- 401 Frederica Street, B-203
- Owensboro, Kentucky 42301
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Should OMHS build a new hospital?
by Rodney Berry & Fran Ellers
Background
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A strategic decision. In an Aug. 16 presentation to the Owensboro Rotary Club, Jeff Barber, president and chief executive officer of Owensboro Medical Health System (OMHS), acknowledged that the hospital faces a critical strategic decision: Do we build a new facility or expand and renovate the existing one?
Necessary changes for inpatients. According to Barber, OMHS needs to add 140 beds, 10 operating rooms and 19 recovery rooms. Admissions of inpatients (who spend the night in the hospital) have been declining for the last few years as more medical procedures are done on an outpatient basis. However inpatient admissions are projected to increase over the next decade, partly because of the aging population, Barber said in an interview. The hospital also needs to modernize its inpatient facilities, which do not allow the safest, most efficient care, he said.
An aging population. A demographic analysis for OMHS shows its inpatient load will grow by about 13 percent over the next several years because the local population is aging and will need more health care (10 percent of the increase). Also, in outlying counties such as Spencer, the population is projected to grow (3.2 percent of the increase), Barber said.
The inpatient load is expected to increase by another 8 percent when OMHS recruits specialists who provide services that patients presently get at hospitals in Louisville, Evansville or Nashville.
Outpatient growth. The hospital’s outpatient centers, such as the emergency room, are newer and do not need to be renovated or moved. However because the growth of outpatient care is outpacing inpatient care, Barber said that the hospital will eventually need to add a second convenient care center and another clinic or clinic site to serve the uninsured, as the McAuley Clinic does now.
Hospital construction boom. Many hospitals around the U.S. are constructing new buildings and expanding capacity. Analysts say the construction may be meeting legitimate health needs but could also raise costs for consumers by increasing utilization, among other things.
Increasing utilization. Part of the hospital’s plan is to add doctors in the community. OMHS plans to recruit 85 physicians, about half of whom would replace retiring doctors. Of the remaining 40, about 20 would be primary care physicians, Barber said.
That would help expand access to primary care, including preventive care, throughout the area. At the same time, all those extra doctors would be detecting more problems and admitting more patients to the hospital, thus increasing utilization of health care in the community.
Cutting costs. Barber said that modernizing the hospital will help it operate more efficiently and reduce some of its operating costs over the long haul. Currently operating and intensive care rooms are too small and the size and layout of patient rooms vary by floor. If the rooms were standard, nurses and other employees would be able to do their jobs more efficiently, Barber said.
To expand and renovate. If the decision is made to expand the current facility, Barber proposes 545,000 additional square feet and renovation of 230,000 square feet. This would cost an estimated $500 million, require five to seven years construction and cause significant disruption to hospital operations. The current 57-acre campus is difficult to expand since the hospital is surrounded by busy streets and a railroad track.
To build new. Barber said that a new one-million square foot facility would cost the same amount, take five years or less to plan, design and build. He recommends a campus of at least 75 acres to allow for long-term growth. The current facility includes areas that were built recently, such as the Mitchell Cancer Center; other areas are nearly 70 years old.
Improvements have been made. OMHS buildings have been renovated many times through the years. Double patient rooms have been converted to singles, emergency and critical care facilities have been expanded and improved, medical offices have been added, as well as many other enhancements. Despite these improvements, some sections lack the capacity and convenience offered at other modern hospitals.
OMHS dominates the market. OMHS is the hospital of choice for its primary market. Ninety-four percent of hospital patients in 11 counties use OMHS over other options. At the same time, patients have to seek some services elsewhere because Owensboro does not have the appropriate specialists.
Owensboro’s largest employer. Barber predicted the expansion would create 800 jobs on top of its current 2,690 – a 30 percent increase (500 at the hospital and 300 connected with offices of 40 physicians the hospital hopes to recruit).
Complementary initiatives. OMHS is expanding into cancer research through a partnership with the Brown Cancer Center of Louisville at the new facility on the hospital campus. At the Mid-America Airpark, OMHS acquired Kentucky Bioprocessing LLC (formerly Large Scale Biology) to expand the firm’s research and product development of pharmaceuticals through the use of plant-based biotechnology, including tobacco.
Sites under consideration. OMHS has apparently focused on sites in the fringe areas of the city that are visible and accessible off the Wendell Ford Expressway (U. S. 60 By-Pass) and/or the planned East-County Corridor.
Use of Parrish campus. If a new hospital is built, Barber acknowledges that facilities such as the cancer center, outpatient services, emergency room and support services would remain at the current Parrish Avenue campus.
Timeline. The OMHS board expects to make a decision by mid-October.
Public input. The OMHS board of directors is under no obligation to solicit public input on this decision. The Public Life Foundation and other community groups may schedule events to examine these options in an open forum.