Friday, January 9, 2004

Good Sam to expand, renew

Hospital to spend $122M over five years

By Tim Bonfield
The Cincinnati Enquirer

Good Samaritan Hospital - one of Greater Cincinnati's biggest - plans to spend $122 million on expansion and renovation over the next five years.

The project will include an eight-story patient-care tower to be added to the front of an existing tower along Dixmyth Avenue, rebuilding a 400-space parking garage off Clifton Avenue, demolishing several houses along Dixmyth to make more parking lots, and moving several services around inside the existing 12.5-acre complex.

The project is the hospital's biggest construction venture in nearly 20 years. The timing reflects a response to steadily rising demand for hospital services, an effort to catch up to changes in medical technology and a financial turnaround that made it possible to pay for the work.

"This is partly about responding to future demand, but we also have insufficient capacity for the demands we face right now," said John Prout, president and chief executive of TriHealth, a health services group that includes Good Samaritan and Bethesda North hospitals.

"We have surgeons waiting for OR time. We have patients walking long distances to get tests. We sometimes have women in labor waiting in hallways for a bed to open," Prout said. "In the 1980s, people said we were overbedded. Now, we're out of space."

Of about 1 million square feet of building space at Good Samaritan, all but 30,000 square feet is being used, officials said. Aging parts of the complex have driven the average age of Good Samaritan's facility to more than 16 years - about a third higher than the regional average of 12 years and about twice as high as the national average of about eight years.

When the dust settles, the hospital will appear different in several ways:

• Overall bed capacity will grow more than 40 percent, from 404 beds to 575 beds.

• The number of operating rooms will grow from 18 to 22.

• The number of cardiac catheterization labs - where patients get a wide range of diagnostic tests and treatments for heart disease - will grow from three to five.

• A series of renovations and relocations within the older parts of the hospital will expand maternity services (already the biggest in the city), concentrate more heart services on the sixth and 11th floors, and move more imaging services to the fifth floor, closer to a rebuilt outpatient entrance off Clifton Avenue.

• Across Dixmyth, several old houses that TriHealth already owns will be torn down to build more parking lots.

The house demolition and some of the internal moves will be completed this year. Then comes the parking garage reconstruction. Officials hope to break ground in late 2005 on the new tower, which will take about three years to build.

The expansion will require adding staff to a hospital that already employs 3,000, but officials did not specify how many jobs will be created.

All of this will occur without public tax breaks for creating jobs (a perk that rarely applies to non-profit organizations); or subsidies for buildings or parking garages; or city council action to take land through eminent domain powers (both of which could apply to the Good Samaritan project).

The city might be asked to support improvements at two intersections near the hospital, and to expedite an assortment of inspections and permits. But no public money will be involved in the main building project, TriHealth officials said.

Instead, the money will come from a combination of cash from ongoing operations and bonds issued through Good Samaritan's sponsor - Catholic Health Initiatives, a system that includes more than 70 hospitals in several states.

The improved ability to pay for a big project reflects improving fiscal health for area hospitals. The previous biggest project in town - the recently opened $77 million heart center at Christ Hospital - was paid for through a foundation gift because the Health Alliance of Greater Cincinnati lacked the cash flow at the time to take on more debt.

At TriHealth, the bottom line has improved from a nearly $20 million loss in fiscal 2001 (ended June 30) to a $15 million gain in fiscal 2003. Those gains can be used to reinvest in upgraded technology, said Steve Schwalbe, vice president of strategic planning.

"These things are possible when you aren't losing millions of dollars a year," he said.

The turnaround reflects a combination of more favorable contracts with health plans and suppliers, cost-cutting efforts including closing Bethesda Oak hospital, more efficient collections and growing demand for services.

"There has been progress on numerous fronts at once," Schwalbe said.

Good Samaritan's expansion also reflects a response to the needs of a slowly growing, increasingly aging Midwest city.

By 2008, TriHealth officials project a 16 percent increase in the number of people age 45 to 65 who live in the 50 ZIP codes most frequently served by Good Samaritan Hospital. That's much faster than Greater Cincinnati's gradual population growth.

"That's when people start needing health-care services," Prout said.

Good Samaritan's plans have drawn little criticism from the business community, which in the past faulted hospitals for running with excess capacity. In fact, the project has won praise from one health insurance leader.

"We applaud John (Prout) for his vision," said Larry Savage, president and chief executive of Humana Health Plan of Ohio Inc. "Good Samaritan, being an older facility, needs this kind of investment. What TriHealth is doing is the right thing for their organization and the right thing for the community as a whole."


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