St. Luke’s: Downtown Boise expansion plans target efficiency

May 31--St. Luke's Health System says its plan to expand its flagship hospital reflects a long-term effort to lower hospitalization rates in the Treasure Valley, while preparing the system to handle more patients as the area's population grows and its demographics change between now and 2030.

St. Luke's unveiled a long-term sketch last month of its plans for Boise. The plan -- somewhat tentative and spread out over the course of decades -- would add about 680,000 square feet to the Downtown campus.

The Boise-based health system plans to file a master plan with the city this month, followed by lengthy commenting periods and public hearings.

St. Luke's has grown by thousands of employees and added hospitals and doctors to its roster in recent years. It has vowed to bend the rising curve of health care spending downward. Growth will help make that possible, its executives have said -- one of the arguments St. Luke's made in the antitrust case it lost before a federal judge last fall.

St. Luke's said its latest plan, in the works for years, illustrates a shift in how hospitals are providing medical care.

"This is a more conservative (approach) than we would have taken 20 years ago," said Ken Dey, spokesman for St. Luke's.

St. Luke's based its blueprint on the assumption that 206,191 more people will live in the Boise-Meridian area by 2025. A larger share than now will be Medicare age, and a smaller share will be women of childbearing age.

"We are a hospital in an urban setting that is continuing to evolve," said Chris Roth, CEO of St. Luke's operations in the Treasure Valley. "We don't know what the future is going to look like entirely, but we have got to have a blueprint."

MOVING PARTS

Roth described the plan as happening in three broad stages.

--Get the infrastructure in place for growth. This includes building a new central plant, which is the behind-the-scenes engine for the hospital. The existing plant is almost 50 years old. The hospital also needs more parking, and St. Luke's is hoping to mesh its plans with the city's vision for the future of Downtown transportation.

--Focus on children's services. This includes building a new Children's Pavilion across Avenue B from the hospital's eastern wing. The pavilion will take some spillover from an overburdened Children's Hospital and make it easier for doctors to work together. Today, pediatric specialists are "disconnected," Roth said.

The pavilion also sets up the hospital to add about 50 pediatric doctors and offer new services: pediatric cancer care, pediatric anesthesiology, a school, a pediatric emergency room and new pediatric medical imaging. The hospital also plans to have all-hours neonatal care.

The Family Medicine Residency of Idaho'sDowntown Boise clinic is expected to move into the pavilion, since the health system's plans include construction that displaces the FMRI clinic on Fort Street.

--Improve and expand what's already there. This includes building a new wing to the north of the hospital and remodeling part of the existing hospital. As St. Luke's builds a new wing and the Children's Pavilion, it will leave the existing hospital with some floors unspoken for. Executives said they aren't certain what they'll do with that space.

The brick-and-mortar hospital will be improved -- with spacious and well-lit rooms, equipped for new technology, arranged in a way that keeps patients from having to travel between floors.

GETTING A HEAD START

St. Luke's officials say they're on a quest to keep people out of the hospital. Why? It's expensive and relatively risky to be there. And under the Affordable Care Act, hospitals now stand to lose some of their Medicare funds if they have high rates of hospitalized patients who boomerang back or get sick during their hospital stay.

However, Idaho already has one of the five lowest hospitalization rates in the country, so St. Luke's doesn't think there is "much room for further reduction" in that area, according to a presentation by St. Luke's officials.

They predict that as the Treasure Valley grows, more residents will need higher-cost inpatient care, such as follow-up care for heart surgery. St. Luke's plans to add 60 beds to the hospital's existing 399.

But St. Luke's doesn't think more patients will need 24/7 nursing care, because they will be able to see doctors in clinics or receive care at home.

The rest of the plan consists of parking, outpatient offices, more room for testing and diagnosing patients, and upgrades.

WILL PATIENTS FOOT THE BILL?

Like other nonprofit hospitals, St. Luke's is funded mostly by Medicare, Medicaid, private health insurance and patients' out-of-pocket spending. That's how it pays off debt for capital projects, such as new construction. For this project, St. Luke's officials say charitable donations from the community will play a large role in covering costs.

Todd Nelson, director of health care finance policy and operational initiatives for the Healthcare Financial Management Association, said patients shouldn't assume that new construction will mean higher prices for medical care.

"The general thought process is you don't raise prices to cover the additional building cost," he said. "That's a strategy you definitely don't want to do."

Instead, he said, smart hospitals are thinking about how to build in efficiencies, as <org>Medicare and other health insurers use payments as an incentive to make hospitals speedier, safer and less bloated.

A former Idaho hospital executive said hospitals also must anticipate developments in technology and reimbursement models.

"Health care facility planning today requires a very sophisticated crystal ball," said William Bodnar, owner of The Leader's Board in Boise, which works with more than 100 hospitals and health systems across the U.S.

Bodnar said St. Luke's has "historically done a very good job of projecting facility demands," based on how busy its Boise and Meridian hospitals are.

He said the same is true at Saint Alphonsus, St. Luke's smaller rival. Saint Al's is owned by the Trinity Health organization and was one of the plaintiffs in the antitrust suit over St. Luke's acquisition of Nampa'sSaltzer Medical Group.

Saint Alphonsus declined to comment for this story.

Audrey Dutton: 377-6448, Twitter: @IDS_Audrey

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