SPHP Announces 13-Year, $150 Million Master Facilities Plan for Samaritan and St. Mary’s Hospitals

St. Peter’s Health Partners (SPHP) today announced a comprehensive, 13-year master facility plan for its Troy-based community hospitals – Samaritan Hospital and St. Mary’s Hospital. The Troy Master Facilities Plan (MFP) includes a $150 million, three-phased strategic development project that would represent one of the largest private-sector investments in Troy and Rensselaer County history.

The plan, when completed in the mid-2020s, would include construction, renovation and modernization of inpatient facilities on Samaritan’s campus and outpatient facilities on St. Mary’s campus. Among the major highlights of the project: construction of a new five-story, inpatient pavilion including an expanded emergency department, and intensive care and progressive care beds; enhancements to cancer services; other infrastructure improvements; and a 500-space parking garage.

The plan, to be implemented over an extended period between 2012 to 2025, would fulfill a key tenet of the October 2011 merger that created St. Peter’s Health Partners – improvements to the health care facilities and programs in Troy. St. Peter’s Health Partners – the region’s largest health system – was created by the merger of St. Peter’s Health Care Services, Northeast Health and Seton Health. It has a $1.1 billion annual budget and is also the region’s largest private employer with 11,700 employees in 125 locations in seven counties of northeastern New York.

Many projects under the plan will require approvals by federal, state or local government and/or regulatory agencies, and will be dependent on securing capital financing.

The Troy MFP is designed to be practical, forward-thinking and flexible, allowing for the immediate start of final planning and construction on some parts of the plan, while making possible adjustments to Phases 2 and 3 as health reform and market forces change health care needs in Troy and the region. Multiple institutional and state studies have suggested that Troy cannot sustain two full-service community hospitals for the long-term. Due to planning, regulatory and bidding processes which must be completed before any construction can begin, relocation of certain services from Samaritan to St. Mary’s will begin approximately in 2015.

Under the Troy MFP, St. Mary’s Hospital will continue to provide inpatient services for the next 10 years as it transitions to become an advanced ambulatory care campus, providing important outpatient services to the community. By 2023, Samaritan Hospital will serve as the single facility for medical/surgical inpatient care in the greater Troy area.

“One of the key goals of the merger was to create a long-term, sustainable acute-care presence in Troy, to position our hospitals to provide the best care possible for patients in this community while acknowledging the tenets and sweeping changes of health reform,” said James K. Reed, MD, MBA, president and chief executive officer of SPHP. “This has always been a part of the historical mission of both Northeast Health and Seton Health, and it was a commitment made by St. Peter’s Health Partners at the time of the merger.”

“Hospitals and other health facilities across the country are undergoing significant changes as a result of federal health care reform and continued reductions in state and federal reimbursement. We wanted to be proactive in creating a facilities plan that responds to the changing health care environment and that will meet the current and future needs of the Troy area communities,” said Dr. Reed.

Follow-up on Earlier System Design Study

The Troy MFP builds on a system design study released in 2010 during the process of merging the three health systems. That study outlined how the system’s acute care hospitals could be reconfigured or consolidated to provide greater access, efficiency and fiscal sustainability. The 2010 system design study called for establishing Samaritan Hospital as the inpatient facility in Troy with its large bed capacity and larger operating room suites. Samaritan’s larger, more flexible site plan and ongoing capital investment have also made the facility more practical for future development. St. Mary’s Hospital would become an outpatient services facility over an extended period of time.

Both the 2010 study and the Troy MFP agree that continuing with two full-service community hospitals is not sustainable. The Troy hospitals currently run at approximately 60 percent of licensed beds capacity, and inpatient volume is expected to decline further. Inpatient volume will not be adequate to sustain two aging hospital facilities over the long-term. Further, neither of the Emergency Departments or intensive care units in Troy are adequate to meet current acute care needs.

The 2010 study was performed by Deloitte, a national health care consulting firm, in conjunction with SPHP senior leadership and the Board of Trustees. It took a broad, pre-merger look at market consolidation potentials in preparation for review of the merger by the Federal Trade Commission (FTC). The more recent Troy MFP took a much closer look at facilities and program needs. Conducted by FreemanWhite – a renowned architectural firm – it included the review of engineering, mechanical, HVAC, plumbing and architectural issues in the facilities to help focus the planning efforts.

In developing a phased approach to facilities development in Troy, the plan answers the questions: what steps to take, in what order to take them, and the timing of those steps.

Under the Troy MFP, St. Mary’s Hospital will remain an inpatient facility, including a full emergency department, for the next 10 years. Over the next decade, Samaritan Hospital will prepare to be the Troy inpatient campus and St. Mary’s Hospital is primed for transition to an advanced ambulatory care campus.

The $150 million overall investment suggested under the Troy MFP is significantly more ambitious than the 2010 study. (That study called for a $50 million outlay for improvements.)

In fact, a key factor in the decision to phase the project is the significantly higher level of capital funds needed for the project through 2025. The extended staging of the project also means that each subsequent phase can be modified, if necessary, based on the market trends that develop between now and the start of that phase.

Details of the Three-Phase Plan

The key components of the Troy MFP include:

Phase 1 will take place between 2012-2017. It will involve the investment of approximately $67 million in infrastructure and facility improvements, including the construction of a new five-story pavilion at Samaritan Hospital with a new, expanded emergency department, intensive care unit, progressive care unit, and future medical/surgical unit. The new Pavilion would be located adjacent to the current ­­­­­­­­­­­­­­­­­Lally Pavilion. A 500-space parking garage will also be built at Samaritan in an existing parking lot for employees and visitors. During this phase, the Samaritan Hospital School of Nursing, expanded outpatient endoscopy services and outpatient chemotherapy services will be relocated to the St. Mary’s Hospital campus.

Phase 2, which will likely occur between 2017-2023, will result in more changes at both the Samaritan and St. Mary’s campuses. The interior of the top floor of the new pavilion will be completed as a medical/surgical unit and there will be further renovation of existing inpatient units at the current Samaritan Tower. The inpatient geriatric psychiatry unit at Samaritan may be moved to Albany Memorial Hospital. Inpatient detox and alcohol rehabilitation will remain at St. Mary’s. St. Mary’s Hospital would continue as an acute care hospital during these first two phases. At the end of Phase 2, all medical/surgical inpatient beds will be moved to Samaritan.

Phase 3, which may overlap Phase 2 and occur from 2021-2025, prepares St. Mary’s to become a consolidated, advanced ambulatory services facility in 2025. Renovation or construction would occur on the St. Mary’s campus to provide urgent care services, as well as imaging, chemotherapy, radiation oncology, endoscopy, ambulatory surgery and laboratory services, as well as various support functions. Detox and/or alcohol rehabilitation may transition to an outpatient setting, depending upon need. Remaining inpatient detox will be at St. Peter’s Hospital. Remaining inpatient alcohol rehabilitation will be accommodated at St. Peter’s Addiction Recovery Center (SPARC) in Guilderland.

Overall, the plan will result in a reduction in inpatient beds in Troy by 2025. Troy currently has 390 licensed/certified inpatient beds. The two Troy hospitals currently have 342 beds available with an average daily census of 234 patients. By 2025, the facilities would be operating 237 beds. With the new configuration, 60 percent of Medical/Surgical rooms will be private rooms (instead of current 24 percent).

Addressing Several Strategic Priorities

The Troy MFP addresses several strategic priorities for St. Peter’s Health Partners’ acute care services in Troy:

• preserving the mission of care to the Troy community;
• reducing the duplication of services between Samaritan Hospital and St. Mary’s Hospital;
• growing outpatient services in anticipation of health reform that will focus on expanded primary and ambulatory care;
• better management of operating costs.

“We know that it is not possible to sustain two community hospitals in Troy, especially within blocks of each other, and it is not an efficient use of our resources,” said Norman E. Dascher, Jr., FACHE, vice president of acute care – Troy, St. Peter’s Health Partners, and chief executive officer of Samaritan and St. Mary’s hospitals. “This master facilities plan will enable us to reallocate our resources, reduce the duplication of services, and maximize efficiency which will serve to improve quality, lower costs, and improve the patient experience for all residents in our community.”

“I am pleased to share this plan which will transform Samaritan and St. Mary’s hospitals so that we can continue to provide the high quality care we have provided for more than two and a half centuries combined. We will be prepared to serve our current patients as well as the wave of newly insured or covered patients who will be seeking care as a result of health reform,” Dascher added.

“This is truly exciting news for the City of Troy and our surrounding communities,” said Robert W. Johnson III, a long-time leader in the Troy area business community. Johnson is co-chair of the St. Peter’s Health Partners Board of Trustees and former chair of the Northeast Health Board of Directors.

“This is by far one of the most significant capital investments in the history of Troy and the Rensselaer County area, and it is an incredible commitment to the continued care of the residents of the Troy communities,” Johnson continued. “At the same time, this is an unprecedented move toward helping lower overall community expenditures, enhancing the accessibility of care to the public, the underserved and aging populations, and bettering patient care for all.”