County okays hospital
The Morgan County Commission unanimously approved a resolution allowing Morgan County War Memorial Hospital to pursue the needed funds to construct a new $25 million critical access hospital.
Commissioner Tommy Swaim made the motion to approve the resolution and Commissioner Brenda Hutchinson seconded the motion at their October 4 meeting.
Could be finished by fall 2009
The new War Memorial Hospital will have 25 swing beds that can be for acute or skilled care as well as 16 nursing home beds. A sub-clause allows a specialty in behavioral health that could permit 10 more beds for mental health care or rehabilitation, said hospital president John Borg.
The new hospital will be located on 80 acres of land on Fairview Drive about a half-mile from its present location. The land was purchased earlier this year.
Construction could begin in the spring of 2008. A groundbreaking is hoped for by June, 2008. Borg believes the building project could be finished by the third quarter of 2009. A 15-month construction schedule is what they are looking at, said hospital vice-president of operations Neil McLaughlin.
Departments could be moved in and functional five to seven days after the construction is completed, said Borg. Equipment must be set up, calibrated and inspected after the move, he said.
The hospital is filing its certificate of need application with the state this month. The state's response is expected within 90 to 120 days.
One-story or more?
The new hospital will range from 60,000 to 75,000 square feet in size and could be one-story or multiple stories in height, said McLaughlin. While they had originally looked at a one-story building, people would have to walk longer to get where they need to go, he said. That could be a drawback in serving an older population.
Architects Perkins and Will, Inc. are telling them there are ways to increase building efficiency with more stories, he said. A smaller roof could allow less heat gain or loss, said McLaughlin.
The architectural firm is a founding member of the Green Guide for Health Care Construction and is committed to designing environmentally-friendly buildings. They are exploring passive solar design, water resources, reclaimed water, storm water run-off and other alternative design concepts, said McLaughlin.
Valley Health will guarantee loan
Valley Health Systems is prepared to guarantee the loan for building the new Morgan County War Memorial Hospital, said Borg. Borg and possibly War Memorial Hospital board chairman Bill Locke, McLaughlin or hospital chief finance officer David Applewood would sign the loan document representing the hospital.
The Morgan County Commissioners and the Morgan County Building Authority would also be required to sign some documentation, said Commission President Glen Stotler. The Building Authority would own the new hospital. County taxpayers won't have any legal responsibility toward the debt, said Stotler.
Hospital revenue will pay loan
The loan to build the new hospital will be paid off by hospital revenue, said Borg at the commission meeting. No tax dollars will be involved, he said.
War Memorial Hospital has increased its revenue by the addition of new physicians' practices in Hancock, said McLaughlin. In-patient and out-patient services are expected to continue to rise with patients and procedures from these added practices.
An auditing firm is conducting a debt service study to show the hospital will be able to meet their annual loan payments with their growing income, said McLaughlin.
Some expenses get reimbursed
A critical access hospital receives federal funding to reimburse its expenditures at the rate of its percentage of Medicare and Medicaid patients, said McLaughlin.
The federal funding program was set up to help small rural area hospitals like War Memorial Hospital provide primary health care and keep their doors open, he said.
The average percentage of Medicare patients at the hospital during April through June, 2007 was 77%. Historically, the hospital is reimbursed between 65% to 72% of their expenses that are considered justified and allowable by Medicare and Medicaid, said McLaughlin.
Cost reports are sent in. Reimbursements are made annually by the federal government and are often not seen until more than a year after the expenditures have been made, he noted.
The hospital has monthly bills plus overhead from paying salaries, lighting, heating and what runs the facility, said McLaughlin. Larger hospitals offer more elaborate procedures that provide more revenue.
"That's how they pay their bills," said McLaughlin.
Finances are complicated
The financial picture is very complicated, said McLaughlin. The hospital has to pay all of the overhead with the money that's coming in and some of the overhead doesn't get reimbursed, he said.
"If we get reimbursed for 70 cents of every dollar, that's still 30 cents we need to make up," said McLaughlin.
War Memorial Hospital had about $1.106
million in excess revenues last fiscal year.
While inpatient and outpatient hospital use dropped slightly from April 30 to June 30,
the average length of stay and number of
patient stays for skilled care and extended care were up.
Some expenses came in that were over
budget and revenue fell off for surgical procedures when general surgeon Dr. Jules Levy left in April.
Interviewing for new surgeon
They have been conducting interviews for a new surgeon and hope to have one on board by the beginning of next year, said McLaughlin. They still have podiatry and other surgical procedures done at the hospital, he said.
The hospital hasn't been hit by the national shortage of nurses. They've maybe had two nursing positions open in the last two years and all nursing positions are filled now, he said. When he does get a nursing position opening, it takes months to fill it, said McLaughlin.
More than half of the hospital staff lives within 10 miles of the building, he said. Around 50% of the nurses live in the community and the rest are from Cumberland, Winchester, Martinsburg, Hancock and Warfordsburg. Some of the staff with more specialized disciplines like radiology also lives within a 30 to 40-mile radius of the hospital.
McLaughlin believes staff that live further away has sought out the friendly, family-oriented atmosphere and less-pressured work environment of War Memorial Hospital over a larger hospital setting.
It also helps the patients when they see the same familiar faces when they come in to the hospital, said McLaughlin. Health care can be kind of scary, but it is less so if patients find familiar people there to tend to their needs, he said.