Spokane Journal of Business

Shriners mulls $15 million-plus expansion of its Spokane hospital

$15 million-plus project could receive approval in April

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-—Staff photo by Mike McLean
The five-story, 96,000-square-foot hospital has been recognized as the most efficient in the network.

Just a few years after facing possible closure and enduring painful belt tightening, Shriners Hospitals for Children-Spokane has been recognized as the most efficient of the 22 Shriners hospitals and now is proposing a $15 million-plus expansion, says interim administrator Craig Patchin.

The five-story, 96,000-square-foot hospital at 911 W. Fifth, which provides orthopedic treatment for children at no cost to their families, is proposing to add more than 15,000 square feet of space and expand its parking structure by about 50 percent to accommodate more than 200 vehicles, Patchin says.

The hospital has received the go-ahead for preliminary design work from Shriners Hospitals for Children headquarters in Tampa, Fla., he says, adding that the preliminary work is being completed by Spokane-based NAC|Architecture.

Patchin says he's optimistic that the Shriners joint board, the final authority to approve capital projects, will give the formal nod to the project in April.

"They've had representatives here (recently) go through the draft proposal, and it's approved at that level," he says. "The architect is working on drawings and will come up with price estimates."

Based on prior experience with other hospital construction projects, Patchin says, "I wouldn't be surprised if it will be between $15 million and $20 million."

Patchin says the Shriners hospital network already has determined the Spokane facility is the most efficient of the Shriners Hospitals for Children as measured by a cost-to-charge ratio, cost per patient day, and employee cost per bed.

"Combined against all 22 hospitals, it comes out on top," Patchin says.

Patchin also is administrator at Shriners Hospitals for Children-Portland, and has been splitting time between the Portland and Spokane hospitals since former Spokane administrator Gene Raynaud left to take the administrator position at Shriners Hospitals for Children-Honolulu.

If the Spokane proposal is approved, the fifth floor of the hospital here would be reconfigured to include a dedicated day-surgery department with a procedure room. A three-story addition would be erected behind the hospital that would accommodate the hospital's administrative offices and temporary living units for families of patients, Patchin says.

The specialty hospital here treats children with disorders involving bones, muscles, joints, and associated tissues. Disorders can range from sports injuries to congenital defects.

The hospital serves patients from Washington, North Idaho, Montana, Alaska, and the Canadian provinces of British Columbia and Alberta. It also accepts patients through Shriners outreach clinics in Mexico, Central America, and Africa.

A 21-member board of directors representing the 12 Shriners temples, or chapters, in the Spokane hospital's primary service area oversees the hospital operations.

The prognosis for the charitable hospital here is much improved since 2009, when Shriners headquarters warned it might close the Spokane facility and five other Shriners hospitals. At the time, Shriners reported the value of its endowment had plummeted to $5 billion from $8 billion less than a year earlier, due to a tumbling economy and declining donations.

Shriners funds hospital operations mostly through earnings from its endowment.

The announcement brought renewed support and community donations for the threatened hospitals. Ultimately, Shriners decided not to close hospitals, but to slash expenses and seek reimbursement from insurance for its patients who have insurance coverage.

The Spokane hospital began billing insurance companies in 2010, although treatment otherwise is free, and insurance coverage or ability to pay is never considered in decisions to provide treatment, Patchin says.

Systemwide, Shriners Hospitals collected $150 million in insurance reimbursements in 2012, while the cost to operate all of the hospitals totaled more than $700 million, he says.

The hospital and associated temples raise funds throughout the year, and the temples handle transportation for patients from their areas, says Kristin Monasmith, a spokeswoman for the Spokane hospital. Proceeds from the annual Shrine Circus performances in the Spokane region also help pay for treatments patients receive here.

Donations have remained stable since the 2009 crisis, Monasmith says.

The hospital also has a full-time development director tasked with raising donations.

"Our goal is to be less than half reliant on the endowment," Monasmith says. "The rest comes from donations and insurance."

Today, the hospital's annual operating budget is $15 million, up from $12.4 million after budget cuts in 2010.

The Spokane facility has 137 full-time equivalent employees, up from 121 in 2010.

The staff includes a pediatric hospitalist, three physician assistants, and about 40 nurses. The hospital recently augmented its physician staff by bringing on a fourth pediatric surgeon and a fifth anesthesiologist.

The hospital, which has a combined mission of providing highest-quality care, participating in medical research, and educating physicians and health-care professionals, also has continued to invest in new equipment and technologies.

In one such investment, the hospital recently upgraded its movement analysis lab with equipment that creates 3-D computer images using digital cameras that ring the lab and record movements from several angles simultaneously, while floor plates measure force and pressure of the patient's movements.

Physicians use the information to analyze walking or gait problems and recommend treatment.

A construction team led by Graham Construction & Management Inc., of Spokane, donated labor and materials to remodel the lab and install the equipment.

In all, the Spokane hospital saw a 16 percent increase in patient referrals in 2012 compared with a year earlier. Surgeons conducted 818 total surgeries last year, up 7 percent from 2011. Most surgeries were outpatient procedures, which underscores the need for dedicated outpatient facilities, Patchin says.

The hospital currently has two full operating rooms on the fifth floor.

A significant part of the expansion would "essentially renovate the entire fifth floor, updating operating suites, and replacing administration space with a same-day surgery unit," Patchin says.

The hospital can handle greater capacity and is accepting patients, Monasmith says. Hospital representatives are reaching out to health care providers to increase awareness of the pediatric orthopedic expertise at Shriners Hospitals for Children-Spokane. The hospital also has simplified its referral system, so patients can be referred to the hospital directly.

"Medical need is the only standard for acceptance of care," she says. "We want the parent to be able to pick up the phone and call. We have a referral coordinator who gets the child into the referral schedule."

Mike McLean
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Reporter Mike McLean covers real estate and construction at the Journal of Business. A multipurpose fisherman and vintage record album aficionado, Mike has worked for the Journal since 2006.

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