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Thursday, Mar 28, 2024

Build Fever For Hospitals

From Glendale to Santa Clarita, hospital systems in the Valley region have caught construction fever, building up and expanding out to keep up with increased demand – or at least the anticipation of it. In the San Fernando Valley, the single largest expansion is in Tarzana, where Providence Tarzana Medical Center, an affiliate of Providence St. Joseph Health in Renton, Wash. expects to start construction on a new patient tower and upgrades to its existing facilities late this year or in early 2018. When finished in 2022, the $514 million “Reimagined Project” will give the 245-bed medical center a state-of-the-art emergency department, a new pediatric intensive care unit and roughly 210,000 square-feet of office space for specialists. “Our decision was based on our experience and our projections for where we’re going,” Providence Tarzana Chief Executive Dale Surowitz said. “We need to make sure we have the services available to the community to care for them.” The construction boom is partly a consequence of systemic changes across the U.S. health industry, which has been impacted by federal rules and an aging population. As the “fee-for-service” model of medicine is replaced by one that emphasizes patient satisfaction, hospitals are upgrading to keep up with changing expectations. In California, they are also being spurred by a state regulation for seismic retrofitting, to which all hospitals must comply by 2030. “The conversation on seismic 10 years ago will be different than one you have today because of all the changes you have on the market,” Jennifer Bayer, vice president of external affairs at the Hospital Association of California, explained. “As a hospital, you’ll look at all of these factors (when deciding how to expand).” Medically necessary features Advances in medical technology are changing hospitals from the inside out. As patient stays decline and the severity of the illnesses of those admitted increases, hospitals are improving their efficiency by reducing the number of patient beds and expanding the amount of space devoted to outpatient services. “The length of stay, consistent with national trends, has gone down, so while admissions have gone up, it has allowed us to care for more people without having to grow the number of beds we have,” Surowitz in Tarzana explained. Fewer beds frees up space for privacy and portable diagnostic equipment. The new patient towers at both Providence Tarzana and Henry Mayo Newhall Hospital, in Valencia, feature fully-enclosed rooms for admitted patients, a trend that is quickly becoming the norm in modern hospital design. “At the time (Henry Mayo) was built, hospitals had mostly semi-private rooms,” Roger Seaver, chief executive of Henry Mayo, said. “Today you almost always build the vast majority if not all newer buildings with private rooms, as ours will be.” The interior aesthetic, too, is getting a makeover. Henry Mayo’s new 29-bed maternity ward will be outfitted with “non-clinical furniture,” while ample windows will flood patient rooms and corridors with natural light, the hospital described on its website. Technological trappings also feature prominently in the region’s new health care facilities. Every room in Kaiser Permanente Inc.’s 64,000-square-foot medical office building in Santa Clarita, which is slated to open early next year, is equipped with screens for video conferencing. This improves efficiency by giving patients at home the option to talk with another physician remotely if an appointment is delayed, explained Dr. Peter Laimins, physician in charge at Santa Clarita Medical Offices 2. “Also, if I need to consult with one of my colleagues at another medical center during a patient visit, we can have almost in-person evaluation and consultation,” Laimins added. Affordable Care Act The architectural changes are in keeping with a wider industry shift to a more patient-centric business model, the structure for which is enforced by the Affordable Care Act. In order to receive maximum reimbursements for patients whose health insurance is provided through Medicare and Medi-Cal, hospitals must meet certain scores on the Consumer Assessment of Healthcare Providers and Systems, industry-wide surveys that assess patients’ experiences. In the Valley region, the construction spree is also driven by a want to give locals access to high-quality medical care without them having to drive long distances. A rise in population density, spurred by a shift from building single-family homes to apartment complexes, will naturally drive demand for health care services. To avoid a crisis, hospitals and medical centers must anticipate the growing need. “We’re expanding not only because of how the industry is changing, but because when we look at where people go for care, too many residents are leaving the Valley for certain services,” Surowitz said. “Our goal is to keep people who live in the Valley staying in the Valley for care.” The aging of the region’s population is another major factor in the push to expand. Between 2011 and 2015, the proportion of adults in Los Angeles County aged 65 and older – the largest consumers of U.S. health care, according to the Centers for Disease Control – grew from 10.7 percent of the population to 11.9 percent. It is expected the elderly will account for 18.2 percent by the year 2030, according to a 2013 study by Price School of Public Policy at USC. Population growth and aging were the key factors in Henry Mayo’s decision to build its $151 million patient tower, which is being paid for in part by a recently completed bond sale and a soon-to-be-launched $25 million public fundraising campaign. “For us, there are really two main factors: The growth of the (Santa Clarita) valley projected and being realized at this point, and the maturing of the population,” Seaver at Henry Mayo said. Seismic shake-up Henry Mayo has already addressed the earthquake safety issue, but it’s the exception rather than the rule. Construction is likely to continue to ramp up across the region as the deadline for compliance with the seismic regulation draws near. Hospitals that have not fixed their facilities risk losing some or all of their ability to operate as an acute care center. Some local hospitals are still in the early stages of planning how they will tackle the upgrades – especially how they will pay for them. “By 2030, we potentially will lose half our beds if we don’t upgrade,” said Mike Wall, chief executive of the Antelope Valley Hospital in Lancaster. “(Retrofitting) is a cost of somewhere around $220 million, maybe higher.” Wall’s hospital is one of many that will spend the next few years determining how and from where to pay for the retrofit, a process that involves reinforcing structures by coupling them to newer buildings; adding exterior concrete columns or steel frames; or rebuilding entirely so that the structure meets the latest seismic codes. A study conducted by Rand Corp. in 2007 estimated the cost for all hospitals in California to come into compliance with the state’s seismic retrofitting laws to range between $45 billion and $110 billion. As of 2012, more than 90 percent of the state’s health care facilities are no longer at significant risk of collapsing during a major earthquake, according to the California Office of Statewide Health Planning and Development, but a considerable number still require extensive construction. Those that do may be forced to shut down entirely if they cannot find the money to make the necessary changes, and some may be forced to shutter anyway if evaluations find that they would have no way of withstanding a temblor. Such was the case with Community Hospital in Long Beach, which announced earlier this month that it will cease operations on Dec. 11 due to its location on top of an earthquake fault that was found to be more active than previously thought. “Hospitals have found a variety of ways to grapple with this, and extenders and subsequent laws can help them along the way so they can find their own unique way of financing,” Bayer said. “But not all will be able to do it.” For some hospitals, such as Providence Tarzana, it makes more fiscal sense to construct new facilities than it does to upgrade existing ones to meet seismic codes. New construction allows them to leverage the mandate as an opportunity to modernize their amenities to suit the industry’s evolution. “This project addresses some seismic issues (on remaining buildings), but it’s mostly new development,” Surowitz said. Without state monies for the seismic upgrades – the bill is the largest unfunded legislative mandate in California history – hospitals are going through multiple channels to finance the effort. Like Henry Mayo, Providence Tarzana is also leaning on a major fundraising campaign to pay for its new facilities. While the bulk of the $514 million expense is being covered by parent company Providence St. Joseph, the hospital is also seeking $151million in public donations to cover the cost. To that end, it recently brought on institutional fundraiser Ann Braun to spearhead the efforts. “Ann is high energy and enthusiastic, with a mix of talent and experience,” Surowitz said. “That mix makes for wonderful things ahead for us.”

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