PLASTIC SURGERY FOR ST. FRANCIS;IN EVANSTON, A $90 MILLION MED REVAMP

St. Francis Hospital of Evanston is planning to replace the main building on its 14.3-acre campus with a smaller facility at a cost of $80 million to $90 million.

Officials of the Roman Catholic last week confirmed plans to downsize the facility and open additional out-patient clinics on Chicago's Far North Side and in the northern suburbs.

Details of the project, including financing, haven't been fully hammered out or presented to St. Francis' board of trustees or state regulators.

But the hospital's board authorized senior management to hire architects and construction managers to map out the rebuilding program, which could start by next spring.

In the hotly competitive North Side-North Shore health care market, the move by the 346-bed institution is an attempt to significantly cut costs and enhance its ability to compete against nearby rivals. Chief among them is highly regarded Evanston Hospital, located five miles north on Ridge Avenue. the new facility is needed to respond to continuing pressure from the region's managed care insurers to shift patients out of hospitals and into lower-cost out-patient centers.

"I think the choice is pretty clear," says Mr. Gizzi, St. Francis' CEO since 1990. "Every hospital recognizes there's a decrease in in See St. Francis on Page 4patient usage now. (And) if you have a lot of square footage that you really don't need, it costs money to keep that up."

the 650,000-square-foot, 86-year-old hospital building that fronts on Ridge Avenue south of Oakton Street and build a 300,000-square-foot facility with as few as 180 beds.

Preliminary plans

Buildings that will remain, according to preliminary plans, include the hospital's school of nursing, parking garage and professional building and the convent used by nuns of the Indiana-based religious order of St. Francis of Perpetual Adoration, which owns the hospital.

St. Francis executives also are looking to expand within their service area with new clinics in Chicago's West Rogers Park neighborhood and in north suburban Morton Grove and Kenilworth. The hospital currently operates clinics in Evanston, Glenview, Lincolnwood, Skokie and East Rogers Park.

St. Francis officials intend to seek approval for the project from the hospital board and the Illinois Health Facilities Planning Board, which reviews all health care capital projects statewide, by early next year and break ground soon after. Under that scenario, the new St. Francis Hospital could open in the summer of 1998.

"We're facing some significant capital investments, " says Mr. Gizzi. "And we think, based on preliminary investigation, that we can meet the future needs of the communities we serve by investing in a new facility."

The hospital has engaged Chicago architecture firm VOA Associates Inc. and St. Louis-based Helmuth Obata & Kassabaum to do preliminary engineering and design work. Chicago's Schal Bovis Inc. and Barton-Malow Co. of Southfield, Mich., have been tapped as construction managers.

St. Francis' rebuilding project is driven by the need to wring excess costs from its operations in the face of declining hospital occupancy.

In 1995, total patient days at the institution dropped 4% from the previous year, to 76,900. The average length of a hospital stay at St. Francis decreased from 6.0 days to 5.7 days, close to the 5.5-day average for the Chicago area, as reported by the Metropolitan Chicago Healthcare Council, an industry group.

According to figures reported to the federal government, 71.6% of St. Francis' beds were filled in 1995-far outpacing the 61.2% metropolitan-area average.

Meanwhile, St. Francis-one of seven Catholic hospitals in the Unified HealthCare Network alliance formed late last year-continues to face tough competition from a dozen nearby rivals.

Closest competitors include 462-bed Ravenswood Hospital Medical Center, which is affiliated with Oak Brook-based Advocate Health Care, Chicago's largest hospital network; Swedish Covenant Hospital, with 343 beds, on the city's Northwest Side, linked with Northwestern HealthCare Network; 301-bed north suburban Highland Park Hospital, and Evanston Hospital, which also is part of the Northwestern network.

"Evanston clearly is a good competitor," says Lawrence J. Stanley, St. Francis' vice-president for marketing, sales and planning. "They are extremely well-financed and profitable."

In 1995 and 1994, Evanston was named one of the top 100 hospitals in the nation by HCIA Inc., a Washington, D.C.-based health care market research firm. The ranking is viewed as important by the nation's 6,000 hospitals, since it uses both patient and financial records to identify the best-managed institutions nationwide.

Seeking competitive edge

A spokeswoman for Evanston Hospital says officials there aren't aware of any plans by St. Francis to rebuild or renovate. "I can only assume that what they're doing is in response to what we're doing," she says. "We've increased out-patient services pretty dramatically."

Says Daniel Schuh, president of University Park-based health care consultancy Deer Creek Associates: "There's been a long-running battle between St. Francis and Evanston Hospital for that market. If St. Francis can cut its costs, it might improve its position."