Inpatient Projects (March 2007)

No more regulatory agency in Illinois?

STATE LAWMAKERS TO DECIDE FATE OF HEALTH FACILITIES BOARD BY APRIL 1

 

By John Mugford

 

April Fools Day could mark a new era for healthcare construction in Illinois. That’s because by April 1, the Illinois Legislature is scheduled to decide whether to dissolve the Illinois Health Facilities Planning Board (IHFPB).

The board has controlled healthcare construction in Illinois since 1974. The goal of the board, of course, has been to control healthcare costs by controlling healthcare construction projects. One of its charges has been to make sure that proposed hospital or healthcare projects would not duplicate services offered at other nearby facilities.

But as is sometimes the case with government agencies, politics – real or perceived – often got in the way of what some critics say was an idealistic, but unrealistic, goal.

Over the years, the IHFPB has, on numerous occasions, come under fire for its decisions. In addition, a kickback scandal in 2004 that resulted in criminal charges didn’t help the board’s stature in the state.

While there are numerous pros and cons concerning the fate of the IHFPB, several stand out. For example, those in favor of dissolving the board point to Edward Hospital’s proposal to build a new 142-bed hospital in Plainfield, Ill. Even though local residents and elected officials have repeatedly voiced their support for the project, the facilities board has rejected Edward’s proposal on several occasions. The latest denial came in late February. Edward officials have vowed to continue their fight for the new hospital.

Proponents of deregulation also point to the conclusions of a study completed by the Lewin Group in mid-February. The study, which was commissioned by the Illinois Legislature, determined that there is little evidence indicating that regulation reduces healthcare costs. The Lewin Group also concluded that regulation has a had a negligible effect on the quality of healthcare services.

On the other side of the debate, however, supporters of retaining the board say that regulation provides protection for many hospitals, especially those that provide services to uninsured patients. At least a couple of nearby hospitals say that if Edward’s new facility is built, they are likely to lose many of their wealthier, well-insured patients to the new hospital.

Even though deregulation proponents are hoping for the eventual dissolution of the IHFPB, many of them agree that perhaps a decision concerning the fate of the board should be delayed for a couple of years or so. Even the Lewin Group suggested that the state take three years or so to study the issue further. There are reports that legislators are considering enacting a hospital-building moratorium for an unspecified period of time to further study the issue.

A task force of Republican senators has suggested that the board continue to operate, but with several reforms to help it be more responsive and effective.

Georgia considers

making changes to

its CON laws

ATLANTA – A massive and complex bill being discussed and debated in Atlanta would revamp the way Georgia approves healthcare construction projects. The bill would reportedly pave the way for the development of specialty hospitals and streamline the approval process for new healthcare projects and expansions.

Gov. Sonny Perdue recently announced his support for House Bill 568, which was sponsored by Rep. Rich Golick, a Republican. News reports indicate that while the bill has plenty of supporters among elected officials, few lawmakers believe the proposal can emerge in its current form. Some bills, by the way, are calling for the dissolution of the state’s Certificate of Need (CON) law altogether.

Should the bill be passed as it is, Illinois-based Cancer Treatment Centers of America would most likely be allowed to build a $150 million hospital near Atlanta, as long as the healthcare company could guarantee that 75 percent of its patients would come from outside of Georgia.

Cancer Treatment Centers has sought an exemption from the state’s CON law, which requires new medical facilities to prove there is a need for their services. Several of Georgia’s not-for-profit systems have argued that the cancer center, as well as other specialty hospitals, should be required to follow the same rules that all other hospitals do.

While the governor’s bill would not repeal the state’s CON requirement, it would, among other provisions, allow licensed hospitals to expand their surgical bed capacities without going through the regulatory process. Also, freestanding surgery centers would be exempt from the CON regulation, as long as they certain requirements to provide care for PeachCare and Medicaid patients.

Not everyone in Georgia, however, is in favor of doing away with CON. One such group is Save Georgia Healthcare, a coalition of the state’s hospitals. The group has stated that the bill would “further destabilize Georgia’s already fragile healthcare system and lead directly to higher overall healthcare spending while threatening the ability of hospitals to maintain basic access to care for citizens across this state,” according to a statement.

A $1 billion deal

to develop hospitals

across the country
HOUSTON – In a whopper of a deal, Charlotte, N.C.-based Alliance Development Group has signed a $1 billion agreement to develop 10 acute-care hospitals across the country for Houston-based University General Hospital Systems. The deal was announced in late 2006.

 

To date, University General has one facility, a 72-bed, for-profit, physician-owned hospital located near the massive Texas Medical Center in Houston. The hospital touts itself as providing five-star, luxury service to its patients. In February, University General received Medicare certification and began treating Medicare patients.

Alliance and University General were brought together by First MidAmerica Investment Corp., which has an office in Houston. Terms of that partnership agreement were not disclosed.

Alliance officials have said in prepared statements that their role is to locate and acquire properties as well as to develop the future physician-owned facilities.

University General announced that it currently has plans to break ground on its next physician-owned hospital in Houston’s Chinatown, with additional facilities coming at later dates in markets such as Dallas, Denver, Phoenix and others.

St. Francis embarks

on $200 million

expansion in Indy

INDIANAPOLIS – In Indianapolis, there’s been an interesting twist to the trend of healthcare systems expanding their facilities in the suburbs while disinvesting in their more urban hospitals. Indianapolis-based St. Francis Hospital & Health Centers recently announced that it plans to significantly increase the size of its Indianapolis hospital while cutting acute-care services at its hospital in the southern suburb of Beech Grove.

The project at St. Francis-Indianapolis, a relatively new (1995) facility on the south side of the city, calls for building a $200 million, five-story, 206-bed patient tower; expanding the emergency department; adding more inpatient operating suites; and adding 1,000 parking spaces. The project is expected to take about three years to complete.

St. Francis officials said they are not “abandoning” Beech Grove, which has 317 beds. Instead, the system says it will expand its outpatient offerings there to better meet the needs of the community. St. Francis has been operating a hospital in Beech Grove since 1914.

St. Luke’s planning

multi-phase project

in Pennsylvania

BETHLEHEM TOWNSHIP, Pa. – The Bethlehem Township Planning Commission recently recommended the approval of the first phase of St. Luke’s Hospital’s future 180-acre campus. The plan was to go before township commissioners in recent weeks for final approval.

The proposal calls for a $125 million first phase – one of at least three future phases. Construction would start this coming summer on a 400,000 square foot regional cancer center and a diagnostic pavilion with a GE healthcare International Imaging facility.

Also included in the first phase would be an ambulatory surgery center, an urgent care center and two MOBs. An acute-care hospital is planned for the second phase of the project, even though St. Luke’s has not decided when it will submit plans for that portion of the project.

Following the development of the hospital, St. Luke’s plans to build an education center.

Baystate Med Center

plans $259 million,

122 bed expansion

SPRINGFIELD, Mass. – Baystate Medical Center in Springfield, Mass., recently announced plans for a large expansion that would cost about $259 million and add about 560,000 square feet of space.

Baystate, at 632 beds, is already the largest healthcare facility in western Massachusetts. The hospital is currently licensed for 653 beds – the expansion would bring the bed capacity to 775 and add about 550 permanent clinical and physician positions.

The system plans to break ground on the project in late 2008. The plan, however, must gain the approval of the state Department of Public Health before proceeding. Completion is scheduled for 2011. The project is slated for completion in 2011.

After bankruptcy,

a new, $650 million

hospital for St. Vincent

NEW YORK – St. Vincent Catholic Medical Centers in New York recently announced bold new plans to emerge from bankruptcy by mid-2007. Following that emergence, the health system plans to start construction on a new, $650 million state-of-the-art hospital in Greenwich Village, on the island of Manhattan.

In February, St. Vincent’s filed a plan of reorganization with the U.S. Bankruptcy Court in New York. The plan calls for refinancing existing debtor-in-possession credit, providing funding to the nonunion pension plan, making payments to creditors of at least 80 cents on the dollar and funding pre-bankruptcy medical malpractice claims.

The system’s new hospital would be built across from its flagship hospital in Greenwich Village. The old hospital building would then be sold to developers, helping to finance the new project. St. Vincent has closed one hospital and divested three others since filing bankruptcy in 2005.

For the Record

Medical Center of the Rockies, a $240 million hospital built by Loveland, Colo.-based Poudre Valley Health System and its partner, Scottsbluff, Neb.-based Regional West Medical Center, recently opened in Loveland. The 570,000 square foot, five-story hospital gives Poudre Valley a healthcare presence in Valentine-city Loveland, which was formerly served only by McKee Medical Center… Chicago-based Kindred Hospitals of Illinois is set to begin construction in coming weeks on a $17 million, 50-bed long-term acute-care hospital (LTAC) in Springfield, Ill. Vacant office buildings on the site of the former Doctors Hospital are to be torn down to make way for Kindred Hospital Springfield, which will be located adjacent to the city’s medical district. The project had been delayed since 2005 because of the finding of an underground sewer line at the site. Now that the issue has been resolved, the project is slated for completion in summer 2008. The designer of the facility is Belli & Belli Architects and Engineers of Wheeling, Ill.  Psychiatric Solutions Inc. of Franklin, Tenn., is asking the state for approval to convert the shuttered Doctors Hospital into an 80-bed psychiatric hospital for children… Craven Regional Medical Center in New Bern, N.C., has received state approval to proceed with a $24.7 million project to add 37 beds – bringing its total to 350 beds. The expansion would also add 21 new rooms for the elimination of the hospital’s semi-private rooms. The project is slated for completion in 2009… Children’s Health System of Birmingham, Ala., has hired two consultants to evaluate options for a possible expansion that could cost anywhere from $25 million to $100 million. One firm is studying the financial feasibility and another is assessing the hospital’s needs. The studies are to be completed in coming weeks… Banner Estrella Medical Center in Phoenix recently announced plans for a $14 million expansion that would add a 36-bed floor for medical, surgical and heart patients. The new private rooms will be located on the top floor of the hospital’s six-story patient tower. The floor already exists as a shelled space. Dallas-based HKS Inc. is the architect on the project… The 25-bed Memorial Community Hospital in Blair, Neb., announced plans for a $24.5 million expansion to add a diagnostic center, new emergency department, and more space for radiology and laboratory services. The first phase of construction is slated for completion by the end of 2008… Doctors Community Hospital in Lanham, Md., a suburb of Washington, D.C., has begun work on a $54 million, six-story patient tower that will convert semi-private patient rooms to private. As a result of the expansion, Doctors will increase its bed capacity from 186 to 251. The project has a scheduled completion in late 2009. The architect is Goodman Associates and the general contractor is Gilbane Building Co.… Nearby, in Fort Washington, Md., Fort Washington Medical Center plans to spend $58 million on an expansion of 14 beds and 70,000 square feet. The project will take the Nexus Health-owned hospital to 51 beds – the hospital originally hoped to expand to 70 beds, but state regulators reduced nixed that figure… St. Luke’s South Hospital in Overland Park, Kan., is set to break ground in August on a $43 million, 92,000 square foot expansion and renovation. The project would add up to 50 new private inpatient rooms, a women’s health unit, a hip and knee joint replacement center, an outpatient wound care center and outpatient chemotherapy and radiation services. Plans also call for the renovation of 20,000 square feet of patient care and support service areas… A new replacement for Kennewick General Hospital in Kennewick, Wash., is expected to cost about $100 million and contain about 200,000 square feet of space. The hospital district’s current facility contains about 113,000 square feet. The hospital would be built on 40 acres that the hospital district already owns. The general contractor is Bouten Construction in Richland, Wash…. Tulsa (Okla.) Spine and Specialty Hospital would almost double in size under a planned $16 million expansion. The project is about five years ahead of the original schedule, according to officials of the 78,000 square foot provider in south Tulsa. The expansion would add 52,000 square feet. The architect is Moore, Okla.-based Costigan and Associates and the contractor is Clark Construction of Oklahoma City. Completion is scheduled for early 2008… The state of Indiana recently closed its call for bids for the building of a $90 million to $100 million psychiatric hospital near the Indiana University School of Medicine in Indianapolis. The facility would be a replacement for the Larue D. Carter Memorial Hospital. While the number of future beds has yet to be determined – estimates call for between 110 and 164 – the facility would have more than 200,000 square feet. The facility would be part of a neuroscience center, a partnership with IU’s medical school and Indianapolis-based Clarian Health Partners. The project would also include a 200,000 square foot medical office building, a 90,000 square foot brain research center, and a parking garage for 1,500 to 2,000 cars… Howard Memorial Hospital, in Nashville, Ark., is hoping to build a $24.1 million hospital to replace its 58-year-old, county owned facility. Hospital officials are set to ask voters in early March to approve a temporary, 1-cent sales tax to cover debt from construction bonds for the 60,000 square foot, 25-bed project. Officials would like to break ground in late 2007 and have the project completed by early 2009… Ohio Valley General Hospital in Pittsburgh recently opened its new 50,000 square foot Surgery and Maternity Center. The contemporary styled, four-story wing of the hospital will be phased into operation during coming months. Pittsburgh-based Burt Hill was the architect and Burchick Construction Co. was the general contractor… Central Peninsula General Hospital in Kenai, Alaska, recently opened its 82,000 square foot addition, which includes 50 new private patient rooms. The new addition is part of a three-phase, $50 million expansion. The latest phase cost an estimated $31 million, while the third and final phase, which begins this month, is slated to cost about $9.14 million. That phase entails renovating about 25,000 square feet of the original hospital and adding another 8,100 square feet of space… An administrative law judge recently sided with Health First of Rockledge, Fla., paving the way for a new 100-bed hospital in Viera, Fla. The hospital is expected to cost about $75 million and be completed by 2010. In making his ruling, Judge Robert Cohen stated that he found Health First’s arguments “more persuasive” than those of rival Wuesthoff Health System, which had challenged Health First’s proposal… A Sacramento Superior Court judge recently ruled that Sutter Health’s $600 million plan for an expansion at its Sutter General Hospital in midtown Sacramento complies with state environmental laws. As a result, the project has the green light to proceed, pending state approval. Sutter General has faced opposition and a lawsuit filed by the Service Employees International Union. q