Consultant asks hospital for advance


A financial consultant for The Memorial Hospital has requested a $20,000 advance payment citing delays in the process to acquire funds for the proposed replacement hospital.

It was one of six measures totaling about $120,000 the board of trustees unanimously approved at its October meeting Wednesday.

Alan Richman of InnoVative Capital requested the advance in a letter to hospital administrator Randy Phelps.

Richman wrote, "Due to the length of time InnoVative Capital has already worked on the Pre-Assessment Stage of your proposed HUD 242 financing, we are respectfully requesting an additional Lender Processing Fee of $20,000 be paid at this time."

Trustee and Building Committee Chairman Ron Danner explained to the board that the new hospital plans have drawn out the process further than Richman had anticipated when he became involved. Danner also noted that the $20,000 was not an additional fee, but merely an advance on the total amount Richman would receive at the project's completion.

Danner referred to it as a "non-refundable advance." The hospital's risk, Danner explained, is that if the replacement hospital never materializes, Richman's fee is non-refundable.

Both Danner and Sue Lyster, the board chair, indicated a strong belief that the replacement hospital will be constructed in one form or another. They consequently saw the advance to InnoVative Capital as an inevitable expense to be paid out sooner than expected. The four board members in attendance unanimously approved the advance.

It will be paid in installments. Phelps spoke with Richman, who agreed to take $10,000 now, $5,000 at the beginning of the year and the balance a few months later. He was not receptive to Phelps' initial proposal of $2,000 per month paid over a 10-month period.

Several technological improvements also were unanimously approved by the four attending trustees.

Dr. Dale Bergstrom recommended TMH purchase a new system for repairing fractures in long bones, such as the femur or the tibia.

Recent technology has made possible less invasive repairs of these fractures using improved long bone nailing techniques. The new system will cost TMH $52,000 if the hospital trades in its old system for $10,000. But Bergstrom said he thinks TMH can sell their current system for more than that.

Trustees approved the purchase on the condition of selling the old system for as much as the market will bear.

As TMH prepares to approach the public with site proposals for the replacement hospital, it will contract with a firm to carry out public opinion polling of area residents about preferred sites and financing options.

At the Wednesday meeting, trustees agreed to hire Dan Jones & Associates to conduct the polls.

After developing a set of questions with the input of hospital staff and board members, Jones will solicit the opinions of 400 residents over a 2-week period. It will then develop an analysis of the collected raw data and deliver it to TMH. The hospital plans to use this information to determine how the community at-large feels about the proposed facility and the financing for it. With a sample size of 400 residents, Jones estimates an error of plus or minus 4.7 percent. It will cost about $10,000.

The board also approved allocation of $10,000 in grant money for the purchase of a terminal server. The computer will allow multiple users to tap into it and use applications at the same time. It will eliminate the need for workstations to be outfitted with individual computers. Instead, users need only a keyboard, a monitor, and a relatively inexpensive unit called a "thin client" that accesses the terminal server.

According to Joe Huelskamp, TMH's information systems coordinator, the terminal server will allow him to add additional users to the existing network without buying expensive desktop computers. All of the thin clients access the same computer, reducing potential points of vulnerability from maintenance and security standpoints.

"All you have to do is maintain the server," Huelskamp said. "Lots of departments don't need complete workstations."

Many employees only need to access common programs, such as Microsoft Word, and hospital databases.

The board also approved the purchase of upgraded an employee timekeeping software package and related hardware, along with software that will help TMH determine, in advance, the medical necessity of a given treatment for purposes of Medicare reimbursements.

Jeremy Browning can be reached at 824-7031 or

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