While many health care structures didn’t actually spring from the ground in 2016, major regional players in the industry had expansion on their minds.
Planning to stay competitive in the rapidly growing Pikes Peak region was a common theme at Penrose-St. Francis, UCHealth Memorial and Children’s hospitals this year.
For the kids
Perhaps 2016’s biggest announcement involving regional health care was Children’s Hospital Colorado’s plans to construct a $154 million inpatient hospital on Memorial North’s campus. A ceremonial groundbreaking took place in November.
“Our commitment to Colorado Springs has never been stronger. We’re really excited about the future,” said Greg Raymond, southern Colorado’s regional vice president at Children’s Hospital.
Raymond said Memorial will provide Children’s Hospital with a pad-ready site in the first quarter of 2017, and the project is anticipated to be complete in 2018. The agreement calls for Children’s to lease 2.5 acres from Memorial for the facility.
The new hospital will include the region’s first pediatric-only emergency department, nearly 100 inpatient pediatric beds, neonatal and pediatric intensive care units, eight pediatric operating rooms and a sleep study lab. The location will also provide a consolidated inpatient and outpatient Center for Cancer and Blood Disorders.
The cost of the project was initially estimated at $110 million. Raymond said one reason for the $44 million increase is because Children’s initially anticipated utilizing more of UCHealth’s existing infrastructure.
“For instance, Memorial North has an MRI machine and [Children’s already has] an MRI here [Memorial’s downtown location]. There was no reason to have three MRI machines within an eighth of a mile. … We looked at how to take patients from the new Children’s Hospital to use the MRI machine at Memorial and bring them back, but we realized there are some very real logistical challenges. … Distance was an issue. Going 1,000 feet is a long way to take a really sick child.”
Expectations of sharing emergency power generators also turned into an additional expense.
“[To be in compliance, a] generator has to be up and running within a certain amount of time, and we would not have been in compliance,” he said. “That was an additional $3.5 million for just our own power backup.”
Construction labor and material costs have also been rising, Raymond said.
Raymond said there’s “low risk” there will be another dramatic cost swing, and because of the design-build nature of the project, planners are collaborating to find savings.
The system currently employs 550 in Colorado Springs and Pueblo, with Children’s Hospital currently providing pediatric expertise at Memorial Central.
Raymond said he doesn’t know exactly how many new full-time jobs will be created once the hospital is open, but was confident “it should be well north of 50.”
He also said a key concern when he first began working in Colorado Springs was recruitment.
“I have been so impressed with how this community sells itself,” he said. “I underestimated how many pediatric providers … wanted to be exclusively clinical and live in this great community.”
UCHealth’s presence in Colorado Springs also experienced growth in 2016. A summary of the system’s expansion was presented in a report to city council this month by Dr. Bill Neff, interim Memorial CEO.
Statistics included a jump to 456,199 clinic visits in 2016 — an 8.2 percent increase over 2015. Acute inpatient admissions and observations increased 5.9 percent to 29,892; emergency department visits increased 3.1 percent to 136,422; surgeries increased 1.2 percent to nearly 20,000; and deliveries increased 3.2 percent to 4,309. Total employment in the system also rose 6 percent to 3,556.
“Our volume metrics for 2016 — we saw increases in all numbers,” Neff said.Memorial Central’s emergency department lays claim to being the busiest in the state.
Fiscally, the system is in a good place, Neff said. Memorial has shared about $2.4 million during the past two years with the city thanks to its lease agreement, signed in 2012, with UCHealth.
“We think that will continue,” he said. “We seem to have stabilized the financial growth model at Memorial, and we’re in good shape to stay in the black and keep advancing payments going forward.”
Memorial also broke ground on a sizable expansion to its north campus. The project will allow many services to be aligned with those at Children’s Hospital, to include labor and delivery and newborn care.
The new construction will add about 130,000 square feet to the existing 230,000-square-foot facility at the intersection of Briargate Parkway and North Union Boulevard. The Business Journal reported this year that plans include a four-story addition primarily meant to house women’s and oncology services, expanding the emergency department, adding two operating rooms and increasing the number of inpatient beds from 88 to about 108.
Inpatient admissions increased 43 percent at Memorial Hospital North since opening, and the number of outpatient visits has nearly quadrupled as it has added medical services.
“We have to recognize that patients, particularly younger generations, expect to have rapid access and advanced care pretty darn close to where they are,” Neff said. “We have to expand the north campus because that whole area is one of the fastest growing on the Front Range. And [the project will] also help to balance services between our central and north campuses.”
Additionally, 2016 marked the opening of UCHealth’s Grandview Hospital, which began seeing patients in October and received its Joint Commission certification this fall. The 58,000-square-foot facility located on North Nevada Avenue provides internal medicine, general and orthopedic surgery and critical care services.
While not growth, Memorial also saw a changing of the guard in 2016, as former President and CEO George Hayes stepped down, to be replaced by Joel Yuhas, who starts Jan. 9.
Yuhas, 46, brings 20 years of health care leadership experience to Memorial. Most recently, he served as president and CEO of St. Mary Medical Center in Long Beach, Calif., part of Dignity Health. His background also includes CEO positions within major hospital systems and experience at community and academic hospitals in the United States and abroad.
“Both campuses have a great year ahead of them as we look at the market expanding,” Yuhas told the Business Journal.
Growth was a driving force in 2016 for Centura’s Penrose-St. Francis hospitals, although one area of planned development was delayed.
Construction plans for the eastern St. Francis Medical Center campus was paused when its financier, Englewood-based Catholic Health Initiatives, halted funding in order to complete other projects.
“We’ve gotten reaffirmation from CHI that we’ll break ground in May of 2017,” said Mark Hartman, chief operating officer at St. Francis Medical Center.
Hartman said capacity constraints at St. Francis led to the expansion push, which will focus on three areas: the emergency department, the neonatal intensive care unit and operating rooms.
Hartman said they’ve used “creative solutions” to deal with capacity issues.
“We only have seven operating rooms, for example. But if it gets really crowded, we’ll run operating rooms later into the evening or have surgeons doing cases on Saturdays.”
This project has also seen a jump in expected cost. The initial estimate came in at around $100 million, but that has jumped by about $12 million.
That is partly due, Hartman said, to rising material and labor costs.
“The labor shortage in construction is very real in our market,” he said. “We might have to pull labor from Denver.”
The system acquired 8.6 acres near Powers Boulevard in September to make space for future projects at the St. Francis campus.
Hartman said Centura’s plans announced in March to build a third hospital campus at Fillmore Street and Centennial Boulevard are still in the works.
The system initially acquired 51 acres and, in November, Centura invested in an adjacent 28 acres currently occupied by an asphalt plant.
“So now we own essentially 80 acres on Fillmore hill,” he said. “We’re really excited about the future of our third campus.”
There was initial neighborhood pushback regarding the planned project as some residents expressed concerns over the completed hospital’s height. Hartman said system representatives have met with neighbors and partnered to create a neighborhood task force to “help guide development.”
Finally, the system entered into a strategic community partnership this year with UCCS on the construction of the Sports Medicine and Performance Center on the UCCS campus.
“That envisions a 72,000-square-foot, state-of-the-art destination center on the UCCS campus. That won’t be complete until 2019, but there’s work going on it already,” he said, adding Centura is in discussions with UCCS regarding construction funding.