Health care providers continue to build in high-growth areas

Mid-year Economic Forecast


Southeastern Wisconsin’s health care systems are in expansion mode.

Throughout the first half of 2018, many of the area’s health care providers have announced plans for new building construction and facility expansion projects in an effort to gain more market share throughout the state.

A rendering of Froedtert’s planned neighborhood hospital in Mequon.

Advocate Aurora Health is seeking to significantly expand its footprint in Kenosha and Racine counties. In its first major development project since merging, Downers Grove, Illinois- and Milwaukee-based Advocate Aurora Health announced in late May plans to build a massive, $250 million health care development in Mount Pleasant, positioning the system near Foxconn Technology Group’s planned campus. The project will include a new hospital, two clinics and a medical office building on a 96-acre site northeast of I-94 and Highway 20.

- Advertisement -

Advocate Aurora Health and Foxconn also announced recently that they will collaborate to develop new technology-driven health care services and tools.

The Mount Pleasant health care facility project announcement came close on the heels of another: Aurora’s planned $130 million health care development at the northwest corner of I-94 and Highway 165 in nearby Pleasant Prairie. The project, which will include a 100,000-square-foot ambulatory center and a three-story, 100,000-square-foot medical office building, puts the system near German gummy bear maker Haribo of America, which will also be a tenant of the Prairie Highlands Corporate Park in Pleasant Prairie.

While Advocate Aurora is planning significant brick-and-mortar investments in Racine and Kenosha counties, it isn’t the only health system expanding there. The Froedtert & the Medical College of Wisconsin network recently entered the Kenosha area under a new affiliation with what was formerly United Hospital System, but now operates as Froedtert South. The network includes Froedtert South’s campuses in Kenosha and Pleasant Prairie.

- Advertisement -

Foxconn, with its promise of delivering as many as 13,000 jobs, creates major opportunities for health systems in close proximity to the huge manufacturing campus.

“Assuming that Foxconn delivers on the promises it’s made, that creates a significant opportunity,” said Minnesota-based health care analyst Allan Baumgarten. “A lot of the (Foxconn) jobs will be well-paying jobs, presumably with good health benefits, and many of those people will be relocating in those counties. It’s a huge business opportunity.”

In addition to having nearby clinics and hospitals, other health care services will likely be needed for Foxconn, including on-site clinic and occupational health services, said Jim Mueller, president and chief executive officer of health benefits consulting firm Mueller QAAS LLC.

All of that business, Mueller said, will likely not go to just one provider, but rather be spread among several.

“There will be slices of the pie,” Mueller said.

To the north, in growing Ozaukee County, Froedtert Health plans to increase its footprint in Mequon with a new “neighborhood hospital” in the affluent suburb, which leaders say will ease some capacity constraints at the health network’s flagship hospital in Wauwatosa. The development, a 17,000-square-foot hospital with a seven-bed emergency department and eight inpatient beds, is planned for North Port Washington Road, across the street from the health system’s existing clinic.

St. Louis-based Ascension Health, parent of Columbia St. Mary’s and Wheaton Franciscan, has an established presence in that market with its Ascension Columbia St. Mary’s Hospital Ozaukee in Mequon.

“In Wisconsin, there are not that many areas that are experiencing population growth,” Baumgarten said. “But there are some, and all hospital systems want to have a presence in those areas, particularly because a lot of that growth typically includes people with good insurance benefits through their employer. When it comes to locating new facilities, whether it’s inpatient hospitals or urgent care or retail clinics, they are targeting those zip codes that have high or above average household income.”

Waukesha-based ProHealth Care Inc. is growing its presence in southwestern Waukesha County, with plans to build a $55 million hospital at the intersection of Highway 83 and I-43 in Mukwonago.

The project will include additions to its
D. N. Greenwald Center campus at 240 Maple Ave. and the remodeling of existing space. It’s the latest of several recent expansion projects at the ProHealth Mukwonago campus. The health system opened a new 66,000-square-foot emergency department on the campus in 2015, and construction is currently underway on a 31,000-square-foot addition to its existing medical center.

When it comes to building new hospitals and clinics, Baumgarten said employers have reason to be wary of the potential impact on health care costs. While health systems may see some revenue increases thanks to higher patient volumes, increased costs will likely fall on the backs of area employers that may face rising costs for health insurance.

“All this investment has to be paid for,” Baumgarten said. “That’s mostly going to occur with increases in payment rates.”

Other factors that have driven up health care costs include the consolidation of health systems, which gives providers more leverage when negotiating contracts with insurance companies, and rising pharmaceutical costs, Mueller said.

Sign up for the BizTimes email newsletter

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

What's New


Sponsored Content


Stay up-to-date with our free email newsletter

Keep up with the issues, companies and people that matter most to business in the Milwaukee metro area.

By subscribing you agree to our privacy policy.

No, thank you.
BizTimes Milwaukee