Sunday, March 24, 2013

NY-Presbyterian Gets Nod for $1B in New Construction Projects

New York-Presbyterian Hospital is about to get a lot bigger with more than $1 billion in new construction projects in the works. Plans include building a behemoth $896 million ambulatory care center at 1283 York Avenue and the takeover of New York Downtown Hospital. The hospital has already received approval for its ambitious expansion plans from state health regulators.

New York-Presbyterian is joining other large hospitals, including Montefiore Medical Center, the North Shore-LIJ Health System, in building "hospitals of the future", which really isn't a hospital at all.

Large ambulatory care centers are under construction across the city as one-stop shopping pavilions where patients can access preventative and specialty care, as well as services that in the past were delivered within hospital walls.

Like its competitors, New York-Presbyterian is moving ambulatory care services out of the hospital in a bid to transform how it delivers care to ambulatory patients. The hospital plans to build an ambulatory care center at 1283 York Avenue, across the street from New York-Presbyterian Weill Cornell Campus at 525 East 68th Street. The new building will house surgery, primary care and infusion therapy services, radiology, Cyber Knife, MRI, PET scanner and linear accelerator services. The price tag: $895.5 million.

The state's Public Health and Health Planning Council, a body that regulates large construction projects by New York State hospitals, are expected to approve New York-Presbyterian's projects at its April 11 meeting.

New York-Presbyterian plans to pay for the huge construction project by fundraising $395.5 million of the cost and taking on a $500 million mortgage at 6% interest for a 25-year term.

Construction is set to start on August 1, 2014. The hospital plans to spend $7.3 million to relocate residential tenants in the two adjacent buildings on the site, and relocate the hospital's administrative offices that occupy the lower floors.

A second project for New York-Presbyterian is the renovation of 10 existing inpatient units located at its Milstein Building on the Columbia University campus. That project will cost $111.4 million, funded through donations. Construction is scheduled to begin in December.

The hospital's emergency department at Columbia is getting a $74 million overhaul, to be financed through fundraising. When finished, that department will have 66 acute care treatment areas, up from 45, and 22 rapid medical evaluation areas, up from 10. Construction will finish by April 1, 2017.

New York-Presbyterian disclosed in its state filings that it earned a profit of $159 million in the first 10 months of 2012. Its tab for the three construction projects is about $1.08 billion.

The state health planning committee also gave preliminary approval to New York-Presbyterian's proposed takeover of New York Downtown Hospital. According to the hospital's application that the state is reviewing, New York Downtown lost $12.5 million in the first 11 months of 2012. The hospital blamed the loss on cuts in state and federal reimbursement, and its limited ability to increase revenues.

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