Gunnison Valley Health considers new medical office building

Gunnison Valley Health (GVH) administrators are exploring a plan to build a $35-50 million medical office building in order to consolidate outpatient services in one facility. If approved, the project — up to 50,000 square fee — will be built on a 4.2-acre parcel of undeveloped land which GVH owns. It is located just north of the new EMS building on North Colorado Street in Gunnison. The building could be completed as early as 2027.

GVH currently leases seven spaces at both ends of the valley for outpatient services like primary care, orthopedics and physical therapy. In addition to the proposed site for the new building, GVH owns 14 other properties in Gunnison County, including the new EMS facility and the former Dollar Store building, now vacant, on Tomichi Avenue.

At a work session with Gunnison County Commissioners on Tuesday, Gunnison Valley Health CEO Jason Amrich provided an update on the status of the proposed project. Stroudwater Associates — a consulting firm specializing in rural health care development — is in the final stages of preparing a financial impact assessment. According to Amrich, it will lay out a range of financing options to help administrators decide whether to seek approval for the project from the GVH board of trustees in July.

“If we do that, then we'll start that planning phase immediately,” Amrich told commissioners. “We're probably two years away from that project being completed. That would also allow us to look at our overall facilities and potentially look at some divestment.”

Stroudwater also contributed to a GVH facility master plan last year that recommended consolidating outlying clinics into a single office building.

“They basically said, ‘You have too many flags across the valley,’” Amrich told the Times. “(Based on) the current state of the buildings and just the cost of renovation and ownership it was their recommendation that a medical office building facility, in both ends of the valley, was needed, with Gunnison being the primary, bigger one.”

Having separate clinics in town comes with a number of disadvantages, Amrich said. Some of the facilities GVH has leased in recent years are aging and in need of costly maintenance. Last fall, when GVH purchased the Gunnison Valley Family Physicians practice, they declined to buy the building to avoid those costs and to position the hospital to be able to afford construction of a new facility.

Other disadvantages include confidentiality concerns in facilities that are too small to provide full privacy; public perception when older buildings don’t meet generally expected standards of appearance; and substandard working conditions for physicians and staff.

GVH has “debt capacity” to finance the new project, Amrich told the Times. However, there are other pathways to paying for it, he said. Those include taking advantage of a USDA loan program meant to fund rural hospital development, tapping GVH reserves or reaching an agreement with a third-party developer.

The plan could also include providing space for private care providers, such as chiropractors, dentists or lab space for the Western Colorado University nursing program, Amrich said.

Alternatives exist should the plan prove to be financially inadvisable, he said.

“There's multiple opportunities for off-ramps, if the project just doesn't make sense,” Amrich told the Times. “That’s one of the reasons why we are holding on to the Dollar Store, just because it gives us the opportunity to at least combine primary care into one space, even if it is smaller in scope.”

Commissioner Laura Puckett Daniels expressed concern about how the public will perceive the project. GVH facilities are owned by Gunnison County, though no tax dollars go toward operations. The exception is the Senior Care Center, which is county-owned and also funded in part by property tax. Commissioners appoint GVH trustees, but have no approval authority over the hospital’s budget.

“There is sometimes this public perception of all these new buildings and all these fancy things, and I'm going to have to pay more for it,” she said in the meeting. “That's where people are hurting, is in their pocketbook and in their access to care.”

Amrich stated that regulations prevent hospitals from passing on the cost of capital improvements to patients, so the project would not result in higher fees. He is more concerned about the adverse effect that potentially substandard buildings have on the public’s perception of the quality of care at GVH, he said.

Those expectations have an indirect impact on the valley’s economic development as a whole, Amrich told the Times. According to a study conducted by the University of Colorado Boulder Leeds School of Business, in 2022, independent hospitals contributed $1.9 billion and nearly 11,000 jobs to Colorado’s economy. GVH currently employs 550 people and in 2024 paid salaries and benefits in excess of $55 million.

The American Hospital Association estimates that for every hospital job, two additional jobs are supported in a community, while each dollar of hospital payroll generates $2.30 in local business activity.

“As we evolve as a community and grow and try to recruit businesses and people that want to bring their livelihood here, we also have to think what is that standard that they're getting in other places,” Amrich told commissioners. “Then how can we make it attractive to live here and get the kind of health care standards that they're used to?”

Once the Stroudwater assessment is complete, GVH hopes to present its recommendations to GVH trustees at a strategic planning retreat scheduled for July.

(Alan Wartes can be contacted at 970.641.1414 or publisher@gunnisontimes.com.)