Renewing St. Joe's
A good time to build a hospital
Tom Tocco seems surprisingly calm for someone who's responsible for spending almost $300 million. Trim and curly haired, St. Joseph Mercy Hospital's director of facilities, engineering, and construction is attentive but unhurried as he tours the hospital's nearly-completed North Tower. Skirting clusters of hard-hatted workers, he explains the fire safety system in the three-story atrium, detours through the much-expanded coffee shop, and describes the new pharmacy and gift shop--"it'll be set up like a CVS," he says. Add the health spa and beauty salon and it could be any small shopping center--until Tocco mentions that cancer patients will also be able to buy wigs and other prosthetics.
Tocco thinks the retail area will be ready by May, the same month patients will move into the seven-story tower's upper floors. But the ground floor will open to the public in mid January, when the main entrance that has served the hospital since 1977 will close. For the next year, visitors and patients will enter through the new building.
The Catholic-affiliated hospital has been growing rapidly ever since it moved to what was then the countryside between Ann Arbor and Ypsilanti more than thirty years ago. Its latest master plan was adopted in 2000. Since then, St. Joe's has built a new emergency room that doubled the number of patient bays; a women's center, family birthing center, and imaging center; and a new operating suite that more than doubled the number of prep and recovery rooms.
The "renewal" is culminating in the replacement of the hospital itself. Overseen by Tocco and St. Joe's VP Kathleen Rhine, it's been underway since 2005. Regulators don't like hospitals to add more beds, and St. Joe's hasn't--but between the nine-story East Tower, which opened in 2007, and the new North Tower, by this spring all 573 patient rooms will have been replaced.
Once the North Tower opens, the hard hats will move over to what's now called the "Legacy" tower--the remaining portion of the 1977 hospital--and
begin tearing it down to make room for a new main entrance. The entrance will open directly into the atrium, which in turn is right next to the new, 140-seat chapel that's on track to open by Easter.
The entire replacement hospital is budgeted at $294 million. The North Tower and the remaining unfinished projects--the demolition, chapel, and new entrance--account for $115 million of that.
Tocco's unruffled demeanor fits perfectly into St. Joe's carefully controlled public persona. It's only when new buildings open that patients get a glimpse of the careful planning and focused effort that have driven its growth. But it surely helps Tocco stay calm that he expects the entire project to be done next year--within budget, and well ahead of schedule.
A deep recession wasn't in the master plan. Like other hospitals, St. Joe's was already under pressure to contain costs, pressure its staff has felt in minimal pay raises in recent years. Then, as the economy worsened, it announced this past May that it would eliminate the equivalent of 120 full-time positions in Ann Arbor.
As overtime was cut and employees were laid off, the construction became a target for resentment. Some staffers complain that their jobs are being sacrificed to keep the renovation on track.
Rob Casalou, president and CEO of St. Joe's and its satellite hospitals in Saline, Howell, and Livonia, says that's not the case. "Hospitals and health systems are not immune to the current economic downturn and hospitals are fundamentally redefining the way health care is delivered," Casalou writes in a prepared statement. With the hospitals facing a projected $52 million deficit in the fiscal year that began last June, "It was unfortunate but necessary to take a look at our staffing resources and better align ourselves for the future."
Casalou told Crain's Detroit Business that the hospitals' net income fell 25 percent in fiscal 2009. Also contributing to the projected deficit was the weak stock market, which forced the system to contribute more to its pension plans. The cuts were split between purchasing and payroll, which shrank $25 million, or 5.9 percent.
Spokeswoman Lauren Stokes points out that the construction is funded out of a separate capital budget, including an ongoing $100 million fund-raising campaign for St. Joe's and its satellites. By far the biggest part of that total, $85 million, is targeted for the Ann Arbor hospital, with $70 million already raised.
The recession will make it harder to complete the campaign. Yet in other ways, the downturn has been good for St. Joe's. With commercial construction stalled, contractors and suppliers bid aggressively for the chance to work on the new buildings. As a result, says Tocco, "we are getting extremely capable facilities at a very reasonable cost."
Though the current $294 million budget is slightly higher than the original estimate of $258 million, Tocco says that represents additional work, not cost overruns. The scope of the project has expanded to include not only the retail area, but also the new entrance and chapel, a new energy plant, and a new recycling center.
"We were recycling before it was cool," says Tocco, pointing out that the new center replaces one built in 1994. Even the old hospital building has been be recycled. After it is vacated in May, Tocco says, "we'll nibble it down." A crane-like, high-reach machine with an articulating hydraulic "claw" will shred the reinforced concrete structure, "rubbleizing" the concrete and pulling out the steel rebar. Tocco predicts that more that 70 percent of the material will be reused.
He is especially proud of the new complex's efficiency. Since 2002, St. Joe's has added 500,000 square feet of floor space. Yet, he says, "we're using nearly 50 percent less water and sewer, 18 percent less natural gas, and 8 percent less electricity." The new energy plant gets much of the credit, but many smaller changes also contribute, from changing landscaping practices to wiring lights to motion sensors to save energy.
"We don't pay money for [green building] certification--we have to make sure our money is used for patient care," says Tocco. "But we exceed all expectations of the certifying bodies" in terms of efficiency.
The earth-toned patient rooms could pass for a very nice motel, but they're much tougher than they look. In the future "we may be working with less staff," Tocco notes, so the designers wanted to be sure the new building would look as good in ten years as it does when it opens.
Every room is "universal," wired and plumbed so it can easily be reconfigured for the needs of different patients. Rooms can even be made into intensive care units on a moment's notice. Tocco say the second floor of the North Tower will become the new surgical ICU. The third floor "will be all mother and child," he says, with pediatrics linking to the adjacent family birthing center and a sunny "meditation garden" designed to resemble a northern Michigan scene, with winding paths, water, and faux birch trees. Upper floors will house medical intensive care, neurosurgery, and specialty care.
What patients notice most in hospitals, though, is their own experience. Designed with extensive input from St. Joe's "alumni"--former patients--the new rooms are a third larger than the old ones, with clearly defined zones for the patient, visitors, and medical staff. Tocco says a prototype room went through dozens of changes as the "patient experience team" tweaked such details as where to put the clock and giving visitors their own TV speaker and volume control.
In the old hospital, Stokes says, about seventy-five percent of patients surveyed said they would recommend the hospital to friends and family members. Since the opening of the East Tower, "we are now consistently in the top decile," Stokes says--that is, more than 90 percent say they would recommend St. Joe's.
Besides being efficient and easy to maintain, it seems, patients love the renewed hospital. For all the strains, that's likely to give St. Joe's an advantage over the U-M Hospitals and other competitors for years to come. Tocco and Rhine appear to have spent that $294 million well.
[Originally published in January, 2010.]