Mayo Clinic will spend nearly $800 million to expand in Arizona and Florida, two growing regions with high demand for hospitals.
Rochester-based Mayo said Wednesday it plans to nearly double the size of its Phoenix campus with a $648 million project. Dubbed “Arizona Forward,” it will add 1.4 million square feet onto Mayo’s existing 30-year-old Phoenix campus, making it one of Mayo’s largest expansions.
The Jacksonville, Fla., expansion, which will include a medical building and parking, will cost $144 million, officials said.
“Arizona Forward represents a pivotal and strategic step in accelerating growth and continuing to provide exceptional service to patients in the state and nationally,” Dr. Wyatt Decker, Mayo Arizona’s CEO, said in a statement. Mayo also has a major outlet in Scottsdale, Ariz. The Phoenix effort will include 94 inpatient beds, five new operating rooms and 31 emergency beds. It will also have larger spaces for dialysis, cancer treatments and neuroscience and transplant medicine, as well as research space. Some of the new Phoenix areas will open by June 2020, with the rest completed in April 2024, officials said.
In Jacksonville, where Mayo has a 400-acre campus, Mayo will add a five-story medical building, a 1,000-slot parking garage and connecting structures. The 120,000-square-foot medical building will connect to the campus’s existing Mayo and Cannaday buildings. Construction should be completed in 2021.
Eight new operating rooms will be added, plus space for cardiology, gastroenterology and hepatology departments. The parking garage will be completed in 2020 and will include a two-story “connector” building with 25,000 square feet for retail and other uses.
Officials said the Florida additions were needed to meet growing patient demand that has surged in recent years. The Florida campus has announced $500 million in construction projects during the past three years that already added 520,000 square feet of building space.
“As a destination medical center, these projects deepen Mayo Clinic’s commitment to providing our patients with unparalleled experience and our teams of experts with the latest tools to deliver serious and highly complex care,” said Dr. Gianrico Farrugia, CEO of the Mayo Clinic in Florida, in a statement.
Allan Baumgarten, a health care markets analyst based in St. Louis Park, said Mayo’s major expansion efforts are in keeping with what has been going on in the industry.
The “mantra in this industry is we want to grow,” Baumgarten said. “We are living at a time of significant investments by health care systems in capital facilities. So if you are in a competitive market like Florida or Arizona, then you are competing against some very large systems. And in order to be competitive, it’s important to grow.”
He noted that many large hospital and health care systems such as MD Anderson Cancer Center, Memorial Sloan Kettering, Banner Health and others are acquiring other hospitals, building specialty centers or establishing important partnerships that lead to patient referrals. “There is a lot of competition,” Baumgarten said. “So I imagine that Mayo is looking around and saying, ‘We need to have the latest, greatest and shiniest of new facilities.’ ”
Competing hospitals in both Phoenix and Jacksonville have announced high-profile projects. In Phoenix, the county-run Maricopa Medical Center is undergoing a $1 billion makeover.
Updating medical facilities also helps retain the highest caliber of cardiologists, oncologists and other specialists. Expanding a campus “like Mayo ensures your top [medical talent] will not be wooed away by other firms that are also making these investments,” Baumgarten said.
Mayo also is expanding in its home base of Rochester, with $217 million in improvements to its St. Marys campus. And it is participating in a joint $5.6 billion, 20-year redevelopment effort there dubbed Destination Medical Center.