Health systems plan surge of new facilities in Mount Pleasant

News Feature

Advocate Aurora Health officials recently celebrated the groundbreaking for the system’s new $130 million ambulatory surgery center and physician office building in Pleasant Prairie.

The three largest health care organizations in southeastern Wisconsin are all planning to build in a high-growth corridor in Racine County.

Since May, Advocate Aurora Health Inc., Ascension Wisconsin and Froedtert South have each unveiled plans to build new facilities along Highway 20, east of I-94, in Mount Pleasant. Those plans include an Advocate Aurora Health hospital, two medical clinics and an office building; a new Froedtert South hospital and medical office building; and an Ascension medical center.

Advocate Aurora Health officials recently celebrated the groundbreaking for the system’s new $130 million ambulatory surgery center and physician office building in Pleasant Prairie.

By adding the new facilities, which will be located just miles from Foxconn Technology Group’s huge Mount Pleasant manufacturing campus that is under construction, each system stands to gain market share in an area that is expected to attract thousands of new jobs and residents in the coming years.

It follows a trend of southeastern Wisconsin-based health care providers expanding their footprints in Wisconsin’s southeastern corner, a region that has attracted major developments in recent years, including Amazon’s fulfillment center in Kenosha and Uline Inc.’s growing corporate headquarters campus in Pleasant Prairie.

Before Foxconn announced its plans for southeastern Wisconsin, Ascension Wisconsin leaders already had their eye on Racine County as an area for expansion.

“Our plan was in place,” said Bernie Sherry, senior vice president and ministry market executive for Ascension Wisconsin. “We had planned to do this even before the Foxconn announcement. As we looked at care delivery, we did an assessment early on.”

Ascension Wisconsin in August announced it plans to build a $42 million medical center in Mount Pleasant, the first of the system’s planned $100 million investment in the Racine area over the next three years.

The 83,000-square-foot medical center, planned for the northeast corner of Highway 20 and Highway H in Racine County, will include primary and specialty care, an imaging center, urgent care, rehabilitation and an ambulatory surgery center.

For health systems, building more facilities allows them to capture more market share and strengthen the pipeline of patients that will use their main facilities and specialists. That’s the strategy behind Ascension’s planned medical center.

“We’re excited about the economic development happening in the region; no doubt about it,” Sherry said. “We know that there’s going to be more people moving here for jobs, which is great. So we’re trying to build a health care delivery system that gives people the most convenient access possible.”

Leaders of Ascension Health, the largest Catholic health system in the country, have charted a national strategy of shifting away from inpatient and hospital facilities, where care is typically more expensive, and into outpatient clinical sites and telemedicine.

“As we looked at the triple aim of quality, experience and affordable cost, on the experience side, we wanted to bring more services closer to where people live,” Sherry said. “…We looked to where the population is, where the neighborhoods are. We decided to bring services you would traditionally see sitting on a hospital campus out to a neighborhood. What services can be off (a hospital) campus and brought to closer to home? That’s the focus in the Racine (County) market.”

The largest of the recently-announced Mount Pleasant health care projects, Advocate Aurora Health unveiled plans in May to build a $250 million health care development on a 96-acre site northeast of I-94 and Highway 20.

The development will include a new hospital, two clinics and a medical office building, which will provide the full spectrum of inpatient services, along with primary care and various primary and specialty physician services. Construction could begin later this year, with an expected opening in 2021.

The project, which was the first significant development announced following Advocate and Aurora Health Care’s merger, came on the heels of another. Advocate Aurora Health recently broke ground on a $130 million ambulatory surgery center and physician office building on a 64-acre parcel at the northwest corner of 104th St. and 120th Ave. in Pleasant Prairie, just south of German gummy bear maker Haribo’s planned new production facility. It’s expected to open in summer 2020.

“The new and expanded services at this location will enhance patient access for the growing number of residents and employers in this region,” said Lisa Just, president of Advocate Aurora Health’s Racine/Kenosha/Lake County patient service area. “We’re excited to see the continued progress of our expansion efforts focused on bringing best-in-class care close to home.”

For Advocate Aurora Health, the developments just north of the Illinois border will allow the system to connect the territorial market of legacy Aurora facilities to Advocate’s, creating a contiguous network stretching from Green Bay to downstate Illinois

Froedtert South, the health care organization formerly known as United Hospital System, this month disclosed plans for a new development on a 41-acre parcel located on the northwest corner of Highway 20 and Highway V in Mount Pleasant. Initial plans call for a two-story, 65-bed hospital, with the option to expand to four stories and 98 beds in the future, along with a freestanding 50,000-square foot medical office building.

“That corridor seems to be exploding,” said Tom Duncan, chief operating officer of Froedtert South. “We initially started planning last February with not only the announcement of Foxconn, but all of the growth along the corridor on (I-94). That helped push us in the direction of wanting to be part of that growth and meeting the needs of those patients closer to home.”

The Froedtert South brand emerged last year as a partnership between Wauwatosa-based Froedtert Health and the former United Hospital System. It currently operates Kenosha Medical Center and St. Catherine’s Medical Center campus in Pleasant Prairie, along with four physician clinic locations.

Froedtert South has made several other recent investments in its facilities in Kenosha and Racine counties. It is nearing completion on a major expansion at St. Catherine’s Medical Center Campus in Pleasant Prairie – a four-story, 239,977-square-foot addition that will house an advanced outpatient surgical wing. It also plans to open a four-story, 50,000-square-foot medical office building located at the new Main Street Market development in Pleasant Prairie.

The influx of health care facilities will meet a need in the area for more health services, said Ling Li, assistant professor of economics at the University of Wisconsin-Parkside, noting Racine County’s low physician-to-patient ratio.

According to the most recent County Health Rankings report released by the University of Wisconsin Population Health Institute and the Robert Wood Johnson Foundation, Racine County’s physician-to-patient ratio is 2,140:1, compared to the state average of 1,250:1. Kenosha County’s ratio is 2,250:1.

“With Foxconn’s arrival and the projected population growth, there will be a higher need for health care service,” Li said. “A new health care facility could meet the potential increasing demand for health care.”

Once shovels hit the ground on the new projects, the race to capture new patients will begin, said Allan Baumgarten, a Minnesota-based health care analyst who examines Wisconsin’s payer and provider markets.

“They each are going to do a major PR push to show how consumer-friendly and appealing their facilities are,” Baumgarten said. “I think they will also have to figure out how to communicate with the families that are coming to work at Foxconn and perhaps moving into the area. They definitely will want to be in-network to whatever insurance companies that Foxconn will work with for employee benefits.”

In addition to bringing care “closer to home,” an often-cited reason when health providers expand into markets, the amenities of new facilities are effective at drawing in patients, Baumgarten said.

“New and shiny facilities have their own attraction,” he said. “If a (health system) builds these out in attractive ways, with maternity suites and a spa-like atmosphere and comfortable beds for dad to sleep in and all private rooms, the new facilities have a certain appeal, especially if they are designed to the desires of the current population.”

Baumgarten said the questions of capacity and overbuilding raised by the surge of new health care facilities in Mount Pleasant are reminiscent of those that emerged in 2010 when Aurora opened a hospital in Summit, just miles from ProHealth Oconomowoc Memorial Hospital, and a medical center in Grafton, about 10 miles from Columbia St. Mary’s Mequon hospital.

“Some of the businesses in those areas said this is going to be costly; there is already more than enough capacity here,” Baumgarten said. “They took out full page ads in local newspapers encouraging local authorities to not approve the new hospitals. But local authorities looked at these proposals for new hospitals … and see lots of good paying jobs, they see new investments that don’t pollute. And there’s reason to believe that the intersection of commercial development and health care has gotten more closely connected in recent years.”

In both the Grafton and Oconomowoc areas, Aurora has collected more market share, reporting strong utilization and profitability, he said.

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Lauren Anderson
Lauren Anderson covers health care, nonprofits, education and insurance for BizTimes. Lauren previously reported on education for the Waukesha Freeman. She graduated from the University of Wisconsin-Madison, where she studied journalism, history and African studies. In her free time, Lauren enjoys spending time with family and friends and seeing live music wherever she can.