St. David’s reveals details of $953M expansion that includes new hospitals, creating 900-plus jobs

St. David’s HealthCare has announced a nearly $1 billion expansion in the Austin metro area that is expected to add two new hospitals in the suburbs, expand hospital capacity at existing facilities and create at least 900 jobs.

The $953 million investment marks the single-largest one-time capital investment since the inception of St. David’s in 1996, and will increase hospital capacity and expand care throughout the fast-growing region, according to CEO David Huffstutler.

The Austin-based health care system announced Feb. 15 plans to build a pair of full-service acute-care hospitals in Leander and Kyle, priced at $142.5 million and $185 million, respectively; and a $33 million, 80-bed behavioral hospital near St. David’s North Austin Medical Center. It will also expand and renovate the St. David’s Women’s Center of Texas, part of a $145.9 million investment at the North Austin Medical Center.

Huffstutler said St. David’s leaders started a comprehensive evaluation of care about a year ago and generated plans based on what could meet current demand — and demand in the future. The investment total includes some projects that are already underway or completed, with the totality of the projects expected to be completed by 2024.

“This area continues to experience unprecedented growth. … We’ve seen that over many, many years in Austin, but it has continued at an even faster pace over the past few years and we don’t see any evidence that that will change going into the future,” he said.

The investment marks a significant expansion for St. David’s HealthCare, which is a partnership between Nashville-based hospital management company HCA Healthcare Inc. and two local nonprofits, St. David’s Foundation and Georgetown Health Foundation. HCA (NYSE: HCA) announced last month it was adding five hospitals in Texas, including two in the Austin area.

This announcement reveals the extent of those plans, which will result in copious business opportunities for builders and contractors. It will also help St. David’s compete with the Austin region’s other major hospital network, Ascension Seton. Ascension Seton has announced more than $1 billion in investment in expanded facilities since mid-2020, including a new campus of Dell Children’s Medical Center and new facilities at the Ascension Seton Medical Center campus in Central Austin.

St. David’s has 169 existing sites of care and is one of the region’s largest employers with 10,700 employees. It said it has invested more than $2.5 billion over the past 25 years into the Austin region. The nearly $1 billion in new investment will come out of operations funds and no philanthropic dollars will be used nor solicited.

“We’re excited about these investments we’re making in Austin and Central Texas, and I think there’ll be a great benefit to the community and I look forward to getting them going,” Huffstutler said.

Meeting suburban growth

St. David’s is adding hospitals and expanding care in some of the fastest-growing parts of the metro.

Huffstutler said St. David’s is “very excited” about the two new hospitals because they will enable “a level of service that we heretofore haven’t been able to do.” They’re located in Williamson County and Hays County — both of which grew faster than Travis County in the past decade. Hays County was actually the fastest-growing in Texas from 2010 to 2020.

The $142.5 million, 150,000-square-foot facility in Leander will offer comprehensive medical care including a 24-hour emergency department, inpatient and outpatient surgery, critical care capabilities, robotic services and maternity and newborn services. Construction is expected to begin this year and is anticipated to be completed in 2024. The facility will initially have 34 beds, with room to add more, and create about 200 full-time jobs.

The facility marks the third phase of construction on a St. David’s campus on San Gabriel Parkway, just north of the massive 116-acre Northline mixed-use development, which is under construction. Phases one and two included a freestanding emergency center and medical office building, both of which are open.

“With the growth that we’ve seen over these past years, we believe it is time to build a small hospital that can be expanded over time and there’s demand there to do it,” Huffstutler said.

At the opposite end of the metro, St. David’s is in the process of acquiring land in Kyle for a similar project, except at a slightly larger 160,000-square-foot facility. The $185 million project is expected to open in 2024 and create 200 full-time jobs.

“The Buda and Kyle area running south of Austin is a rapidly growing area. Our nearest facility there is our South Austin Medical Center,” Huffstutler said. “There’s a lot of growth to the south of that and we believe that represents opportunity for us in that area as well. … That will then alleviate some demand on our South Austin facility.”

St. David’s also announced it is investing $53.1 million in an expansion project at St. David’s Round Rock Medical Center that will include the hospital’s operating room and patient care room capacity. The project, which will begin this year, will include two additional floors, including a 34-bed patient care unit, four additional operating rooms and support spaces.

Specialty services at existing sites

Another target for St. David’s was to focus on speciality services, and primarily women’s services.

At the North Austin Medical Center, a $145.9 million project includes the two-phase renovation and expansion of St. David’s Women’s Center of Texas, starting with the renovation of 28,325 square feet that will add 30 neonatal intensive care unit beds. The second phase includes a 166,369-square-foot expansion that will add four C-section operating rooms, 36 labor and delivery beds, 24 antepartum beds and 32 full-term nursery beds. The entire project is expected to be completed in 2023.

“Patients have come to us and have continued to fill our capacity to the point that we need to expand a very successful program with a great reputation and good doctors. We’re running out of space there, so that’s the driver of that expansion,” Huffstutler said.

At St. David’s South Austin Medical Center, a renovation of the women’s services unit will begin this year, starting with the conversion of several existing postpartum rooms into labor, delivery, recovery or postpartum rooms, along with a renovation of the C-section suites. A nearby 11-bed bed medical surgical unit will be fully renovated to used as postpartum rooms.

St. David’s will also invest $43 million to renovate and expand the St. David’s Rehabilitation Hospital and expand oncology services and women’s services at St. David’s Medical Center. These projects are estimated to be completed next year.

Nearly $18 million will be spent at the rehab hospital for the construction of an additional floor, creating 20 beds, while also restoring the therapeutic pool. About $7.5 million will be used to developed a special unit for women’s oncology, including renovating 23 patient rooms, and constructing 15 post-operative patient rooms. The remaining $17.5 million will be used to renovate the women’s services unit at St. David’s Medical Center.

The company also announced it will be creating a $33.8 million, 80-bed behavioral health hospital near St. David’s North Austin Medical Center to meet the demand for more mental health services in Central Texas, including patients from emergency departments who need continued care.

The 63,000-square-foot hospital will include indoor and outdoor therapy areas, a separate adolescent area, outpatient services and capacity for 12 more beds in the future. It is expected to open in 2024 and will be designed for future expansion as needs grow. It will create more than 200 new jobs.

“We do lease space on our St. David’s Medical Center campus to a third-party behavioral health operator; that lease is terminating over the next year,” Huffstutler said.

He said that HCA Healthcare has had success with behavioral services, calling it “an underserved service line in this community.”

“We often have patients who have to wait in our emergency departments because it’s difficult for them to get placed in a behavioral health facility, including our own patients and those from other facilities around the community. Having additional behavioral health beds in this community is needed and will be very helpful,” Huffstutler said.

Other projects

Some of the St. David’s projects are already underway — or will be starting shortly.

The company is investing $168 million to expand the South Austin Medical Center, which will add 30 patient beds, four operating rooms, support space and a 24-bed rehabilitation unit. That project is expected to be completed in 2024.

The company has already completed parts of an $81 million expansion at the center, which included a buildout of medical and surgical space and parking space, which were completed late last year and added 34 patient beds and 700 parking spots.

St. David’s is also expanding the main tower of the North Austin Medical Center to add 21,214 square feet, including 32 medical or surgical patient rooms and an additional 438 parking spaces. That project is expected to be completed this year.

The company is also working on a $20.9 million capital expansion at the Heart Hospital of Austin. The majority of the project was completed last fall, adding 14 progressive care unit beds and increasing bed capacity by 25%. The facility will also expand its support service areas, including pharmacy, laboratory and dietary services.

The announcement also included $80 million for construction of future capacity at area hospitals to accommodate future growth.

Courtesy of Austin Business Journal. Click here to see the full article.