SOUTH HAVEN — Bronson Healthcare plans to design and build a new $22 million community hospital around the trends occurring within the health care industry and the Southwest Michigan market.
The Kalamazoo health system intends to significantly downsize the number of licensed beds at a new Bronson South Haven Hospital and end surgical procedures, while focusing primarily on primary care, wellness, disease management and the most-used medical services locally.
The new two-story hospital would rise on the east side of South Haven’s existing campus, replacing an aging facility and medical office buildings to create a “health village.” A portion of the original hospital dates back to 1941.
“We’ll have a modern new facility that’s going to set the community up for the future needs. As we move more toward population health, we’re really going to be focusing on primary care,” said Kirk Richardson, COO at Bronson South Haven.
“I definitely think South Haven will be an example of what you can do in a small community to maintain the essential services within the community,” he said.
The new hospital campus would include private patient rooms, a diagnostic lab, medical imaging, pharmacy, and medical offices for primary care doctors and specialists, plus the Bronson FastCare walk-in medical clinic and the Bronson Wellness Center that offers fitness, rehabilitation, nutrition and other services geared toward wellness.
A newly constructed hospital would have improved access and patient flow, generating efficiencies that make operating costs “a lot better,” Richardson said.
Citing low inpatient and surgical volumes, Bronson plans to reduce licensed inpatient capacity at the new hospital to eight beds from 49 beds, and to halt surgeries in South Haven.
Surgical volumes last year totaled 1,012 cases across two operating rooms, or less than three per day, according to data from the state. The hospital through July lost $1.2 million on surgeries and projects to lose more than $2 million for the full year, Richardson said.
Only about 10 percent of South Haven patients undergoing inpatient procedures stay in the market. Others go to hospitals in Holland, St. Joseph or Kalamazoo for their procedures.
Building and equipping two ORs in a new hospital would cost another $4 million to $6 million on top of the $22 million just “to have assets in Van Buren County that have low utilization,” Richardson said.
“It just doesn’t make sense financially for the health care system to do that,” he said.
In the future, patients in South Haven would still have office appointments with their surgeon locally, but their surgical procedures would be done at Bronson Methodist Hospital in downtown Kalamazoo or LakeView Hospital in Paw Paw, in southeastern Van Buren County.
The planned reduction in licensed beds reflects the decades-old trend in health care toward outpatient care that’s led to significantly lower inpatient volumes. Bronson South Haven in 2017 averaged a daily occupancy rate of just 8.1 percent, or five inpatients, according to state data.
“As medicine is rapidly changing and the demand for inpatient beds is decreasing, it’s important for health systems to be changing the way they do things, because you can’t be stuck in your old way or you’re going to be left behind,” Richardson said.
Bronson Healthcare acquired the former South Haven Health System in January 2017. After a subsequent assessment, “we came to the rapid conclusion we need to replace the current facility,” he said.
Upgrading the existing facility and replacing old sewer, water and HVAC systems to “keep the building functional” would cost far more than developing a new hospital, Richardson said. Bronson South Haven in 2017 spent more than $1 million “just making repairs to the building itself,” he added.
The cost of the proposed new facility exceeds the $18 million in capital improvements that Bronson committed to making in South Haven following the merger.
“When we chose to partner with Bronson Healthcare in 2016, we knew it would make our hometown health care stronger and provide better access to primary care, diagnostics, specialty care and the resources necessary to serve the community long term,” said Dennis Palgen, former board chair of South Haven Health System. “Bronson’s plan to build new health care facilities in South Haven is an exceptional gift to our community that will be welcomed now and appreciated for generations to come.”
Design work on the project begins this month and construction could start in a year, pending state certificate-of-need approval and the final go-ahead from Bronson’s board of directors.
If all goes to plan, Bronson hopes to occupy the new hospital by the end of 2020.