Insiders' Insights

Building a replacement hospital comes with many challenges, not the least of which is what to do with the old hospital building. Converting the space into something new may not be as easy as knocking it down. But finding alternative uses for the facility can benefit the hospital and community at large.

Martin W. Guthmiller
Chief Executive Officer
Orange City Area Health System

We planned to convert our old hospital into a long-term care facility combining our two existing nursing homes. Upon further study, however, we learned that we could build new for lesser cost than to remodel. One of the biggest challenges we discovered was dealing with the multiple grades on the ground level that were a result of various additions. Another challenge was dealing with antiquated mechanical and electrical systems. A solution was to break up the building into multiple business units. As a result, the disparate mechanical and electrical systems did not have to work together. We sought to lease out the building to numerous entities, primarily those with nonprofit status. For example, a women and children’s shelter now resides in the old patient-care area, and Iowa Workforce Development office space is in the former clinic area.

Ray Shoemaker
Chief Executive Officer
Humphreys County Memorial Hospital
Belzonie, MS

First and foremost, you have to do a detailed feasibility study. Take into account the patient need and your ability to fund a new business startup until reimbursement comes in from payer sources. At the same time you have to be willing to take a chance. You can’t analyze it to death. Some of the most cost-effective uses for old hospitals are homeless shelters, long-term acute-care hospitals, psychiatric and behavioral health services or transitional programs. The biggest obstacle is often the upkeep and restoration of the facility in order to meet state and federal guidelines. Over time, some hospitals gravitate to adding in wood structures. That may be fine while you are in that facility, but all of those things may have to be remodeled to meet new codes and regulations. There are a lot of unpredicted costs to reopen a facility, so you need to make sure the facility can sustain itself.

—Carrie Vaughan