photo by: Rendering courtesy of Pulse Design Group

A look at one of the main entrances to the proposed LMH outpatient medical center in west Lawrence.

Local hospital leaders agreed to spend nearly $5 million more on a mega medical building near Rock Chalk Park, but not without questions about whether the hospital was focusing too much on west Lawrence.

The Lawrence Memorial Hospital Board of Trustees agreed Wednesday to spend up to $4.45 million to expand the third floor of a planned medical outpatient building that will be constructed near the northeast corner of Sixth Street and the South Lawrence Trafficway.

The third-floor expansion will push the estimated cost of the medical building to $101 million, or about $2.6 million more than the original budget for the project, according to figures provided by LMH Health, which is the new brand name for the nonprofit hospital company. The additional third-floor space won’t immediately house any functions but rather will be used to accommodate future growth.

That strategy brought questions from at least one board member. Dr. Lee Reussner said he wanted to keep the project on budget because he wanted to ensure that LMH had plenty of resources to take advantage of opportunities in other areas of town, or for enhancements at LMH’s main campus at Third and Maine Streets.

“I don’t want to see us spend money where we could spend it on staff here, or take it away from other locations like East Lawrence,” Reussner said. “I want to be careful that we don’t put too much stock in one location.”

The remaining board members approved the expenditure with several saying that they thought it would be less expensive and less disruptive to operations to build the space now rather than several years in the future when LMH may have a pressing need for it.

Russ Johnson, president and CEO of LMH, also told Reussner that the hospital is exploring options for service locations in other parts of the community.

“There are very active conversations going on to serve East Lawrence with primary care,” Johnson said. “Those aren’t baked yet, but we are very committed to doing that.”

The west Lawrence medical office building — which is planned to be about 200,000 square feet and located just south of the Rock Chalk Park sports complex — is expected to spark the move of several medical services in town. The hospital already has announced the LMH Breast Center will move from its space at LMH South at Clinton Parkway and Kasold to the new west Lawrence center. Johnson indicated on Wednesday that the hospital may close the LMH South facility in future years. He told the board LMH was paying $600,000 a year in lease payments for the facility and had begun to have conversations with the landlord about its future.

In addition to the Breast Center, the west Lawrence building is scheduled to house an enlarged surgery center for outpatient procedures; an orthopedic center of excellence run by OrthoKansas; LMH Therapy practice; doctor’s offices for the Internal Medicine Group and Mt. Oread Family Practice; and offices for Plastic Surgery Specialists of Lawrence.

The building also is designed to have office space that several third-party health providers can lease from LMH. Original plans called for there to be about 30,000 square feet of space available for leasing. With the third-floor expansion, the amount of space available for lease could grow to more than 70,000 square feet.

Johnson said LMH has had good conversations with several health partners that want to locate in the building. But Johnson cautioned board members that LMH won’t immediately lease or fill all 70,000 square feet of shell space in the near future. He said it may take five to seven years for the space to be fully leased.

LMH hopes to have a groundbreaking for the new facility on Sept. 18, although some excavation work already has begun. Plans call for the building to be open to patients in July 2020.

In other news, the board:

• Announced that Karen Shumate is retiring as chief operating officer of the hospital later this month. Shumate has been with LMH since 2000 and oversaw some of the hospital’s largest projects since becoming COO in 2006.

“You have been part of a team that has really overseen a transformation of this organization,” Johnson said. “There are individual lives and families who are absolutely better because of your work.”

Shumate will continue to work on a contract basis for LMH to help oversee tasks related to the west Lawrence building project and mental health care initiatives at the hospital.

“It has been an honor,” Shumate said of her tenure. “It is an amazing hospital with amazing people.”

• Heard a report that LMH is taking over a role that Bert Nash previously was scheduled to fill as part of the county’s plan to improve mental health services. LMH has agreed to employ three behavorial health clinicians that will provide mental health care at the LMH emergency room. Originally, Bert Nash was scheduled to employ the mental health clinicians. Only one of the three positions had been filled. Shumate said conversations with Bert Nash and county officials determined it made more sense for the clinicians to be employed by LMH since they would be based at the hospital. The county will help cover the costs of the new employees, just as it had agreed to do for Bert Nash.

• Received financial statements showing that the hospital’s bottom-line performance continues to come in below budget expectations. For the year, the hospital’s net operating income is about $2.5 million below budget expectations. The nonprofit hospital, however, is still producing revenues in excess of expenses, with about $3.9 million in net operating income through July. Hospital revenues also are coming in above budgeted amounts, but operating expenses also have increased more than budgeted, according to a report delivered to the board.

Editor’s note: This article was corrected to clarify Shumate’s contract role with LMH in the future.