Building frenzy? Area hospitals adding 500 more beds.

Hospital construction is booming in metro Denver--like never before. Between now and 2004, three new suburban hospitals plan to open with a total of 313 beds and the flexibility to add up to 800 more. Existing Denver-area hospitals also are expanding, creating roughly 125 additional beds. It's a building frenzy unmatched in Colorado history. "Thanking Back, I don't recall I've ever seen this number of new facilities being constructed," said Larry Wall, president of the Colorado Health and Hospital Association, a health-care industry group. Wall has been with the association for 29 years.

Some say it's about time--that hospitals are playing catch-up with the metro area's explosive growth. Hospital space has been so tight in recent years that emergency cases sometimes had to be diverted from one to another metro hospital. The Denver population is graying as well as growing, and older people require more health-care services.

But how much expansion is enough?

Colorado is among 15 states that killed "certificate of need" statutes in the 1980s, so state officials no longer rule on whether proposed health-care facilities are necessary Hospital executives ardently defend their current projects as prudent and conservative, but some wonder how the building boom will affect skyrocketing health-care costs.

"We know that adding more hospitals to the systems will translate to higher costs for consumers," said Donna Marshall, executive director of the Colorado Business Group on Health, an organization of employers who strive to see that the state's health care is affordable and high quality Still, Marshall agrees it's been a long time since a new hospital was built in the metro area, and that new facilities "offer a great deal of promise" in the use of high-tech computers and other enhancements to patient care.

Even some who are part of the building boom worry about the distant future.

"Do I think this hospital is a reflection we could be overbuilding? Absolutely not," said Maureen Tarrant, president and chief executive officer of HealthONE's new Sky Ridge Medical Center, set to open in August 2003 in Lone Tree in Douglas County "Do I think there could be a risk of overbuilding or building too soon? Sure. But we haven't seen it yet."

Patient needs aren't being met, said Dave Hamm, vice president, system services, for Exempla Healthcare, which operates Lutheran Medical Center in Wheat Ridge and St. Joseph Hospital in Denver. "We struggle to stay off 'divert,'" Hamm said of the practice of sending ambulances to different facilities.

MARKET CHANGES

Hospital economics have changed dramatically in the past 25 years. "The hospital today is not the same as the hospital 10 years ago," said Wall. The growth of managed health care and technological advances have cut time spent in the hospital. Denver's average hospital stay now is just less than four days, down from 7 to 7.5 days "not that many years," Wall said.

As length of stay shrank, metro hospital removed some beds. As of Jan. 1, 2001, Wall said, metro hospitals were staffing only 4,016 of 5,198 beds for which they were licensed.

Why not simply restore those beds? In most cases, the space now is used for other services, and if that's the case, building becomes the most economical choice, administrators say.

"If the demand is there, and you must add to the system's capacity, new construction is less expensive than renovation," Tarrant said. New facilities also can more easily incorporate new technology, she said.

And finally, the trio of planned new hospitals is slated for the metro area's fastest-growing suburbs--two of them in Douglas County, which grew by 124,000 residents to 183,808 between 1990 and 2001. People want hospitals to "be local and convenient and accessible," Wall noted. The third facility is planned in Lafayette, in the fast-growing Bloomfield/Longmont corridor.

Avista Adventist Hospital in Louisville, opened in 1990, was the last existing acute-care hospital to be licensed in the metro area, according to records of the Colorado Department of Public Health and Environment. (Precedent, which opened in Denver's old Mercy Hospital, was licensed in 1998, but closed about two years later.)

The three new hospitals are:

* HealthONE's $147 million Sky Ridge Medical Center, opening next summer near C-470 and Interstate 25. Douglas County's first full-service hospital, it will open with 106 beds and will have another 60 beds "shelled in" that could be opened quickly said Tarrant, Ultimately, it could accommodate up to 350 beds. Sky Ridge will offer obstetrics, pediatrics, cardiac care including open-heart surgery sports medicine and a trauma center.

* Exempla's new 143-bed hospital in Lafayette. Total cost of the project, including land and equipment for the hospital, will be $240 million. In addition, Kaiser Permanente Colorado will construct one office building on the yet-unnamed hospital's campus and Exempla will build another. The new hospital can be expanded to as many as 350 beds if demand develops, said Hamm.

* Parker Adventist Hospital, under construction at #-470 and Parker Road by Centura, the state's biggest health care company with 10 hospitals statewide. The 70-bed, $108 million, full-service hospital, slated to open in late 2004, will have 30 more beds shelled in and could expand eventually to 400 beds, said Ruthita Fike, executive vice president of operations.

All three companies spent years to assess needs, look for sites and work with communities before going ahead with construction. All have been welcomed.

"This hospital has been so warmly received," said Tarrant of Sky Ridge. "It's been a pleasure to plan and it's going to be a pleasure to operate." Fike said Parker-area officials are "thrilled" Centural is going to fill the community's need for a hospital. Exempla's community surveys found residents would "rather have doctors and hospitals close to where they live," Hamm said.

OLD MADE NEW

The three companies say they plan to keep operating their existing facilities, and many of them have been or will be upgraded. HealthONE, for instance, has spent between $35 million and $45 million a year in the past few years to upgrade emergency, surgical and diagnostic services at its six hospitals and 54 clinics statewide, said Linda Kanamine, vice president of marketing and public affairs.

Centura's Littleton Adventist Hospital is in the midst of a $40 million expansion that will add 32 beds; Avista in Louisville has spent $32 million and added 36 beds, and St. Anthony North in Westminster has added cardiovascular and neurosurgery capabilities with a $7 million project that added 25 beds.

The major hospital corporations are not the only ones expanding.

The University of Colorado Health Sciences Center, which now operates 270 beds at its Denver campus, will open 101 beds by early 2004 at the former Fitzsimons Army Medical Center in Aurora. Over time, all but 100 of the Denver campus beds will be closed. Growth at Fitzsimons hinges on whether the Veterans Administration decides to relocate its Denver hospital with CU's. The CU-VA combined facility could reach 600 to 700 beds by 2010.

Denver Health Medical Center has opened a $44 million, four-story addition with 113 beds and a new orthopedics clinic. The new space allowed the center to convert some four-patient rooms to private and semi-private rooms for a net increase of 30 beds. It's not enough, said Stephanie Thomas, chief operating officer of the center, which serves a large indigent and Spanish-speaking population.

"We will be full within a year of our opening," Thomas said. The center has incurred all the bonded indebtedness it can, she said, and isn't sure where money will come from to meet future needs.

Indeed, developers of the metro area's new hospitals say finances are the main reason why there will be no overbuilding.

"All the hospital companies are prudent as they look at bringing hospital projects on line and how they're going to sequence those," Tarrant said.

Centura, a joint operating agreement between Catholic Health Initiatives and the PorterCare Adventist Health System, is a careful steward of its monies, Fike said. "As a faith-based (company), we take this very seriously," she said. "We don't have a lot of extra dollars."

Exempla's Hamm agreed: "We have an ethical as well as financial obligation to be prudent and cost-effective," he said.