Healthy growth: Mergers, trends drive growth of health systems
Fast-growing Cumberland County is quickly becoming a battleground for large health systems as they try to make care more accessible to patients.
Penn State Health recently announced plans to build a 108-bed acute care hospital off Good Hope and Wertzville roads near Interstate 81 in Hampden Township.
The new hospital, expected to break ground in early 2019, will be just a few minutes away from UPMC Pinnacle’s West Shore Hospital, which opened in 2014.
“The services are going to where the people are,” said Dave Black, president and CEO of the Harrisburg Regional Chamber and Capital Region Economic Development Corp.
Cumberland County has been the fastest-growing county in Pennsylvania this decade. Its population of 235,406 as of 2010 is expected to grow by 45,000 through 2040, according to projections from the Pennsylvania State Data Center.
More than 40 percent of that projected growth is expected to take place in four municipalities on the West Shore: Hampden, Upper Allen, Silver Spring and East Pennsboro townships.
Penn State Health has been looking to build facilities in Cumberland County for a number of years, said Steve Massini, the organization's CFO and COO.
Based in Derry Township, the health system has been adding practices on the West Shore, including Penn State Medical Group Mechanicsburg, a primary care clinic off I-81 in Silver Spring Township.
The new hospital is the next big step for Penn State Health as officials aim to build a regional health network through a partnership with Pittsburgh-based insurer Highmark Health.
“Cumberland County is a growing and very important market,” Massini said. “We have a lot of patients in that area. We really looked and said it makes sense to provide more access to real estate out in the community where people live and work.”
Every major health system in Central Pennsylvania has said that improving access to care is a top priority. That has propelled construction activity across the midstate.
And it’s not just new hospitals, which get more attention because of their bigger price tags.
Most health systems are expanding more into the urgent-care market and buying up primary care and specialty practices to be closer to patients. The new facilities, officials contend, will bolster competition and improve the quality and the pace of care, which they argue could help lower health care costs for consumers. At the very least, they claim, the sprawling network of facilities should help lower the rate of future cost increases.
UPMC Pinnacle, which emerged last year after Harrisburg-based PinnacleHealth joined the University of Pittsburgh Medical Center, already has several projects in the works or in planning across Central Pennsylvania.
“We are looking at all aspects of our system for expansion and growth,” said Paul Toburen, vice president of facilities and support services for UPMC Pinnacle.
Chief among the health system’s projects is the new UPMC Pinnacle Memorial Hospital in West Manchester Township, York County, which will replace the smaller Memorial building in Spring Garden Township.
UPMC Pinnacle is investing more than $300 million in the new Memorial Hospital campus on Loucks Road.
The future five-story hospital, which sits on the site of the former Hawk Lake Golf Course, will open next summer with 130 private rooms. It also will feature acute and emergency medical care, cardiology and vascular services, chronic disease management and surgical services.
The 121-acre campus also includes a medical office building next to the hospital with ambulatory surgery, a women’s imaging suite, a sleep lab, infusion center and cardiac rehab as well as five other pad sites.
“We’re looking at what would complement our current hospital and ambulatory care buildings,” Toburen said.
If the demand is there to expand existing facilities, Toburen said UPMC Pinnacle will look to make the necessary investments. That could eventually include expanding the West Shore Hospital, which was built with future expansion in mind. UPMC Pinnacle also has hospitals in Lancaster County and in Hanover, York County, that could see changes.
UPMC Pinnacle, like other health systems in the region, also has consistently added primary care and specialty care practices to its network.
Officials expect that trend to continue, along with the development of new outpatient facilities that may require health systems to add more doctors and staff.
And that medical growth often attracts other business, which creates a need for more housing and retail development.
Business leaders like Black and commercial real estate developers have said they expect to see more construction around the Wertzville Road exit of I-81 because of investments by UPMC Pinnacle and Penn State Health.
“That entire intersection has been underdeveloped for some time,” Black said.
Hotel development also has occurred off Wertzville Road. Additional restaurant and service sector growth could follow, Black said. “It’s just a matter of time. Growth will work its way down Wertzville.”
Not to be outdone in the growth department is WellSpan Health in York County.
WellSpan has been equally active in construction efforts. However, the organization’s primary focus is not to add more hospital beds, said John Porter Jr., executive vice president and COO.
Instead, WellSpan has been expanding primary and secondary services in both the existing and new communities it serves.
WellSpan has completed three other affiliations over the past five years, including a move into Lancaster County through a deal with Ephrata Community Hospital.
The organization has been expanding its services in each of those areas. Urgent care has been a big focus for WellSpan, including in its home of York County. Urgent care centers allow health systems to reach new communities and extend their footprint into neighboring counties.
“This is in direct response to consumers who want to access primary care in a different way,” Porter said. “We see continued growth in urgent care. This is a growth opportunity for us because it’s an entry point to the system where we can coordinate care with other elements where needed.”
WellSpan also is building more primary care operations in parts of York and Lebanon counties to improve access in some underserved areas.
Additionally it is trying to fend off competition in areas like Hanover, where it is building an 80,000-square-foot health center. Nearby Hanover Hospital is part of rival UPMC Pinnacle.
The $49 million WellSpan center, opening in March in Penn Township, will house an outpatient surgery suite, lab and imaging services, and primary care and specialty physician offices.
Closer to home, WellSpan is planning two large expansions at its Apple Hill Health Campus in York Township. One is a cancer center expansion that will cost up to $45 million, while the other is a $37 million project to expand the cardiovascular center.
Porter said the current facilities are undersized to meet growing patient demand.
“We probably have three times as many projects that we would like to do than what we can afford,” he said.
Once large organizations are able to fill in the brick-and-mortar gaps across their coverage areas, officials said they expect the focus will shift more toward technology investments, including greater smartphone access to primary care and specialty practices to determine whether an in-person visit is needed.
The growth in facilities also could lead to a greater expansion of evening and weekend hours, which will improve patient access, Porter said. “It’s what consumers want to see.”
This story originally appeared in the Fall 2018 Construction & Real Estate Report supplement to the Oct. 26 edition of the Business Journal.