Chicago-area hospital seeks OK for $133M project

Palos Community Hospital wants to overhaul its Orland Park, Ill., campus, a project that would include a new medical office building and heat up competition for patients in the area.

Palos Community has asked state regulators to approve a $133 million project that would include a four-story, 107,760-square-foot building for doctors' offices and diagnostic and treatment space.

The Palos Heights, Ill.-based hospital also wants to build a three-story, 16,000 square foot building to connect two existing office buildings with the new Orland Park center and a 125,000-square-foot parking garage.

Last year the University of Chicago Medicine started construction on an outpatient facility less than three miles away, slated to be completed by early 2017. The U of C system is much bigger, with $1.4 billion in 2014 operating revenue, compared with $340 million for Palos.

U of C Medicine also aims to lure more inpatients in the area. In November, the system announced that Ingalls Health System, a hospital in south suburban Harvey, would become part of Hyde Park-based U of C Medicine.

One consultant isn't sure there's enough demand in the area for so much new supply.

"This area of Illinois has received a tremendous amount of competitive attention from hospitals in the last 10 or 15 years,” said James Unland, president of Chicago-based consulting firm Health Capital Group. "Are there legitimate unmet medical needs, or is this another Walmart going up three blocks from the Walmart that's already there?”

Advocate Health Care, the area's largest system, also has facilities in the area, such as Advocate Children's Hospital and Advocate South Suburban Hospital in Oak Lawn and Hazel Crest.

Palos' CEO, Dr. Terrence Moisan, said in a statement that the expansion would help improve care in areas such as cancer and neurology, specialties it gained through the partnership it started in April with Loyola University Medical Center.

According to Palos' application to Illinois regulators, the expansion would allow the hospital to fully develop its relationship with Loyola, which plans to put 25 doctors in Orland Park.

The board, which decides the fate of health care projects in the state to prevent duplication of services, hasn't yet slated a date to vote on Palos' request. The new construction would take place on vacant land, with the hospital estimating the project would be completed in June 2019.

“A redeveloped South Campus is critical to our mission of delivering quality care where and when our patients need it,” Moisan said in the statement. “The modernization project allows us to plan for the future, in terms of partnerships and health care delivery, and remain a strong part of the community.”

In December, Palos and Loyola opened a 10,000-square-foot cancer center on the Orland Park campus, and they plan to continue expanding cancer treatment at the proposed facility, said Daniel Post, executive vice president of network development and system integration at Loyola.

Post said the expansion plan is not a response to U of C's outpatient center, saying Loyola has served patients in the area for decades with its Orland Park, Homer Glen and Hickory Hills locations.

U of C Medicine declined to comment.

"Hospital proposes major overhaul of Orland Park campus" originally appeared on the website of Crain's Chicago Business.