Even in Today's Economy, Creative Solutions Get Hospital Projects Built

J. Todd Robinson, AIA, and Alan P. Richman, for HealthLeaders Media , April 30, 2010

While TMH knew it was essential they replace their almost 60-year old facility, George Rohrich, the hospital's CEO since 2006, says the tide turned in favor of achieving their goal when a tax ballot was presented to voters and passed in 2007, which provides $1.5 million annual support for TMH. This level of municipal support from a small community of roughly 10,000 was also bolstered by the TMH foundation's successful capital campaign, which raised an additional $1.2 million. "These two actions helped make the project feasible and demonstrated community support for HUD funding", says Rohrich. The Colorado hospital obtained a 25-year construction/permanent $40.3 million FHA 242 low-cost loan.

"Once the loan was in place, with everyone working toward a common goal, we were able to complete our hospital eight weeks ahead of schedule and $2 million below budget," he says. "We were able to put this saved money back into the project to include enhancements for patient care."

Located on the western slope of the Rocky Mountains, the stone and brick hospital is sited on a vantage point overlooking the town. The new hospital offers patient privacy, security and technological advancements, all of which were not available in its predecessor. The mountainous setting inspired the lodge-like design that includes a two-story lobby with a gas fireplace, natural lighting through clerestory windows, wood and stone detailing. Expanded surgical service, enlarged and operationally efficient emergency department and birthing center enable the hospital to better serve its community. It is now positioned to turn around patient out-migration to neighboring healthcare facilities and also benefit the hospital's recruitment efforts.

"Our overall market share, based on our 10 largest service lines, had been decreasing over the last 10 years, stabilizing at 50 percent in 2007," says Rohrich. "Although it's still too early to document a change in utilization, we have no doubt that we will see a progressive increase in market share. And, as for physician recruitment, even during the design stage, the new hospital was a deciding factor for bringing in two new general surgeons, two family medicine physicians and two OB/GYNs."

Acute Care Hospital
Meadows Regional Medical Center in Vidalia, GA, is a case in contrast. Over the past nine years, MRMC began outgrowing its current 66-bed acute-care facility mostly through an increase in outpatient traffic exceeding 400 percent. To evaluate their options to accommodate the increased patient load, the hospital CEO initiated both internal and external debt capacity and master facility analyses. Once their debt capacity was ascertained and a replacement hospital was deemed more viable than an onsite expansion, Meadows knew which direction to go.

"At Meadows, we began with a strong commitment that quality was more important than speed, and that all stakeholders had the right and need to be heard and involved to produce the best result," says Alan Kent, president and CEO. "Our early focus began with the assembly of a strong internal team that represented multiple facets of the organization including the clinical, operational and financial disciplines." Also included were representations from the Board, medical staff, management and non-management levels. Our team was authorized and empowered to make the decisions regarding competitive selection of the project management firm, architectural firm, construction management firm and financing company.

"The key element for success is in the choice of team members," says Kent. "Feedback from our architects, construction manager, subcontractors and users helped us evaluate alternatives quickly and rule out those that created budgetary problems. They also gave us flexibility to examine different approaches to certain problems to achieve a strong plan that all parties could ultimately endorse."

Meadows became the first hospital in Georgia to receive an FHA Section 242 insured loan, totaling $84.76 million, ensuring that the 194,000-square-foot, two-story replacement hospital would become a reality. It is scheduled for completion toward the end of this year.

Operational efficiencies, departmental relationships and flexibility for future expansion were drivers to the design of this facility as well as the creation of an identity and presence for the healthcare provider that will now be visibly sited on a state highway.

Though very different types of hospitals, TMH and MRMC represent successes in their own markets. They obtained financing, completed timelines on or ahead of schedule, and identified cost-effective design solutions that responded to each owner's vision.

J. Todd Robinson, AIA, is principal of architectural firm Earl Swensson Associates Inc., and Alan P. Richman is president and CEO of InnoVative Capital, LLC, a HUD-licensed FHA mortgage bank specializing in financing FHA 242 mortgage insured hospital loans. They may be reached at toddr@esarch.com and arichman@innovativecapital.com, respectively.
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