting for final approval from King County officials before moving ahead with the project.

JEFFERSON, Ind. – A group of investors has pulled the plug on plans for a private specialty hospital in Jefferson.  The investor group had purchased a site and was seeking doctors to join them as investors in a 40-bed hospital that would have focused on surgical practices in the southern Indiana community. However, leaders of the investment group said they could not generate enough interest from doctors in the region. The community is home to a county-owned hospital, the Clark Memorial Hospital.

BOISE, Idaho – Controversy over a plan for a private specialty hospital is heating up in Idaho. A group of physicians report that they are insulted by the Idaho Hospital Association’s attempt to stop them from building a private specialty hospital in the Treasure Valley area near Boise. The hospital association, in fact, has asked the Idaho Board of Health and Welfare to pass a temporary moratorium on all hospital construction until the state’s Legislature can take up the issue in 2007. Officials with existing hospitals contend the new specialty hospital, as well as all physician-owned specialty hospitals, would draw insured patients and revenues away from community hospitals. A recent meeting concerning the issue at the offices of the Board of Health and Welfare became quite contentious at times, according to news reports. Before acting on a moratorium, however, the board said it needed to determine whether it has the legal authority to take such action. Idaho does not have a Certificate of Need (CON) law; the state’s hospital association plans to propose such a law during the next Legislative session.

WASHINGTON, D.C. – The Senate recently passed a VA/Military Construction Bill that included $52 million in planning and design work for a VA replacement hospital planned at the former Fitzsimons Army Medical Center in Aurora, Colo. The facility is planned as a replacement hospital for the VA’s 128-bed hospital in Denver. The VA hospital, which is expected to cost hundreds of millions of dollars, would be one of several medical providers that are relocating to the Fitzsimons site.

ST. HELENA, Calif. – The St. Helena Hospital Foundation announced that it has launched a $27.5 million capital campaign to support the first phase in a five-phase plan for renovation and expansion at St. Helena Hospital.  Phase 1 is scheduled to include the development of a new 25,000 square foot facility that houses a cancer center and an expanded outpatient surgery center along with expansion of a birthing center,  cardiovascular lab services and an electronic medical records system. The total cost for the project is estimated at $30 million. Construction is scheduled to start in spring 2007 with completion slated for 2008.  Hospital officials indicated that they would like to pursue an additional $30 million in capital improvements in the five years following completion of their phase 1. q