Volume 1, No. 7
September 2005

iMpact University Bank President Steve
Ranzini
University Bank President Steve Ranzini Moving Bank Into Remodeled Hoover Mansion
Director for Study of
Automotive Transportation
New Director for Study of Automotive Transportation
ICBC convention
It Takes a Lot of Work to Put on a Major Conference
University of Michigan Hospital
Photo by Dale Fisher, Dale Fisher Gallery ©2005.

U-M Health System
Forms Long-Term Plans

By Kate Kellogg

In today's demanding health care environment, growth is inevitable for nationally acclaimed medical centers like the University of Michigan Health System. UMHS leaders have conceived an ambitious plan that aligns long-term growth with major goals in education, research, and patient care.

Unveiled last June, the UMHS Master Plan includes bricks and mortar as well as environmental enhancements and vital connections with various campuses and the larger community. The blueprint identifies opportunities for new buildings and environmentally-friendly transit options that would meet future needs. Potential new facilities would add about three million square feet to the core medical campus's six million square feet of existing or under-construction buildings. Many of the plan's developments are expected to materialize over the next ten to 15 years.

The Master Plan focuses on three locations that are sites of existing UMHS facilities: the Medical Campus core, the Wall Street area across the Huron River, and the East Medical Campus at Plymouth and Earhart Roads. All three areas already are either bustling with construction activity or slated for new buildings or expansion projects. (See accompanying list of ongoing projects.) Most recently announced major projects are the C.S. Mott Children's Hospital and Women's Hospital replacement project and the Kellogg Eye Center expansion. UMHS leaders worked with the university's planners, architects, central administration and Regents in drafting the Master Plan. The U-M groups also sought input from he City of Ann Arbor's Planning Department and Ann Arbor Township. The plan first began to take form when Robert Kelch, executive vice president for medical affairs and CEO of the Health System, came on board in 2003. At that time, the Women's and Children's Hospital replacement project was in the earliest planning stages.

“I thought we needed a more coordinated master plan that would look at growth opportunities throughout the system and ways to utilize land in an environmentally sound and civic-minded way,” he says. “We used our collective intellect to think about where we want to be in the future. Since land is a very limited resource, we need to build for the long term and avoid hasty responses to space challenges.”

He characterizes the Master Plan as a “template that is not cast in stone.” It was designed for flexibility in view of fast-changing health care needs. The plan identifies possibilities for developments that are patient- and pedestrian-friendly and supportive of the health system's growing staff. The planning team also respects the city's philosophy of urban density surrounded by green space and parks.

“The city has asked us not to consume any more large expanses of land that would be taken off the tax rolls,” says Henry Baier, U-M associate vice president for facilities and operations. “That led us to conclude that buildings of about ten stories in one small area would not conflict with the city's own master plan.”

That is one reason the UMHS Master Plan emphasizes opportunities in the Wall Street area, such as the new building that will serve as an expansion to the Kellogg Eye Center, increasing the center's space by 50 percent. The 215,000-square-foot building will be located immediately northwest of the current Kellogg research tower and will replace operating rooms and eye care clinics now located in buildings adjoining the tower. The $120 million project also will house the Delores S. and William K. Brehm Center for Type 1 Diabetes Research and Analysis. The center is named for the couple who donated $44 million to UM in 2004, $30 million of which was designated for new research facilities. Construction is expected to begin in about a year.

Similarly, the Mott and Women's replacement project will be built on grounds that are already part of the health system. The new facility will occupy about one million square feet at the site of the current surface parking lot south of Taubman Health Center on the main Medical Campus. HKS Architects has been appointed to design the $498 million complex. Groundbreaking is scheduled for the fall of 2006 and construction will take approximately five years to complete.

The replacement project is necessary to meet dramatically increased patient demand and to accommodate future research, education and clinical care innovations. It will incorporate major advances in medicine and technology that have transpired since Mott Children's Hospital opened in 1969. Since then, pediatric surgical services have increased an average of five to 10 percent each year and deliveries at the Women's Hospital Birth Center have doubled in the past decade. In 2004 alone, 11,519 children were admitted to or born at the facility.

Like the Kellogg Eye Center expansion, the Mott and Women's Hospitals' replacement will be funded partly by future gifts to the university-wide Michigan Difference Campaign. UMHS already has raised $36 million—including a $25 million grant from the Flint-based C.S. Mott Foundation—toward the project and hopes to exceed the $50 million goal. The balance will be funded by the U-M Hospitals and Health Centers through bonds and capital reserves. More tentative plans for the Medical Campus core include the possibility of replacing some 50-year-old buildings in the Kresge complex and the area just south of the Molecular and Biological Neuroscience Building. Both areas would be focused on research and educational facilities and have transit options to bring people in and out of the area.

Pedestrian-friendly Connections
In addition to facilities, the Master Plan provides for enhanced pedestrian flow, additional parking, more efficient transit options, and plenty of open green space. The plan acknowledges the need for frequent and reliable transportation between the Wall Street area and the Medical Center. It envisions a convenient transit center that could shuttle people back and forth between locations. “The goal is to keep individual driving trips to a minimum,” says Baier. The conceptual design also suggests the eventual construction of a parking deck in the Wall Street area. In the meantime, a 530-space parking structure, already under construction on Ann Street, will relieve immediate parking pressures.

For staff and visitors who appreciate a good walk, new pedestrian links are an important part of the design. A pedestrian-friendly area would integrate the Wall Street area with the Lower Town neighborhood. Other connections would take pedestrians from the Wall Street area up to the main Medical Campus. “We especially want to make crossing Fuller Street a more positive experience and to provide pedestrian access to Riverside Park [which lies just across the river from Fuller],” notes Baier.

In each of the three areas of development opportunity, the plan seeks to integrate physical facilities with the natural environment and community. For example, the East Medical Campus—site of the future U-M Depression Center—shows potential for 800,000 square feet of facilities, parking and transit near existing buildings and those under construction. In keeping with the plan's commitment to land conservation, a park-like setting would preserve natural features and promote a healing environment.

The entire Master Plan's layout is designed to foster connectivity and collaboration within and between different units, University Planner Sue Gott noted in a June presentation to the U-M Regents. The transit options and pedestrian enhancements should strengthen cooperation with schools and colleges on the university's central and north campuses.

An Investment in the Future - and Michigan
While many aspects of the Master Plan are still in the visionary stage, the Kellogg Eye Center expansion and Children's and Women's replacement projects are moving forward. The Regents have approved the proposals and now schematic designs are underway, says Baier. In formulating the initial plans, the U-M Office of Architecture, Engineering, and Construction spent much time talking with UMHS health care professionals, he says.

“We asked the staff of the Kellogg Eye Center, ‘what kind of facilities do you need to do cutting-edge diabetes research?’ For the Children's and Women's Hospitals' replacement, we asked what child health care may look like in the years ahead. Mott receives patients from all over the state—and even the world—who are very complicated patients in terms of treatment. We rely on experts in each area of care to inform our architects.” These projects amount to an enormous investment in clinical care for many decades forward, he adds. Naturally, the university needs to reap returns on that investment.

Both the Master Plan and the health system's Strategic Goals aim to ensure that the UMHS will maintain its ability to deliver high quality health care to an aging population. As people live longer, they require more and more medical intervention. That's one reason the U-M health system needs to increase capacity both on central campus and through outreach activities, says Kelch.

“The challenge is that we don't know exactly how society will pay for those health services,” he says. “So we are striving to become more efficient in providing value to patients. I think we have a long history of significant progress in that direction.” While health care is a human service, the reality is that it's also a major industry. In order to thrive in the face of ever-rising costs, the health system must generate a positive operating margin. It consistently achieves that objective; the U-M Hospitals and Health Centers recently reported an operating margin of 5.1 percent on revenues of more than $1.31 billion for fiscal 2005.

The general public, however, tends to think the operating margins of nonprofit hospitals are close to zero, Kelch observes. But in today's world of health care, “capital needs and technology are growing faster than the rate of depreciation. Without a positive operating margin, we would not be able to fulfill the Master Plan.”

As the Master Plan unfolds, its benefits will likely accrue to the Ann Arbor area and state as well as the UMHS. In fact, Kelch believes the plan will help the U-M Health System “become an even greater engine for the local economy.” Many of the plan's provisions contribute to the university's and city's environmental stewardship, he adds. Pedestrian friendly links, open space, and better transportation options can only improve quality of life on the medical campuses and surrounding areas.

The construction activity alone will in many ways boost the local and regional economies. The university tends to draw workers from throughout southeast Michigan, including many from the Washtenaw County area. “We mainly rely on outsourcing for subcontractors and virtually all the work goes to local construction firms,” says Baier. “We need hundreds or even thousands of workers for big jobs.”

Most of the materials used in construction have local sources as well. Concrete, steel, dirt, stone, and sand will likely come from nearby suppliers, as will many medical devices. The university relies on Michigan furniture manufacturers as well, says Baier. “The economic impact is going to be significant.”

In the longer term, the Master Plan will further strengthen Ann Arbor's reputation as the home of one of the country's top-rated university health systems. (U.S. News and World Report has once again ranked UMHS 11th in the country in its annual “America's Best Hospitals” rankings.) The hospitals and Medical School already draw some of the most accomplished researchers, practitioners, and students from throughout the country and world. New state-of-the-art facilities and environmental enhancements will no doubt accelerate that influx.

Current UMHS Projects

Not included in the 3 million square feet of potential buildings identified in the Master Plan, are the following facilities now under construction or recently completed.

• The Biomedical Science Research Building is scheduled to open in early 2006. Located at the southern edge of the main Medical Campus the new BSRB provides 470,000 square feet of research laboratories, life science support facilities, and a 300-seat auditorium.

• The Cardiovascular Center is scheduled to open in 2007 at the site of the “Old Main” hospital on the Medical Campus just south of the Cancer & Geriatrics Center and University Hospital. The six-floor, 350,000-square-foot building includes three ambulatory care clinic modules, labs, eight operating rooms and 20 intensive care beds, and shelled space for future needs. An adjoining 465-space parking structure will provide parking for staff and patients.

• The East Ann Arbor Ambulatory Surgery and Medical Procedures Center is a 46,000-square-foot outpatient diagnostic and treatment facility on the East Ann Arbor Medical Campus. Scheduled to open in 2006, the building includes operating rooms, medical procedures rooms and related support areas. The site is east of the existing East Ann Arbor Health Center with a pedestrian link proposed to connect the new facility to the Health Center. An on-site parking lot will be expanded as part of the project.

• Also on the East Ann Arbor Medical Campus is the Rachel Upjohn Building, which will house the U-M Depression Center. The center, which will include outpatient psychiatry and substance abuse clinics and research areas, will open in late 2006. The center is named for Mrs. Edwin E. Meader, whose maiden name was Rachel Mary Upjohn, and who, with her husband, provided a $10 million gift toward construction of the building. The three-story 112,500-square-foot facility, designed by Albert Kahn Associates, will provide psychiatry specialty services in an uplifting environment to patients of all ages.

• The 530-space Ann Arbor Street Parking Structure, under construction near the BSRB, will have seven levels and connect to the Catherine Street parking structure. It is scheduled to open in mid-2006.

• A new addition to the Medical Science I Building will house the Medical School's new cyclotron (particle accelerator) to make radionuclides for medical imaging and treatment. The mostly underground facility includes radio-chemistry labs as well as Medical School administration space. It is scheduled for completion near the end of this year.


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