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Indian River Hospital decides to scale back Wellness Center

STORY BY MEG LAUGHLIN (Week of July 10, 2014)

Indian River Medical Center is cutting its much-touted Wellness Center to less than half its originally planned size, eliminating the gym, dramatically downsizing the imaging center, and filling most of the smaller building with doctors’ offices.

The original Wellness Center was to have housed a variety of complex imaging equipment. But the hospital purchased Vero Radiology a few weeks ago, and much of its equipment duplicates what had been planned for the original wellness center.

The cost of the scaled-down Wellness Center, originally projected at $32.6 million, has been reduced by some $10 million. But to build it, the hospital still will borrow $20 million – along with the $23 million it just borrowed to purchase Vero Radiology.

Indian River Medical Center also will take an additional $1 million dollar hit for professional fees paid for design of the original larger Wellness Center plan, which will no longer be needed.

The decision to shrink the Wellness Center from its original 133,300 square feet to 64,800 square feet was approved at a hospital finance committee meeting on Tuesday, July 1st.  The facility is to be built on land next door to the main hospital.

At the finance committee meeting, hospital leaders predicted that the building – which now will be entirely owned by the hospital instead of as part of a joint venture with the developer – will save IRMC more than $13 million over two decades in that would have been paid in rental of office space for the increasing number of hospital-employed doctors.

Eight physician practices consisting of 22 physicians and 58 support staff members will relocate to the new Wellness Center, along with 53 employees who work in the hospital’s financial services departments. Also, the hospital said that 22 more physicians will be recruited.

The building will house the hospital’s outpatient services.

The late Trevor Smith, a Hospital District trustee who shortly before his death attended the finance committee meeting that approved the plan, expressed dismay over the multi-million dollar expense on top of the cost of purchasing Vero Radiology.

“That’s $43 million dollars in debt incurred by the hospital at a time when the hospital is telling the District that we can’t reduce indigent care funding, because we will hurt the hospital’s mission.”

Smith died unexpectedly a few hours later in a car accident.  But prior to the accident, Smith voiced concern that the hospital appeared to be moving ahead with the altered Wellness Center plan without getting it approved by the majority of Hospital District trustees – who approved the original plan in October 2012.

Furthermore, he said, the huge indebtedness “absolutely doesn’t make sense,” given the hospital’s uncertain financial future because of reduced volume and admissions, Medicare penalties and the likely reduction in reimbursement money from the District.

“It’s somewhat maddening,” he told Vero Beach 32963.

Monday, Hospital District Chairman Tom Spackman said that the hospital could not proceed with the dramatically altered plans for the Wellness Center without Hospital District approval: “They have got to come back to us on this,” he said.

Indian River Medical Center leaders did not respond to a request from Vero Beach 32963 for comment.