Outpatient Projects (December 2006)

System shifts focus to outpatient care

VIRGINIA PROVIDER CARILION IS RESTRUCTURING TO DEEMPHASIZE HOSPITALS
By John Mugford

As many health systems across the country shift, or consider shifting, a variety of hospital services to outpatient care or specialty services – in part to increase profits and efficiency – a debate over the practice is heating up in Roanoke, Va. The dominant healthcare provider in the western part of Virginia, the eight-hospital, not-for-profit Carilion Health System, earlier this year announced a restructuring plan to shift the system’s emphasis away from traditional hospital care.

Instead, Carilion says it wants to reorganize as a not-for-profit, physician-led multi-specialty group practice, which would entail focusing on specialized physician services, physician training and medical research. The system would become known as Carilion Clinic.

The system’s eight hospitals would remain open after the restructuring, Carilion officials say. In addition, the system is in the process of planning for a flagship clinic and medical office building (MOB) on land it controls in a business park in Roanoke. A ground breaking is planned for spring 2007 for the MOB, which would eventually sit alongside a future research facility.

Carilion would be a 50:50 partner with Virginia Tech University in the research facility, which is to be called the Clinical Research Institute. The clinic and research center, according to Carilion, would create an atmosphere capable of attracting top doctors and researchers in various fields of medicine.

While figures have not been released for the cost of the facilities, Eric Earnhardt, the director of media relations for Carilion, says the total restructuring plan is expected to cost about $100 million.

Mr. Earnhardt said Carilion typically budgets about $70 million to $80 million for annual capital expenditures and usually has large projects ongoing.

While Carilion officials say the restructuring is designed to prevent forecasted financial losses in coming years, critics, including doctors affiliated with the system, warn that the plan could backfire. The critics, some of whom are part of a doctors’ group known as the Coalition for Responsible Healthcare, contend that the quality of healthcare in the area could suffer as a result of the restructuring plan.

Some critics say that employee morale is low at Carilion and that the system needs to improve its equipment and the care it provides to patients in order to improve its stature and bottom line. More than 400 area residents, including healthcare professionals affiliated with Carilion, attended a forum to address the restructuring. According to a report posted on the coalition’s Web site, many expressed concerns about the restructuring.  Some doctors said Carilion faces problems if it plans to disassociate itself from independent physicians.

In a press release issued by Carilion, President and CEO Edward G. Murphy, MD, stated that even though Carilion has “excellent hospitals, skilled physicians and state-of-the-art technology, the traditional healthcare delivery system has not achieved the desired level of quality, excellence and accessibility for patients.”

“The health care industry as currently structured is headed down a path that leads to higher cost and less value for patients.” Dr. Murphy added in the statement. “Our goal, is to align our organization in a way that makes the patient’s best interest our top priority.”

The CEO said he traveled the country to study other health systems, adding that Carilion’s restructuring is based on models used by world-renowned institutions such as the Mayo Clinic, Cleveland Clinic and the Lahey Clinic.

Doctors and other health care workers dominated the coalition’s first public event, which was billed as a forum to air the public’s concerns about the massive Carilion restructuring plan. At the forum, several doctors repeated concerns that Carilion’s plan could actually raise health care costs and reduce quality.

Implementation of Carilion’s restructuring is expected to take five years or more. Officials say key steps include recruiting physician specialists from the region as well as from across the country, building the required infrastructure to support the Clinic, and expanding Carilion Clinic’s medical education and research departments. The construction of the new outpatient facility will begin within the next year.

Outpatient complex

would replace hospital

in Lancaster, Calif.

LANCASTER, Calif. – A $98.8 million, 124,000 square foot outpatient medical complex would replace the former High Desert Hospital in Lancaster, Calif., according to plans recently approved by the Los Angeles County Board of Supervisors. The project would include a 39,000 square foot ambulatory surgery center, a 38,000 square foot clinical services building, a central plant and a 47,000 square foot MOB.

County officials were considering a plan that would require the acquisition of a 15-acre parcel from the city of Lancaster. The site is a home to a series of buildings that once housed the former High Desert Hospital, which was closed three years ago. Since then, occupancy has been soaring at the High Desert area’s two main hospitals, 117-bed Lancaster Community Hospital and 379-bed Antelope Valley Hospital.

The county has hired the Los Angeles office of CannonDesign to create a master plan for the site. The tentative plan calls for putting the construction portion of project out for bid in coming months, with construction scheduled to start in May 2008. Completion is slated for late 2010.

Outpatient center

could fuel growth

for N.C. system
SMITHFIELD, N.C. – Officials at Johnston Memorial Hospital in Smithfield are looking to the development of a $35 million diagnostic center along U.S. Interstate 70 near Clayton as a chance to continuing growing their system. In fact, officials have called the future imaging center an “outpatient chassis.”

The hospital has agreed to acquire 75 acres for $5.6 million for the project. The hospital was expecting to close on the land acquisition in December and begin construction in coming weeks. The diagnostic center would include an emergency room and eight observation beds where patients could be kept up to 48 hours. Also planned are operating rooms for outpatient surgery and an adjoining MOB.

Hospital officials say the project is being instigated by rapid growth in Clayton and western Johnson County, which is between Smithfield and Raleigh, N.C. Officials say Johnston Memorial Hospital in Smithfield would remain the system’s flagship facility, where an $85 million expansion and renovation is planned. Officials believe the Smithfield hospital is on the verge of evolving from a community hospital into a regional medical center.

Johnston Memorial would need Certificate of Need (CON) approval from the North Carolina Division of Facility Services before it could establish the emergency room and buy the diagnostic imaging equipment for the outpatient center in Clayton.

 

New surgery center

to increase caseload

at Indiana hospital
SOUTH BEND, Ind.– An expansion at Memorial Hospital in South Bend, Ind., is planning a technologically advanced, $79.4 million outpatient surgery center. Ground was broken in recent months on the facility, with completion scheduled for fall 2009.

Memorial officials say they expect a 53 percent increase in surgical cases once the center is complete, with the number of operating rooms on the campus increasing from 15 to 22. The number of recovery rooms would increase from 18 to 27 while pre-surgical beds would increase from eight to 15.

The building is being designed to allow a future vertical expansion. The architect on the project is the Indianapolis office of BSA LifeStructures.

 

Plaza Cos. begins

MOB adjacent to

Phoenix hospital

PHOENIX – Phoenix-based The Plaza Cos. recently started construction on a 113,000 square foot, five-story MOB adjacent to Paradise Valley Hospital in Phoenix.

Prior to the start of construction, the MOB was 70 percent pre-leased to a variety of tenants, including physicians specializing in cardiology, pulmonology, urology, and an ambulatory surgical center. Paradise Valley Hospital currently has 140 beds but will grow to 200 beds by 2008.

While details were not provided, The Plaza Cos. reports that it offered physicians the opportunity to invest in the MOB. The development firm teamed with San Antonio-based USAA in financing the project.

Phoenix-based Butler Design Group is the architect on the project while Des Moines, Iowa-based Weitz Co. is the general contractor.

Physicians’ group faces

opposition for proposed
N.C. medical park
SCOTTS HILL, N.C. – A group of about 100 physicians has teamed up to form SENCA Properties, a limited liability corporation that plans to build a medical office park and mixed use project on a 45-acre parcel it has acquired in Scotts Hill, N.C., just outside of Wilmington, N.C.

The park would include doctors’ offices, retail stores and restaurants on about 19 acres. SENCA plans to sell the remaining 26 acres to New Hanover Regional Medical Center of Wilmington, N.C., which plans to build a satellite hospital on the site.

The doctors’ group, however, faces plenty of obstacles, as it first proposed the project in October 2005. The New Hanover County Board of Commissioners denied an initial request for a rezoning due to public opposition over the magnitude of the project. SENCA has since reworked the plans and now says it would build infrastructure on just 50 percent of the site, leaving the rest as green space. Neighbors, however, say they are not giving up in their opposition to the project.

University of Virginia

moves closer to

$63M cancer center

CHARLOTESVILLE, Va. – The University of Virginia in Charlottesville, Va., got a big boost from the state in its effort to build a $63 million cancer center. The cancer center would be named after late U.S. Sen. Emily Couric of Virginia, who died five years ago after battling pancreatic cancer.

The university recently received good news from state lawmakers, who have included $25 million in the state’s 2006-08 budget for the construction of the cancer center, which will have a ground breaking in 2008. One of the moving forces behind the project is Ms. Couric’s husband, George A. Beller, a cardiac physician at the University of Virginia.

Meanwhile, the campaign for the necessary funds is about two-thirds of the way to the final goal, according to officials involved in the project. In addition to the cancer center, the project would entail an adjoining education center. The project is slated for land across the street from the university’s new main hospital facility. q

FOR THE RECORD

Moses Cone Memorial Hospital of Greensboro, N.C., is the latest area hospital to try and stake a claim in growing Kernersville, N.C., where the system has plans for a 41,000 square foot MOB. The building would have medical offices and imaging, a small laboratory, physical and occupational therapy, and a small pharmacy. Area hospitals have been trying to stake out turf in Kernersville, which is centrally located in the Triad area. State officials recently rejected a proposal from Novant Health to build a hospital in Kernersville. However, High Point Regional Health System is constructing an office building and fitness center in the town…Griffin Hospital in Derby, Conn., has begun planning and seeking approvals for a $33 million construction and renovation project. Hospital officials hope to build a $27.3 million, three-story, 49,000 square foot Ambulatory Care Pavilion and Community Cancer Center next to the main hospital. The hospital is also proposing $5.7 million in renovations to the hospital itself. The hospital will need Certificate of Need approval from state regulators before proceeding. Officials hope to open the new facility in late 2008… JE Dunn Construction Co. has started work on the 21,000 square foot Pikes Peak Medical Office Building on the site of the new Pikes Peak Regional Medical Center in Woodland Park, Colo. The Colorado-based general contractor also began work earlier this year on the $9.8 million, 41,000 square foot Pikes Peak Regional Medical Center, situated on an 11-acre mountainside site… HealthSouth of Birmingham, Ala., plans to move its downtown Louisville, Ky., surgery center to northeastern Jefferson County, where it would join a list of new medical facilities. The healthcare company recently applied for state permission to relocate HealthSouth Louisville Surgery Center to Norton Commons, a mixed-use village-style development in Jefferson County. The 19,000 square foot surgery center would be part of a new 100,000 square foot MOB in Norton Commons. Nearby are several other outpatient facilities, including Baptist Hospital East’s future 200,000 square foot outpatient medical and surgery center…  Morris Hospital & Healthcare Centers in Morris, Ill., is proposing a 56,700 square foot MOB on the west side of its campus. The MOB would be connected to the hospital and contain physician offices, a women’s imaging center, and other services. The total cost is estimated at $16.5 million. Morris Hospital officials plan to file an application with the Illinois Health Facilities Planning Board in early 2007… A 64,000 square foot MOB is being planned for the campus of Lancaster General Hospital in Lancaster County, Pa. Brownstown, Pa.-based Benchmark Construction Co. has been chosen as the general contractor for the $15.5 million MOB, which will include an ambulatory surgery center… A new 50,000 square foot MOB is likely to replace retail in a retail-saturated area of Omaha, Neb. The initial plans for a 13-acre mixed-used project called Tivoli did not include an MOB. But now that the area has become inundated with retail, developers Jerry Slusky and John Hoich have decided to make a change in the plan. The MOB will replace about 32,000 square feet of planned retail in the project. The area has experienced demand for MOB space since the opening of Alegent Health’s nearby Lakeside Hospital in 2004… Loma Linda University Medical Center in Loma Linda, Calif., in recent weeks announced that it has plans for an outpatient clinic that would cost about $100 million. The clinic would be built near the medical center’s heart institute. Medical center officials did not provide details about the project, saying they would do so at an upcoming news conference. Construction is expected to being on the project within a year…Co-developers of the Bronk’s Corners mixed-use project in Joliet, Ill., have added a 44,000 square foot MOB to their plans. Ardmin Properties Real Estate, of Woodbridge, Ill., and Caton Commercial Real Estate Group of Plainfield, Ill., in recent weeks announced that the medical building was included in a final 39-acre, planned urban development submitted to the city of Joliet. The project would also include retail, restaurants and offices. The plan calls for a portion of the medical offices to be sold as condominiums… The Phoenix office of Chicago-based Healthcare Development Partners has plans for a 61,000 square foot outpatient and diagnostic imaging center in Peoria, Ariz. In recent weeks, the development firm announced the signing of a major tenant, Sun Health, which would become the first health system to offer medical services in northern Peoria. Officials say the center will be developed in two phases, with the second phase housing a surgery center. Phase one is slated for completion in early 2008…  Trammell Crow Co.’s office in Oklahoma City recently started construction on a surgery center that will be leased by a joint venture of Dallas-based Integris Health and United Surgical Partners International, as well as individual physicians. The facility will have about 11,000 square feet. Trammell Crow Healthcare Services is taking the lead on the project, while Dallas-based Ascension Group LLC is the architect and Arlington, Texas-based FJW is the construction manager… Colorado Springs Osteopathic Foundation recently broke ground in Colorado Springs on an 11,700 square foot facility, called Centennial Health. The construction contractor is Pueblo, Colo.-based H.W. Houston Construction Co.; the architectural team is composed of James W. Nakai & Associates and Keystone Associates… Corona Regional Medical Center in Corona, Calif., recently announced plans to build a satellite facility to serve the residents of growing Eastvale, Calif., about eight miles from the hospital. Corona Regional is part of the King of Prussia, Pa.-based Universal Health Services system. The hospital is proposing a two-story medical plaza in Eastvale, which would include doctors’ offices and urgent care services… Southern Regional Health System of Riverdale, Ga., has announced plans for two outpatient facilities that would cost an estimated $22.7 million. A two-story ambulatory surgery center and a three-story medical office building would be built in a mixed-use project on 92 acres near Jonesboro, Ga. The facilities would have a digital diagnostic center and a digital outpatient breast imaging center. Atlanta-based Meadows and Ohly LLC Spivey Station is the developer of the medical buildings… Citing a growing population and capacity limitations, NorthEast Medical Center of Concord, N.C., has announced plans for a $23.1 million, 23,689 square foot, 24-hour outpatient emergency care facility in nearby Harrisburg, N.C. The proposal calls for NorthEast at Harrisburg to offer additional services as well, including diagnostic imaging services, CT scans, ultrasounds, radiography and mammography. NorthEast is in the process of acquiring a 31-acre site near U.S. Interstate 485. The project needs CON approval from the North Carolina Division of Facility Services of the state’s Department of Health and Human Services. q