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Business Observer Friday, Mar. 27, 2015 7 years ago

Aggressive treatment

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Florida's largest nonprofit public health system is about to get bigger. The launching pad: a forecast of significant population growth.
by: Jean Gruss Contributing Writer

Think roads were crowded this season? Try the emergency rooms.

With patients crowding hallways of its four hospitals, Lee Memorial Health System is embarking on an aggressive expansion that could cost $625 million over the next five years.

The system is already spending $150 million to build the Golisano Children's Hospital in Fort Myers, and it has proposed spending another $175 million on a new health campus that includes emergency services in the fast-growing area of Estero, home to the new Hertz global headquarters.

Now Lee Memorial may spend up to $300 million for a 275-bed expansion of Gulf Coast Medical Center in Fort Myers. The Lee Memorial board recently approved hiring architects and planning consultants for the project. It would expand Gulf Coast Medical Center, on Daniels Parkway near U.S. 41 in Fort Myers, to a total of 624 beds by adding three floors to the existing facility by 2020.

Jim Nathan, president of Lee Memorial Health System, says rising patient volumes and the forecasted influx of baby boomers to the area demand additional supply. Lee Memorial Health System is Florida's largest nonprofit public health system, with 1,423 beds and more than 1 million patients a year. It employs 10,500 people and reported $1.36 billion in revenues for its most recent fiscal year.

“We realize now that we can't wait any longer,” says Nathan. “We have no choice but to try to respond.”

The data backs up Nathan's perspective. For example, for the five months from October to February, inpatient admission at Lee Memorial's hospitals was 8.9% higher than the same five-month period last year. Emergency visits grew 7.1% in the same period and the hospital's walk-in clinics posted wait times of five to eight hours this busy winter season.

While the hospital system plans to sell bonds to finish the construction of the children's hospital, Lee Memorial Chief Financial Officer Ben Spence says the system has enough cash reserves to pay for the Gulf Coast Medical Center expansion. “Based on the way we operate today, we can take this on without adding debt,” he says.

Spence says the rapidly growing patient volumes that led to the expansion needs, combined with expense controls, will give the hospital system the money it needs to fund the growth.
“We've really embraced the concept of lean management,” he says.

Dave Kistel, Lee Memorial's vice president of facilities, says the system doesn't need approval from the state to add beds to the existing hospital. In addition to the 275 beds, Kistel says the hospital also needs to build a parking garage totaling 1,100 spaces. “Not only do you have to add beds, but you also have to add the support services,” he says.


Healthy Business
Medical center expansions are becoming popular necessities on the Gulf Coast.

Lee Memorial Health System, which could spend up to $600 million on various projects, is one of several health care organizations in expansion mode. Doctors Hospital of Sarasota, owned by publicly traded Nashville-based HCA, is undergoing a three-phase $17 million renovation and expansion that includes a doubling of its emergency room space. Doctors Hospital officials, like those at Lee Memorial, cite surging patient counts for the expansion needs.

More potential health care growth in the region includes Sarasota Memorial Hospital, where plans are underway for a possible Level II trauma center. Also, Brandon Regional Hospital, an HCA-owned facility in Hillsborough County, has several projects under construction, from a 72-bed emergency room to a new parking garage.

Follow Jean Gruss on Twitter @JeanGruss

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