Mark Sanchez: This is a big one that we first reported on this back in January, and we'd heard about it and Corewell spoke to us about it and now last week here are some details. It's a 780,000 square foot patient tower there on the Butterworth campus on Michigan Street, $1.34 billion. Corewell hopes to begin construction on this new patient tower next year. Completion by 2030. It's going to have a new emergency department, 180 private inpatient rooms, 17 operating rooms and the folks at Corewell really say that this is going to give them some added capacity to meet the growing inpatient volumes at the Butterworth Hospital campus. It's got 876 beds there between Butterworth Hospital, the Meijer Heart Center, and Helen DeVos Children's Hospital. We'll see as this progresses now through the year.
Corewell is going to need just a whole bevy of city approvals for this and then has to go through at the state level what's known as the Certificate of Need Process where that's a regulatory process on the state level where projects that meet a certain threshold or have a certain clinical element to it need to get reviewed at the state level.
So, this is going to kick off here in the coming weeks. And as you said, this is a big, big major project and it's going to again, alter that skyline there along that medical mile that we've seen develop and grow over the last 20, 25 years with all those developments on the north side of Michigan Street, you know, Lemon-Holton Cancer Pavilion, the Meijer Heart Center, the DeVos Children's Hospital, and it just keeps going. And now this is one more major element to that stretch.
Patrick Center: And for the footprint, there's some demolition of existing hospital buildings.
Mark Sanchez: Yeah, there's a facility there on Barclay Avenue and Michigan Street. And this is going to go up adjacent to the Meijer Heart Center. And there's an existing building there, I can't remember the square footage off the top of my head, it houses some outpatient clinics right now for Corewell Health. Those are going to come down to make way for this new patient tower.
And we should add, we did a follow up story here this week as well, that, you know, Corewell has been working and reaching out to the neighborhood association there. You've got the neighbors just to the east of this property. And one of the things they did is they went up a little more to kind of maybe then compress that footprint and not encroach as much on the neighborhood. So that's also a factor in this working with the neighbors and the association there.
Patrick Center: You did talk about population growth in West Michigan. How much of it is a function of that, but also some of the rural hospitals that are closing?
Mark Sanchez: Yeah, there's no mention about the rural hospitals. Obviously, if you're in a rural community, you need some of that specialty care, the heart surgery, oncology, especially for heart and cardiac care, you might be coming to Grand Rapids. But a lot of this is predicated on just growth.
It's no secret. Grand Rapids, Kent, Ottawa, Muskegon, Allegan counties, this region in West Michigan is growing. The population is going up. We're an aging population. That means we all consume more health care. All that adds to the patient volumes they're seeing there. Again, their argument is this is to accommodate first modernize the facility and some of those areas of these older hospitals. There's a little difficulty moving equipment around sometimes, but also just not only modernize, but also just accommodate the growth. It's going to have about net 80 additional inpatient beds there. So, it's really what you hit on the population growth and just this increased demand for care.
Patrick Center: You talk about the expense of this development over $1 billion for this tower. There are those who say there's a lot of money in healthcare and when it comes to patient billing, the Michigan legislature wants to take a closer look at the expense of healthcare.
Mark Sanchez: Yeah, this is something that came up, it's legislation proposed in the state house by your representative Curtis VanderWall. He's a Republican from Ludington and he chairs the House Health Policy Committee. And last week the committee held a hearing on a bill he has proposed that would basically ban facility fees.
Now if you go, for an example, that Representative VanderWall cited in the committee hearing, you go and you have a blood draw at a diagnostic lab that's owned by the health system or hospital. He cites how he was charged a facility fee for each vial of blood that was drawn. And we've heard about this more and more the last number of years that the health systems are assessing facility fees. Even if you're not getting a procedure or something done at the hospital, you're using an outpatient clinic, which many people do because they tend to be lower cost. Now you're having an added facility fee.
These fees generate revenue for the hospitals and the health systems to basically run their operations. So now there's been a lot of complaints about these, and the legislature is taking up a bill that would ban facility fees for care delivered at facilities that are outside of hospitals. Outpatient services done at hospitals, except obviously for emergency care or major surgeries and you have an overnight stay. And then facility fees even for telemedicine when you have that virtual visit with a doctor. So as Representative VanderWall says, the goal here is simple; we need to lower costs.
There's been this continual escalation of healthcare costs for many years and in his view, not much has been done about it, or we have not done action to lower these costs. That's a direct line from him in the committee hearing last week. So, we're going to see how this plays out.
Some folks believe this is just maybe provoking the proper term of conversation to debate about high health care costs. Because you also have some legislation that the Speaker of the House, Matt Hall, introduced this summer back in June to basically tell hospitals to cut their prices 10%, would cap their ability to raise prices above the inflation rate and restrict late payment fees, and then also prohibit hospitals and health systems from reporting medical debt to consumer credit agencies.
And this is all coming together here because these bills on facility fees, you had the hearing in the morning on the committee level, the committee did not vote, but later in the day, the full house discharged the bill from committee and brought it to the full house floor. So, my guess is some of these bills are all going to get considered and discussed together and it's going to bring folks to the table to start having a healthy debate about high health care costs, not only here in Michigan, but all over. This is an issue in every community, in every market, in every state across the country. We keep seeing health care costs rise. Agree or disagree with what Mr. VanderWall has proposed, but here's his one idea, just one single way to maybe start controlling some of these costs.
Patrick Center: We're talking with Crain's Grand Rapids Business staff writer, Mark Sanchez. The state is addressing a US-131 congestion issue. Every day during our traffic report, in this area, there's always a backup. It seems like there's always an accident. It's right next to LMCU Ballpark and ff you've driven that stretch during drive time, you've experienced this.
Mark Sanchez: Yeah, that old praise, if you know. You know, and I leave the office here in downtown and I go over to my walk across the river and to our parking lot where we park and I look at that northbound US-131 that it's all backed up into downtown. It's moving slow and you're right. It's where the 131, I-96 interchange and then as you go north into Comstock Park, it is clogged.
Now the easy solution that a lot of people, well, just add another lane. Well, that adding another lane comes with a lot of cost. Not only the cost to build it, but the cost to maintain it. So, here's an idea that state has used effectively in other areas. You've seen these on the freeways in Detroit, especially on that congested west side in the western suburbs of Detroit.
It's called a flex route. Basically, you have your shoulders. So, you have signs above the roadway during the busy periods, those high travel periods, the rush hours when the congestion hits and the backups start, that green light above that extra lane, that shoulder goes on, use that shoulder and it creates an extra lane. It's a flex route. It's not open at all times of the day, but the state has the ability by making these improvements in the roadway and the signage to open up these travel lanes during peak congestion periods. And that's coming here next year. The Michigan Department of Transportation expects to begin the project there on northbound 131 north of town in the spring 2027 and have it completed by the fall of 2028.
Patrick Center: And there is some bridge work that will have to take place also.
Mark Sanchez: Yeah, of course the irony here is you're doing this to help prevent congestion, but then of course during all this work, you're going to have what? Congestion. So, it's a span of six miles on southbound US-131 and six miles on northbound US-131. And it'll stretch from the I-96 interchange at the southern end up to Post Drive on the north end. And we should also say that the plan to turn on the flex route signs did you say it will operate from about 7 to 9 a.m. during the morning rush hour and 3 to 7 p.m. during the evening rush hour?
Patrick Center: Crain's Grand Rapids Business staff writer, Mark Sanchez. Thank you so much.
Mark Sanchez: Thank you, Patrick.