EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Minnesota Department of Health Public Interest Review
for Proposed New Inpatient Hospital
Submitted November 5, 2004
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Section
Page Number
I. Introduction
3
II. Maple Grove Commitment
4
III. Maple Grove Campus – Phases of Development
4
IV. Health Care Services
6
V. Description of Licensed Beds
7
VI. Affiliated Provider Groups
7
VII. Site Description
10
VIII. Project Costs
10
IX. Primary Service Definition
11
X. Population and Demographic Projections
12
XI. Utilization Estimates
13
XII. Access to Services
17
XIII. Care for the Low Income and Uninsured
18
XIV. Market Analysis
18
XV. Financial Impact of a Maple Grove Hospital
27
XVI. Financial Impact for Other Hospital Providers
28
XVII. Human Resource Impact
29
Appendices
• Appendix A - Data Sources and Methodology
• Appendix B - 2003 Hospital Discharges for PSA
• Appendix C - 2008 Hospital Discharges for PSA
• Appendix D - Hospital Service Areas
• Appendix E - Letters of Support
• Appendix F – Additional Requested Information
30
34
37
55
63
67
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
I.
Introduction
North Memorial Health Care and its affiliated physician groups have served people in the
northern and northwestern suburbs for over 50 years. North Memorial’s location has made it the
most logical provider of hospital and health care services to patients living in the northwest
corridor. Currently, North Memorial serves more Maple Grove residents than any other hospital
in Minnesota1. Over a third of the area’s residents seek inpatient care at North Memorial, nearly
three times as many as any other hospital. According to Scarborough Research, an
independent research firm, North Memorial is the hospital most preferred by Maple Grove area
residents for their health care needs.
North Memorial is the only hospital west of downtown Minneapolis, which includes the Maple
Grove primary service area, that has achieved the designation of a Level I Trauma Center.
Serious accidents and injuries from the northwest corridor are taken to North Memorial for
treatment. This past year, our air and ground ambulances transported over 8,000 people from
the Maple Grove area to various health care facilities. As an integrated hospital-based
transportation service, we are able to combine state-of-the-art transport vehicles, highly trained
personnel and the latest technology that optimizes survival rates for severely injured people.
Through the years, North Memorial’s medical transportation system has grown to five
helicopters, 115 ambulances, and over 600 employees.
Our paramedics and transport personnel have trained and worked with northwest communities’
first responders for decades. We have become part of the fabric of the community. As a
community partner, we have participated in local parades, firework displays, open houses, and
disaster drills. We have conducted safety programs in the community, such as child bike and
helmet safety programs, child car seat classes, and mock vehicle crashes at the area high
schools. Each year, North Memorial donates over $15,000 worth of hospital supplies and
equipment to local community fire and police departments.
One of North Memorial’s largest specialty areas is heart care. The North Memorial Heart Center
has been recognized nationally as a 100 Top Hospital by Solucient LLC, an independent
provider of health care intelligence. The Heart Center currently cares for more heart patients
from Hennepin County than any other hospital. North Memorial was also the first hospital in the
Midwest to implement the “single-unit stay model” of care for cardiac surgery patients. This
model allows patients to stay in the same room through their entire hospital stay, with the
exception of the actual surgery. This program has improved recovery times and shortened the
length of stay for patients, prompting hospitals in the Twin Cities and across the nation to adopt
this innovative approach to improving their heart surgery programs.
Another recognized specialty at North Memorial Medical Center is our Women’s and Children’s
Services. North Memorial is equipped to handle the most simple or complex births. One of the
advantages of giving birth at North Memorial is the experience and expertise in providing all
levels of specialized care for mothers and their children. More than 3,000 babies are delivered
each year, and as a Level III Newborn Intensive Care Unit (NICU), North Memorial is certified to
provide the highest level of care for mothers and newborns who are ill or born early.
1
Minnesota Hospital Association (MHA) Data 2003
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November 5, 2004
BUSINESS CONFIDENTIAL
This high level of clinical expertise extends to the North Memorial Cancer Center, one of the
largest and most respected cancer programs in the Twin Cities. By creating programs unique to
each cancer type, North Memorial is recognized as a center of excellence for its Breast and
Women’s Cancers Program, Colon Cancer Program, Lung Cancer Program, Melanoma
Program and Cancer Genetics Program.
North Memorial Health Care is the Twin Cities only independent health care provider with more
than 900 physicians on staff. These physicians provide a complete continuum of primary and
specialty health care to the Twin Cities’ northwest corridor, including Maple Grove and
surrounding communities. Ranging from emergency care and rehabilitation to family medicine
and pediatrics, North Memorial has the expertise and established relationships with physicians
already serving the Maple Grove community.
II.
Maple Grove Commitment
As one of the fastest growing communities in Minnesota, the residents of Maple Grove need
medical services that are easily accessible and meet their changing needs. North Memorial is
committed to continue to provide high quality health care services to the residents of Maple
Grove and surrounding communities. Through our planned development of a 30-acre health
care campus, the residents in the northwest corridor will have expanded access to the same
high quality medical services offered by North Memorial and our partners in a convenient Maple
Grove location.
Our vision for the North Memorial Health Care Campus includes a full-service inpatient hospital,
primary and specialty physician clinics, outpatient surgical suites, and urgent/emergent care,
including access to our Level I Trauma Center via our extensive air and ground ambulance
system. North Memorial is committed to growing with the community, placing services that are
immediately needed at the forefront of our phased approach. Since North Memorial’s
independent medical staff currently serves this market, they can easily provide service at the
new medical campus.
III.
Maple Grove Campus – Phases of Development
North Memorial has signed a purchase agreement with Ryan Companies for 30 acres of a
proposed 157-acre development at the intersection of I-94 and the proposed extension of
highway 610. The first phase of our planned development will be in partnership with Children’s
Hospitals and Clinics and North Memorial affiliated physician provider groups. This partnership
provides an optimal mix of providers to meet the complex needs of this growing community.
Established, long-time residents of the Maple Grove area will continue to need a strong primary
and specialty care network, while the young families moving into the area will seek convenient
pediatric and obstetric services. All residents will be served by the enhanced presence of
convenient emergency and urgent care.
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EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
The development of the ambulatory care facility and the hospital would greatly enhance the
access to medical care for residents in the northwest corridor. Access is defined by the amount
of time traveling to and from existing providers and the availability of providers. Through our
unique partnership with Children’s Hospitals and Clinics and physician specialists, services that
are currently not available in the Maple Grove area will be conveniently provided to area
residents. Building medical facilities, including urgent/emergent services, closer to Maple Grove
significantly decreases the amount of travel time experienced by residents in the northwest
corridor.
Phase One will begin with the establishment of an ambulatory care facility. This facility will be a
combination of medical offices for primary care and specialty physicians, Children’s Hospitals
and Clinic’s pediatric specialty clinics, outpatient surgical suites, medical diagnostic laboratories
and urgent/emergent care. Construction is scheduled to begin in 2005, and this phase is
expected to open in 2006. North Memorial and Ryan Companies are currently seeking approval
from the Maple Grove City Council in order to initiate this phase.
Phase Two of the project is dependent on legislative approval that would enable North Memorial
to transfer 80 existing hospital beds from its Robbinsdale campus to the Maple Grove campus.
The long-term master facility plan for North Memorial recommends that the beds in the current
inpatient facility will convert to all private rooms, consistent with patient demand. Conversion to
private rooms would mean that 80 beds, based on current and projected demand, would best be
used in Maple Grove. By “right-sizing” the current facility, we will enhance our patients’
experience in our Robbinsdale facility, while providing a mechanism to meet the growing needs
of the residents of the northwest corridor, without increasing the overall licensed bed capacity in
Minnesota. North Memorial will begin the formal design and construction planning processes for
a Maple Grove hospital after the legislature approves the transfer of beds. The expectation is
that the hospital would open two to three years after this approval.
The final phase of our vision for the Maple Grove campus would be the expansion of the
inpatient hospital, ambulatory care areas and medical clinics. The implementation of this phase
would go forward on an as-needed basis, based on the needs of the community, current use of
the existing facilities in the area and an evaluation of the impact that technology will have on the
delivery of patient care. If the need to expand the inpatient hospital is sufficiently demonstrated,
we would seek all necessary legislative approvals at that time.
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EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
IV.
Health Care Services
North Memorial Health Care will provide a complete array of inpatient and outpatient services at
the Maple Grove campus. As previously stated, the development of this medical campus will be
in three phases. The specific services provided in each of these phases are described below.
Phase I
• Physician Services
o Family Practice
o Internal Medicine
o Pediatrics
o OB/Gyn
o Cardiology
o Oncology
o Orthopedics
o Oncology
o Gastroenterology
o ENT
o Urology
o Neurology
o Pulmonology
• Urgent/Emergent Care
• Pediatric Specialty Clinics
• Ambulatory Surgery Services
• Medical Imaging
• Cancer Center
• Laboratory
• Pharmacy
• Retail
• GI laboratory
• Sleep Lab
• Rehabilitation Services
• Support Services
• Helipad
Phase II
• 80 Bed Hospital (pending legislative approval)
• Inpatient Surgery & Imaging
• Dining Room/Kitchen
• Inpatient Laboratory & Pharmacy
• Loading Dock
• Support Services
• Heliport
Phase III
• Additional Inpatient Beds (if needed/pending legislative approval)
• Expanded Outpatient Services
• Expanded Medical Office Space
• Additional Parking
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EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
V.
Description of Licensed Beds
As described in Section III, it is North Memorial Health Care’s intention to move 80 existing
licensed beds from the Robbinsdale facility to the new Maple Grove hospital. It has been
determined that this move will enable us to “right-size” the Robbinsdale location and improve
the overall delivery of care by converting semi-private rooms into private rooms. According to
Mike Romano of Modern Healthcare magazine, “Single rooms have become the industry norm.
Almost everything being built now is single rooms. It is a matter of the baby boomers aging.
People have more choice now of where they go for their care, and want to go to a single.”
In addition to patient demand, it is becoming required with federal legislation such as the Health
Insurance Portability and Accountability Act (HIPAA), because semi-private rooms make it
difficult for caregivers to consult with patients and families regarding confidential information.
North Memorial believes this improvement to its Robbinsdale facility is necessary for it to
continue to compete effectively in the Twin Cities market. Through a demand analysis, we have
determined that the capacity of the current facility would still be adequate if 80 beds were
moved to Maple Grove. In spring of 2005, North Memorial will open 80 new beds in the Heart
and Stroke Center in the present facility. Given the estimated future demand for inpatient care,
we believe there is a strong business argument that bringing the new beds on line, converting
semi-private rooms into singles, and moving 80 beds to the fastest growing community in our
primary service area would not only be a strong strategic move for North Memorial Health Care,
but also the optimal allocation of inpatient bed capacity in the northwest corridor.
Breakdown of Beds for the Maple Grove Facility
Service Category
Number of Beds
Medical/surgical
50
Women’s & Children’s Services
22
Critical Care/Step Down Unit
8
TOTAL
80
VI.
Affiliated Provider Groups
North Memorial and its affiliated physicians have been a community partner in the Maple Grove
area for over 50 years. Currently, North Memorial is providing the following health care services
to residents of this area.
•
•
•
•
•
North Memorial Ambulance (ground and air service)
North Memorial Rehabilitation Services
Maple Grove Urgent Care
Institute for Athletic Medicine-Maple Grove
North Memorial EMS Education
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EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
In addition to these services, North Memorial’s primary care physicians and specialists are
committed to this region. Many of the physicians already have clinics in the area or in the case
of the specialists, they have outreach locations where they see patients certain days of the
week. Those who presently do not see patients in Maple Grove have expressed interest in the
North Memorial Maple Grove health campus.
Physician Group/
Clinic Name
Camden Physicians
Cardiovascular
Consultants
Specialty
Hospital Locations
Minneapolis Radiology
Associates
Radiology/ Interventional
Radiology
North Memorial
North Memorial
Methodist Hospital
(Electrophysiology
patients only)
North Memorial
Mercy-Coon Rapids
Unity-Fridley
Fairview Princeton
Cambridge Hospital
Buffalo Hospital
Monticello/Big Lake
Fairview Wyoming
North Memorial
Monticello/Big Lake
North Clinic
Primary Care
North Memorial
Hubert H. Humphrey
Cancer Center
Primary Care
Cardiology
Sub Specialty:
Internal Medicine
Oncology
Sub Specialty:
Internal Medicine
Northwest Orthopedic
Surgeons, PA
Sub Specialty:
Internal Medicine
Orthopedic Surgery
Oakdale OB/Gyn, PA
Obstetrics/Gynecology
Partners in Pediatrics
Pediatrics
Respiratory
Consultants PA
Pulmonary Medicine
Specialists in General
Surgery Ltd
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Sub Specialty:
Critical Care
Internal Medicine
General Surgery
North Memorial
Buffalo
WestHealth
North Memorial
North Memorial
Children’s Hospitals &
Clinics
North Memorial
North Memorial
Monticello/Big Lake
Buffalo
Mercy
Unity
BUSINESS CONFIDENTIAL
Clinic Locations
Maple Grove
Plymouth-WestHealth
Spring Lake Park
Pine City Clinic
Princeton
Cambridge
Litchfield
Buffalo
Monticello
Wyoming
Maple Grove (partnership
with North Memorial)
Monticello Clinic
Maple Grove
Osseo
Plymouth (WestHealth)
Buffalo Clinic
WestHealth
Elk River
Maple Grove
Robbinsdale
Monticello/Big Lake
Hospital
Buffalo Clinic
Monticello Clinic
Camden Physicians Clinic
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Map depicting the North Memorial-affiliated physician locations
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EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
VII.
Site Description
The site is located in the southeast quadrant of the proposed extension of Highway 610 and
Interstate 94 interchange. Direct access to the site will be off of Maple Grove Parkway which will
have full interchanges with both lnterstate 94 and the proposed Highway 610. To ensure
convenient access to the campus, Maple Grove Parkway will be a six lane divided road with turn
lanes and a signalized intersection at the main entrance to the medical center property.
As noted above, the North Memorial development is proposed as a three phase project:
I.
Phase I will begin with the establishment of an ambulatory care facility. This facility will
be a combination of medical offices for primary care and specialty physicians, outpatient
surgical suites, medical diagnostic laboratories and urgent/emergent care. The medical office
building is proposed to be 70,000 square feet, and the outpatient center is proposed to be
105,000 square feet. Currently, North Memorial and Ryan Companies are seeking approval
from the Maple Grove City Council in order to begin construction in the spring of 2005 with
opening of the first phase in October of 2006.
2.
Phase II consists of an 80 bed inpatient hospital (pending legislative approval) that
would include all private rooms, surgical suites, imaging, emergency services, dining services,
laboratory and pharmacy services, support services and a heliport. The hospital is proposed to
be 160,000 square feet.
3.
Phase III would complete the vision for the Maple Grove campus by the possible
expansion of the inpatient hospital up to 240 beds, ambulatory care areas and medical clinics.
The implementation of this phase would be based on the needs of the community, current use
of the existing facilities and an evaluation of the impact of technology on the delivery of patient
care. Legislative approval would be required for the additional beds.
VIII.
Project Costs
Phase I: Ambulatory
Facility
Medical Office Building
Ambulatory Center
Care
Associated Costs (000’s)
Land & Assess
Building
Equipment
Total
$2,679
$12,456
$1,000
$16,135
$2,679
$25,325
$15,000
$43,004
Phase I Total
$59,139
Phase II: Inpatient Hospital
80 Bed Hospital
$8,036
$35,007
$15,000
$58,043
Phase I & II Total
$13,394
$72,788
$31,000
$117,182
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EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
IX.
Primary Service Definition
The Primary Service Area (PSA) for the proposed hospital is represented on the map depicted
below. This PSA is defined by 20 zip codes and was selected based on Minnesota Hospital
Association (MHA) discharge data by zip code, proximity to the proposed site, traffic patterns
and other geographic factors. The methodology utilized in this selection is based on an analysis
of where residents from this region presently seek inpatient health care services and applying
some assumptions regarding their willingness to change.
North Memorial’s Maple Grove Primary Service Area
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EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
X.
Population and Demographic Projections
The population residing in the PSA represents approximately 321,000 people2 and is projected
to grow more than twice as fast as Minnesota’s overall population growth through 2008. The
largest age group is the 18-44 category; however, the baby boom generation (ages 45-64) will
be the fastest growing segment for this area. Over the next 10 years, as the baby boom
generation moves into the 65+ age category, the demand for health care services will
significantly increase in this market. Additional hospital capacity will be necessary to meet this
demand, depending on hospital utilization rates and the impact of technology on inpatient care.
A complete description of the data sources and methodology can be found in Appendix A.
Projected Population Growth
2003 - 2008
10.0%
8.7%
9.0%
8.0%
7.0%
6.0%
27,864 new residents
5.0%
4.1%
4.0%
3.0%
2.0%
206,732 new residents
1.0%
0.0%
Primary Service Area
2
Minnesota
Solucient and Claritas
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EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Demographic Forecast by Age and Gender
70000
-1.7%
-0.6%
Overall Female Growth: 8.8%
Overall Male Growth: 8.6%
Overall Total Growth: 8.7%
60000
50000
28.2%
3.4%
3.8%
26.7%
40000
Pop. 2003
Pop. 2008
30000
20000
18.8%
22.4%
10000
0
Age 0-17
Age 18-44
Age 45-64
Age 65+
Age 0-17
Female
XI.
Age 18-44
Age 45-64
Age 65+
Male
Utilization Estimates
With the anticipated growth of the population, hospital utilization is expected to increase in a
similar manner. Overall hospital discharges for this PSA will increase 8.7% over the next 5
years and total inpatient days will increase to over 15,000 days by 2008. Current and future
utilization data by service line is displayed in Appendix B & C.
Major Service Line Growth (2003 to 2008 discharges)
Gender
Cardiology
General
General
Medicine
Surgery
Male
15.0%
12.5%
11.7%
Female
15.2%
12.6%
11.0%
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BUSINESS CONFIDENTIAL
Obstetrics
Orthopedics
NA
9.5%
12.0%
13.6%
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 TOTAL DISCHARGES
16000
14000
12000
10000
8000
6000
4000
2000
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 TOTAL DAYS
60000
50000
40000
30000
20000
10000
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
For all specialties, ambulatory visits are anticipated to grow 11% over the next five years.
Significant growth will occur in cardiology, oncology, pulmonology, rheumatology, nephrology,
outpatient surgery, and urology.
Ambulatory Visit Growth Estimates
1,240,000
Specialties include:
Allergy/Immunology
Cardiology
Dermatology
Gastroenterology
General & Family Practice
General Surgery
Hematology/Oncology
Internal Medicine
Medical Subspecialties
Nephrology
Neurology
Obstetrics & Gynecology
Ophthalmology
Orthopedic Surgery
Other
Other Pediatric Subspecialties
Otolaryngology
Pediatric Cardiology
Pediatric Neurology
Peadiatric Psychiatry
Pediatrics
Physical Medicine and Rehab.
Plastic Surgery
Psychiatry
Pulmonary
Rheumatology
Surgical Subspecialties
Urology
1,220,000
1,200,000
1,180,000
1,160,000
10.8% Growth
1,140,000
1,120,000
1,100,000
1,080,000
1,060,000
1,040,000
1,020,000
2003 Visits
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2008 Visits
BUSINESS CONFIDENTIAL
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November 5, 2004
BUSINESS CONFIDENTIAL
20.3
19.5
20
18.8
18
17.7
Surgery
21.8
Nephrology
Percentage Growth
25
Rheumatology
Ambulatory Visit Growth Estimate
2003-2008
17.7
15
10
5
Urology
Pulmonology
Oncology
Cardiology
0
Major Services
So urce: So lucient
As expected with a younger population, the relative acuity for this PSA is less than what
hospitals throughout Minnesota are experiencing.
Relative Acuity
116.5
466
117
116
115
114
113
112
111
110
109
108
107
470
460
450
110.7
430
430
420
410
Minnesota
Maple Grove
Discharges/1,000 P o pulatio n
Days/1,000 P o pulatio n
Source: M HA, Solucient and Clarit as
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November 5, 2004
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XII.
Access to Services
North Memorial’s development of both the ambulatory care facility and the hospital will greatly
enhance access to medical care for residents in the northwest corridor. Access is defined by the
amount of time traveling to and from existing facilities and the availability of providers. Through
our unique partnership with Children’s Hospitals and Clinics, services that are currently not
available in the Maple Grove area would be conveniently provided to area families. Families
would not be required to drive to Minneapolis to receive pediatric specialty services. Building
medical facilities, including urgent/emergent services closer to Maple Grove, significantly
decreases the amount of travel time experienced by residents in the northwest corridor.
Currently, the three closest tertiary hospitals within the PSA are North Memorial, Mercy, and
Methodist. Access to North Memorial is more direct due to the existing bridges and highway
systems. Based on actual data collected for this submission, no matter what time of day, it was
faster and fewer miles to travel from the intersection of highways 30 and I-94 to North Memorial
than any other hospital. As seen below, the time of day had a significant impact on how long it
took to get to any facility, ranging from 14 minutes to 52 minutes due to traffic congestion.
North Memorial Ambulance Service has provided medical transportation to this region for over
40 years. According to our 2003 transportation logs, the average ambulance transport time to
North Memorial was 16.1 minutes, with a range of 7.9 to 34.0 minutes. For the same period of
time, the average ambulance transport time to all facilities was 18.7 minutes. Year-to-date, the
data indicates this length of time has increased to an average of 16.3 minutes for transports to
North Memorial and 19.1 minutes to all facilities.
Time of Day
6:00 am-8:00 am
North Memorial
Miles
Minutes
12.2
39
Mercy
Miles
15.7
Minutes
44
Methodist
Miles
Minutes
19.8
52
4:00 pm-6:00 pm
11
17
15.5
37
18
26
1:00 am-3:00 am
11
14
16
20
18
20
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November 5, 2004
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XIII.
Care for the Low Income and Uninsured
According to the Minnesota Hospital Patient Origin Report: Where State Residents Received
Acute Care In 20003, the counties surrounding the metropolitan area have fewer people who are
uninsured and a significantly higher percentage of the population have private health insurance.
The counties represented in this PSA are Hennepin, Wright, and Sherburne. The table below
shows the variations in health insurance coverage among these counties. In order for hospitals
to remain financially solvent, they need a payor mix that has a strong private health insurance
component to offset under compensated care.
Health Insurance Coverage
County
Hennepin
% Population % Population % Population % Population
Uninsured
Medicare
Other Public
Private
6.5
12.3
10.3
70.9
Sherburne
5.3
7.3
6.1
81.3
Wright
5.4
10.0
6.5
78.1
If North Memorial’s patient volume from this PSA was significantly reduced, it would negatively
change our payor mix, increasing the relative amount of uncompensated care and public
assistance. It would be very difficult to remain financially solvent if this occurred, and the viability
of the entire regional health care infrastructure could be compromised. In contrast, North
Memorial’s construction of the Maple Grove project would enhance the competitive mix of the
Twin Cities hospital market.
Based on North Memorial’s current payor mix for this PSA, 1.1% of the residents seeking
services at the hospital are uninsured and 12.2% are medical assistance patients. For all other
patients seeking services at North Memorial, 2% are uninsured and 19.6% are medical
assistance patients. Since we have over 30% of this market, we believe that our data is
reflective of an anticipated payor mix the Maple Grove facility would experience, so our current
policies and procedures would apply.
XIV.
Market Analysis
Based on 2003 MHA hospital discharge data, North Memorial serves over a third of the PSA,
nearly three times as many patients as any other hospital in Minnesota. This strong market
share permeates through all of the major service categories. North Memorial has the leading
market position in cardiology, ENT, general medicine, gynecology, neonatology, neurology,
obstetrics/newborns, oncology, orthopedics, and urology. The only categories that North
Memorial is not the market leader is in chemical dependency, ophthalmology, psychiatry, and
rehabilitation services, where services are being provided by niche facilities.
3
Minnesota Department of Health, December 2003
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November 5, 2004
BUSINESS CONFIDENTIAL
32.4
30.0
25.0
9.2
6.4
9.2
8.7
8.7
9.5
10.0
9.8
10.6
15.0
11.9
20.0
12.2
Market Share Percentage
35.0
32.4
Overall Market Share
5.0
0.0
No rth
M emo rial
M ercy
M etho dist
Unity
Discharges
A bbo tt
No rthwestern
FairviewUniversity
Days
Source: M HA 2003
36.7
35.0
6.4
5.8
10.0
8.7
9.9
15.0
9.2
20.0
9.0
25.0
19.8
30.0
20.7
Market Share Percentage
40.0
37.6
Cardiology Market Share
5.0
0.0
No rth M emo rial
M ercy
M etho dist
Discharges
Days
Source: M HA 2003
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Unity
A bbo tt
No rthwestern
EXECUTIVE SUMMARY
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November 5, 2004
BUSINESS CONFIDENTIAL
40.0
28.8
35.0
30.0
26.3
40.0
45.0
20.0
15.0
11.6
25.0
13.2
Market Share Percentage
41.3
Chemical Dependency Market Share
10.0
5.0
0.0
Unity
Fairview-University
Discharges
Source: M HA 2003
No rth M emo rial
Days
35.0
30.0
Mer cy
5.0
4.9
Met hodist
5.0
5.4
4.5
10.0
7.9
6.8
15.0
8.7
8.3
20.0
10.7
14.4
25.0
15.7
16.5
Market Share Percentage
40.0
32.5
33.9
ENT Market Share
Abbot t
Unit y
0.0
Nor t h Memorial
Fair view-
Children' s
Univer sit y
Nort hwest er n
Discharges
Days
Source: M HA 2003
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November 5, 2004
BUSINESS CONFIDENTIAL
35.0
30.0
M etho dist
5.1
5.2
M ercy
5.3
7.4
10.0
FairviewUniversity
Hennepin
Co unty
5.7
5.4
15.0
9.5
9.1
20.0
10.9
10.0
25.0
12.0
12.4
Market Share Percentage
40.0
37.9
37.4
General Medicine Market Share
5.0
0.0
No rth
M emo rial
Unity
Discharges
Children's
Days
Source: M HA 2003
35.0
35.7
9.3
7.9
10.0
9.8
9.4
15.0
12.0
20.0
13.7
25.0
13.9
30.0
17.1
Market Share Percentage
40.0
32.8
Gynecology Market Share
5.0
0.0
No rth M emo rial
M etho dist
M ercy
Discharges
A bbo tt
No rthwestern
Days
Source: M HA 2003
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Unity
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Neonatology Market Share
25.0
25.2
20.8
23.9
20.0
2.8
7.9
8.1
8.9
8.7
7.3
6.1
10.0
11.1
15.0
11.8
12.1
12.4
Market Share Percentage
30.0
5.0
0.0
Nor t h Memor ial
Abbot t
Mer cy
Met hodist
Hennepin
Nor t hwest er n
Unit y
Childr en's
Count y
Discharges
Days
Source: M HA 2003
37.3
35.0
30.0
6.8
5.6
7.1
6.2
7.3
8.7
10.0
7.5
15.0
8.8
20.0
11.8
25.0
11.6
Market Share Percentage
40.0
37.2
Neurology Market Share
5.0
0.0
No rth
M emo rial
M ercy
M etho dist
Discharges
Unity
Days
Source: M HA 2003
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A bbo tt
No rthwestern
FairviewUniversity
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
28.0
5.7
5.1
10.0
8.7
8.4
12.1
11.6
15.0
12.4
12.0
20.0
16.4
25.0
18.3
Market Share Percentage
30.0
28.4
Newborn Market Share
5.0
0.0
No rth
M emo rial
M etho dist
A bbo tt
No rthwestern
Discharges
Source: M HA 2003
M ercy
Unity
Fairview
So uthdale
Days
26.7
5.4
5.8
7.8
10.0
8.5
10.2
11.1
15.0
15.0
13.0
20.0
15.7
25.0
17.0
Market Share Percentage
30.0
26.5
OB Market Share
5.0
0.0
No rth
M emo rial
M etho dist
Source: M HA 2003
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A bbo tt
No rthwestern
Discharges
M ercy
Days
BUSINESS CONFIDENTIAL
Unity
Hennepin
Co unty
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
35.0
Mer cy
Unit y
5.1
6.7
10.0
5.8
5.4
15.0
6.9
7.3
20.0
8.3
7.3
25.0
10.7
8.9
30.0
16.0
20.9
Market Share Percentage
40.0
37.9
34.4
Oncology Market Share
Abbot t
Childr en's
5.0
0.0
Nor t h Memorial
Fair view-
Met hodist
Universit y
Nor t hwest ern
Discharges
Days
Source: M HA 2003
45.0
40.0
12.1
20.0
6.1
15.0
10.0
5.0
3.8
25.0
16.0
27.4
30.0
19.7
35.0
29.3
Market Share Percentage
50.0
45.5
Ophthalmology Market Share
0.0
P hillips Eye Institute
No rth M emo rial
Discharges
Fairview-University
Days
Source: M HA 2003
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Hennepin Co unty
EXECUTIVE SUMMARY
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November 5, 2004
BUSINESS CONFIDENTIAL
40.0
39.8
35.0
30.0
8.6
10.0
8.4
10.3
10.7
10.5
15.0
11.1
20.0
10.9
25.0
11.5
Market Share Percentage
45.0
37.9
Ortho Market Share
5.0
0.0
No rth M emo rial
M etho dist
A bbo tt
No rthwestern
Discharges
M ercy
Unity
Days
Source: M HA 2003
6.3
10.0
12.0
15.0
9.7
12.8
16.9
20.0
17.9
20.3
22.0
25.0
26.0
Market Share Percentage
30.0
24.3
Psychiatry Market Share
5.0
0.0
FairviewUniversity
No rth M emo rial
A bbo tt
No rthwestern
Discharges
Days
Source: M HA 2003
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BUSINESS CONFIDENTIAL
M ercy
Hennepin
Co unty
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
8.5
15.0
10.0
5.4
20.0
6.8
18.1
25.0
9.3
30.0
18.3
27.7
26.0
35.0
34.5
Market Share Percentage
40.0
35.9
Rehab Market Share
5.0
0.0
A bbo tt
No rthwestern
No rth M emo rial
M etho dist
Discharges
Hennepin
Co unty
Regio ns
Days
Source: M HA 2003
40.0
35.0
30.0
5.8
8.1
5.5
6.5
10.0
7.9
9.7
15.0
8.3
6.3
20.0
9.4
8.2
25.0
12.3
10.5
Market Share Percentage
45.0
38.0
39.6
Urology Market Share
Abbot t
Fair view-
Childr en's
Nort hwest ern
Univer sit y
5.0
0.0
Nor t h Memor ial
Mer cy
Met hodist
Unit y
Discharges
Days
Source: M HA 2003
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EXECUTIVE SUMMARY
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November 5, 2004
BUSINESS CONFIDENTIAL
XV.
Financial Impact of a Maple Grove Hospital
As the largest provider of hospital services in Maple Grove, North Memorial will be the most
significantly impacted organization when a new hospital is built. We believe that if North
Memorial is successful in developing the new hospital campus in Maple Grove, it would enable
us to continue to grow in our natural service area (Appendix D). The other markets served by
North Memorial are not experiencing positive changes, like the changes occurring the Maple
Grove area. It would be very difficult for North Memorial to replace this patient volume due to the
number of competitors in the immediate area. If North Memorial is not successful in developing
a hospital campus in Maple grove, our financial viability is threatened as we estimate a shift in
market share that would result in a reduction of net revenue of $45 million and the
corresponding margin reduction on that lost revenue of $13 million.
The current margin of $13 million is utilized to support North Memorial Community Care
programs, which for the total corporation in 2003 approximates $15 million as well as the
support services on behalf of patients and North Memorial’s bottom line. Additionally, this $13
million represents an approximate 70% reduction of North Memorial’s current operating margin
and an approximate 25% increase for the other health care systems that have expressed
interest in developing a hospital campus in Maple Grove.
North Memorial’s successful development of a hospital campus will uniquely complement the
outpatient campus to be developed in 2005 in the following ways:
1. Provide inpatient care in Maple Grove without increasing the number of hospital beds in
the state of Minnesota.
2. An opportunity to enhance the Robbinsdale facility by “right-sizing” it and provide private
rooms.
3. Rational development of programs for the Maple Grove community with expertise in
emergency and trauma care, transportation services and children’s services.
4. Effective deployment of trained, experienced staff as approximately 25% of North
Memorial’s employees live in Maple Grove and surrounding communities.
5. Further integration with physicians who serve the Maple Grove community, many of
which are affiliated with North Memorial.
6. Opportunity to develop community-based board of trustees, with representatives from
Maple Grove, to oversee the development of medical services for the community
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EXECUTIVE SUMMARY
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November 5, 2004
BUSINESS CONFIDENTIAL
XVI.
Financial Impact for Other Hospital Providers
We have reviewed the relative market share for other hospitals serving the Maple Grove
community. Respective market shares are reflected in Section XIV. We anticipate that a new
hospital in the Maple Grove community will draw an overall market share of 40% of the PSA. As
outlined below, the reduction of business to existing hospitals ranges from an estimated 2% for
Fairview University up to 13% for North Memorial. We believe that the other hospitals have a
greater opportunity to replace lost business as their service areas (Appendix D) are anticipated
to grow. Most of North Memorial’s projected growth is located in the northwest corridor. Building
a hospital in Maple Grove, not associated with this organization will prevent future growth for the
Robbinsdale hospital. The table below reflects the number of estimated years that would be
required to replace lost business to a Maple Grove hospital. As can be seen, this represents a
very significant threat to the future viability of North Memorial Health Care and its ability to serve
the rest of its communities.
Provider
Estimated
Reduction in
Admissions*
Percent of Total
Admissions
Annual
Population
Growth Rate in
Hospital
Service Area
0.4%
0.9%
Estimated
Number of
Years to
Recover Lost
Admissions
30.9
2.6
1.2%
0.9%
0.9%
5.3
4.7
2.3
North Memorial
3,926
12.5%
Abbott
1,028
2.4%
Northwestern
Mercy/Unity
2,661
6.4%
Methodist
1,396
4.2%
Fairview772
2.1%
University
*Assumes a 40% market share for a hospital in Maple Grove
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November 5, 2004
BUSINESS CONFIDENTIAL
XVII.
Human Resource Impact
Due to North Memorial’s reputation and location, over 1700 of our employees reside in the
Primary Service Area. Over a thousand of those employees live within a five mile radius of the
city of Maple Grove. Part of North Memorial’s plan for moving 80 existing hospital beds to Maple
Grove, takes into account that many of the employees who live in that area would work in the
new facility. As we “right-size” the Robbinsdale facility, we would “right-size” our workforce as
employees who reside in the northwest corridor choose to work in Maple Grove.
If a new hospital is built in Maple Grove by a competing health system, there is a high
probability that many of those employees would seek employment at the new facility. This would
have a negative impact on our ability to provide care, especially in the job categories that are
difficult to find qualified employees. Below is a summary of the number of employees who live in
the PSA and are in positions that are considered difficult to fill.
Position
Registered Nurse
Pharmacist
Pharmacy Techs
Rad. Techs
Rad. Assistants
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Number of North
Memorial
Employees Residing
in the PSA
564
15
15
11
9
Total North
Memorial
Employees
BUSINESS CONFIDENTIAL
Percent of Total
1322
28
28
33
13
43%
54%
54%
33%
69%
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Appendix A
Description of Data Sources and Methodology
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November 5, 2004
BUSINESS CONFIDENTIAL
Demographics
Data Sources
1999, 2003, & 2008 ZIP Code estimates, Claritas, Inc.
2000 Census, U.S. Bureau of the Census
Methodology
Solucient acquires all of its demographic data from Claritas, Inc. including 1999, 2003 and 2008
statistics for every ZIP Code in the United States. All statistics in the Claritas 2003 release are
based on 2000 Census data.
Inpatient Demand Estimates
Inpatient Demand DRG Estimates predicts the total volume of annual acute care admissions
and patient days by ZIP code, age group, sex and DRG for every market in the United States.
Solucient used all payer state discharge data for 26 states and MEDPAR data to construct
population-based use rates and then applied these rates to demographic projections by ZIP
code to estimate inpatient utilization for 2003 and 2008.
Data Sources
2000, 2001 & 2002 all payer state discharge data from 21 states
2002 Medicare Hospital Market Area File, CMS
2001 MEDPAR (Medicare) data, CMS
2001 TEFRA Medicare Enrollment File
2003 & 2008 Demographic Projections, Claritas, Inc.
Methodology
Solucient used hospital discharge data from 2000, 2001 and 2002 to create inpatient utilization
rates by county, age group, sex and DRG for every market in the United States. These use
rates were then multiplied by 2003 and 2008 demographic projections at the ZIP code level to
estimate the volume of admissions and patient days that the population will demand. All
estimates are made by gender and for various age groupings, including both four main age
groups as well as more detailed pediatric age groups. The main age groups are 0-17, 18-44, 4564 and 65+. The pediatric age groups are <1, 1-4, 5-9, 10-14 and 15-17.
Data Preparation, Filters and Quality Checks
Solucient implemented multiple filters, groupers, and quality checks to the all payer state data
and the MEDPAR data prior to creation of the use rates to improve accuracy of the estimates.
Solucient included only inpatient acute care facilities that are short-term, non-Federal hospitals.
Solucient determined which hospitals met these criteria by using a combination of public
reference databases as well as empirical analysis of each facility's average length of stay.
In order keep all estimates consistent, Solucient re-grouped all of the state data using the official
Federal Fiscal 2002 DRG grouper, or DRG version 19. Because some of the data used in these
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EXECUTIVE SUMMARY
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November 5, 2004
BUSINESS CONFIDENTIAL
estimates is not from the Federal Fiscal Year (October 2001 to September 2002), the DRG
assigned to each record, and the estimates that result from them, may differ from that provided
by the state.
Solucient filtered out all records with missing or erroneous values for county, age, sex and
principal diagnosis. Invalid combinations of age, sex, DRG, and ICD-9 diagnosis code were also
removed. Records with a length of stay value that was missing, negative or greater than 365
days were removed.
Ambulatory Visit Estimates
Data Sources
2003 & 2008 Demographic Projections, Claritas, Inc.
2001-2003 Medical Group Management Association (MGMA) Physician Compensation and
Production Survey
1997-2001 National Ambulatory Medical Care Survey (NAMCS)
2001 Proprietary Commercial Claims, Solucient
2001 Medicare Claims, CMS
Methodology
Solucient created physician visit estimates by first constructing ambulatory visit rates by
specialty, patient age, patient sex, site of service, and county of patient residence. Visit rates
are built from public and private claims streams as well as Federal surveys. Claims data are
used to construct overall visit rates by age, sex, county and site of service. These overall visit
rates are specific to each and every county in the United States and reflect local patterns of
health care demand and access to physicians. Site of service refers to the type of setting rather
than specific provider locations. The two sites available are private physician office and other.
The other site includes any hospital-owned or freestanding outpatient facility.
The National Ambulatory Medical Care Survey is then used to provide physician specialty
breakouts for these overall visits and to adjust the claims-based models to reflect all payers (not
just Medicare and Commercial). The specialty breakouts are applied differently for each age/sex
group and for each of the four census regions (Midwest, Northeast, South and West). In
addition, different breakouts are constructed for urban vs. rural counties - urban counties are
those belonging to a Metropolitan Statistical Area (MSA) and rural counties do not belong to an
MSA.
Visits are defined as a patient’s face-to-face encounter with a physician in a private office or
hospital-owned setting for evaluation and management. Solucient defines such visits using the
CPT-4 code definition for Evaluation and Management (E&M codes). Inpatient encounters,
emergency department encounters and major surgical encounters have been excluded from the
visit estimates. These excluded encounters are estimated in other Solucient demand databases.
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November 5, 2004
BUSINESS CONFIDENTIAL
Once these visit rates are completed, Solucient multiplies these rates by their appropriate
populations by age and sex to yield visit volume estimates at the ZIP Code level for 2003 and
2008.
2003 Discharges and Use Rates
Actual 2003 discharges, as well as use rates based on those discharges, were obtained from
the Minnesota Hospital Association Standard Information Reports. The MHA provides this
information quarterly, and it is reported for each zip code and hospital in the state.
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November 5, 2004
BUSINESS CONFIDENTIAL
Appendix B
2003 Hospital Discharges for PSA
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EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Total Discharges
Discharges by Service Line
8000
7000
6000
5000
4000
3000
2000
1000
0
6776
5536
4396
3933
3397
2349
1671
1670
1328
Female
Source: M HA 2003
1228
951
916
628
509
178
68
M ale
Patient Days by Service Line
30000
27134
Total Days
25000
20000
15000
14581
14496
12910
12829
11697
10000
9652
8091
7367
5282
5000
4552
3421
2477
2280
1194
108
0
Source: M HA 2003
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Female
M ale
BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Average Days
Average Length of Stay by Service Line
16.0
14.0
12.0
10.0
14.7
14.0
13.2
7.4
8.0
6.0
4.0
2.0
0.0
8.2 7.8
7.2 7.3 7.3
6.3
4.9
5.6
Females
Source: M HA 2003
5.2
5.8 5.5
M ales
5.0
5.7 5.4
4.3 4.6 4.5
4.0 4 4.0
To tal
Average Days
Average Length of Stay by Service Line
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
4.0
3.7
3.4
3.6
Source: M HA 2003
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3.2
3.4
3.4
3.2 3.3
2.4 2.3 2.4
2.6
2.5
2.0 2.1 2.1
1.5
1.7 1.6
1.3
0
Females
M ales
BUSINESS CONFIDENTIAL
To tal
1.3
0
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Appendix C
2008 Hospital Discharges for PSA
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EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 TOTAL DISCHARGES
16000
14000
12000
10000
8000
6000
4000
2000
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 TOTAL DAYS
60000
50000
40000
30000
20000
10000
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 CARDIOLOGY DISCHARGES
1600
1400
1200
1000
800
600
400
200
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 CARDIOLOGY DAYS
6000
5000
4000
3000
2000
1000
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 CHEMICAL DEPENDENCY DISCHARGES
400
350
300
250
200
150
100
50
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 CHEMICAL DEPENDENCY DAYS
2500
2000
1500
1000
500
0
Male
Female
Age 0-17
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Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 E.N.T. DISCHARGES
160
140
120
100
80
60
40
20
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 E.N.T. DAYS
350
300
250
200
150
100
50
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 GENERAL MEDICINE DISCHARGES
2500
2000
1500
1000
500
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 GENERAL MEDICINE DAYS
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 GENERAL SURGICAL DISCHARGES
1200
1000
800
600
400
200
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 GENERAL SURGICAL DAYS
6000
5000
4000
3000
2000
1000
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 GYNECOLOGY DISCHARGES
1000
900
800
700
600
500
400
300
200
100
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 GYNECOLOGY DAYS
2500
2000
1500
1000
500
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 NEONATOLOGY DISCHARGES
900
800
700
600
500
400
300
200
100
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 NEONATOLOGY DAYS
7000
6000
5000
4000
3000
2000
1000
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 NEUROLOGY DISCHARGES
600
500
400
300
200
100
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 NEUROLOGY DAYS
2500
2000
1500
1000
500
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 NEWBORN DISCHARGES
2500
2000
1500
1000
500
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 NEWBORN DAYS
4500
4000
3500
3000
2500
2000
1500
1000
500
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 OBSTETRICS DISCHARGES
7000
6000
5000
4000
3000
2000
1000
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 OBSTETRICS DAYS
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 ONCOLOGY DISCHARGES
350
300
250
200
150
100
50
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 ONCOLOGY DAYS
1800
1600
1400
1200
1000
800
600
400
200
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 OPHTHALMOLOGY DISCHARGES
30
25
20
15
10
5
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 OPHTHALMOLOGY DAYS
45
40
35
30
25
20
15
10
5
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 ORTHOPEDICS DISCHARGES
1200
1000
800
600
400
200
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 ORTHOPEDICS DAYS
4500
4000
3500
3000
2500
2000
1500
1000
500
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 PSYCHIATRY DISCHARGES
900
800
700
600
500
400
300
200
100
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 PSYCHIATRY DAYS
7000
6000
5000
4000
3000
2000
1000
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 REHABILITATION DISCHARGES
80
70
60
50
40
30
20
10
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 REHABILITATION DAYS
1000
900
800
700
600
500
400
300
200
100
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
2008 UROLOGY DISCHARGES
400
350
300
250
200
150
100
50
0
Male
Female
Male
Age 0-17
Female
Male
Age 18-64
Female
Age 65+
2008 UROLOGY DAYS
1400
1200
1000
800
600
400
200
0
Male
Female
Age 0-17
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Male
Female
Age 18-64
BUSINESS CONFIDENTIAL
Male
Female
Age 65+
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Appendix D
Hospital Service Areas
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Primary Service Area (PSA)
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
North Memorial PSA
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Abbott Northwestern PSA
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Mercy PSA
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Unity PSA
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Fairview University PSA
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Methodist PSA
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Appendix E
Letters of Support
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Appendix F
Additional Requested Information
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Maple Grove Primary Service Area
The following zip codes define the Primary Service Area utilized in North Memorial’s
submission to the Department of Health.
55311
55316
55327
55369
55374
55428
55442
55443
55445
55301
55330
55340
55341
55357
55373
55376
55429
55432
55444
55446
Maple Grove SW
Champlain
Dayton
Maple Grove Osseo
Rogers
New Hope
Plymouth NE
Brooklyn Park - Central
Brooklyn Park - West
Albertville
Elk River
Medina, Hamel, Corcoran
Hanover
Loretto
Rockford
St. Michael, Rogers
Crystal
Fridley
Brooklyn Park - East
Plymouth NW
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Service Description
Phase I – Ambulatory Care and Medical Office Building (opening 2006)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Physician Services
o Family Practice
o Internal Medicine
o Pediatrics
o OB/Gyn
o Cardiology
o Oncology
o Orthopedics
o Gastroenterology
o ENT
o Urology
o Neurology
o Pulmonology
Urgent/Emergent Care
Ambulatory Surgery Center
Cath/Electrophysiology Labs
Observation Unit
Outpatient Medical Imaging
Cancer Center
Laboratory
Pharmacy
Retail
GI laboratory
Rehabilitation Services
Support Services
Ambulance Garage
Helipad
Phase II- 80 Bed Hospital (pending legislative approval, estimated opening in 2008)
•
•
•
Inpatient Bed Composition
o Cardiology
o Medical/surgical
o Ob/Gyn
o Level II Nursery
o Oncology
o Orthopedics
o Pediatrics
o Psychiatric
o Special Care Units
Inpatient Surgical Suites
Level III Trauma Center
o Linked to North Memorial’s Level I Trauma Center
o Air and Ground Ambulance Service
o Emergency Services
o Expanded Ambulance Garage (NMHC already has ambulances in Maple Grove)
o Heliport
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Phase II (continued)
•
•
•
•
•
•
•
•
•
•
•
•
Cardiopulmonary Services
o Cath/Electrophysiology Labs
o Stress Testing
o Echocardiography
o Holter Monitoring
o Electrocardiogram
o Respiratory Therapy
o Pulmonary Diagnostics
o Cardiac Rehabilitation
Neurology Services
o Evoke Potential
o Electroencephalography
o Stoke Clinic
Oncology Services
o Outpatient Clinic
o Chemotherapy/Infusion Therapy
o Possible Radiation Therapy
Medical Imaging
o General Radiology
o Bone Densitometry
o Fluoroscopy
o Nuclear Medicine
o Mammography
o Computed Tomography
o MRI
o Interventional Radiology
o PET (possible)
Dialysis Services
Inpatient Laboratory
Pharmacy
Rehabilitation Services
o Physical Therapy
o Occupational Therapy
o Speech Pathology
Community Education
Dining Room/Kitchen
Loading Dock
Support Services
Phase III (pending legislative approval, estimated opening in 2013)
• Additional Inpatient Beds (up to 260 beds)
• Expanded Outpatient Services
• Expanded Medical Office Space
• Additional Parking
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Summary of Inpatient Bed Analysis
Maple Grove Market Totals
MHA Prod
Discharges
2008
2013
2018
Cardiology
4,976
5,680
6,409
Chemical Dependency
755
805
831
ENT
614
664
General Medicine
8,393
General Surgery
Required Beds
2008
2013
2018
9
27
31
710
1
3
3
9,343
10,280
21
63
70
2,704
2,959
3,164
9
27
30
Gynecology
931
1,003
1,043
2
4
5
Neonatology
1,552
1,605
1,669
Neurology
1,971
2,211
2,451
5
16
18
Newborns
4,124
4,262
4,434
6
15
16
Obstetrics
5,635
6,001
6,121
7
19
20
Oncology
1,019
1,149
1,281
4
11
12
Ophthalmology
85
93
102
Orthopedics
3,768
4,212
4,637
8
25
28
Psychiatry
2,471
2,641
2,739
4
11
11
Rehabilitation
244
274
304
Urology
1,363
1,535
1,708
3
9
10
Grand Total
40,605
44,440
47,885
79
230
254
* Date Source: Solucient
** Assumes 85% occupancy rate.
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Use Rate Assumptions
Inpatient Estimates
Both discharges/1,000 population and days/1,000 population are based upon 2003 MHA data for the
four county area of Anoka, Hennepin, Sherburne, and Wright. This is done to ensure an adequate
sample size to develop age/sex/drg specific use rates. These cohort-specific drg-specific rates are
then applied to the projected population changes of the Maple Grove Market.
As both the discharges and days use rates are based on 2003 statistics, and we are not changing
the underlying cohort/DRG specific use rates, then by definition, our assumption is that the
cohort/DRG specific lengths of stay are each held constant.
ED visits, Amb Surg Encounters, and OP Procedures Estimates
As with the inpatient use rate, we built age-sex specific use rates from the four county area, and
then apply those rates to the specific demographic projections of the Maple Grove Market.
In the case of Amb Surg encounters, and Outpatient Visits, we have also provided projections which
incoporate historic trends in outpatient use rates. Specfically, as technologies have proven to either
increase in adoption or decrease in utilization, those projections were carried forward for five years.
We attentuate this affect by not adjusting the change in use rate past our five year projections. The
two projections offered in this approach, should be considered a sensitity-range, of potential future
volumes.
Market Share Assumptions
Inpatient Estimates
High-level Assumptions
2013 Marketshare 52% in service lines not otherwise exclused or depressed
2008 Marketshare is a ramp up to reach the 52% by 2013
Service Line Exclusions
Chemical Dependency
Neonate
Rehab
Service Lines (not at 52%)
Psych (only 15% not full 52%)
Obstetrics - to account for the exclusion of neonates, we decreased the market share of obstetric
cases accordingly (a 30% decrease - consistent with the proportions of normal newborn to neonate
cases in the four-county area, while also assuming certain higher-risk ob cases will not deliver at the
proposed facility, regardless of whether their child(ren) wind up be neonate).
Open Heart excluded (see specific DRGs below)
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
DRG
103
104
105
106
107
108
109
DRGNAME
HEART TRANSPLANT
CARDIAC VALVE & OTHER MAJOR CARDIOTHORACIC PX W CARDIAC CATH
CARDIAC VALVE & OTHER MAJOR CARDIOTHORACIC PX W/O CARDIAC
CATH
CORONARY BYPASS WITH PTCA
CORONARY BYPASS WITH CARDIAC CATH
OTHER CARDIOTHORACIC PROCEDURES
CORONARY BYPASS WITHOUT CARDIAC CATHETERIZATION
Emergency Department Estimates
High-level Assumptions
50% of both emergent and non-emergent totals
Ambulatory Surgery
High-level Assumptions
50% across board
Outpatient Estimates
High-level Assumptions
50% across board
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BUSINESS CONFIDENTIAL
EXECUTIVE SUMMARY
MAPLE GROVE HEALTH CARE CAMPUS
November 5, 2004
BUSINESS CONFIDENTIAL
Projected Utilization Volumes
Forecast 2008 Discharges
Population
Cardiology
Chem. Dep
E.N.T.
General Medical
General Surgical
Gynecology
Neonatology
Neurology
Newborns
Obstetrics
Oncology
Ophthalmology
Orthopedics
Psychiatry
Rehabilitation
Urology
TOTAL
Age 0-17
Male
Female
48049
46838
39
37
58
31
85
80
587
488
144
85
0
12
802
573
108
90
2047
2026
0
87
73
23
5
4
143
81
134
151
3
1
38
86
4267
3857
Age 18-64
Male
Female
111565
111877
1431
863
344
202
142
122
1638
1905
652
1125
0
895
0
0
431
477
0
0
0
5973
242
253
22
25
1118
1020
554
849
57
68
346
310
6978
14086
Age 65+
Male
Female
12828
17682
1326
1359
29
24
50
81
1209
1799
285
324
0
103
0
0
350
432
0
0
0
0
180
308
7
12
457
1017
43
94
39
33
354
261
4329
5847
Total
348839
4778
683
553
7364
2553
996
1443
1815
4274
6017
1034
74
3692
1816
193
1335
38619
Age 0-17
Male
Female
48049
46838
278
352
377
159
202
169
1933
1618
709
398
0
27
5850
4144
372
329
4251
4128
0
250
420
166
6
7
431
254
913
961
85
6
119
364
15947
13332
Age 18-64
Male
Female
111565
111877
4027
2267
1906
1002
297
248
6529
7180
3263
4912
0
2184
0
0
2115
2063
0
0
0
15710
1707
1140
43
41
3153
3325
4782
6259
806
929
1134
1140
29760
48401
Age 65+
Male
Female
12828
17682
4729
5081
188
112
154
253
5362
8086
2355
2817
0
309
0
0
1602
1861
0
0
0
0
969
1573
10
13
1999
4143
278
944
559
413
1264
1160
19470
26766
Total
348839
15754
3718
1298
29490
13943
2478
10490
8007
8793
15847
5741
117
12712
14031
2692
4947
150057
Forecast 2008 Days
Population
Cardiology
Chem. Dep.
E.N.T.
General Medical
General Surgical
Gynecology
Neonatology
Neurology
Newborns
Obstetrics
Oncology
Ophtalmology
Orthopedics
Psychiatry
Rehabilitation
Urology
TOTAL
Utilization volumes are projected by applying utilization rates from 2003 MHA data (described elsewhere
in document) to 2008 population estimates from Solucient and Claritas.
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BUSINESS CONFIDENTIAL