Hartford Hospital is preparing for a significant $61 million investment that will expand and nearly double the beds in its emergency department, lead to the renovation of several vacant, rundown buildings near its campus on Jefferson Street, and allow for the construction of a much-anticipated parking garage.
The investment, officials say, is part Hartford Hospital’s 10-year master facilities plan that aims to reshape and rebuild the organization’s entire campus by 2020, in an effort to create a more coordinated delivery system for patients.
The various projects will create about 280 jobs, officials said.
Hartford Healthcare, the parent organization of Hartford Hospital, will be doing a $350 million bond offering to finance the $61 million investment. The remaining funds will go toward refinancing existing debt held by hospitals affiliated with Hartford Healthcare, including MidState Medical Center in Meriden, The Hospital of Central Connecticut, and Windham Hospital.
“We are rebuilding and reshaping our campus in preparation of the delivery system of the future,” said Jeffrey Flaks, the executive vice president and chief operating officer of Hartford Healthcare.
Flaks said some construction is already underway, including a new and expanded chapel on Hartford Hospital’s main campus that will be opening in the next 30 days.
About $16 million is being invested in the expansion of the hospital’s emergency department, which will add 20,000 square feet and 26 new private beds to the 60 beds that already exist there.
But the renovations are more than just about adding rooms and space, Flaks said. The overarching goal is to create a more integrated health care delivery system for patients that improves care quality and also cuts down on wasteful costs.
To achieve that end, the hospital is redesigning the emergency department to create a new operational workflow, he said.
That will mean upgrades in technology and electronic medical records, new private room designs, and bringing services — including a full time lab, pharmacy and imaging center — directly into the emergency department to expedite care.
“Part of the expansion is about creating a new flow and function and putting the patient at the center of the experience,” Flaks said, adding that the renovated emergency department could be completed by January.
Flaks said Hartford Hospital’s emergency department has grown each of the past four years. It sees more than 100,000 patients annually, creating a need for more space.
That’s been a trend experienced by other area hospitals as well, even though efforts are being made nationally to try to shift more patients out of the emergency room and into lower-cost satellite, urgent care centers.
St. Francis Hospital, for example, just opened a new 385,000-square-foot state-of-the-art patient tower that doubled the size of its emergency department and is able to accommodate up to 100,000 patients a year. And Danbury Hospital is preparing for a $150 million expansion that will greatly expand its emergency department.
Flaks said demand for emergency services continues to rise, but the hospital is still focused on strengthening its satellite network in the suburbs. The hospital, for example, will open a new urgent and primary care center in Avon later this year.
Meanwhile, Hartford Hospital also expects to break ground in September on a 1,200-space, $40 million parking garage to be located on Hudson Street, adjacent to its education resource center.
Flaks said the new parking garage, which will add to the more than 5,000 parking spaces already on its campus, will be largely for employees, and will include a 6,000-square-foot fully staffed wellness center.
The hospital still needs final approval from the city, which could happen in August, followed by a groundbreaking in September. If that timeline is achieved, construction could be completed by December 2012, officials said.
“We are redistributing parking on campus to allow patients, family and visitors to have primary access to our facilities,” Flaks said, adding that existing garages will also be retrofitted with modern amenities.
The hospital will also be spending about $5 million to rehab several buildings it owns or leases on Jefferson Street and will move some administrative functions into those buildings to free up space on its primary campus, Flaks said.
Funding for the project will come from a major $350 million bond offering from Hartford Healthcare, assisted in part by the Connecticut Health and Educational Facilities Authority, said Richard G. Stys, Hartford Healthcare’s vice president and treasurer. Stys said most of the offering will go to refinance existing debt among Hartford Healthcare’s various hospital affiliates including MidState Medical Center in Meriden, The Hospital of Central Connecticut, and Windham Hospital.
After the refinancing, all the hospitals’ combined debt will move under the Hartford Healthcare parent company, creating, for the first time, a single, obligated group.
Stys said the larger size and scope of Hartford Healthcare is giving all of its hospitals access to the refinancing, which will provide no savings but help lower the risk in the organization’s debt portfolio.
Smaller health care institutions have little to no access to bond markets, which has been one of the main factors driving merger and affiliation activity among hospitals in Connecticut and across the country.
Stys said Hartford Healthcare is also in the process of obtaining a credit rating, and rating agencies are expected to begin assessing the system’s credit quality in early August. The bond offering is planned for September, Stys said.
“With the current view of health care, it is very difficult for individual hospitals to access the capital markets,” Stys said. “We want to create a solid platform for a system to grow and access capital markets on an efficient basis.”
