Consultants lean toward current site for new hospital |

Consultants lean toward current site for new hospital

Jeremy Browning

If The Memorial Hospital’s business continues to migrate elsewhere and if a new facility cannot be established, TMH may not have a future here, a consultant for the hospital said this week.

The comments of Keith McLaughlin, a consultant from Hammes Company, came after he noted that orthopedic surgeons recently have said they won’t perform outpatient surgeries in TMH’s operating room because it is too small to accommodate them and their staffs.

The project manager addressed the board of trustees Monday with a sense of urgency but McLaughlin later said he didn’t mean to sound ominous but it has happened to other rural hospitals across the country.

“Everybody’s hurting,” McLaughlin said.

That’s why legislation in recent years has allowed these hospitals a break, giving them higher Medicare reimbursements, for example.

Hospital Administrator Randy Phelps speaks of the three legs that support healthcare — good staff, good equipment and a good facility. Phelps said he’s proud of the staff, the equipment is state of the art but the facility is crumbling around them.

TMH’s board convened the special meeting to discuss the cost analysis report with key consultants, hoping to clarify the report and achieve a true “apples-to-apples” comparison of all the proposed sites for the replacement hospital.

But it became clear, as the experts voiced their opinions, that the most plausible, and maybe the only possible plan would be to construct a new hospital — in phases — at the existing location. Under that plan, certain administrative functions, material handling and the laundry would remain in the old building while all of the “clinical” functions would move to a new co-located facility.

“That certainly seems like their recommendation from a financial standpoint,” said Ron Danner, a hospital trustee and chairman of the building committee.

Alan Richman, an investment banker with Innovative Capital, who will help TMH secure funding, said HUD would not likely fund a hospital in Craig of the size or cost currently proposed — a 72,000-square-foot facility with a price tag in the upper $20 million range. He said any lender, including HUD, will limit money it will give to a rural hospital because of the size and how quickly hospital profitability can vary.

The partial reuse proposal is the “only plan that is close to fundable,” said Don Finlayson, president of Architectural Nexus, the project architect.

Comparable hospitals around the nation that have been able to secure funding seem to be in the range of 51,000 square feet, McLaughlin said.

THM’s 72,000-square-foot plan, called a “space allocation program,” was developed after the project manager and the architect interviewed hospital staff to initiate a design for the proposed facility.

This program will need to be pared down to make the facility more realistic. Finlayson proposed a refinement of the program, determining which rooms could be made smaller or which functions could be combined to reduce the size and cost of the project without losing services that are driving revenue.

“The paring down we have suggested simply revolves around getting construction costs down to a level that is fundable, that you can afford,” Finlayson said.

Richman expressed opposition to moving the hospital to a new location. He said TMH would lose the equity it has in the current site. Also, he pointed out that HUD will not fund the cost of bringing utilities such as water and sewer to a “greenfield.” Money for those expenses would have to be secured outside the HUD-approved funding.

“We all worked hard to consider other sites, but a decision has to be made to go forward or not,” Richman said.

The meeting ended with the board making tentative plans to make the report public at two community forums sometime in November after election day but before Thanksgiving. TMH asked the project’s key players, the architect, the project manager and the banker to come to Craig to provide the public with information contained in the cost analysis report.

Richman said he thought it would be “self-evident” to those attending the meeting that “this (construction at the existing location) is the way to go.”

Jeremy Browning can be reached at 824-7031 or

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