St. Jude Medical Center Plans $160M Expansion
By VITA REED
St. Jude Medical Center in Fullerton plans to spend some $160 million in the next six to seven years expanding its North Harbor Boulevard campus to meet demand for service, new earthquake safety requirements and changes in how healthcare is delivered.
“There’s no doubt that hospitals are being constructed more to critical care and outpatient, as opposed to the (medical care or surgery-recovery) bed of the past,” said Robert Fraschetti, chief executive of 331-bed St. Jude. “There’s much more being done in the outpatient setting today. By the time patients do find their way to the hospital,it’s rather unfortunate to say this, but it’s true,they’re sicker. So we’re seeing more need for critical care, and the expansion really does accommodate this.”
As for how St. Jude will finance the expansion, “there are only three ways to fund. One is to earn it. One is to borrow it. And the other is to have someone give it to you,” Fraschetti said. “The obvious answer is a combination of the three.”
St. Jude plans to use a mix of its own cash, borrowing with rates based on parent St. Joseph Health System’s AA-rated bond status and a fundraising campaign with a $40 million target to finance the project, he said.
The largest portion of St. Jude’s expansion is a five-story, 108,000-square-foot patient-care tower on the south side of the main campus. The tower’s elements include four new heart catheterization labs and a new emergency room.
Of the emergency room, Fraschetti said, “It seems incredulous to talk about it. The reason I make that comment is it’s only 10 years ago that we had a major capital campaign to build our existing emergency room.”
St. Jude is approaching 50,000 emergency room visits a year, Fraschetti said, and already exceeds what officials had projected for 2008.
The tower’s other features are set to include a 20-bed intensive-care unit that will bring the hospital’s total to 52 intensive-care beds, and a maternal-child health center with labor-delivery rooms, postpartum facilities, a neonatal intensive-care unit and a well-baby nursery.
“That’s one we’re very, very excited about,” Fraschetti said.
Even though St. Jude’s upcoming patient tower is the largest part of the expansion, it won’t be the first completed element.
The first building is set to be a 9,000-square-foot endoscopy center to house procedures for gastrointestinal disorders, bronchial disorders and colon cancer screenings. Increased volume, particularly in colon cancer, is the reason for the new center, Fraschetti said.
St. Jude’s endoscopy building is slated to cost around $4 million and is expected to be open for patients by the end of 2002, according to Fraschetti.
The next component will be a multistory parking structure with around 560 spaces. Fraschetti said St. Jude has been running offsite shuttles to parking because of a shortage of spaces.
Another part of the expansion is a three-story, 75,000-square-foot medical office building across the street from the main St. Jude campus that will be linked to the main building via a bridge over Harbor Boulevard. It will house several hospital departments, such as the St. Jude Breast Center and the Virginia K. Crosson Cancer Center, Fraschetti said. A second medical office building could come roughly six years down the road, he added.
In an October interview, Joan Taylor, St. Jude’s director of service line management and business development, said the hospital wants a new breast and cancer facility for several reasons. One is long-term stability through ownership, rather than paying rent, she said. Additionally, she said, the new building would add 30% to the space available for breast health and cancer programs.
Along with the cancer and breast centers, St. Jude also plans to put its radiation oncology department in the new building, Taylor said last year.
“You never put radiation in a leased building,” Taylor said, pointing out that hospitals need to own such facilities in order to build safety storage vaults.
Even though there are renderings, St. Jude hasn’t selected a general contractor for the southwest tower yet, said Karen Canizzaro, director of construction services.
Fraschetti said the hospital hasn’t estimated how many jobs would be created as a result of the expansion. The hospital now employs some 1,975 people.
Demographics aren’t the only reason St. Jude is putting up the money for new construction. Like nearly all acute-care hospitals in California, St. Jude is working to meet earthquake safety requirements mandated in the 1990s by the state.
Earthquake safety became a major concern for California’s hospitals in the wake of 1994’s Northridge earthquake, which damaged several hospitals, including UCLA Medical Center.
The state’s seismic safety law has two major provisions: All hospitals built before 1973 must conduct a seismic evaluation and submit a compliance schedule to the state by January 2008. By January 2030, all acute-care hospitals must have the capability to be self-sustaining for 72 hours in the event of a major earthquake.
The law gives hospitals the option of retrofitting facilities. Fraschetti said that there will be some degree of retrofitting of St. Jude’s campus, but he also said he hopes that the California Office of Hospital Planning and Development will extend the deadlines for the work.
According to Fraschetti, having the new patient tower will assist St. Jude when it comes time to retrofit the existing facilities.
“We do add beds and we do add capacity, which does give us some room to move things if we have to move things,” he said, adding that architects have said that the hospital probably won’t have to close down buildings as a result of the new earthquake-safety standards.
Earthquake-safety compliance “has challenged a lot of providers,the cost is substantial,” said Gary Jabara, a partner in Deloitte & Touche’s real estate practice who specializes in healthcare. Many California hospitals, according to Jabara, have opted to build new patient tower facilities, rather than retrofit existing ones.
Such buildings, Jabara said, mostly were built prior to 1973, “when healthcare delivery was different” and there was more emphasis on inpatient care. Today, “they’re performing more procedures (outpatient); they don’t need beds.”
St. Jude is one of three local hospitals owned by St. Joseph, a not-for-profit organization based in Orange. The Fullerton hospital’s sister facilities are St. Joseph Hospital-Orange and Mission Hospital Regional Medical Center in Mission Viejo.
