A New Partnership For Detroit
Detroit Medical Center (DMC) offers Vanguard Health Systems the opportunity to make a significant investment in an already successful, high quality health care system in Detroit and lift it to the ranks of the elite systems in the country. DMC has overcome challenging economic times to remain in the black year after year, but it hasn t had the resources to build the kind of modern hospitals opening in the suburbs. Vanguard s investment will change all that, providing a strong financial foundation to preserve, protect and strengthen all of DMC s hospitals for the future. Vanguard will be investing $850 million in DMC hospitals in the next 5 years. $500 million will go to major projects, including a brand new 4 story Pediatric Specialty Center, a 175,000 square foot Children s Hospital Tower, a new Cardiovascular Institute, and expanded and modernized facilities at Detroit Receiving, Sinai Grace, Harper/Hutzel, Rehabilitation Institute, and Huron Valley-Sinai. The remaining $350 million will be for ongoing equipment and capital needs, everything from new DaVinci Surgery Robots to replacement angiography suites and cath labs to badly needed anesthesia machines, ventilators, ultrasounds, and patient monitoring equipment. These are the investments we need to preserve and protect DMC s historic mission to provide charitable care and to allow a hospital system based right here in Detroit to develop into one of the finest health care systems in America. DMC and Vanguard Health System Proposed Investment and Estimated Cost Project List Project Hospital Estimated Cost Total Pediatric Specialty Center Children s $ 33,000,000 Children s New Tower Children s $170,000,000 Clinic Building Backfill Children s $ 5,200,000 $208,200,000 Patient Care Unit Renovations Detroit Receiving $ 20,000,000 Pre/Post Op Space Enhancement Detroit Receiving $ 2,400,000 2 Additional Operating Rooms Detroit Receiving $ 6,400,000 $ 28,800,000 Surgical Services Renovation Harper/Hutzel/CVI $ 20,000,000 Lobby Expansion/Renovation Harper/Hutzel/CVI $ 10,000,000 Ground Floor Redesign Harper/Hutzel/CVI $ 20,000,000 Inpatient Unit Renovations Harper/Hutzel/CVI $ 11,250,000 Cardiovascular Institute & Harper/Hutzel/CVI $ 75,140,000 $136,390,000 Outpatient Specialty Bldg Rebuilding Mack Parking Deck Central Campus $ 35,300,000 $ 35,300,000 6th Floor Renovation Rehab Hospital $ 2,850,000 $ 2,850,000 Emergency Dept Expansion Sinai Grace $ 33,000,000 Façade/Front Entrance Sinai Grace $ 10,000,000 Outpatient Ambulatory Bldg Sinai Grace $ 25,500,000 ICU Expansion Sinai Grace $ 5,000,000 Radiology Relocation Sinai Grace $ 4,200,000 $ 77,700,000 Private Room Renovation Huron Valley $ 6,800,000 ICU Bed Expansion Huron Valley $ 4,000,000 $ 10,800,000 Routine Capital Expenditures $350,000,000 $850,040,000
DMC Children s Hospital of Michigan Construction of Four-Story Expanded, Cutting-Edge Pediatric Specialty Center DMC Children s Hospital of Michigan Hospital was built in 1971 with a capacity to hospitalize 600 patients a month. Today, we see more than 1,000. The operating room s were built to handle 400 surgeries a month. Today, we do more than 1,200. Clinics were built to handle 4,000 children a month. We now see 16,000 a month. To better meet the health care needs of Michigan s children we will build the Children s Hospital of Michigan Pediatric Specialty Center to meet extraordinary patient demand. The Pediatric Specialty Center consolidates outpatient services in a flexible facility that emphasizes primary and preventative care for Children s Hospital. By facilitating patient access to services, including labs, X-ray and immunization facilities, specialty clinics, and physicians offices, the Center s design fosters a culture of wellness. A general pediatric clinic, comprehensive outpatient rehabilitation clinic, and specialty clinics occupy three floors of the Center while a fourth floor houses physician office suites. The design of the glass-walled Center enhances and complements the existing campus. The Center frees up space for future medical program expansion in the Main Hospital. Project Estimate: $33,000,000 DMC Children s Hospital of Michigan Pediatric Specialty Center
Construction of a Modern 175,000 Sq. Ft. Hospital Tower Housing 4 Centers of Excellence The New Children s Hospital will comprise of five floors and new patient beds. This new hospital will be designed with larger inpatient rooms to accommodate new medical technology and expanded family-centered care services. New construction will total 175,000 square footage and 125,000 square footage of existing space will be renovated. Floor space will increase by about 30 percent overall. This additional support space will provide for more family-centered care, increased operating room capacity, expanded intensive care space, new technologies, and expanded space for pre- and post-operative surgical activities. Project Estimate: $170,000,000 A $5.2 million plan for remodeling the Carls Building for new physician clinics will add to the feel of a completely new Children s Hospital complex. Total DMC Children s Hospital of Michigan Estimate: $208,200,000 DMC Children s Hospital of Michigan Patient Tower 5
DMC Detroit Receiving Hospital Makeover and Modernization of the City s Historically Revered Gemstone Hospital, Detroit Receiving DMC Detroit Receiving Hospital patients share a single bathroom between two patient rooms. The renovation will allow the construction of new units providing for one bathroom per patient room. While the design is still being finalized, the renovation contemplates building out two new modern floors. Project Estimate: $20,000,000 DRH will also receive two new state-of-the-art operating rooms. Project Estimate: $6,400,000 Additional projects include: Increasing space in the pre- and post-operative units. Project Estimate: $2,400,000 Total DMC Detroit Receiving Hospital Estimate: $28,800,000 7
DMC Harper University Hospital and DMC Hutzel Women s Hospital Expanded State-of-the-Art Operating Rooms DMC Harper University Hospital Surgical Services area was constructed in 1975. Surgical Services at that time consisted mostly of inpatient services, where 90 percent of patients required a postoperative stay in the Hospital. Current surgical services result in 40 percent of patients requiring post-operative stay in the Hospital. This change in surgery mix demands a larger, more comprehensive area for pre- and post- operative services. These areas are currently undersized in square footage and number to meet our patient needs. The Surgical Services renovation will more than double the space available for pre- and postoperative care of surgery patients and add cutting-edge technology. Project Estimate: $20,000,000
DMC Harper University Hospital, DMC Hutzel Women s Hospital and DMC Cardiovascular Institute Enhanced Reception and Patient Information Areas DMC Harper University Hospital, DMC Hutzel Women s Hospital and DMC Cardiovascular Institute main floors and corridors will be renovated for patients and visitors to find their way to clinical services through both hospitals. The layout does not allow for adequate patient lobby or concourse space. The space will be larger and uniform for way-finding from the main and ground floors. Project Estimate: $10,000,000
DMC Harper University Hospital, DMC Hutzel Women s Hospital and DMC Cardiovascular Institute Improving Patient Environment for Care This project will include renovating four patient floors. Patient rooms will be brought to current standards for both private and semi-private care. The bathrooms will be brought to handicap accessible code standards. New expanded nursing work areas will be added to meet the demands of physicians, nurses and medical residents. Additional upgrades on the heating and cooling system will be made for greater patient comfort and hospital efficiency. Project Estimate: $11,250,000 Adding Needed Parking on Main Campus Currently the main campus of the Detroit Medical Center does not have adequate parking for visitors and staff to meet the demands of patient care. DMC leases space and shuttles staff to meet demands. The Mack Parking Deck will be demolished to dramatically open up the southern end of the downtown campus. A new parking deck with 1,750 parking spaces will be located next to the new DMC Cardiovascular Institute. This dramatic new entrance will compliment Midtown. Total DMC Main Campus Parking Estimate: $35,300,000
DMC Cardiovascular Institute and Outpatient Specialty Building First Class Facility for First Class Specialty Care A new home for the DMC Cardio Team One physicians for non-invasive procedures, the DMC Cardiovascular Institute and Outpatient Ambulatory Center, will have four floors and 120,000 square feet of space for specialty services. The first floor will be used for non invasive cardiac and vascular procedures including vascular testing, echo cardiology, stress testing, nuclear cardiology and EKG services. The second floor will house an outpatient surgery center and the third and fourth floor will house specialty physician clinics. Project Estimate: $75,140,000 The procedure areas of the Cardiovascular Institute (CVI) are located on the Ground Floor of Harper Hospital. The pre- and post- procedure areas are undersized and not able to handle the current number of patients much less accommodate the continued growth of CVI. The Group Floor Redesign provides for additional patient and family waiting areas along with movement of an angiography suite to provide space for an additional cardiac cath lab. In addition to developing better space to support the needs of cardiac patients the redesign plan will also provide better patient and family space for other procedure areas on the Ground Floor including: radiology, endoscopy, nuclear medicine and angiography. Project Estimate: $20,000,000 Total DMC Harper/ Hutzel Hospitals and Cardiovascular Institute Estimate: $136,390,000 DMC Cardiovascular Institute and Outpatient Specialty Building
DMC Rehabilitation Institute of Michigan Renovate and Reopen Sixth Floor Patient Unit DMC Rehabilitation Institute of Michigan sixth floor patient rooms need to be 100 percent handicap accessible for our patient population. The renovation will provide for 100 percent barrier-free private baths with showers. Renovation will include upgrades for new electrical and mechanical systems for greater efficiency. Nursing and physician work area will be updated for increasing space demands and new rehabilitation space will be located on the patient units. Total DMC Rehabilitation Institute of Michigan Estimate: $2,850,000
DMC Sinai-Grace Hospital Dramatic Upgrades to More Than Double ED Treatment Space DMC Sinai-Grace is a Level II Emergency Department that treats more than 87,000 patients annually in an ED that was built in 1980 s to serve 50,000 patients. DMC Sinai-Grace Emergency Department visits have increased 45 percent in the past 5 years. The current Emergency Department has 46 patient beds and 2 resuscitation rooms, yet sees an average 1,600 patients per week. Expanding Sinai-Grace s Emergency Department will provide: More space to treat the increasing volume of trauma cases and patients with medically complex conditions; A significantly improved patient care environment that will be safer, more private, and more accessible and comfortable for patients and their families; More space to accommodate the new medical technology in emergency medicine; and Greatly improved educational and training space for students and residents. Project Estimate: $33,000,000
DMC Sinai-Grace Hospital Expanding Space with 60,000 Sq. Ft. for Patient Care Specialty Services DMC Sinai-Grace Hospital s current footprint does not allow for adequate space for all clinical services. The new Sinai-Grace Hospital Ambulatory Building will be three stories and 60,000 square feet of much needed space for high volume outpatient services. The building will house an urgent care clinic, procedure areas and specialty clinics. Project Estimate: $25,500,000 Additional projects include increasing the number of ICU beds and relocating the Radiology Department next to the newly renovated Emergency Department. Project Estimate: $9,200,000 Improving the Main Hospital Façade The Sinai-Grace façade exterior needs a new facelift. The energy-wasting single-pane windows from 1939 and aging architecture are in dire need of upgrades. Patients and their families complain the rooms are too old in the winter and too hot in the summer. DMC Sinai-Grace Hospital Ambulatory Building The renovation will include a new Sinai-Grace exterior with an entirely new window system and new exterior panel system for patient comfort and building efficiency. Additionally a new entry area will be constructed for easier patient access and way-finding capabilities to hospital services and clinical areas. Project Estimate: $10,000,000 Total DMC Sinai-Grace Hospital Estimate: $77,700,000
DMC Huron Valley-Sinai Hospital Expanding Private Patient Rooms In 2008 and 2009, two new competing hospitals - Providence Park and Henry Ford West Bloomfield opened in the DMC Huron Valley-Sinai Hospital market. Both of these new hospitals are 100 percent private rooms. In 2008, the DMC Board approved the construction of a new medical office building (MOB) on the HVSH campus. The intent was to relocate hospital services to create space for the construction of additional private rooms and additional ICU beds to meet market demands. The project will create 40 new private rooms. Project Estimate: $6,800,000 The ICU will be expanded by six beds to meet patient demands. Project Estimate: $4,000,000 Total DMC Huron Valley-Sinai Hospital Estimate: $10,800,000
Who is Vanguard Health Systems? Vanguard Health Systems, based in Nashville, Tennessee, is an investor-owned hospital company with 15 facilities in four large urban markets in the country. Founded in 1998, we provide capital access, thought leadership and the benefits of national scale to health care delivery systems. Health care is personal and local and therefore Vanguard s regional systems carry local brands and reflect the heritage and culture of their local markets. The company s mission is to help people in the communities we serve achieve health for life. This mission means our company is focused far beyond just the care we provide in our hospitals; rather we are active in identifying and delivering solutions for the overall health needs of community. At Vanguard, we believe in the mission of providing health care to everyone and we act on that belief. We provide funding to local charitable foundations and activities, and our hospitals address important issues affecting surrounding neighborhoods. Our ultimate goal is to develop systems that offer comprehensive health services for the communities we serve and to be a visible corporate leader in those communities. How would the DMC/Vanguard Partnership be Structured? Vanguard Health Systems will acquire the DMC system, which will become Vanguard s Michigan subsidiary (Vanguard currently operates subsidiaries in Arizona, Illinois, Texas, California, and Massachusetts). DMC operations will be overseen by a Michigan subsidiary advisory board made up of 4 members appointed by Vanguard and 3 members appointed by DMC Board. DMC will continue to operate under our historic names. The current management team will remain in place. Vanguard will invest $850 million in DMC hospitals for capital and equipment in the next 5 years, with $800 million being spent in the City of Detroit. Employees will continue in their same jobs and their seniority, pay, and benefits will be protected. All union contracts will be honored. The Difference between Non-Profits and Investor-Owned For Profits As Detroit has seen all too well, non-profit hospital systems today are very much bottom-line driven. 14 hospitals have been closed in Detroit over the last 20 years, all by non-profits, many of whom built new hospitals in the suburbs. Non-profits have some financial advantages, such as not paying taxes. The biggest disadvantage of a non-profit is that it has no investors. To raise money for modern facilities, a nonprofit has only two choices: get donations or borrow. With what happened on Wall Street in 2008, DMC has no ability to borrow. Donors in Detroit are overburdened. If DMC remained non-profit, we had no ability to modernize our hospitals for years to come. By becoming investor-owned for profit, we can partner with an investor who believes in DMC, the City of Detroit, and our future. Vanguard is willing to invest $850 million into our hospitals because they believe we can create a medical system that rivals the Cleveland Clinic right here in Detroit. If they are right, new patients and new jobs will return to the DMC campus in record numbers. At a time when other investors are leaving Detroit, Vanguard has chosen to bet heavily on DMC s future success. With our track record the last six years, we think they are making a good bet. Vanguard s Commitment to DMC s Historic Mission Vanguard is unique in that it is a national investor-owned system whose strategy has been to acquire hospital systems in urban areas and to treat everyone, regardless of ability to pay. Vanguard currently operates hospitals in San Antonio with higher rates of uninsured patients than DMC. They ve been successful while embracing this mission. Vanguard has made several contractual commitments in the contract with DMC: To continue operating our hospitals for a minimum of 10 years Not to sell any hospital for a minimum of 10 years. To provide charity care under DMC s historic policies for a minimum of 10 years. To support fully DMC s education mission and to honor all educational contracts, including those with WSU and MSU. To support DMC s research mission and to honor the NIH Perinatal Research Branch contract. To support the DMC s partner Karmanos Cancer Center and to honor all contracts with Karmanos. To fully support DMC s Supplier Diversity Program to provide opportunities for minority-owned, women-owned and Detroit-based businesses. To operate DMC as a Detroit based system and to maintain its regional headquarters in the City of Detroit. To honor all historic donor naming agreements for facilities or programs. What happens next? The DMC and Vanguard have signed a non-binding letter of intent. The parties expect to have a formally binding contract by June 1, 2010. That contract is conditioned on a Wayne County Renaissance Zone receiving state, city, and county governmental approval. Once the Binding Contract is signed by June 1, 2010, the agreement is reviewed by the Michigan Attorney General to verify that Vanguard is providing fair value to the community. Once Attorney General approval is received, DMC would formally become part of the Vanguard system, making it one of the five largest private health care systems in America.