The Lake Chelan Community Hospital Board of Commissioners continue to compile plans and data for a potential new medical campus, after breaking down reports and research during a facilities workshop held on Thursday, June 2.
Lake Chelan Community Hospital (LCCH) hired a consultant, Jody Carona, from Health Facilities Planning and Development, to present data with her recommendations moving forward. Carona has been a consultant for hospitals for the last 35 years, almost exclusively for rural hospitals similar to LCCH.
“The steering committee has worked for the last nine months on analyzing our facility health needs in this community,” said Commissioner Mary Signorelli. “We are here primarily to bring the rest of the board members who have not been a part of this process together so that everybody can move forward to make a decision in the future.”
Commissioners received a packet of information that included a debt capacity study, a site analysis and a strategic master facilities plan, along with a recommendation from the facilities steering committee.
Because it was a workshop there were no final decisions or actions, but the Board of Commissioners had the goal of reaching a consensus on the master plan direction.
“The committee’s recommendation is to build a hospital as part of a medical campus at Apple Blossom Center,” Carona said. “Their secondary option is a phased approach at Apple Blossom, and the third is to remodel and expand at the existing hospital. Even though it is a third option it is not a recommendation, but it is something to evaluate.”
The debt capacity study was done by Ross Manson of Eide Bailly, and included a financial analysis of what LCCH could afford and manage in terms of debt.
Manson determined through the hospital’s ability to service debt, while maintaining a large enough cash balance to operate, LCCH could afford a project between $15 million and $20 million. This debt would be in addition to the $7.8 million that the hospital has currently.
“I was surprised by some of these figures and with Ross’ presentation,” said Commissioner Tom Warren. “I’m not sure we can build the hospital we need with $20 million.”
LCCH CEO Kevin Abel said that without a financial partner or some kind of organization, the hospital will not be able to get the roughly $35 million it needs to complete a project.
After the debt capacity study, commissioners listened to a presentation from Carona that outlined a strategic master facilities plan for LCCH, and her recommendations for moving forward.
“You are in an enviable position, because you’re growing while most (rural hospitals) are shrinking,” Carona said. “When we’re trying to plan for that, it’s a little bit different than when we see a hospital with slow but steady growth and an influx of tourists as well.”
Carona said healthcare is moving in the direction of prevention and wellness, where a strong primary care base is integrated into communities. There is the idea of identifying people at risk for deterioration in their health and coordinating care, so that they are not coming into the emergency room or being hospitalized, Carona said. She added that it would benefit the hospital greatly to continue to follow this trend and focus more on developing the hospital’s community clinic.
Carona used a number of factors including demographics, health care reform, the changing roles of primary care, and advances in technology to determine the future of LCCH volume and what upgrades the hospital would need.
“Our conclusion is that during peak times and during the day, you’re going to need more capacity,” Carona said. “We recommend increasing slightly beyond the 13 [universal] beds you currently have for the hospital. If you choose not to go beyond 15 or 16 beds, we recommend you look at how to accelerate discharge or create short stay areas.”
Carona added that the emergency department needs more treatment capacity, and that the hospital should plan for more than average volumes with six rooms and integration of walk-in, after hours, or urgent care.
“I surprised myself with the recommendation,” said Carona. “If it’s financially feasible, I would recommend you look at moving forward with a medical campus at a new location. This current building is at the end of its useful life.”
Carona cited 45-year-old infrastructure and design that “struggles to provide the care that [the hospital] is planning to provide in the future.”
The Board of Commissioners will also hope to upgrade the Lake Chelan Community Clinic in addition to the hospital because of design flaws in the layout of the building.
“With 16 treatment rooms, the existing clinic has sufficient capacity, but the space is not designed for today’s care delivery,” Carona said. “Co-locating with the hospital for easy access to lab, x-ray and pharmacy should create efficiencies and benefit patients.”
Re-designing the clinic would not be a viable option according to the commissioners because of having to divert patients during construction and the loss in revenue from doing so.
Abel added that the hospital currently applies for waivers with the Department of Health in order to remodel rooms without having to meet all of the code requirements.
“I suspect the time will come when waivers won’t get granted. You just never know with that kind of thing,” Abel said, adding that without a waiver the hospital would not have been able to install its new CT scanner.
The commissioners all agreed that the current hospital facility is inadequate in providing the best healthcare for the community, but struggled to come to an agreement in the solution.
“To put more money into this facility is almost a waste of money,” Signorelli said. “We’ll do it as long as we need to in order to keep it running, but when we get right down to it, this facility is not changing. It’s still the facility we had ten years ago when we did the first bond.”
Commissioner Mary Murphy said she believes it is the programs that drive facilities, not the facilities that run the programs. Hospital programs are services provided to the community that range from general surgery to orthopedics or gynecology. Each program has the opportunity to bring in revenue for the hospital, so choosing programs that fit the community is important.
“Once you figure out the programming, then you can address facilities,” Murphy said, adding that the community should have an opportunity to provide input on what kinds of services the hospital will offer in the future.
The commissioners currently have the following programs in mind for future hospital operations:
- General Medicine and Surgery
- Cardiac Surgery
- Cardiology and Interventional Cardiology
In order to move forward with presenting the community with any sort of option, Murphy said she would like to see more data and information about the costs for each recommendation and its programs.
“What I think the community would want to know is what is the financial burden for those options? Even though it is not recommended, what is the financial burden for the third option?” Murphy said. “Then we can talk about what is feasible. When talking about taking on non-voted debt, I think the critical questions are still not answered. Forgive me but I’m going to keep asking questions, because that’s my job.”
Signorelli said Murphy’s questions are good questions, but without knowing the size of the facility then the cost remains unknown.
Carona said she felt the commissioners agreed on the concept of a new facility, but not the finances around it.
“The concept seems correct, but we haven’t seen the due diligence around how we finance this and demonstrate it as the best alternative,” Carona said. “I am not hearing anybody say let’s not explore this.”
Commissioner Fred Miller said that the third option of doing nothing but keep up with repairs is moving backward as the healthcare industry progresses.
“If we build a new facility, we’re looking at 20, 30, even 40 years with that facility,” Miller said. “If we remodel this one, we only have 15 or 20 more years before we’re back at the same place again.”
After hours of discussion, the board of commissioners agreed on what steps need to follow in order to move forward on these issues:
- Conceptually, the board indicated that consolidating and creating a campus at Apple Blossom is the preferred option. Before an official recommendation, additional data is needed that includes evaluating the following three options: 1) Moving to Apple Blossom either in phases with the clinic and then the hospital or all together, 2) Staying at the current site, remodeling, and applying the same programs, 3) Do nothing except keep up with minimum code requirements in each facility.
- Simultaneously, the board and external resources will develop a capital cost for each of those options, along with a revenue and expense sheet. This step will answer questions like the cost for each option, how to pay for it, the financial position of the hospital, and the values that come out of each scenario.
“Concurrent with these steps there will be community forums about this process, the opportunity to describe the programs in the future, and the kinds of services you will offer and why,” Carona said. “Give the community the opportunity to talk about values in programs and explain the process of the decision-making that we’re going through. This is one step of many steps, not the end of the road but the beginning.”
The commissioners agreed that in order to move forward, being transparent with the options and their costs with the community would help build trust that seems to have disappeared over the years.
“I agree that we need to provide this for the community so they can compare costs,” said Commissioner Phyllis Gleasman. “The reason the last [vote] went down was there was not enough financial disclosure for the community.”
Commissioners and audience members agreed that by making the community feel like they are part of the decision-making process, planning and developing can go a lot further with that support.
“Now you have the opportunity to say, what does the community need?” Amanda Ballou, CEO of Heritage Heights said, using the Senior Living Initiative as an example of how to engage the community on healthcare issues. “Instead of looking at history and how the bonds worked and how the votes went, let that go—that’s all history and baggage. Look at what the programs need to be going into the future and what kind of revenue that would generate. That’s what a numbers person would do.”
Carona said the timeline for the next steps would be to have an analysis by early Fall. The analysis would include the programs the hospital would hope to have, and apply them to the three scenarios that also includes a financial analysis.
LCCH and the Board of Commissioners will publish a de-briefing of the workshop and its outcomes, and will announce the public forums to better engage the community on the decisions and options being presented.
“Today was a big brainstorming session, and we got pretty far with an initial intake of a lot of information,” Abel said. “Let’s process this and think about the topics from today and continue to talk about this both with the commissioners and the community.”
(By Kaitlin Hetterscheidt)