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Freestanding EDs Can Make Providers Healthy

By Keith Konkoli, for HealthLeaders Media, July 30, 2010

Case Study: St.Vincent Health

A member of Ascension Health, the nation’s largest not-for-profit and Catholic healthcare system, St. Vincent Health is Indiana’s largest healthcare employer, with 19 facilities serving the central part of the Hoosier State.

With existing full-service hospitals in Indianapolis and its environs, St. Vincent administrators sought to expand their presence in the city’s fast-growing northeast suburbs. Their specific objectives were to:

  • expand their presence in Hamilton and Madison counties;
  • maintain and grow market share in the rapidly expanding suburbs of Fishers, Noblesville, Carmel and Pendleton;
  • continue their strategy of locating facilities near Interstate highways;
  • achieve “first-to-market” status at Interstate 69 Exit 10;
  • develop the first freestanding ED in Indiana; and
  • maintain off-balance sheet status.

    With a 31.3% share of all inpatient admissions and 40% of all ED admissions in the Exit 10 market as of 2005, St. Vincent sought to protect and expand upon that strong base with a freestanding ED. The site selection process began in January 2006. By June 2006, St. Vincent had secured 26.6 acres just southeast of the I-69/State Road 238 interchange in the Indianapolis suburb of Fishers, a site providing excellent highway visibility and access.

    After evaluating various options for the property, St. Vincent officials settled on a plan calling for a 15-bed freestanding ED. The new facility would screen and stabilize adult and pediatric patients, be staffed 24/7 by board-certified emergency medicine physicians, and provide a helipad for air medical transportation. The faith-based institution also tapped the expertise of several area ambulance providers during the design process.

    In addition to providing better, more accessible care, the freestanding ED was a key financial strategy for St. Vincent. The Fishers facility would be owned by BremnerDuke Healthcare Real Estate, which provided financing, planning, development, leasing and construction management services to St. Vincent. That decision allowed St. Vincent to avoid the risk associated with trying to lease the part of the building it would not be using. The third-party ownership structure also enabled the system to receive off-balance sheet treatment for the asset, preserving capital for other uses.

    St. Vincent to communicate its vision for the new facility to prospective physician-tenants and evaluated the level of interest to “right-size” the building. About 85,000 square feet (about 71%) of the planned 120,000 square feet of space was “pre-leased” by the health system before construction in September 2007. A fast-track design and construction process was used.

    The $31.7 million, three-story St. Vincent Medical Center Northeast opened in October 2008. It features 11 exam rooms, four observation rooms, a trauma room and a room for victims of sexual assault. It also offers an ambulatory surgery center and all-digital imaging center, and secondary uses including pediatric care, a breast center, a stress center, a sleep lab, physical therapy and a women’s boutique. Future plans for the campus include a full-service acute care hospital and a medical office building.

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