When Baton Rouge General Medical Center closed the emergency room at its Mid City campus in March 2015, the hospital’s board of directors said the move, though unpopular, was necessary to stop the bleeding at a facility that was losing $2 million a month.
More than 3 1/2 years later, the Mid City campus is continuing to operate in the red, and its 20,000-square-foot former emergency room remains vacant.
But there have been numerous positive changes on the campus, as BRG’s administration has quietly worked to repurpose underutilized space and attract new tenants that will not only build synergistic relationships within the hospital but will also generate revenues to help keep the lights on. Among the developments:
• The 70,000-square-foot medical office building adjacent to the hospital has attracted new group practices and is 95% leased, while the hospital’s overall occupancy is up to 70%.
• A new renovated reference lab on the hospital’s ground floor is providing testing and processing services to a variety of third-party clients, like independent physician groups and nursing homes.
• The William Carey School of Nursing opened a baccalaureate nursing program in 2016, leasing space that had been vacant for several years, and will graduate its first class of nearly 50 nurses in February.
• A residential psychiatric program—a partnership between BRG and a private provider group—will open in early 2020 on formerly vacant space on the fourth floor that’s currently under renovation.
“These are new business lines we are developing to take advantage of the resources we have here,” says BRG CEO Edgardo Tenreiro, who has been able to more than halve the amount of red ink bleeding from the Mid City campus by growing revenues nearly 30% and shrinking expenses more than 60%.
The financial situation could improve still further if the hospital is able to land a contract with the Bridge Center, which is considering leasing 18,000 square feet of the vacant emergency room to serve as the site for city’s new behavior health crisis stabilization center, which is funded by a dedicated tax.
The campus has obvious advantages, including its easy accessibility on Florida Boulevard, and is already equipped with many of the support services such a facility would need.
But while Bridge Center officials acknowledge the many strengths the location offers, they’re not ready to commit just yet.
Tenreiro says landing the Bridge Center is not critical to the future of the Mid City campus. But it would go a long way toward ensuring its viability, which, in the long run, would be good for the entire hospital system, as well as Florida Boulevard.
“It would be nice to have and would create a lot of the synergies we’ve been working to build,” he says. “It would be good for the facility.”
Diversifying and expanding
When the BRG Mid City campus opened its doors at 3600 Florida Blvd. in 1950, it was a state-of-the-art facility in the heart of Baton Rouge. But over the years, the neighborhood changed and, with it, the hospital’s patient base.
In the mid-1990s, BRG opened a second campus on Bluebonnet Boulevard in the fast-growing, prosperous part of the parish, where the city’s insured population was migrating. The indigent and Medicaid patients were left behind.
In the mid-2000s, when the Jindal administration began looking to overhaul the state’s charity health care system, it approached BRG to serve as its partner and teaching hospital in Baton Rouge.
But talks never went progressed, according to those involved in negotiations at the time. The state ended up partnering instead with Our Lady of the Lake Regional Medical Center, which became the charity provider after the 2013 closure of Earl K. Long Charity Hospital in north Baton Rouge.
BRG was left in something of a lurch. Uninsured patients flooded its Mid City emergency room, seeking treatment for everything from gunshot wounds to an ear infection. Because BRG wasn’t the state’s partner hospital, however, it didn’t receive the same reimbursement level as did OLOL. The facility, already in shaky financial straits, began hemorrhaging money and in 2015, shuttered its ER.
Though closing the ER meant the loss of the majority of referrals to the hospital’s acute care wing, part of the facility was already being used for other services. The hospital’s fifth floor, for instance, is home to a post-acute care wing with extensive PT and OT clinics, as well as the Olinde House—a four-room, fully furnished apartment, where OT patients can practice using appliances and doing typical household chores as part of their rehab.
On the hospital’s ground floor, Hospice of Greater Baton Rouge, the only nonprofit palliative care provider in the market, leases 7,000 square feet for an inpatient facility, where clients and their caregivers can stay together in a homelike setting for up to several weeks.
Over the past few years, BRG has built on that base of post-acute care services, diversifying and expanding it with new business lines and tenants.
The new reference lab is a prime example. The hospital invested roughly $1 million upgrading the facility two years ago with new robotics equipment and marketing the services to outside clients. Today, it processes some 1,500 samples a month and has already generated some $3 million in net revenues.
Down the hall, the William Carey Nursing college opened in an 8,000-square-foot space that was vacant at the time but had previously housed an internal medicine practice and, before that, a cardiology unit. Though BRG also has its own nursing diploma program, the William Carey School provides a different offering for students who want a college degree. For BRG it’s a win-win: a paying tenant that is graduating badly needed nurses in an underserved market.
Another new business line is an ambulance service, which enables BRG to transport patients between its two facilities and also to transport patients outside of East Baton Rouge Parish to any hospital in the region. Though BRG is not yet licensed to pick up patients within East Baton Rouge Parish, it’s applying for its license and is hoping to have one soon.
“It’s not so much a moneymaker for us but a cost reduction strategy,” Tenreiro says. “We’ve been working on it for a while so hopefully we’ll be fully operational next year.”
Also next year, a new residential psychiatric facility will open on the hospital’s fourth floor, where it will occupy about 30 beds and 15,000 square feet.
Besides the revenues the new ventures and tenants are bringing to Mid City, the facility continues to serve as an important complement to the system’s Bluebonnet campus.
“While Mid City is still not profitable as a standalone entity, it’s a vital part of our system, providing behavioral health services, skilled nursing, radiation oncology, primary care, and much more,” says Tenreiro, noting that Mid City makes up about 7% of the system’s net revenue and about 10% of system expenses. “We expect those numbers to continue to improve as we continue to add new services and tenants.”
Given the partnerships it has created, tenants it has attracted, and the facility’s location and synergies, BRG officials believe they’re uniquely situated to serve as the new home for the Bridge Center, which is funded by a dedicated tax and is being developed by a nonprofit board in conjunction with a private provider.
The idea behind the center is to create a short-term mental health stabilization center that will provide an alternative to jail or the emergency room—often, the only two places where police can take patients suffering from mental illness or extreme substance abuse issues.
In 2018, BRG’s Mid City site was the apparent favorite of the board for the new Bridge Center. But the board decided to select a provider first and let the new leadership have a say in where to locate the center.
Tenreiro is still hopeful the hospital will land the deal to house the center. Bridge Center Board Chair Kathy Kliebert is also enthusiastic about the location. But getting East Baton Rouge Parish voters to approve a dedicated funding stream for the center was no small feat. The board, she says, wants to make sure it does everything right and considers all possibilities. Besides, the Bridge Center board is still working out the details of its contract with RI International, which will operate the facility.
“Once the contract is finalized they can begin negotiating a contract for space,” she says. “Hopefully that happens in the next couple of weeks.”
If the Bridge Center locates at BRG, it would utilize 18,000 square feet, roughly 90%, of the vacant ER space, which would generate considerable revenues for the facility, though Tenreiro says he can’t estimate how much.
If a deal with the center can’t be struck, he plans to explore multiple other options on the table for utilizing the space, though he is not ready to discuss them yet.
Whatever happens, he believes the facility can serve as a catalyst for redevelopment along the underserved and long neglected Florida Boulevard corridor. The hospital’s main entrance on Florida is currently obscured by high fencing. Tenreiro would like to eventually see that removed and re-landscaped with green space and a more inviting footprint.
“We believe we can build on some of the redevelopment under way in Mid City and use that to help the area,” he says. “There’s a lot of enthusiasm along Government Street that can extend north. We can build on that enthusiasm. We’re at the epicenter of the dividing line in Baton Rouge. We’re in a position to help bring the two sides together.”