Mercy Health gains approval from Trinity Health for $271 million medical tower, campus consolidation project

Friday, September 25, 2015

Mercy Health Muskegon announced a major milestone that will allow leaders there to begin a $271 million medical center and consolidation project at the hospital system's Mercy Campus.

Greg Loomis, the healthcare system's president and CEO, said Thursday, Sept. 24 that Trinity Health has approved the local system's plan to build a nine-story tower at 1500 E. Sherman Blvd and renovate the existing building there.

The Livonia-based parent company is one of the largest Catholic healthcare systems in the United States and oversees facilities in seven states, including St. Joseph Mercy Ann Arbor.

The medical center will allow the Mercy Health Muskegon to expand and relocate services at a single acute care facility, while reducing hospital beds from 408 to 267.

"We're going to 'right size' our hospitals and become more efficient," Loomis said on Thursday.

The new development, which comes just two months after the hospital system announced a new timeline for the project, was accompanied by the release of new renderings of the medical tower.

When the hospital system revealed the older design last year, officials said the project would cost $220 million. The amount increased after completing additional schematic design work, Mercy Health spokeswoman Joan Kessler said.

Funds for the project will come from cash reserves, donations and intercompany financing through Trinity Health.

Officials had initially planned to begin construction this year, but delayed the project to better prepare for health care reform and to focus on how it could implement Lean principles.

Mercy Health filed a Certificate of Need request with the Michigan Department of Community Health in June after receiving approval from its local and regional boards.

The CON program gives state officials the authority to approve and deny decisions related to mergers, medical equipment, hospital beds and clinical services in an attempt to balance cost and competition for Michigan patients.

Healthcare projects planned by Mercy Health, along with other healthcare in 13 West Michigan counties, will no longer undergo evaluation by the Alliance for Health since the watchdog and regional review organization ceased operations in May.

Kessler said Mercy Health Muskegon officials expect a decision from the MDCH this fall, which is also when the hospital will begin preliminary site work.

Since delaying the project, officials have made a few changes to the forthcoming consolidation.

When Mercy Health Muskegon first announced consolidation plans in 2013, officials said the Hackley Campus's emergency department would be transformed into a high-functioning urgent care center and that behavioral health services would remain on site.

Loomis said plans for the urgent care remain, but behavioral health services will now move to the Mercy Campus.

Hackley Community Care Center's relatively new satellite facility will also stay.

Loomis added that Mercy discussions about the future of the Hackley Campus have already begun with City of Muskegon officials, including city manager Frank Peterson.

"We expect that campus to be very busy," he said. "We will have a presence there."

Kessler said unlike Mercy Health's urgent-care locations in Whitehall and at its General and Lakes Village campuses, the urgent-care facility at Hackley will feature extended hours and on-site diagnostic services.

Mercy Health Muskegon's General Campus at 1700 Oak Ave., which also boasts a memory clinic and the local system's oldest laboratory, could be sold, demolished or repurposed.

Loomis said Thursday that demolition will likely be the fate for the aging building.

"It would be an expensive building to maintain," Loomis said. "The property itself would be more useful than the building."

Loomis said the patients, employees and physicians alike can expect a better experience while receiving care and working at the new campus, which should be completed by June 2019.

Doctors will no longer have to travel between campuses and patients will enjoy more privacy in larger rooms, he said.

"The tower is 100 percent private, which is a huge change for us," Loomis said.

Mercy Health Muskegon's Birth Center, which is currently located on two floors at the Hackley Campus, will be on one floor, spanning both the new medical tower and renovated existing Mercy Campus building space. A walkway will connect the two areas.

And the emergency department, which will be located in the garden level of the new tower, will combine the best elements of the Mercy and Hackley campuses, Loomis said. The campus's trauma unit will be located above the ED so medical staff and patients will enjoy close proximity to surgical care.

Jeff Alexander, Mercy Health Muskegon's vice president of strategic integration and lead executive for facility planning and design, said officials changed some elements of the tower's exterior to better position the hospital system in the future.

The minor changes, Alexander said, will allow for a more timeless, modern look that will make it easier for hospital leaders to build a new facility several decades from now.

Loomis said some of the minor changes implemented this year also made space for conference rooms to accommodate educational activities at the hospital.

The local hospital system, formerly known as Mercy Health Partners, said its ultimate goal was consolidation when Hackley Hospital merged with Mercy General Health Partners in 2008.

Five years later, in January 2013, officials unveiled their first campus merger plan, which encompassed retrofitting a new three-level building to the existing Mercy Campus building for about $97 million. Officials later nixed that idea, saying that it wasn't the best long-term plan, Loomis said.

Full-scale site work at the Mercy Campus is scheduled to begin in May 2016, with construction to follow about four months later during the fall.

Work crews are expected to begin renovating the Mercy building in July 2018, just a few weeks before the new medical center shell, including the nine-story tower, should be complete.