Wrangell's hospital administration and members of its advisory board met with the Borough Assembly on Tuesday evening to discuss the next steps for construction of a new building.
Wrangell Medical Center desires a new hospital facility in order to meet state and federal standards, in addition to the accompanying benefits to service and revenue such a move would bring. The planned location would be off of Wood Street, neighboring Alaska Island Community Service's clinic.
Progress on the project has taken several false starts over the past half-decade, including the scuttling of a $24.7M loan through the Department of Agriculture's Rural Development office following a contentious recall election in 2012. The past two years have seen WMC awaiting a decision for predevelopment assistance by Foraker Group in Anchorage, a prospect which now appears unlikely.
Several design concepts had come from past efforts, but no consensus was ever reached on how to proceed. In his discussion with the Assembly, hospital CEO Robert Rang suggested that past plans should be discarded and the project redesigned anew.
“To get the community's support it strikes me it would be best to start from scratch,” he told them. Rang explained several benefits to this, including bringing down the overall cost of the project from the $26M price tag it had previously carried, in part due to its planned size.
“I think we can probably downsize. I'm not sure where that number is, but I think that would be a good starting point,” he said. The needs of a new facility could be around 40,000 square feet, up from the hospital's current 27,000.
Rang felt a good way to economize the new building's revised design would be to have multiple levels, reducing its overall footprint while still allowing expansion in areas the hospital would need, such as its long-term care unit, which was cited in its initial certificate of need request.
“My vision would be to have two floors. I think that would help reduce our cost as far as the amount of roof space that we would need. It would also allow us to separate the long term care home from the institutional part of the facility,” he said.
He would still like to see the new hospital go next to AICS, as the two medical providers work closely together and share services. A new WMC building would mirror the clinic's aesthetically, and be close enough to connect with a covered walkway.
“It needs to compliment it,” Rang explained.
He would also like to see a more modern facility constructed, conforming to the needs and expectations of the healthcare industry. “On the hospital side of things, we need to have private rooms instead of shared rooms because of privacy and section control issues, the new standards that are expected of a hospital.”
Currently WMC has eight in-patient beds, two to a room. Long-term care is certified for 14 beds, but with the community's aging population Rang pointed out there is a need for greater capacity; up to 18 or 20.
A modern facility would also need to take into account greater technological needs. A new facility would need a dedicated server room, sufficiently wired and cooled.
Rang explained a new building could mean additional positions as well: “If we went with the two-story model to separate LTC from the acute care portion of the hospital, there is going to be some minor additional staffing just to make sure that we have adequate staffing on each individual floor.” He estimated that could add two or three full-time equivalent positions.
Some of the cost for a new facility could also impact billing, which would boost hospital revenues and could help pay for construction.
“We're cost-based reimbursed, so whatever our costs that are associated – and that includes capital expenses – goes towards that. So Medicare and Medicaid, we would just raise our rates to cover some of that,” Rang explained. He estimated both sources make up about 80 percent of WMC's revenue stream.
“That only covers a percentage,” he added. At present the hospital operates on roughly $12M per year, and brings in enough to cover those costs.
“It's going to require some kind of dedicated funding,” commented Doran Hammett, hospital financial director.
Rang brought up different avenues for funding the city could possibly pursue, such as loans through USDA Rural Development at the federal level, or revenue bonds.
“There are other types of bonds too, but you have to be careful with that because then that limits the city's ability to borrow for other projects later,” he cautioned. This includes general obligation bonds, which could hinder new projects for the city for two or more decades.
As for the current hospital building, it could be put to other uses, though not meeting requirements to be a medical center. Once WMC relocates to a new facility, the previous building would revert to the city's care. The building was largely built in the mid-1960s, and preventative maintenance on it has fallen since the prospect of a new building appeared.
“There were a lot of ideas kicked around, but nothing definite,” Mayor David Jack said. Because of its size and layout, it may be suitable for an educational campus, or else be subdivided for office space or other businesses. But with its maintenance needs and utilities issues, another option would be to include the cost of its demolition with that of the new facilities' construction.
Funds from the previous building effort are still available for use in preparing a design. Approximately $1.2M of a prior grant remains ready to use through May 2017, though an extension could be secured if a plan were in place for its use. Rang explained it could cover expenses for hiring an architect and a project manager. Army Corps permitting and other certifications for the project are still up-to-date through the spring.
Assembly members agreed it would be best for the hospital to proceed with taking on a consultant to assess the situation before hiring an architectural firm, which can run up to 10 percent of total project costs and would likely exhaust the grant resources.
“Before you start spending, I think we should check things first,” Borough Manager Jeff Jabusch noted.
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