Hospitals Deal with Growth: Las Vegas expands its medical centers at a time when health providers are merging and consolidating
(Reprinted from the Las Vegas Review Journal, September 7, 1999)
By Hubble Smith
Occupancy rates for some Las Vegas Valley hospitals are higher than those at Strip hotels, and with 6,000 people a month moving here, hospitals could be rolling out cots in the new millennium. “Two years ago, when they built two new hospitals (Summerlin Hospital Medical Center and MountainView Hospital), everybody was worried there were too many hospitals,” said Bill Hale, chief executive officer of University Medical Center.
Today, while most cities in the United States are experiencing hospital mergers and closures, Las Vegas is building new facilities and expanding existing ones, with nearly one-third of a billion dollars in projects under construction. UMC, MountainView and Desert Springs hospitals are undergoing major expansions, St. Rose Dominican is building its 139-bed Siena Campus in Henderson and Sunrise plans to begin reconstruction this fall.
The $77 million expansion project at University Medical Center. The two-story, 52,000-square-foot addition will house a new emergency room, intensive care unit and critical care unit. Photo by Steve Andrascik
Las Vegas’ dynamic growth and a trend of hospitals looking to outside sources for capital improvements have spurred this unique segment of construction not seen in many other cities around the nation, said Bob Rosenthal, president of San Diego-based Pacific Medical Buildings. “Hospitals today are pressed for capital to keep up with new technology and constant remodeling,” Rosenthal said during a visit to the $16 million Del E. Webb Medical Plaza his company is building adjoining St. Rose Dominican-Siena Campus. “Hospitals are in the process of converting themselves from traditional hospitals to an emphasis on out-patient care with beds. That takes capital. Hospitals are looking to outside investors, and they’re increasingly turning to investors like us.”
The medical plaza, which is owned by investors in Pacific Medical — many of whom are doctors in the building, attaches on all four floors to the Siena Campus hospital under construction on the southwest corner of Lake Mead Drive and Eastern Avenue. “Heart surgeons can walk directly from their offices on the second floor into cardiac care units,” Rosenthal said. “The same with maternity on the third floor. It’s convenient for them to get to their own specialties.” The floor-to-floor heights are a little higher than normal medical buildings and the construction code standards are as stringent as those for hospitals. The medical plaza could later be converted into an outpatient facility, he said.
The $185 million Siena Campus, which includes the cost of the medical plaza, will feature a community medical center, ambulatory care center, physician offices and ancillary health care services. Construction is expected to be completed in March. In the northwest valley, MountainView is about half finished with a $34 million expansion that will add 72 beds to the existing count of 120, Chief Executive Officer Mark Howard said. MountainView is owned by Nashville, Tenn.-based Columbia/HCA Healthcare Corp. The new north wing will include eight operating rooms — five coming on line when the addition opens in May and three shelved for future growth — two Caesarean section rooms, a heart catheter laboratory, CAT scanner and ancillary support services. MountainView’s master plan calls for further expansion in 2002 to keep pace with the rapid growth in the northwest. MountainView has the highest occupancy (92.9 percent) of any Nevada hospital and delivers about 170 babies a month, Howard said.
UMC, a nonprofit 540-bed hospital run by Clark County, is working on a $77 million renovation that will bring down the east wing and put up a new northeast wing. The two-story, 52,000-square-foot structure, located between the trauma center and main hospital, will house the emergency department on the first floor and intensive care and critical care units on the second floor. The new emergency room will expand to 52 examination rooms from the current 45. Construction of an ambulatory surgery center and new parking garage should start within a couple of months, according to Hale, the CEO.
“In three years, you won’t recognize the place, there’s going to be so much new construction,” he said. Clark County commissioners, acting as the hospital’s board of trustees, approved a bond issue to cover most of the construction costs. The initial project is expected to be completed in May. The outpatient surgery center is another sign of change in hospital operations, which have seen tighter profit margins, declining reimbursements and increased managed care penetration. “With technology the way it is now, you don’t have to do as much invasive surgery,” Hale said. “There’s more laser surgery where they don’t have to cut you open. In many cases, patients can go back to work the next day.”
At Lake Mead Hospital Medical Center in North Las Vegas, a $6.2 million medical office building is being privately financed by local doctors and the Rendina Co., similar to St. Rose Dominican’s venture with Pacific Medical, Chief Executive Officer Randall Hempling said. It will be 70 percent owned by the doctors. “It shows that physicians are investing in North Las Vegas instead of somebody just making rent money,” Hempling said.
The 45,000-square-foot building will include a radiation oncology center and medical office space for specialists and primary care physicians. At the 241-bed Desert Springs Hospital on East Flamingo Road, a $15 million, five-story tower project will increase floor space by about 100,000 square feet, said Mike Tyrnczyn of the hospital’s marketing department. A new lobby entrance on the ground floor will provide direct access to the hospital from Bruce Street. The south side of the tower has an ambulatory patient entrance to the emergency room. The second floor also connects directly with the existing facility for access to the intensive care unit, surgery center and patient rooms. The third, fourth and fifth floors will house patients, each floor having 40 beds. Thirty-two rooms will be private and four semiprivate. “This new tower will provide us with the facilities to continue delivering quality patient care well into the next millennium,” said Desert Springs CEO John Hummer. Desert Springs, acquired by Universal Health Services in February 1998, is one of three local hospitals in The Valley Health System. The others are Valley Hospital Medical Center and Summerlin Hospital Medical Center.
Rosenthal of Pacific Medical Buildings said the demographics for Henderson are driving the St. Rose Dominican-Siena Campus project, noting that Del Webb’s huge Anthem residential community is just down Eastern Avenue. “All the doctors want to be here because of the demographics,” he said. “They’re opening branch offices here to cover this market.” About 70 physicians are expected to occupy the 93,000-square-foot Del Webb Medical Plaza. Office space will cost $2.20 a square foot, and it’s already 86 percent leased, according to Rosenthal. “People look for hospitals in their neighborhood when they go to buy a house,” said Sean Patrick, spokesman for Del Webb’s Anthem development, which anticipates a population of about 30,000. “We’re as happy to have them on Eastern (Avenue) as they are happy to have us up here.” Vicky VanMeetren, senior vice president and administrator of the Siena Campus, said St. Rose Dominican, with its Catholic influence, is usually conservative in its plans.
Bob Rosenthal, left, president of Pacific Medical Buildings, discusses construction progress on the Del E. Webb Medical Plaza that will connect to St. Rose Dominican-Siena Campus in Henderson with Vicky VanMeetren, the hospital’s administrator. The plaza is being privately developed and will be owned by investors, many of whom are doctors in the building. Photo by Gary Thompson
However, with Henderson now the second-largest city in Nevada, St. Rose has projected a second phase of the Siena Campus within five years that would add another 161 beds, for a total of 300. “The fourth floor is an empty shell so that when we go to expand, we don’t have to put the patients through the inconvenience of construction,” VanMeetren said. She also noted that ancillary departments are actually oversized to accommodate more outpatient care. Because of the increasing need for hospitals to emphasize outpatient services, most medical office buildings being developed today house extensive outpatient diagnostic and treatment services as well as physicians’ offices, Rosenthal explained.
The 2-year-old Veterans Administration’s ambulatory care center at Vegas Drive and Martin Luther King Boulevard is a good example. It has a full laboratory, radiology department and doctor’s offices on the premises, said VA public affairs spokeswoman Lisa Howard. The VA has opened outpatient clinics in Henderson and the Mobile Assistance and Homeless Shelter, and is selecting final bids for a Pahrump clinic from providers who are already established there, she said.
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