Case Study: Consolidating Two Acute Care Hospitals

By Cynthia Hayward
Originally printed in the
SpaceMed Newsletter
Spring-Summer 2011
www.spacemed.com

BACKGROUND
Ocean Health System includes three acute care hospitals with a total capacity for
670 beds although each hospital staffs significantly less beds:

Valley Hospital with 245 beds

Coast Hospital with 360 beds

Rural Hospital with 65 beds

Valley Hospital and Coast Hospital are located six miles apart in a scenic northeast
region. Acute care beds are currently located at both sites along with duplicative
emergency departments, surgical suites, and various diagnostic and support services. Both of these facilities share essentially the same market along with a competitor hospital to the northeast.
Rural Hospital, although only eight miles away from Valley Hospital, requires travel
via a congested and winding road with the travel time averaging between 20 and 30
minutes. Rural Hospital also has a distinctly different patient catchment area than
Valley and Coast Hospitals. Most of Rural Hospitals patients come from the west
where it competes with hospitals bordering a large urban area.

Rural
Hospital

Other County
Hospital

65
Beds

8m

ile
s

s
ile

5m

245
Beds

6 mile
s

Valley
Hospital

360
Beds

Coast
Hospital

KEY PLANNING ISSUES

A clinical service realignment plan was developed based on an evaluation of key
clinical and support services, current resources (staffing, equipment, space, and
facilities), patient origin, and other market characteristics. The goal was to eliminate
system-wide redundancies and minimize operational costs, while maintaining or
increasing market share. Since Rural Hospital serves a distinctly different market
than Coast and Valley Hospitals, consolidation of Rural Hospital with the other two
acute care facilities would negatively impact market share. Therefore, it was
decided to generally maintain the status quo as to Rural Hospital's geographic
location and current array of services acute medical surgical beds, full service
emergency department, inpatient and outpatient surgery, diagnostic radiology, CT,
nuclear medicine, and non-invasive cardiac diagnostics.

2011.4.2

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www.spacemed.com

Page 1 of 3

Case Study:
Consolidating Two
Acute Care Hospitals
Continued

PROPOSED FACILITY CONSOLIDATION PLAN

A new 210-bed hospital is planned with a community hospital focus and centers of
excellence in obstetrics, cardiology, and cancer care. Valley Hospital will maintain
inpatient and outpatient sub-acute, rehabilitation, and psychiatric services with the
older wings demolished to reduce the overall space to be maintained at this site.
Rural Hospital will be maintained with a community hospital and short-stay focus
and Coast Hospital will be demolished and the land sold off to a local developer for
an alternate use.

Rural
Hospital

New Hospital
Community hospital
focus with OB, cardiac,
and cancer care

Community
65
hospital/
Beds
short-stay
focus
8m

210
Beds

s
ile
80
Beds

Valley
Hospital

5m

Other County
Hospital

2 miles

s
ile
360
Beds

Maintain IP/OP
sub-acute,
rehab, and
psych services

Coast
Hospital

The table below displays the proposed clinical service realignment plan which assumes that the Valley Hospital site will continue to be used for inpatient sub-acute,
rehabilitation, and psychiatric services, along with outpatient dialysis, physical/occupational therapy, and psychiatry.

Clinical Service

Coast
Hospital
Site

Valley
Hospital
Site

New
Hospital
Site

Rural
Hospital
Site

Inpatient
Services

Acute Medical/Surgical
Sub-Acute
Rehabilitation
Psychiatry
Obstetrics

Closed
Closed
Closed
Closed
Closed

No
Yes
Yes
Yes
No

Yes
No
No
No
Yes

Yes
No
No
No
No

Outpatient
Services

Emergency
Surgery
Imaging/Special Procedures
Cardiac Rehabiliation
Dialysis
Physical/Occupational Therapy
Psychiatry
Radiation Therapy

Closed
Closed
Closed
Closed
Closed
Closed
Closed
Closed

No
No
No
No
Yes
Yes
Yes
No

Yes
Yes
Yes
Yes
No
No
No
Yes

Yes
Yes
Yes
Yes
Yes
Yes
No
No

As shown on the following page, a reduction in the need for expensive procedure
rooms or treatment spaces and corresponding equipment and staffing is anticipated with the consolidation of the Valley and Coast Hospital acute care services
into a single new, efficient facility.

2011.4.2

Copyright SpaceMed

www.spacemed.com

Page 2 of 3

Case Study:
Consolidating Two
Acute Care Hospitals
Continued

Current Procedure Rooms/Bays

Modality

Emergency Treatment
Diagnostic Imaging
CT
Nuclear Medicine
Surgery

Coast
Hospital

Valley
Hospital

10
4
1
1
4

Combined
Need

Total

14
4
1
2
5

24
8
2
3
9

Variance

18
5
1
2
7

-6
-3
-1
-1
-2

The elimination of six emergency treatment bays, three diagnostic radiology rooms,
one CT scanner, one nuclear medicine camera, and two operating rooms to accommodate the same or greater number of procedures has significant cost implications both on the initial capital cost of new construction and on long-term operational costs.
COMPARISON OF EXISTING AND NEW SPACE
The construction of a new, efficient facility results in significant space reduction as
shown in the graph below.
160,000

Existing Valley Hospital

140,000

Exisitng Coast Hospital

120,000

New Hospital

100,000
80,000
60,000
40,000
20,000
-

Inpatient
Nursing Units

Diagnostic/Treatment
Services

Administrative
Services

Building Support
Services

Customer
Amenities

Prior to construction of the new facility, Coast Hospital and Valley Hospital together
utilize 532,000 building gross square feet (BGSF). The new facility will require only
340,000 BGSF with 80,000 remaining at the existing Valley Hospital site to accommodate post-acute, rehabilitation, and psychiatric services. With Coast Hospital
closed, a total of 420,000 BGSF will be needed to accommodate the same or higher workloads compared to the existing 532,000 BGSF. This results in a savings of
112,000 BGSF (21percent reduction).
Cynthia Hayward, AIA, is founder and principal of Hayward & Associates LLC.

2011.4.2

Copyright SpaceMed

www.spacemed.com

Page 3 of 3