$21.5M hospital project approved

Hammond-Henry Hospital board members gave their unanimous approval to a $21.5 million capital project at their regular meeting Jan. 19.

The “Designed to be Patient Kind” project is a combination of construction, renovation and demolition which will take over two years to complete. Features include a third operating room, a new therapy and rehab center, replacement of its long term care building and demolition of 40,000 square feet of existing space.

The board began the planning process 18 months ago by revisiting a master facility plan that was completed in 2003. “We felt good about the footprint that we started back in 2004,” said hospital board chairman Gary Gesme about the project. “We took another look and realized that with a few modifications we were still on the right track.”

That plan called for extension of the main two-story hallway of the hospital to the south, construction of another building to the south and demolition of everything to the east of the main hallway. “We’ve really kept to that theme of extending the main hallway, except for the addition of the long-term care building to the southeast,” said hospital chief executive officer Brad Solberg. “That location will really give our long-term care services its own identity.”

Skilled care and extended care are now provided in two floors in a building constructed in 1963. The two services will be combined in a newly-constructed building. “We had challenges operating on two different floors,” said Solberg. “By reducing our bed capacity and moving to one floor, we will add some efficiencies. Also, our patients and residents will enjoy the amenities of a newly-constructed unit.”

One of the priorities of the project is the addition of a third operating room. Hammond-Henry’s surgery center was constructed in 2002. It includes two operating rooms, a small procedure room and an endoscopy suite. The third room is being added to address increased volume. “We’ve seen volumes double since 2002,” said Laura Domino, vice president of patient care services. “It will be a welcome addition to this busy department.”

The new room will also be equipped to perform peripheral vascular procedures. Described as a hybrid room, equipment for vascular procedures will be movable, allowing general procedures to be completed in the same room.

Other new construction includes a building to the south of the central plant. That building will accommodate many of the services still housed in the old part of the hospital that will be demolished. The second floor will be home to the new therapy/rehab center, which will feature an aquatic therapy pool.

Due to the schedule, some parts of the project will need to be built before renovations can take place in current locations. “It’s like a jigsaw puzzle, but by the end of the process, the pieces will fit together very well,” Solberg said. “By the end of the project, the oldest part of the hospital will essentially be the 1993 building.

Considerable financial analysis of the proposal has taken place at the board level for several months. Eide Bailly, the hospital’s audit firm, as well as Brim Healthcare, the hospital’s management firm, have weighed in positively on the project. Medicare reimbursement for the project is favorable due to the hospital’s classification as a critical access hospital. This designation provides cost-based reimbursement, whereby Medicare pays their portion of the costs incurred on an annual basis.

Funding for the project will come predominantly from general obligation revenue bonds, $17.5 million worth of these bonds are scheduled to be sold within the next two weeks. These bonds will not affect taxes, as they are based upon the future revenue of the hospital. Additional funding will come from hospital reserves and a capital campaign that will be announced soon.

The project is being designed and engineered by Shive-Hattery through their Moline and Bloomington offices. Russell Construction is serving as the general contractor through a design/build contract. Plans call for project bids in May and groundbreaking the first week of June.

“It’s a positive step that we took tonight,” said Gesme. “We’ve studied this thoroughly to get to this point and we’re eager to move on to the next step.”     

Prior to the vote, board members were asked to give their thoughts on the building project. “We keep making steps, going down the road and there comes a time when we need to make a decision,” Dr. David Nelson, vice chair, who presided over the meeting, said.

“I think we’ve all struggled with this decision. This is a big project, and in my own mind my vote is ‘yes,’ based on the mandate of the community,” Bruce West said. “The community really supports this project. I had previously determined that ‘old money’ just wasn’t out there any more, but there’s more there than I thought. If we don’t do something now, it might not be there in five years.

Timing is everything. It’s still a big project and it might not be a perfect package, but you have to look at the offset.”

Steve Durian added, “With interest rates and construction costs the way they are, I think the time is right. The stars are aligned basically.”

In her research of the project, Kathy Griffith said donors she has spoken to are proud to have this hospital in their community. “There is support out there for the project,” she said.

Susan Philhower is optimistic about the future of the hospital. “I don’t think we have much choice but to move forward. If the alternative is to do nothing, that is unacceptable,” she said.

Dr. David Nelson said he feels the budget for the project is realistic. “With the government paying for a huge percentage of this, that’s big,” he said. “We can all be proud of this hospital and we have to build on that pride. Doing nothing would be unconscionable.”

Sue Gray also feels the timing is right for the project. “We’ve gotten a lot of information and we’ve penciled a lot of numbers,” she said. “I hope we continue to sharpen those numbers before we can be really comfortable with the project.”

Bill Dale added he is in support of the project. “I do share the opinion that doing nothing is not a good option for us,” he said.

Gesme added he has a tremendous amount of confidence in the broad spectrum of the members of the board. “We’re going to face some major physician and staff recruitment issues in the next few years,” he said. “This project will have a major bearing on recruitment. It’s the right time to move forward.”

In other business, hospital auxiliary representative Florence Hendrickson reported to the board on the auxiliary’s recent orientation for four new members and six existing members.

The auxiliary is also planning a “Thank You” dessert luncheon to be held beginning at noon on Feb. 15 in the hospital’s first floor conference room, The luncheon is for hospital employees and Hendrickson invited board members to attend.

In other business the board:

• Learned Lori Thomas, RN, a nurse at Hammond-Henry Wound Center who also works in Home Health, is the recipient of the February U Strike a Difference Award.

• Heard a report on the Colona Clinic from Julie Theill, vice president of operations. Theill said they closed the month of November with 166 visits to the clinic, averaging 7.5 per day. Specialty clinic physicians, she said, who will begin offering services this month include Drs. Leno, Rizzo and Bobba. “We have a billboard up advertising the Clinic and we are getting good visibility,” Theill said.

• Gave their approval to the abatement of tax levy Ordinances 195 and 196 for the calender year 2009, relating to the series 2004 and 2005 bonds.

• Approved a pay request from Russell Construction for design work they completed through the month of November, 2009, for $178,161.04.