The Redevelopment of Pendleton Memorial Methodist Hospital

A True Story of Public Private Partnerships

Before

After

In 2005 Hurricane Katrina devastated Pendleton Memorial Methodist Hospital in New Orleans East to such an extent that it never opened again. In the years following the hurricane, the population of the region east of the Industrial Canal slowly rebounded and by May 2010, the area reached approximately 70% of its pre-Katrina population; yet a full service hospital had not been re-opened to serve the residents.

In early 2011, Navigant was commissioned to evaluate the healthcare needs of the area and the potential for sustainable healthcare services. The final report suggested ambulatory services could be sustainable however highlighted the reality that a full service hospital would be financially difficult to sustain. Recognizing the importance of full service healthcare to the region, the Mayor of the City of New Orleans, State of Louisiana health officials, and the Orleans Parish Health Service District Board committed to finding a way to bring a full service hospital to New Orleans East.

An RFP was issued for program management and strategic consulting services to develop a Vision, Business Plan, Master Plan and Implementation Plan for a new hospital and to manage the financing, design and construction of the facility.

Navigant, in partnership with DMM Associates of New Orleans was selected to bring Healthcare Real Estate, Strategy and Performance Improvement experts together with local market knowledge to form a full service Team of consultants for the development of a sustainable solution for full service healthcare in the region. The new and repurposed facilities had to meet new codes for hurricane and projectile resistance as well as emergency preparedness.

Challenge

  • Develop a “hyper” fast-tracked process for the design, financing, construction and activation of the facility while meeting City, State, FEMA, and HUD requirements
  • Affordably repurpose the existing hospital to modern codes and best practices for hurricane and projectile resistance as well as emergency preparedness
  • Continually coordinate the work with City, State, FEMA and local agencies
  • Plan and design best practice operational models with no hospital personnel or user groups in place
  • Develop and implement a communications/marketing plan for urgent care services while the hospital was in development
  • Prequalify and select operational "provider" partners (Public Private Partnerships)

Solution

The facility opened in July 2014, including the six-story repurposed clinical services tower along with a new 3-story operating suite platform and emergency department. Funding sources include State of Louisiana Community Development Block Grants, FEMA funds and a HUD 242 insured loan. This was only the second public project in Louisiana history to receive permission from the State to use a Construction Manager at-Risk contracting and delivery approach in lieu of the tradition design-bid-build approach. Understanding the challenges and difficulties of the project, the Project Team also committed to achieving a “partnering” approach through team building events and development of guiding principles based on equity, transparency, and mutual benefit to focus the team on common goals. This significantly contributed to the success of the project.

Project Services Provided by Navigant
  • Visioning
  • Strategic Planning
  • Operational Planning
  • Master Planning
  • Facility Implementation Planning
  • Full Program Management Services included: 
    • Project Team Organization
    • Master Budget Development and Management
    • Master Schedule Development and Management
    • Disadvantaged Business Enterprise Program Development and Management
    • Consultant Selection
    • Public Bidding for All Vendors and Sub-Contractors
    • Management of Medical and Technology Equipment Planning, Purchasing, Delivery and Installation
    • Management of HUD financing requirements
    • Project Risk Management
    • Design and Construction Oversight

Results

  • A full service, 80 bed hospital master planned, designed and bid in nine months and constructed in fourteen months. Project delivered under-budget.
  • Achieved the aggressive goal of a 35% DBE (Disadvantaged Business Enterprise) participation level for the project.
  • Emergency, primary and acute care services are now in an area with no service since Hurricane Katrina
  • An operating model that is financially sustainable
  • Creative partnership with LCMC, including capital participation
  • Well-defined plan for an orderly transfer of patients and shut down of the facility in the face of another significant natural event.

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