Home > About BNE > Press Room > 2009 Archive > August > Vascular and research center

New building signals big changes in medical care

Project is largest development in years

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By Henry L. Davis
Buffalo News News Medical Reporter
August 02, 2009

When construction begins Monday on the new vascular and research center on the Buffalo Niagara Medical Campus, it will mark the beginning of one of the biggest developments in the region in years.

The $291 million project will not only be one of the most expensive here in decades, but promises to reshape medical care in the community, strengthen medical research and the training of doctors at the University at Buffalo, and spur further development.

"This is going to create energy and a hub of activity downtown," said James Kaskie, chief executive officer of Kaleida Health.

To Kaskie and others, the building also will offer proof and confidence to a community that major projects can get done, even during a recession.

"People are going to see something is happening here other than talk," he said.

The 10-story facility, which will abut Buffalo General Hospital at Ellicott and Goodrich streets, is a collaboration between Kaleida Health and UB, and consists of two pieces:

* Four floors will consolidate Kaleida Health's heart, stroke and vascular care services in one location temporarily being called the global vascular institute, and also will include a new, expanded emergency room.

* UB will use the top five floors for related medical research and a "bioscience incubator" to help encourage spin-off business startups.

The project will allow Kaleida Health to shift 1,000 physicians and staff, as well as thousands of patients, from Millard Fillmore Hospital to Buffalo General and the new building after its scheduled completion in November 2011. Millard Fillmore at Gates Circle then will be closed.

The project will receive a ceremonial groundbreaking on Monday, three days after Kaleida Health bought the last parcel of land for the building -- $1.1 million paid to the city for a section of Goodrich Street.

On a larger scale, it is the first tangible result from the state-ordered consolidation of Kaleida Health and Erie County Medical Center. The two organizations remain separate for the time being, but are operating under a parent corporation, Great Lakes Health, that has significant influence over key decisions.

ECMC will participate in the new center and help finance it.

The participants see the project as an end of an era defined by a medical arms race between the hospitals that resulted in expensive duplication of some services and large gaps in others.

Moreover, without a hospital of its own, UB years ago spread specialist-training programs among the community's hospitals. Medical research and doctor training, which the hospitals came to rely on as a source of inexpensive physician labor, constantly suffered from poor support as the hospitals pursued their own competitive agendas.

Now, UB plans eventually to move its medical and dental schools and other health-related programs downtown -- an estimated 13,000 faculty, staff and students. The idea, in partnership with Kaleida Health and ECMC, is to create an academically focused medical center at multiple locations, although the heart of it is proposed for the Buffalo Niagara Medical Campus.

"We're bringing to Buffalo something it has never had -- the sort of flagship medical center that knits together research and education with medical services," Kaskie said.

The campus includes the blocks where Roswell Park Cancer Institute and the Hauptman- Woodward Institute are located.

"What's happening signals UB's new orientation toward the health community. We're going beyond just providing manpower," UB President John Simpson said.

UB is using $118 million in public funds for its portion of the building. The university views the project as a model of what UB would like to do in the future on a regular basis, especially if it succeeds in gaining passage of state legislation that would give UB more flexibility to pursue public-private partnerships, Simpson said.

This project took a bumpy and long path to get to the point of construction, and there were many moments when it seemed unlikely. By the time Kaleida Health and ECMC agreed last year to cooperate, the credit markets had tightened up as the recession took hold.

Kaleida Health received $64.5 million from the state as part of the consolidation agreement with ECMC, as well as a $30 million loan from the medical center for the new building. However, with the economy sliding, Kaleida Health was unable at this time to tap into tax- exempt bonds, a typical source of hospital financing, for the rest of its $173 million portion of the project, Kaskie said.

Instead, Kaleida Health put together a consortium of backers, including banks and pension funds, to provide "bridge" financing with taxable bonds. After five to seven years, he said, the hospital will refinance in another way, depending on market conditions.

Doctors played key roles in planning the new building, seeking a design that would combine in one location the various specialists who deal with blood vessel diseases in different parts of the body, and then dovetail that with a research facility and business incubator.

Advances in medicine have blurred the lines between specialties that handle conditions in the body's vascular highway. Yet heart and vascular surgeons tend to work separately and, at times, competitively.

The thinking goes that the benefits of coming together -- from sharing knowledge to being more cost-efficient -- outweigh the turf battles that historically split the specialities.

"It's a unique concept in the delivery of vascular care," said Dr. L. Nelson Hopkins III, chief of neurosurgery at Kaleida Health and chairman of neurosurgery at UB.

Talk of the provocative concept began five years ago, Hopkins said, but it was the "money and muscle" of Jeremy Jacobs, chairman and chief executive officer of Delaware North Cos., that gave it substance.

Among other things, the Jacobs family funded meetings in Georgia and Wyoming that brought together medical experts from around the world and the building designers, Cannon Design, to discuss what a dream facility for vascular care might look like, he said.

"We've created a building that will force doctors to get out of their silos and collide with each other, and with scientists," he said. "It's also convenient and beautiful for patients."

When combined, the Millard Fillmore and Buffalo General heart surgery program will stand as one of the largest in the state. It's hoped that consolidation allows for the sort of expansion and improvement of services that can help the program capture more patients, purchase new technology and recruit physicians.

Andrew Rudnick, president of the Buffalo Niagara Partnership, described the project as "transformational" for the city.

"It kicks off the next phase of medical campus development," he said, "and is a component of UB's commitment to a downtown campus."