Friday, April 9, 2010
Hospital building boom nears end
Kaiser’s new hospital last of major projects
Portland Business Journal - by Courtney Sherwood Business Journal staff writer
Steel workers will place the final beam on the skeleton of the Portland area’s largest construction project on April 12.
Topping off Kaiser Permanente’s $359 million Hillsboro hospital marks a key milestone for Kaiser, which has invited Washington County leaders to watch as the 36-foot beam is hoisted to the fourth floor roof of the patient tower. The Westside Medical Center is scheduled to open in 2013.
It’s likely the last big hospital project the metro area will see for years. Oregon hospitals, which have spent more than $1.5 billion on construction and expansion over the past half decade, are scaling back on ambitious projects to instead build networks of much smaller clinics.
That includes Kaiser.
In addition to building a number of hospitals in California in recent years, Kaiser spent $300 million on recent upgrades to its Sunnyside Medical Center.
But medical office buildings costing $10 million to $60 million will dominate its construction spending over the next 10 years, said Willy Paul, director for design and construction in Kaiser’s Northwest region.
Kaiser’s also eyeing Southwest Washington, Oregon City and sites near its new Hillsboro hospital as it considers where to build its next clinic.
Other hospital groups are making similar shifts in their capital plans.
“Most of our construction work right now, from a patient care perspective, is in primary care clinics,” said Gary Walker, spokesman for Providence Health & Services.
Providence Portland Medical Center opened its $204 million, 11-story cancer center in 2008. It has several smaller capital projects underway at its metro area hospitals.
Now it’s looking to build primary care clinics in Fishers Landing, near Camas, Wash., and in the Bethany area of Beaverton.
Adventist Health, which owns a hospital and 20 clinics in Southeast Portland, likewise plans to open more clinics within its footprint.
“We’re finding that there are still communities that don’t have good access to primary care,” said spokeswoman Judy Leach. “Our capital plans are driven by community need.”
The focus on smaller medical offices marks a shift for the region’s major health care organizations, which had been on a building spree.
Big projects have included construction of the $300 million Legacy Salmon Creek hospital in Vancouver, Wash., the $204 million Providence Portland Cancer Center, and Adventist Medical Center’s just-completed $105 million 180,000-square-foot Pavilion expansion. Legacy Health System expects to open its $250 million Children’s Hospital at Emanuel in 2011.
The shift to building smaller clinics comes just as national health reform has boosted the emphasis on primary care. The Patient Protection and Affordable Care Act rewards medical systems that can tackle complex health problems while keeping patients out of the hospital.
Mark Richardson, dean of Oregon Health & Science University’s School of Medicine, expects that reform will encourage less hospital construction and more hospital mergers — such as the pending merger of Vancouver-based Southwest Washington Health System with PeaceHealth of Bellevue, Wash.
Large systems that offer a wide array of physician services and medical facilities will fare best under government programs that reward coordinated care, Richardson said.
A recent hike in Oregon hospital taxes may also affect how medical groups choose to grow. In 2009, the state Legislature raised the tax on hospital revenue from 0.63 percent to 3 percent, with hospital support, to increase the number of poor adults who could enroll in the Oregon Health Plan. Non-hospital clinics might avoid the tax.
Hospital officials say the shift from big buildings to smaller clinics was not spurred by legislation or economic forces.
“It reflects the natural cycle of growth and expansion,” said Kaiser’s Paul.
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