HealthAlliance of the Hudson Valley officials say they plan to use increased financial muscle stemming from a new partnership with Westchester Medical Center to expand the scope and size of a plan to centralize all hospital services at the former Benedictine Hospital, while transforming the campus of the former Kingston Hospital into a “medical village” for outpatient services.
The centerpiece of the plan announced by HealthAlliance officials last week is construction of a new four-story tower which will add 110,000 square feet to the Mary’s Avenue hospital’s 327,000-square-foot footprint. The tower will house a new emergency room, intensive care unit, endoscopy center and medical surgical floors.
“When the renovation is complete, Kingston will be home to one of the most impressive and technologically advanced community hospitals in the nation,” said HealthAlliance President and CEO David Scarpino.
While the company has long planned to consolidate in-patient services (now split between the two hospitals) at Mary’s Avenue, earlier proposals called for the consolidation to be achieved through renovation of existing space.
But HealthAlliance Chief Strategy Officer Josh Ratner said this week that the proposed new construction reflected the company’s more robust financial position, following the sealing of an affiliation deal with Westchester Medical Center earlier this year.
“[Prior to the affiliation] we had no ability to borrow, nobody was going to lend us any money,” said Ratner. “We had to work within the confines of that reality.”
The company had hoped to accomplish the consolidation plan with $88.9 million in state funding; the new plan increases the total project cost to $133.6 million. Of that, $112 million will fund new construction and renovations on Mary’s Avenue while the conversion of the Broadway campus into the medical village is expected to cost about $21.6 million.
Ratner said the upgraded project would allow the company to provide a number of amenities, like more private rooms and larger ER and ICU facilities. The overall number of beds, meanwhile would drop from the current 300 to 201 following consolidation.
The reduction in bed space and the drive to create the medical village reflect a trend towards outpatient care and preventative medicine, rather than more expensive hospital-based care. Medicare and other insurers have created incentives for providers that make it more lucrative to keep patients with chronic conditions like diabetes and heart disease healthy through education and outpatient treatment than to treat them in a hospital setting when they get sick. Currently the two HealthAlliance hospitals currently have an occupancy rate of just 65 percent.
The rapid shift away from hospital-based care derailed an earlier effort to revamp healthcare in Kingston by merging Kingston and Benedictine hospitals under the HealthAlliance umbrella. The 2009 consolidation was mandated by a state commission as an attempt to address the fiscal and operational inefficiency of competing hospitals offering duplicate services less than a mile apart in Midtown Kingston. The new company spent $40 million in state funds to shift “emergent” care services to the Broadway campus while consolidating secondary care services at Mary’s Avenue. By 2012 declining admissions and the rapid shift towards outpatient care had rendered the “two hospitals, one company” model unworkable. In 2013, the company announced plans to shift all hospital services to Mary’s Avenue. Since then, the company has sought state funding and a partnership with a major medical center to fund the plan.
While traditional hospital care would move to Mary’s Avenue, the Broadway campus would be transformed into what Ratner likened to a “mall” — one-stop shopping for a range of health care needs. According to Ratner, the medical village is expected to house physicians’ offices as well as a broad range of businesses which fall under the general heading of health. Ratner said some of the medical village’s occupants would be HealthAlliance’s own outpatient services. Others would lease space from the company. Ratner said similar medical villages had replaced closed hospitals in other communities and helped revitalize surrounding neighborhoods.
“They don’t just contribute to healthy communities,” said Ratner. “They become economic drivers that bring jobs, education and workforce development.”
Construction on the Mary’s Avenue campus is expected to begin in mid-2017 and take two years. Once the project is finished, all hospital services will shift there and work will begin on the medical village. The entire consolidation process is expected to take five years.