This story by Nora Doyle-Burr was published by the Valley News on Dec. 15.
[L]EBANON, N.H. โ Dartmouth-Hitchcock Medical Centerโs plans for a $130 million expansion point to a growing demand for the high-level services offered by New Hampshireโs biggest hospital but also highlight questions such as how will it be financed, what kinds of strains might it place on infrastructure in the Upper Valley, and who will work there and where they will live.
Though D-H officials said they have not yet finalized their plans โ which include 60 new inpatient beds in a new four-story โinpatient tower,โ 14 new rooms in the emergency department and a 400-space parking garage โ they are aware of the pressures a project of this scale may put on road, sewer and water systems, D-H CEO Joanne Conroy said in a phone interview on Wednesday.
โI donโt underestimate the planning of invisible infrastructure that has to take place,โ she said.
But though the project may be a burden in some ways, Conroy said, it also offers to boost the regionโs economy.
โI do believe it will be an incredible accelerator of economic growth,โ Conroy said.
A Question of Need
The new beds will not be subject to a state review known as a โcertificate of needโ process, which seeks to determine whether a project is necessary to appropriately address the stateโs health care needs, because New Hampshire no longer requires it. The Legislature eliminated the certificate of need requirement in 2016 in an effort to reduce the regulatory burden on health care providers and, at least in theory, allow market forces to do their work.
Vermont still has a certificate of need process, which gives the Green Mountain Care Board the authority to prevent unnecessary duplication of health care services, according to the boardโs website.
In New Hampshire, the elimination of this review reduces the publicโs access to information about demand for the services and to revenue projections, Lucy Hodder, who directs the Health Law and Policy program at the University of New Hampshire, said in a phone interview.
โWe have to blindly trust that our institutions are committed to the triple aim,โ Hodder said.
In health care, the triple aim refers to lowering costs, improving health and improving patient experience.
While Hodder said she could not comment specifically on the DHMC project, she said she doesnโt blame individual institutions for the failure of state law to require detailed reports outlining the need for the project. Hospitals are balancing competing demands, she said โ that of bringing in sufficient revenue from their high-end services and that of trying to meet community needs.
Without a public review of the need for new and expanded health care facilities and services, Hodder said, โWho knows whatโs going on?โ
Despite the elimination of the certificate of need, Conroy said the health care system will be transparent about its plans and the reasons for them.
โYou have to be able to give a compelling argument,โ Conroy said.
She said she is expecting feedback from officials in both Vermont and New Hampshire, whether or not D-H seeks it.
โWhich is fine,โ she said.
When DHMC announced the expansion plan last week, its news release said demand is driven by a variety of factors, including the aging population, the hospitalโs role as a safety net provider and the health systemโs growth.
The lack of available beds โ occupancy rates regularly run at 90 percent โ requires that DHMC divert high-acuity patients seeking high-level or specialized care to facilities elsewhere in New England, the release said. The new four-story tower is expected to provide access for the existing unmet demand of approximately 3,000 inpatient admissions per year. One of the proposed towerโs new floors would include space for an additional 30 beds that could be added at a later date.
Conroy said DHMC turns away between 200 and 250 people per month right now because it is so close to capacity.
โItโs hard to say, โNo, we cannot help you,โ โ she said.
DHMC, with 396 licensed beds, has a relatively low number for the population of about 1.9 million that it serves, Conroy said, noting that the total bed count includes pediatrics and obstetrics, both of which can have highly variable utilization rates.
In comparison, the University of Vermont Medical Center in Burlington is licensed for 562 beds to serve a population of about 1 million in Vermont and northern New York, D-H spokesman Rick Adams wrote in an email.
The scale of the DHMC project seemed to make sense to John Brumsted, CEO of the University of Vermont Health Network.
โThis project looks to be driven by Dartmouth-Hitchcock Healthโs focus on what is necessary to meet the needs of their patients and the communities they serve,โ Brumsted wrote in an email. โFor academic medical centers in rural areas like ours, there is the additional consideration of being, in many cases, the sole provider of specialty care such as trauma services.โ
Though the Green Mountain Care Board has no regulatory authority over DHMC, about 40 percent of the Lebanon hospitalโs patients are from Vermont, and the board is aware of some of the needs the project aims to address, Green Mountain Executive Director Susan Barrett said. She pointed to long wait times, the increasing acuity of patient illnesses and aging demographics.
โHopefully it will alleviate the pressure thatโs on Vermont hospitals,โ she said. The board wants โpeople to be able to stay in their community.โ
Paying for It
The project will be financed through a combination of operating revenue, bonds and donations toward the project, Conroy said. The ratio has not yet been determined, she said.
She said D-H is going into the project with strong ratings and operating margins. D-H ended last fiscal year in June with an operating surplus of $47.5 million. Last January, D-H held onto an โAโ credit rating from Fitch Ratings and the Standard & Poorโs Global Ratings. At that time, the ratings agencies also upgraded their outlooks for the D-H system.
Margaret Johnson, a New York-based Fitch analyst, said D-H hasnโt yet released a financing plan for the project, so itโs hard to say whether it would affect D-Hโs credit rating.
But she pointed to the fact that Fitch revised its outlook for D-Hโs finances to positive in January because of improvements the hospital system had made to its operations following its 2016 operating loss of $12.2 million.
D-H is in a โbetter position to absorb a project of this magnitude than they were, say, two years ago,โ Johnson said in a phone interview.
On the philanthropy front, Conroy said DHMC hasnโt sought funding on this scale for a building project. The $102 million Williamson Translational Research Building, though located on the DHMC campus, primarily was a Dartmouth College project, she said. It was completed in 2015.
The hospitalโs 12-bed Jack Byrne Center for Palliative and Hospice Care, which opened last year, was a smaller project with a price tag of $22 million, which was primarily covered through philanthropy, including a $10 million gift from the Jack & Dorothy Byrne Foundation.
Conroy said she didnโt know whether DHMC would consider naming the new inpatient tower for a major donor.
The hospitalโs development office, which is shared by the Geisel School of Medicine, she said, is looking into the question of: โWhat do people want to support?โ
In addition to the expansion project at DHMC, D-H also is working on a $59 million expansion to its outpatient clinic in Manchester. That project, at D-Hโs Wellington Road facility, will include a six-room ambulatory surgery center, medical infusion space, a pharmacy, a magnetic resonance imaging, or MRI, unit and new offices, according to D-Hโs September announcement of the project.
The $59 million expenditure was something credit analysts took into consideration in January when they reaffirmed D-Hโs โAโ rating and revised the outlook upward, Johnson said.
โThatโs been ongoing,โ Johnson said. โItโs the new patient tower thatโs new information.โ
Housing and Transportation
Before it can be implemented, the plan will require site plan review by the Lebanon Planning Board, a local building permit, and reviews by New Hampshire Department of Health and Human Services licensing and certification officials and by the State Fire Marshalโs Office.
During these reviews, community members will have the chance to ask questions relating to issues including traffic, water, sewer, grading and drainage. While the project will add traffic to the Route 120 corridor and increase housing demand in an already-tight market, community members say these are issues they are already working on in collaboration with DHMC.
And before DHMC can welcome patients to the new tower โ which is slated to be built near two existing patient towers on the north side of the DHMC complex โ it would need to recruit workers to about 300 new positions, help them find a place to live and also find an effective way to get them to work.
To that end: โWe will be doing something to create more workforce housing,โ Conroy said.
She didnโt offer specifics on the housing plans other than to say that she hoped the project could be located close enough to DHMC that employees wouldnโt have to drive to work.
In terms of transportation, Conroy said the hospital will continue to encourage employees to carpool. DHMC also has a parking lot, โLot 9,โ near Jesseโs Steakhouse in Hanover from which employees can hop on a shuttle, she said. She did not sound interested in charging for parking, noting that itโs not usually a popular change.
Instead, she said she hopes to participate in broader community conversations about โhow do we move people around?โ
Some solutions might include more routes and more frequency of Advance Transit, to bring patients and employees to and from the hospital, Bethany Fleishman, Vital Communities transportation program manager, said in an email.
โNot only will this help reduce congestion and alleviate parking pressure, but it saves money overall and has a huge environmental benefit,โ she said.
Fleishman also pointed to carpooling, vanpooling, walking and biking as additional alternatives to commuting to work alone by car.
As these broader conversations continue, Conroy said, the additional 400 spaces in the planned new parking garage will โgive us some breathing room.โ
Though Lebanon has limited sewer capacity for new development, City Manager Shaun Mulholland is on the same page as Conroy when it comes to the needs to support hospital workers and the regionโs broader economy moving forward. He also pointed to transportation and housing.
The Upper Valley already is in a โcrisis situationโ when it comes to housing, he said. Recent estimates indicate the region is short about 5,000 housing units.
If something isnโt done to address the shortage, Mulholland said, he worries that businesses will start looking to relocate.
Though some city officials have said theyโd like D-H to start putting more money toward the payment it makes in lieu of taxes, which totals more than $1.5 million annually, Mulholland said he values D-Hโs partnership and hopes to continue the cityโs โpositive relationshipโ with the stateโs largest private employer.
For example, he said, D-H has been helpful with sidewalk projects in the Route 120 corridor. It also is partnering with the city for a new traffic light signaling system, which Mulholland said will improve safety. The city has been in talks with DHMC about teaming up on a community paramedic program, which would help to address patientsโ health needs in their homes.
Conroy also spoke about her hopes to establish a โhospital at homeโ program, which would allow patients within a certain radius of DHMC and with a certain severity of illness to be treated by D-H providers in their own homes.
The funding piece is something Conroy said sheโll have to talk with insurers about, but she said it would be a way to keep DHMC beds available for the sickest patients.
The expansion will not fulfill all needs, nor is it expected to be completed until 2023, so Conroy said it will continue to be important for DHMC to work with smaller hospitals within the D-H system โ including Cheshire Medical Center in Keene, Alice Peck Day Memorial Hospital in Lebanon, New London Hospital and Mt. Ascutney Hospital and Health Center in Windsor โ to find the right beds for patients.
โWe expect the numbers of people that want to receive (care) to continue to increase here,โ she said.
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