Health care|January 6, 2013 7:00 AM

Colorado hospitals on a $3.4 billion construction boom

Cash pours into new facilities in time of change, recession

The Children’s Hospital of Colorado in Aurora is one of many putting an emphasis on design, color and light in their new construction, saying it helps the healing process. Photo courtesy Children’s Hospital of Colorado

The Children’s Hospital of Colorado in Aurora is one of many putting an emphasis on design, color and light in their new construction, saying it helps the healing process. Photo courtesy Children’s Hospital of Colorado

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Reported by Ann Imse
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Colorado hospitals are on a $3.4 billion building boom.

That’s the total value of some 50 hospital construction projects occurring all over the state, a Colorado Public News examination has found.

This expansion is occurring at a time of great change in the industry, with some factors driving demand up, while others drive it down. The high cost of health care was cited as the second most important issue facing the country in polls during the fall election.

Colorado Public News found five new hospitals underway or opened within the past three years, from Denver to Rangely in northwestern Colorado.

Eleven major additions have been undertaken in Aspen, Boulder, Grand Junction and Pueblo, as well as Denver and its suburbs. They range from new towers full of inpatient beds, to stand-alone emergency rooms, surgery centers and clinics.

Some of the new construction begs the question of just what constitutes a hospital anymore. The $100 million branch Children’s Hospital being built in a southern Denver suburb has surgery, imaging, diagnostics, everything expected in a hospital – but just 12 beds designed to keep people overnight or for longer periods of time. By contrast, the main Children’s has just expanded to 414 inpatientbeds.

“We have many, many more patients” being treated in less than a day, explained Jerrod Milton, vice president of operations for Children’s, on a recent cold, windy day at the construction site for the new hospital. In fact, Children’s has seen the number of such outpatients grow by 70 percent in the five years. “This is our goal – it’s to try to keep people out of the hospital,” Milton said.

Increased outpatient care is reducing the need for hospital beds, but other factors complicate the picture. The federal health care law is expected to insure half a million more Coloradans beginning in 2014, raising demand for hospital procedures. At the same time, the state expects a 54 percent rise in the current decade in the number of Coloradans 65 and over, and they will need more care as they age.

CEOs must figure out how all these trends will affect their expensive investments in buildings.

“The future of healthcare is unknown for everybody,” said Bain Farris, CEO of Saint Joseph in central Denver. “But none of us believes there will be more money.”

Nevertheless, Farris is rolling the dice right now on the state’s most expensive current hospital project, a $623 million new hospital. That’s because he needs a more energy-efficient building as cost pressures mount. The latest equipment – robotic surgery, giant imaging scanners and the like – demands more room, more power, and more cooling. He also needs a hospital designed for inpatients who are more ill than in the past, because the healthier ones go home more quickly.

So how can Colorado patients afford all this? Hospital administrators insist that costs will drop as they reduce the time patients stay.

“Theoretically, there should be less patient demand, but we don’t know when that is going to hit us,” said Bruce Schroffel, CEO of University of Colorado Health. Its University Hospital in Aurora is building the largest inpatient expansion in the state.

Donna Lynne, CEO of Kaiser Permanente, doesn’t envy the hospitals’ positions. “Building today for hospitals is a risky business,” she said. “Everything is being done outpatient.” Her group’s patients don’t even want to go to the doctor’s office, much less a hospital, she said. “People want to take a picture of the mole on their arm, send an email to the doctor and get a message back” letting them know what to do next.

Hospitals also face the likelihood of a major change in the way they are paid, says Colorado Business Group on Health, which promotes lower costs and higher quality. One experiment in Colorado would give certain hospitals a pre-set payment for treatments, leaving any extra cost for avoidable complications on the hospital. A number of the construction projects are switching fromtwo-bed rooms to private rooms, in part to reduce hospital-borne infections.

 

The wave of hospital construction also is being spurred by low costs. “The economy has dragged down the cost of capital,” Milton said. Those low interest rates are joined by low building costs, as construction companies desperate to remain in business through the recession have cut their prices to snag the hospital work.

Hospitals across the state also are building to cope with change. Aspen Valley Hospital is spending $78 million to triple its size, without changing its total 25 inpatient beds. Given its high-cost location, the hospital is even building 18 apartments for employees.

Many of the new facilities are gorgeous, with fireplaces and atriums replacing cramped lobbies. Children’s Hospital’s Milton said there is quite a bit of research showing the “colors and light and arts and all of that complement the healing process, and help get people out of the hospital quicker.”

Major Colorado hospital projects

University Hospital in Aurora is building the most expensive addition at $400 million, as it adds 276 beds to a facility only eight years old. CEO Bruce Schroffel cites a deliberate decision to go $700 million further into debt. This money was invested in new facilities and to recruit top specialists from around the world. It paid off, in booming business, and also a ranking as the top-quality academic hospital in the nation. That ranking counted effectiveness of treatment, mortality and patient safety, among other measures.

“It’s a different perception of who we are than we were 10 years ago,” said Schroffel.

UCH is now taking that brand wider by affiliating with Poudre Valley Health System in Fort Collins, and by taking over Memorial Hospital in Colorado Springs in October. Schroffel said he expects to see some modernization at Memorial in the next five years, but there is no plan as yet. Poudre Valley just completed an E.R. and surgery center in Greeley and is working on a new cancer center in Fort Collins.

Children’s Hospital of Colorado also is seeing growth due to its reputation as one of the nation’s top pediatric hospitals, drawing patients from well beyond the state.

It is adding beds, both at its five-year-old main facility in Aurora and in branches along the Front Range. As part of the UCH takeover of Memorial in Colorado Springs, Children’s took over Memorial’s 100-bed pediatric unit in October.

Milton says “it’s certainly possible” that Children’s could expand further in Colorado and even beyond the state’s borders. “If there is a need and we can do it, we’ll certainly consider it.”

St. Anthony saw a hole in coverage in the Denver suburbs, moving its trauma care hospital to the west side of the city, and building one-third of the beds as intensive care. Its parent company, Centura, is developing a new hospital in Castle Rock, and another in Westminster along Interstate 25 at 144th Street. It is also adding physician practices, occupational health, and hospice programs to provide a full spectrum of health care, not just hospital care.

SCL Health System has purchased a plot of land once slated for another hospital further north in Frederick. SCL says it hasn’t decided what type of medical facility to build there yet.

St. Mary’s Hospital in Grand Junction is in the midst of a $267 million renovation, including the addition of a 12-story tower.

Parkview Medical Center in Pueblo added operating rooms, 84 beds and switched from 2-bed to private rooms in a $31 million expansion. Demand in the southeast corner of the state is rising, as the population ages and more people are becoming diabetic, said CEO Mike Baxter. The hospital also brought in more specialists, so patients with more difficult problems could receive care closer to home instead of driving to Denver, he said. “If we’re not set up to compete, we’ll fall behind,” he said.

Boulder Community Hospital is in the midst of a $110 million expansion.

Rangely District Hospital is replacing its building at a cost of $35.2 million.

Valley View Hospital in Glenwood Springs is building a $29 million addition.

Spanish Peaks Regional Health Center in Walsenburg is expanding its emergency department and adding a decontamination room due to the occasional injury due to chemical spills on Interstate 25 and at oil and gas sites, said CEO Todd Oberheu. Now, decontamination occurs in a blow-up room outdoors. “We would put somebody into hypothermia if we had to do that today,” he said.

» Colorado Public News found nearly $3.5 billion in hospital construction projects in Colorado, either underway or completed in the past three years. Data research by Rabah Kamal and Ann Imse.
Licensee/Project
Location
Type
Completion Date
Cost
Description
Exempla Good Samaritan Medical Center/Comprehensive Cancer CenterLafayette, COAdditionFall 2013$17 millionNew Comprehensive Center for radiation and medical oncology services. 87,552 sq. ft.
Exempla Saint Joseph HospitalDenver, CORenovationMarch 2013$3.1 millionPET/CT renovation, 3552 sq. ft.
Exempla Saint Joseph HospitalDenver, COReplacement hospitalLate 2014$623 million 7 stories, 830,000 sq ft, 348 private patient rooms
Exempla Lutheran Medical CenterWheat Ridge, CORenovation2013$2.7 millionNew geriatric psychiatry unit. 20 bed locked unit on 4th level; and facility infrastructure.
Exempla Lutheran Medical CenterWheat Ridge, COAddition2011$70 millionNorth tower, 300,000 sq.ft. including operating rooms, maternity and neo-natal care.
Exempla Lutheran Medical CenterWheat Ridge, COBuildout2012$2.1 millionOutpatient cancer center buildout
ExemplaFrederick, COTBDTBDTBDExempla has purchased a 49-acre site at I-25 and Co 52. but not announced plans .
Denver Health/Montbello Family Health CenterDenver, CONew clinic2011$7.5 millionNew 18,145 sq. ft. clinic
Denver Health/Lowry Family Practice CenterDenver, CORenovationFall 2012$10.27 millionComplete remodel of existing clinic
Denver Health/Westside Family Health CenterDenver, CORenovationTBD$40 millionComplete remodel of existing clinic
Denver Health Medical CenterDenver, CORenovationNA$33 millionFour-story addition called Pavilion M with 16 adolescent psychiatric beds; kidney dialysis; outpatient surgery; and financial assistance office; Upgrade and buildout of pre-op, post-anesthesia, and Surgical Intensive Care.
HealthONE/Presbyterian/St. LukeÕs Medical Center (HealthOne) and Rocky Mountain Hospital for ChildrenDenver, CONew/additionSummer 2010$113 millionAddition of 100,000 sq. ft. Rocky Mountain Hospital for Children; and 120,000 sq. ft. medical office building.
HealthONE/North Suburban Medical Center, Denver, CODenver, CONew ERSpring 2012$11.2 million10,000 sq. ft. free-standing emergency department.
HealthONE/Presbyterian/St. LukeÕs Medical CenterDenver, COAdditionFall 2012$38 millionAddition of 55,000 sq.ft. to Neonatal and Pediatric ICUs, adding 20 beds in pediatric.
HealthONE/Rose Medical CenterDenver, CORenovationJune 2013NA First floor main lobby renovation; Essential electrical system upgrade; first floor radiology support area; first floor admitting; ompletion of 2nd floor surgery remodel; remodel of patient wings on 3rd, 4th, & 5th floors; first floor radiology remodel; first floor radiology support area, offices, transport and nurses area
HealthONE/Sky Ridge Medical CenterLone Tree, COAdditionSummer 2014$107 millionAddition of 90 beds, women's center, operating rooms, women's center and parking structure.
University HospitalAurora, COAdditionApril 2013$400 million12-story tower with 276 inpatient beds, new emergency department, operating rooms, diagnostic and treatment faciliities, employee parking garage.
University HospitalAurora, CoAdditionMay 2012$20 millionAnschutz Cancer Pavilion expansion
University HospitalAurora, COAdditionDecember 2011New patient parking garage
Unversity HospitalAurora, CoAdditionTBD$2 millionNew Rocky Mountain Lions Eye Institute
University HospitalAurora, CONew clinic/surgery centerDecember 2012$16 millionNew clinic and outpatient surgery center
UCH/Poudre ValleyFort CollinsNew cancer cancerFall 2013$17.5 millionNew cancer cancer
UCH/Poudre ValleyGreeley, COER/surgery centerNov-12$14.5 millionNew ER and surgery center
Children's Hospital Colorado/Broomfield Arista Therapy CenterBroomfield, COReplacement therapy centerJuly 2012$1.2 million Replacement therapy center of 20,000 sq. ft. includes expanded speech-language, learning and physical therapy services, audiology services and a sensory park.
Children's Hospital ColoradoAurora, COAdditionSeptember 2012$250 millionEast Tower addition, 10-story350,000 sq. ft. with maternal and fetal health institute, 108 beds
Children's Hospital ColoradoAurora, COAddition2013$4.2 millionFitzsimmons Pavilion for primary care clinics
Children's Hospital ColoradoAurora, CORenovation2013$15 millionRadiology renovation
Children's Hospital Colorado Colorado SpringsColorado Springs, CONew specialty care centerJune 2012$11 millionSpeciality care center with 50,000 sq. ft.
Children's Hospital Colorado/South ÊCampusHighlands Ranch, CONew hospital2013$100 millionNew branch hospital, 175,000 sq. ft. , with only 12 inpatient beds, expandable to 48 beds; includes surgery, imaging, urgent care, outpatient specialty, and diagnostic services.
Children's Hospital Colorado at Saint JosephDenver, COAddition2010NAAddition of 6,865 sq. ft. with specialty clinics
Centura/Castle Rock Adventist Health CampusCastle Rock, CONew hospitalSummer 2013$128 millionNew 50-bed hospital added to free-standing emergency department
Centura/St. Anthony North Medical PavilionWestminster, CONew ERFall 2012$26 millionNew 48,000 sq. ft. free-standing emergency room, with imaging, lab and physicians' offices
Centura/St. Anthony North Medical PavilionWestminster, CONew hospital2015$177 millionNew hospital to join free-standing ER; 350,000 sq. ft., 92 inpatient beds.
Centura/Parker Adventist Hospital expansionParker, COAddition2011$76 million130,000 additional sq. ft. including operating rooms, 30 inpatient beds, outpatient area, lab.
Centura/St. Anthony HospitalLakewood, COReplacement hospitalJune 2011$435 millionNew Level 1 trauma care hospital, 8 floors, 560,000 sq. ft. , 222 inpatient beds, 36 emergency department rooms,
14 surgical suites, two medical office buildings.
Aspen Valley HospitalAspen, COAdditionFirst phase Fall 2012; Second phase 2014$78 millionTriping of the size of the hospital with no change in 25 bed inpatient capacity. Finished to date: physical therapy, cardiopulmonary rehab, diabetes education, patient care unit, intensive care unit, oncology/infusion therapy, orthopedics and cafeteria. Still to come: parking garage and 18 employee apartments and renovation.
Boulder Community HospitalBoulder, COAddition2014$110 millionAddition of 100,000 sq. ft. and 135 rooms at Foothills, emphasis on acute care. Outpatient to be later concentrated at Broadway location
Craig HospitalEnglewood, COAddition, renovationTBD$75 millionFour-story expansion space, 25 new patient rooms, renovation
East Morgan County Hospital DistrictBrush, CORenovationNANARemodeling essential electrical system
Estes Park Medical CenterEstes Park, COAdditionNANA3,110 sq. ft. addition for a new CT scan room and equipment
Heart of the RockiesSalida, CONew clinicMay 2012$5.5 million18,367 sq. ft. clinic
Mckee Medical CenterLoveland, COAdditionFall 2012$9 millionExpansion of cancer center
Parkview Medical Center IncPueblo, COAddition2010$31 millionGround and 1st floor renovation with 84 new rooms and 45 more inpatient beds; adds two more operating rooms and support services
Rangely District HospitalRangely, COReplacement hospitalSummer 2012$35.2 millionNew hospital of 68,672 sq. ft. with 18 beds, surgery, labs, radiology, clinic space, ambulance garage.
Spanish Peaks Regional Health CenterWalsenburg, COAdditionApril 2013$2.5 millionNew emergency department, 7,278 sq. ft., with decontamination room
St Mary's Hospital and Medical CenterGrand Junction, COAddition2010$267 millionNew 12-story tower and renovation, including emergency, intensive care, womenÕs healthcare and childbirth, operating rooms, education center, lobby, cafeteria, coffee shop, gift shop, reflection room, and registration office.
Valley View HospitalGlenwood Springs, COAddition2012$29 millionFive-story addition, including cancer center, emergency, radiology and family birthplace departments.
Yuma District HospitalYuma, COAdditionFall 2012NAAmbulance garage and access
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