Hospital Eyes 93M Renovation

July 12, 2002
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GRAND HAVEN — A renovation planned to begin this fall will enable North Ottawa Community Hospital to expand its emergency department and high-demand outpatient medical services that have seen sizable growth in recent years.

The first-floor renovation, to cost $9.3 million, also will help visitors better navigate an inefficient and confusing maze of corridors, as well as generate operating efficiencies, improve coordination among staff and better integrate the adjacent Harbor Dunes Health Center into the hospital.

“Basically, we’re going to become more efficient,” North Ottawa interim President and CEO Mike Payne said.

The hospital will finance the work by using $2.59 million in cash reserves and a 20-year bond issue of $6.76 million.

North Ottawa is seeking approval from the Michigan Department of Community Health to proceed with the renovation. The recent submittal of a certificate of need application to the state comes about a year after completion of the $10 million Harbor Dunes Health Center, which was developed in partnership between North Ottawa and Horizon Medical PLC, a group of primary-care and specialty physicians in the Grand Haven area.

The Alliance for Health, a regional health-care planning organizations in Grand Rapids that reviews CON applications and issues a recommendation to the state for denial or approval, expects to hold a public hearing on the project later this month or in August, President Lody Zwarensteyn said.

Based on a preliminary review, NOCH’s proposal makes a lot of sense, Zwarensteyn said.

“This will add efficiencies,” he said. “It’s a tough market out there and hospitals have to provide services that are needed in an efficient way.”

The complete reconfiguration of North Ottawa’s first floor will provide additional space for the emergency department and growing outpatient services. The emergency department will get a new urgent care clinic that’s designed to better separate non-emergency from emergency cases so those patients are quickly diagnosed and treated without lengthy waits.

NOCH’s Breast Evaluation Center, women’s health clinic and cancer treatment center also will receive far more space to handle growing outpatient volumes.

“The proposed project seeks to ‘right size’ the facility, allowing areas of expected growth the space they require to efficiently service projected volume increases,” NOCH’s CON application states.

The 81-bed, acute-care hospital’s outpatient volumes have grown 4 percent annually since 1999. About 85 percent of the hospital’s patient volume now comes from outpatient surgical, laboratory and radiology services, Payne said. The ratio was about 50-50 just 10 years ago, he said.

The large increase reflects the changes that have occurred in health care in the past decade and the need for hospitals to continue to adapt.

“It’s stretched our facility to the point where we now have to become more outpatient-friendly,” Payne said. “We’ve got to improve the way people get through our system.”

Financially, the additional space for outpatient care is designed to make the services more accessible and attract more market share, hopefully generating even higher volumes and generating cost efficiencies for NOCH, which finished its 2002 fiscal year $173,527 in the red on revenues of $36.9 million.

Cost efficiencies and new patient revenues generated from the renovation will result in a $297,115 net impact to NOCH within the first year, according to the hospital’s CON application.

In oncology services alone, visits to NOCH’s outpatient cancer treatment center are projected to grow to 8,000 annually within three years, a 150 percent increase in volume from just two years ago.

Oncology services have grown by about 10 percent in the last three years. Volume growth is expected to accelerate as oncologists begin offering more clinical services at NOCH, which presently is unable to adequately manage growing cancer patient volumes and new oncology services. The renovation will expand the cancer treatment center from 2,000 square feet to 4,000 square feet.

Outpatient surgery, endoscopy and imaging also will receive more space, part of which comes from the recent relocation of the hospital’s rehabilitation services department next door to the Harbor Dunes Health Center.

The emergency department will grow from 5,500 square feet to 6,200 square feet and include the addition of an urgent care area. NOCH’s emergency department has seen a 2 percent annual increase in visits since 1999, with a 10 percent yearly rise in urgent-care patients whose injuries or illnesses are not serious or non-life threatening.

The urgent-care clinic will operate during the evening and other off-hours, such as weekends and holidays, when primary-care physicians’ offices and NOCH’s existing off-site medical center are not open. The intent is not to compete with physician practices and its own medical center, Payne said.

“Everything’s got to complement each other,” he said.

North Ottawa expects to earn approval for the renovation project this fall and begin the work in early 2003, Payne said. Construction will occur in phases, so as to cause as little disruption as possible, with final completion targeted for late 2004.           

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