Lansing's next health care boom starts in 2022. Will the industry just keep growing?

With a new hospital, a new emergency room, years' worth of developments and a $1.4 billion price tag, the next phase of Greater Lansing’s health care boom begins in 2022.

The growth is anchored by McLaren Greater Lansing’s new hospital, which is slated to go online in March, and Sparrow Health System’s new standalone emergency room, opening in Okemos sometime in the summer.

And according to the Lansing Economic Area Partnership, those two developments and others could bolster economic growth in Greater Lansing for years to come.

“(Health care jobs) are in one of the higher categories, globally speaking, of an industry of growth into the future,” LEAP President and CEO Bob Trezise said. “We’re very fortunate to have all the necessary tools to do that right here in our region. It’s all a matter of putting it together.”

Investment scale

Sparrow Health System’s $800 million capital improvement plan, announced in September, will fund multiple sites and initiatives in Greater Lansing over the next six years. Those include:

• A free-standing emergency department in Okemos, scheduled to go online summer 2022

• A new five-story patient tower for its downtown Lansing hospital, which will allow for doubling the size of the existing downtown emergency department

• A three-story downtown outpatient surgical center

• New office building and drive-thru pharmacy facility

• Tens of millions of dollars earmarked for improvements at community hospitals Sparrow Carson, Sparrow Clinton, Sparrow Eaton and Sparrow Ionia

More: Sparrow unveils $800 million investment, including five-story tower at Lansing hospital

The patient tower and the outpatient surgical center are still in the design phase. Sparrow’s last major investment was its $64 million Herbert-Herman Cancer Center, which opened in 2017.

The new developments are intended to meet the region's growing population and need for care, according to Tom Bres, senior vice president, chief administrative officer and CIO at Sparrow.

"One of the things we're proud of is being community-owned, locally headquartered, and everything that we are doing in this capital investment plan is focused on what our community needs are," Bres said. "There is significant growth that we're experiencing in terms of demand for different types of care."

Meanwhile, McLaren Greater Lansing’s $600 million new hospital is its largest investment to date, with 240 private beds and a 53-acre campus, according to President and CEO Kirk Ray. Some highlights of the new developments include:

• An attached outpatient care center that will also house residency and teaching programs

• A new heart institute and endoscopy center

• A one-story health and wellness pavilion, prepared for drive-up clinical services including wound care and pain management

• Covered ambulance garages to shield patients from bad weather

"If you're going to design something with a blank palette from the ground up, this is kind of the future of health care," Ray said.

A development 'double whammy'

Health care is a special case when it comes to economic development, said Keith Lambert, LEAP's chief operating officer.

The hefty McLaren and Sparrow investments will affect the local economy like any other business would, but they also affect the health of the local population.

“It has this kind of double whammy,” Lambert said. “It’s important from a job creation standpoint, but it’s also important as a quality of life indicator of the type of care you can receive in the immediate realm of your neighborhood and your community, not having to travel an hour for certain types of care.”

Big investments like Sparrow's and McLaren's also inspire confidence in other businesses looking to mid-Michigan, Lambert said. That gives LEAP the traction it needs to attract other businesses in the health care industry to Greater Lansing, a major goal for a coalition working to build a medtech hub here.

Job growth and hiring

Expansions and job openings go hand in hand, putting both health systems in competition for workers as they staff up next year.

Sparrow doesn't yet know exactly how many jobs its new investments will create, but the health system expects to hire to meet the demand of its new locations, Bres said.

McLaren is anticipating a 20% growth in emergency services and a 5%-10% growth in labor delivery services on the new campus, meaning dozens if not hundreds of new jobs.

Improving recruitment and retention are major priorities for both health care providers, especially as Sparrow works toward a new contract with its nurses, pharmacists and other caregivers. Both McLaren and Sparrow point to different aspects of their new investments as supporting those goals.

Staff-oriented considerations at McLaren's new hospital include cash bonuses for referring a new employee, "areas of respite" for staff who need a moment, coffee shops, a new food court and improved sleeping quarters. Ray said those changes may sound insignificant, but they're an important talking point when recruiting residents.

"There is something to be said about having a brand-new, state-of-the-art hospital to attract employees," Ray said. "We're seeing that now in our hiring processes, even though we're in this kind of slump nationally."

Partnership with MSU

McLaren’s new hospital is deeply entwined with Michigan State University. It's even built on land purchased from the university, and its opening will allow a number of collaborations with MSU.

Those include sharing data for clinical research, expanding clinical trials and bolstering health services for underserved populations in Lansing.

Additionally, MSU Health Care will provide clinical services at McLaren Greater Lansing, including cancer care at the Karmanos Cancer Institute located there. MSU will also move its women's imaging services to the new McLaren campus.

Bolstering the relationship between higher education and health care is an exciting opportunity for LEAP, which hopes to build a college-to-career pipeline in the sector. The goal is to keep graduates in the area and strengthen Greater Lansing's health care landscape.

"It's about creating an ecosystem," Lambert said.

Already, 80% of students at MSU's two medical schools stay in the state of Michigan for work, according to Dr. Norman Beauchamp, MSU's executive vice president for health sciences. The McLaren partnership is an opportunity to increase that number even more.

"If we are an institution charged with training the necessary workforce for our community, state and nation, it's a perfect alignment that goes directly at a need to increase that capacity," Beauchamp said.

Changing the city's look

McLaren's and Sparrow's developments will also change Greater Lansing in a literal sense, from its roads to its skyline.

Sparrow's Okemos ER will sit on parcels of Meridian Township land re-zoned to allow for its existence.

Ray said McLaren worked with the city of Lansing to add a CATA bus stop at the new location and improve road infrastructure off the highway for patient accessibility.

Sparrow is already an anchor institution for Lansing's Michigan Avenue corridor, and LEAP expects more mixed-use development like housing and retail as the downtown campus grows.

Though it's still in the design phase, Sparrow's five-story hospital tower plan will add a new shape to the skyline. That's an important move in the psychological game of economic development, Trezise said.

"You're building this sense of momentum, of confidence," he said. "We really think the No. 1 way that psychology of having greater confidence is expressed is by changing the skyline. It says this is a place on the move. That this is a place of inspiration and creativity and something growing.”

Contact reporter Annabel Aguiar at aaguiar@lsjnews.com or (517) 449-8248. Follow her on Twitter @annabelaguiar.

This article originally appeared on Lansing State Journal: Will Lansing's health care industry just keep growing?