Friday, November 6, 2009

New Hospital Catalyst in Owensboro's Shifting Economy

The following is the text of remarks by EDC President/ CEO Nick Brake at the Board of Adjustment meeting to approve the conditional use permit for the new hospital on the east-side of Owensboro:

Some in the community are approaching the opportunity of a new hospital from a 20th century perspective. From this point of view the hospital serves the same basic function of a church or a grocery store in providing services to the people that live here. Hospitals are considered strictly a service industry and therefore do not count as economic development.

I am going to challenge us to view this opportunity in the context of our present global economic age—in this environment the drivers of regional economies especially in mid size or small regions are no longer just large companies—they are institutions like hospitals and research universities.

While it is certainly true that our hospital does take seriously their fundamental mission of taking care of our people, like other growing medical systems OMHS has successfully pursued an economic development mission that make it more than just a community hospital. And since we do not have-- nor ever will likely have-- a research university —our hospital is our driver. And as a result they have positioned Owensboro as a regional medical hub with innovative partnerships in research, teaching, and economic development. The location in eastern Daviess County adjacent to the I-65/ I-64 Corridor is the best location for the OMHS to expand for the good of our economy.

The economic development importance of hospitals is evident in looking at our peer communities. U of L economist Paul Coomes identified these regions for us as a way to benchmark ourselves against like communities. None of these communities have research universities; all are similar to Owensboro in terms of population and infrastructure. We have used these regions as benchmarks in examining the impact of the current recession. Those with a large percentage of workers in medical occupations have significantly lower unemployment rates, 6- 8 % during this recession. Those with the smallest concentrations of medical workers have the largest unemployment rates, between 13 -16%. Owensboro is right in the middle of the list of 12 peers.

A great example from one of our benchmark communities that has transitioned from manufacturing to health care is LaCrosse, WI. They have developed one of the largest medical clusters per capita in the United States. They do not have a research university—they have a regional university campus. We are positioned similarly with the growth of Western Kentucky University-Owensboro and other higher education partnerships, many of which are connected to OMHS. LaCrosse is a couple of hours from the Mayo Clinic and have numerous partnerships much the way OMHS collaborates with hospitals in Louisville and Nashville. The medical cluster in LaCrosse consists of almost 9,000 people; their bachelor degree attainment rate is 27%, a full 10 percentage points ahead of ours. During the recession over the past year their unemployment rate topped out at around 8% and has averaged at 6% for most of the recession. They have an active research and technology transfer component that has lead to the formation of new companies and new jobs. This is a great chance to transform our economy.

Given the way global economic forces have decimated many small regions throughout the Midwest and southeast-- not supporting the expansion of this hospital would be a betrayal to our future economic prosperity. The days of us being solely a manufacturing based economy are over. This expansion will further diversify our economy. We have seen these forces touch us in the past month at Hon and GE. The headline in the paper tomorrow will be about 100 more laid off at Daramic. We have a unique opportunity to retrain our workforce with these layoffs; many are already seeking retraining in the medical field.

The location on the eastern side of the county is strategically superior to the current hospital site on Parrish Ave. The clear opportunity for growth from a community hospital to a regional medical hub exists because OMHS will be in a position to capitalize on the Southern Indiana and north central Kentucky markets further away from Evansville and closer but not too close to Louisville. This location will enhance the hospital’s services as an export industry, which translates into more primary dollars circulating through out local economy.

I want to address the issue of the Parrish Ave campus. If you look at the former Mercy Hospital property on Ford Ave, OMHS has made that property very attractive and a functional part of their health system, focusing on wellness. I know the plans have not been finalized, but certainly there are exciting opportunities for the best use of the Parrish Campus. I mentioned earlier higher education and research—it would be a tremendous way to help aide the further expansion of allied health and applied research programs. The OMHS Campus is close to our new business accelerator the Centre for Business and Research—the Parrish Campus could be a fully functional technology park for many of these companies to grow into—the possibilities are limitless, the commitment from OMHS is strong, and the track record of previous property development is exceptional.

Lastly, I want to address the expansion of OMHS and the potential for planned, smart growth-type expansion along the new corridor. It is not a question of if development will occur along that corridor; it is more of a question of when. Allowing planned expansion of the hospital along that route puts the community in the driver’s seat to leverage sustainable development rather than allowing unplanned suburban expansion to occur as a consequence of a new highway.

The options are clear; if we want OMHS to be Owensboro’s hospital then they can stay where they are presently located. If we want them to be our region’s medical center and the catalyst of an economic change, then approve this tonight so that we that together we can take the next step helping this region be competitive in the 21st Century economy.

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