Home Banking & Finance Westchester Medical Center plans $230M expansion

Westchester Medical Center plans $230M expansion

Westchester Medical Center Health Network has announced plans for a $230 million expansion to alleviate tight space that impedes outpatient services on its Valhalla campus.

“We’re plumb out of space,” said Michael Israel, president and CEO of WMCHealth.

WMCHealth will build a 280,000-square-foot ambulatory care pavilion next to Westchester Medical Center. The eight-story, steel and glass structure is designed for outpatient services, including imaging, surgery and heart and vascular care. It will also have private rooms and offices for doctors.

The need for the new facility goes back to the nature of the medical center. There are actually three facilities on the campus: a 415-bed adult hospital, a 136-bed children’s hospital and a behavioral health center.

The medical center focuses on advanced care. It is classified as a level one trauma center. It has a burn unit, transplant center, helicopter ambulance service and other acute care services. About 7,000 patients a year — 19 to 20 a day — are transferred to the medical center.

The medical center does not compete directly with community hospitals. While most babies are delivered at community hospitals, for instance, high-risk deliveries are handled by the neonatal intensive care unit in Valhalla.

“Our patients are very sick, very acute,” Israel said.

Acute care has overshadowed outpatient services.

The ambulatory care pavilion will solve three problems.

First, it will open up beds for trauma patients. The medical center is operating at full capacity but it must block out 25 to 30 beds every day for new critical care patients. Yet, all beds are in semi-private rooms, and the hospital may only use the rooms for one person on a patient’s first day.

WMCHealth will build 24 private rooms and convert 24 semi-private rooms to private. The total number of beds will be the same, but the 48 private rooms will accommodate new critical care patients.

Second, outpatients are sometimes bumped for trauma cases. That displeases patients and doctors, Israel said. Outpatients will have priority in the new building.

Third, doctors are spread out over the campus and beyond. The pavilion will consolidate many of the physician practices in one place.

The outpatient squeeze will not get any easier in the coming years. Unlike many community hospitals that are seeing fewer patients, WMCHealth’s patient counts have increased by 2 percent to 3 percent a year.

Westchester County will issue up to $340 million in tax-exempt, municipal bonds to finance the $230 million project. About $44 million will be used for infrastructure projects, like parking, according to county officials. The rest will be used to refund old debt.

Regulatory maneuvering in recent years made the financing possible. In 2008, county industrial development agencies lost the authority to issue tax-exempt bonds on behalf of nonprofit organizations. In 2013, Westchester County Executive Robert P. Astorino established a local development corporation to fill that void.

Since then, the LDC has given nonprofit organizations access to $264 million in low-cost, tax-exempt bonds. But WMCHealth is organized as a public benefit corporation, rather than as a traditional nonprofit, and did not qualify for LDC support. It is a kind of municipal authority, like the Metropolitan Transportation Authority. “Technically, we’re a public hospital,” Israel said.

The LDC amended its bylaws to include such corporations, and on March 1 the state approved the change.

Taxpayers are not responsible for the bond payments. The borrower, in this case the hospital, has to pay off the debt.

The hospital project fits into the county’s grand strategy of promoting the region as a health care, health technology and biotech hub, to improve quality of life and create jobs. Health care contributes $15 billion to the local economy, according to the Westchester County Association.

The new project will be the largest health care building since 1977 when Westchester Medical Center’s main tower was built.

The hospital expects to break ground in June and open the pavilion for business in 2018. Skanska USA is the construction manager.

The project is expected to create 225 construction jobs and another 180 full-time jobs when the building opens. Israel said the new jobs will be across the board: nurses, doctors and support staff.

WMCHealth began planning the pavilion three years ago. Even as construction documents were being drawn and it was applying for a state certificate of need, the hospital system was expanding. It grew from a $750 million, three-hospital center in Valhalla to a nearly $2 billion, seven-hospital system in the Hudson Valley. It employs more than 10,000 people and serves more than 3 million people in eight counties.

WMCHealth also had to overcome a legal obstacle. It had bypassed public hearings and local zoning and permit requirements by declaring that the project would have no significant environmental impact. The town of Mount Pleasant sued, accusing the hospital of trying to circumvent the zoning code.

Acting Supreme Court Justice Robert A. Neary ruled in favor of the hospital. He applied a test that balanced the public interests of the town and the hospital. The judge noted that the new facility would simply improve upon a service already provided in a smaller building on the campus.


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