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A new hospital or a remodeled hospital were future options for Pratt Regional Medical Center discussed at a joint meeting Monday night at the hospital.
The PRMC Board of Directors, the Pratt County Hospital Board of Directors, the Pratt Health Foundation Board of Directors, the Pratt County Commissioners, the Pratt City Commissioners and the Pratt City Manager gathered to learn the hospital facility problems and two methods to address the problem: build a new hospital or remodel the existing facility with a total replacement of all mechanical, electrical and plumbing.
While the group didn’t vote on the matter, the entities agreed educating the public about the need would be a key to getting the hospital financed.
Estimated cost of a new building is $38.8 million plus interest making it around $45.0 million. The new hospital concept includes room for growth.
A remodel would cost about $22.0 million and with interest about $28.0 million, said Stephen Lewallen, president and chief executive officer of Health Facilities Group.
The hospital doesn’t have the financial capability to pay for a remodel or new building by itself. The projected cash flow to cover the debt is $7 million and the hospital doesn’t have it, said Susan Page, PRMC president and chief executive officer.
“We can’t do this major project without (financial) help,” Page said.
General obligation bonds or public commission bonds would be issued. Additional options are property tax increase and/or sales tax increase, said Charles Wells, Healthcare Financial advisors.
If a new hospital is built, it can be done adjacent to the existing facility on the northeast side of the property keeping only the Medical Arts Building addition and tearing down the original 1950 building and the 1978 addition.
All plans are speculation at this time. None of this is set yet and much work has to be done before any action is taken on the matter.
Overall, the new building was favored. Dr. Wakon Fowler said a new facility would help attract more physicians offering more services for the community and region.
The current facility, except for the newest addition, has reached or passed its lifetime now something has to be done to repair or replace the facility, Lewallen said.
After 60 years the original hospital and the 30-year-old addition the hospital needs to replace all the electrical, mechanical and plumbing. The water system has a high silicate content that is destroying the plumbing. Many other problems are costing the hospital more and more money every year and something has to be done.
“It’s starting to happen now. Over the years it will nickel and dime us to death,” Lewallen said.
Other problems include the emergency room is too small, patient rooms are small, no shower facilities in the rooms, patients have to be moved from floor to floor for procedures, little room to make improvements in electrical, mechanical and plumbing.
Dave Hughes of Hutton Construction said the facility had lasted longer than expected. “It’s beyond its projected life. Your stuff is beyond its years,” Hughes said
Everything needs to be replaced for mechanical, electrical and plumbing. Tens of thousands of feet of pipe need to be replaced, wiring ripped out and replaced along with plumbing and all while the hospital continues to function.
“This is not going to be an easy thing to do,” Lewallen said. “It’s very complicated.”
The remodel would take about a year and a half to replace everything, said Brett Budd, Hutton Construction.
Concerns were raised about the number of patients that would choose to go to another facility over the construction period to avoid the construction mess.
A new hospital building would take about the same time to construct and not disrupt current hospital operations.
The hospital would have to continue operations while the remodel is in progress and then it would be an up-to-date MEP with a 60-year-old body that would continue to age.
“Maybe this is an exercise in futility,” Lewallen said.
Timing is crucial for the entities to decide what to do. The current bond finance situation could face inflation so a decision must be made soon to take advantage of current rates.
“There’s a lot to contemplate. I think there’s a very short window,” Wells said.
If the process started today the fastest bonds could be issued would be summer 2010.
“Time is of the essence. Now is the time to act,” Wells said.
Bids are down 20 percent from a year ago and the cost of money has come down dramatically but that could change quickly.
If the hospital borrows money on its own it will have to pay 6.25 percent interest but if it can get some government help it can borrow money for 4.25 percent interest, Wells said.
A new hospital or a remodeled hospital were future options for Pratt Regional Medical Center discussed at a joint meeting Monday night at the hospital.
The PRMC Board of Directors, the Pratt County Hospital Board of Directors, the Pratt Health Foundation Board of Directors, the Pratt County Commissioners, the Pratt City Commissioners and the Pratt City Manager gathered to learn the hospital facility problems and two methods to address the problem: build a new hospital or remodel the existing facility with a total replacement of all mechanical, electrical and plumbing.
While the group didn’t vote on the matter, the entities agreed educating the public about the need would be a key to getting the hospital financed.
Estimated cost of a new building is $38.8 million plus interest making it around $45.0 million. The new hospital concept includes room for growth.
A remodel would cost about $22.0 million and with interest about $28.0 million, said Stephen Lewallen, president and chief executive officer of Health Facilities Group.
The hospital doesn’t have the financial capability to pay for a remodel or new building by itself. The projected cash flow to cover the debt is $7 million and the hospital doesn’t have it, said Susan Page, PRMC president and chief executive officer.
“We can’t do this major project without (financial) help,” Page said.
General obligation bonds or public commission bonds would be issued. Additional options are property tax increase and/or sales tax increase, said Charles Wells, Healthcare Financial advisors.
If a new hospital is built, it can be done adjacent to the existing facility on the northeast side of the property keeping only the Medical Arts Building addition and tearing down the original 1950 building and the 1978 addition.
All plans are speculation at this time. None of this is set yet and much work has to be done before any action is taken on the matter.
Overall, the new building was favored. Dr. Wakon Fowler said a new facility would help attract more physicians offering more services for the community and region.
The current facility, except for the newest addition, has reached or passed its lifetime now something has to be done to repair or replace the facility, Lewallen said.
After 60 years the original hospital and the 30-year-old addition the hospital needs to replace all the electrical, mechanical and plumbing. The water system has a high silicate content that is destroying the plumbing. Many other problems are costing the hospital more and more money every year and something has to be done.
“It’s starting to happen now. Over the years it will nickel and dime us to death,” Lewallen said.
Other problems include the emergency room is too small, patient rooms are small, no shower facilities in the rooms, patients have to be moved from floor to floor for procedures, little room to make improvements in electrical, mechanical and plumbing.
Dave Hughes of Hutton Construction said the facility had lasted longer than expected. “It’s beyond its projected life. Your stuff is beyond its years,” Hughes said
Everything needs to be replaced for mechanical, electrical and plumbing. Tens of thousands of feet of pipe need to be replaced, wiring ripped out and replaced along with plumbing and all while the hospital continues to function.
“This is not going to be an easy thing to do,” Lewallen said. “It’s very complicated.”
The remodel would take about a year and a half to replace everything, said Brett Budd, Hutton Construction.
Concerns were raised about the number of patients that would choose to go to another facility over the construction period to avoid the construction mess.
A new hospital building would take about the same time to construct and not disrupt current hospital operations.
The hospital would have to continue operations while the remodel is in progress and then it would be an up-to-date MEP with a 60-year-old body that would continue to age.
“Maybe this is an exercise in futility,” Lewallen said.
Timing is crucial for the entities to decide what to do. The current bond finance situation could face inflation so a decision must be made soon to take advantage of current rates.
“There’s a lot to contemplate. I think there’s a very short window,” Wells said.
If the process started today the fastest bonds could be issued would be summer 2010.
“Time is of the essence. Now is the time to act,” Wells said.
Bids are down 20 percent from a year ago and the cost of money has come down dramatically but that could change quickly.
If the hospital borrows money on its own it will have to pay 6.25 percent interest but if it can get some government help it can borrow money for 4.25 percent interest, Wells said.
