It looks like the health care market is going to get a new multimillion-dollar player in west Lawrence.

Lawrence Memorial Hospital and Lawrence-based OrthoKansas announced Tuesday they have signed an “affiliation agreement” that will allow the two businesses to build a state-of-the-art orthopedic facility in west Lawrence.

And that may just be the beginning. LMH President and CEO Russ Johnson said any new facility would include other hospital services — although not inpatient beds — and would be on a site large enough to accommodate expansion.

“It is fair to say this is going to be substantially more than a clinic building,” Johnson said. “It really will be a new access point for (services).”

Johnson said the hospital hasn’t settled on a location for the facility, but has narrowed its search to a few prominent locations in west Lawrence. Design work for the facility hasn’t yet been completed, but Dr. Doug Stull, president of OrthoKansas said initial discussions have included plans for a building ranging from 60,000 to 100,000 square feet in size.

The work that OrthoKansas does — think knee surgeries, hip replacement, shoulder and hand procedures and other such surgeries — will be a major part of the new facility. Stull said OrthoKansas is planning to add at least three more doctors to it current roster of doctors trained to conduct specialized and complicated orthopedic procedures. Stull said he envisions the new center becoming a destination for people throughout the region who need speciality orthopedic work.

“Northeast Kansas will be the region we focus on for starters,” Stull said. “But if it grows the way it could, it could be a midwest hub for orthopedics.”
OrthoKansas has been based in Lawrence since 1971, and has about 60 employees and six doctors.

With Lawrence’s reputation as a sports-oriented, active-lifestyle town, plus a growing senior population, Stull said it made good sense to build an expanded orthopedic center in Lawrence.
Johnson said it also makes good sense for LMH to look for a new location beyond its Third and Maine facility in central Lawrence. He said LMH “absolutely” was committed to maintaining the Third and Maine campus as its main facility in the community and serving as the place for traditional inpatient hospital and emergency care.

But Johnson said LMH needs to think strategically about how it delivers outpatient care, which already accounts for nearly 80 percent of LMH’s revenues. That outpatient care includes everything from physical therapy to imaging work to visits to primary care doctors.

“It is clear that health care is moving toward a consumer environment and a consumer economy in a lot of areas, but especially outpatient care,” Johnson said. “Access and convenience is so important. This places us in a strong position for where the market is going.”

The University of Kansas hospital system has opened a new orthopedic and sports medicine center along Wakarusa Drive. It has partnered with Lawrence doctor Jeffrey Randall, who previously was with OrthoKansas.

The deal is significant because it marks the first time KU Hospital has entered the Lawrence market in such a big way. Importantly, KU Hospital made it known as part of its announcement that is is “working with other health care organizations in Lawrence to identify collaborative practice opportunities.”
Johnson previously has said that if LMH can successfully complete this project with OrthoKansas, it should send a message to the broader medical community that LMH also is serious about partnerships and knows how to get them done.

Johnson said he hopes to have a site selected for the new facility within the next two months. Purchase of the site, among other details of the project, will have to be approved by the Board of Trustees for LMH, which operates as a nonprofit.

Stull said access to both Kansas Highway 10 and Interstate 70 will be important attributes for a building site. West Lawrence has two large areas of undeveloped commercial ground — one near Rock Chalk Park in northwest Lawrence and another near the new Bob Billings Parkway and South Lawrence Trafficway interchange — that have prime access to both roadways. LMH officials did not comment on particular sites they are considering.

I will let you know when I hear more details about the LMH-OrthoKansas partnership.

In other news and notes from around town:

While some people may need a knee replacement, I more often feel like I need a wallet replacement. A new report on Kansas incomes shows many of us may be in that boat.

Kansas had the fourth lowest income growth of any state in the country during the second quarter of 2017, according to the U.S. Bureau of Economic Analysis.

Personal income grew by only 0.4 percent during the quarter, which ranked Kansas 47th among the states. The national average was 0.7 percent.

Growth in the Plains region, which includes Kansas, generally wasn’t too good in the second quarter. Here’s a look at how other states in the region fared:

— Iowa: up 0.1 percent

• Minnesota: up 0.5 percent

• Missouri: up 0.7 percent

• Nebraska: up 0.1 percent

• North Dakota: up 0.7 percent

• South Dakota: up 0.4 percent

All the states in the region saw their earnings from the farm sector decline. What was different about Kansas is it also saw a significant drop in the manufacturing sector.

Kansas saw earnings in the nondurable goods manufacturing sector drop by about $130 million. On a percentage basis, that was the largest drop of any state in the country.

When you look at the total manufacturing sector — which includes durable goods and nondurable goods — Kansas lost about $125 million in earnings during the quarter. Of the Plains states, North Dakota was the only other state to post a decline, and it was only a $1 million decline. In contrast, Minnesota and Missouri led the way with about a $260 million increase in manufacturing earnings.

One type of manufacturing plant that may not be coming to Kansas is a chicken-processing facility. We all know of the opposition that Tyson’s plan for a chicken plant outside of Tonganoxie has created.

Well, the speculation has certainly begun that Tyson may take the project outside of Kansas. The Omaha World-Herald has a story speculating that Nebraska economic development officials will try to recruit the plant now that Tonganoxie and Leavenworth County officials have backed away from a deal with Tyson.

Tyson hasn’t commented, nor have eco devo leaders in Nebraska. But there is speculation that the project could move to Nebraska because that state successfully recruited a chicken plant that will be operated by Costco. The discount retailer is building a chicken-processing facility in Fremont, Neb.

An economic development site selector told the Omaha newspaper that he expects Tyson to no longer consider Kansas for the deal.

“I suspect they’re going to leave Kansas in the dust and look for another low-cost, right-to-work place in the Midwest,” John Boyd, with Princeton, N.J.-based The Boyd Co., told the World-Herald. “Nebraska makes perfect sense.”

Worth keeping an eye on.