The biggest health care addition to town since Gilbert’s last hospital opened in 2011 is under construction, a sure sign that health care facilities continue to stream into the market.
Those facilities, however, are different from a generation ago. The Patient Protection and Affordable Care Act and consumer demand have changed the health care delivery model in recent years, experts said. That change affects what the health care landscape market looks like in town.
Banner Health and Dignity Health, the two big players in Gilbert’s market, focus now on keeping people out of their hospitals for many procedures, the companies say. That means more integrated practices and outpatient care centers are coming into town. Both companies are nonprofits.
Health care has been a focus of Gilbert’s economic development efforts for at least a dozen years, town officials said. Land is earmarked for health care uses, and education initiatives have made an attractive workforce for health care and fields related to science, technology, engineering, math, such as for biomedical firms. Additionally, the booming population means the demand for health services is there, officials said.
The companies express appreciation for Gilbert’s effort in the areas and praise the town’s pro-business environment for making it easy to operate here.
“Part of our nonprofit mission and organization is to look at what the community needs, assess that and respond to it,” said Lamont Yoder, Banner Gateway and MD Anderson medical centers CEO. “And the only way to do that is to have a good relationship and collaboration with [the town]. It’s been very positive on both sides.”
Facilities continue to arrive
The marquee facility under construction is the Women’s and Children’s Pavilion on the Mercy Gilbert Medical Center campus, coming to town through a partnership between Dignity Health, owner of Mercy Gilbert, and Phoenix Children’s Hospital.
At 380,000 square feet, the five-story tower will have a bigger footprint than Mercy Gilbert, which has 350,000 square feet, Mercy Gilbert President and CEO Mark Slyter said.
Slyter said Gilbert’s rapid growth, creating a need for additional women’s and children’s services, and its pro-business environment made the partnership with PCH natural. The two companies have collaborated on projects elsewhere.
“When you have those types of dynamics happening … you’re going to get companies like ourselves very interested in not only their initial investments but expanding on those investments in a significant way,” he said. “And that’s why we have done the partnership of Phoenix Children’s Hospital to expand the services in Gilbert.”
The pavilion is not the only significant recent development. Cancer Treatment Centers of America opened an outpatient care center April 1. OrthoArizona opened a surgical center Jan. 14.
Also coming online soon: Behavioral-health service provider Springstone is constructing its Copper Springs East facility among the many medical offices south of Mercy Gilbert.
Health care delivery shapes market
All of these additions fit current trends in the health care market. Some of that came from the Affordable Care Act, which put an emphasis on efficiency in health care delivery, said Julie Johnson, a principal who specializes in health care real estate in the Phoenix office of Avison Young, a commercial real estate company.
“Real estate was part of how to make that more efficient because instead of having a suite of 25 different practices and 25 waiting rooms, 25 bathrooms, 25 break rooms, they created a sense of efficiency and synergy within an integrated practice,” she said.
Johnson said more outpatient care centers is another result. As an example, Johnson points to a medical building under construction south of Mercy Gilbert where many of the tenants will be surgeons who will perform surgeries on-site.
“For just a variety of reasons and the fact that it’s so much less expensive, the outpatient setting is really something that has grown a lot,” she said. “There will always be the need for high acuity, for the hospital campus. But they’re saving the hospital campus for really much more of that specific need and then pushing the rest of it off campus.”
That goes along with what Yoder at Banner and Slyter at Dignity said is happening in their companies.
“All of our growth now has been in pre- and post-acute care,” Yoder said. “That’s where people in the community want their care to be. Nobody wants to be in the hospital unless they absolutely have to be in the hospital.”
Both expect more will come. Slyter points to recent partnerships with surgeons, such as with OrthoArizona, as an example of what it plans to continue to do.
“That seems to be what more people are wanting,” he said.
Yoder said Banner will take advantage of its assets in town.
“We have a lot of land in the area, and so we will continue to respond to what the community needs,” he said. “As the community grows, we have the ability to grow with them. That’s just something that we continuously evaluate.”
As for Gilbert, it has been a long effort to bring more science, technology, engineering and mathematics jobs to town, including in health care and related biomedical professions, Economic Development Director Dan Henderson said.
“We’ve, over the better part of a decade, worked with our partners, worked with our higher education institutions, done a lot of listening in order to understand what are some of those root issues—and then developing compelling strategies that allow us to complement what’s already here in the state,” Henderson said.
Some of the results can be seen in the land set aside for medical use, 30 acres, according to Henderson. It also can be seen in education from the schools’ STEM efforts up to the town constructing the University Building, which houses Park University and will add a University of Arizona nursing program in the fall.
All of that helps build an educated workforce that will allow not only health care facilities, but also biomedical firms to operate here.
Gilbert’s growing population is frequently cited by those interviewed as a driver for the market, but so is the business-friendly atmosphere.
“Gilbert has a great reputation for being a friendly city to develop in and cost effective,” Johnson said.
Slyter called the town special and added the town benefits from Dignity’s presence, too. The Women’s and Children’s Pavilion, for example, brings 1,800 construction jobs here and another 1,000 long-term and well-paying jobs when completed.
“We have world-class facilities, talents and innovations,” Henderson said. “And we’ve developed the public-private partnerships to help Gilbert succeed and be that location of choice for health care.”