Building a medical arts building on hospital grounds is essential to the future of Allen County Regional Hospital, Tony Thompson, hospital CEO, told trustees at their meeting Tuesday night.
Currently, visiting specialists attend patients at the facility located on the grounds of the old hospital as well as those who are patients in the hospital.
The distance, 2.1 miles, “is too far,” for the specialists to conveniently attend to patients at both locations, Thompson said.
Most procedures, including lab work and X-rays, are performed at the hospital, Thompson said, while routine visits are in the clinic.
The result is that procedures, which could be done the same day as an examination, are postponed for another week.
The visiting specialists are a “feed for the hospital” in terms of patients, Thompson said. “And bring more surgeries our way.”
A new medical arts building next door to the new hospital also would make it easier to recruit additional specialists, many who drive from Wichita and Kansas City on a weekly basis, Thompson said.
Plans for a medical arts building “were penciled in,” when the new hospital was built, said Sean McReynolds, hospital trustee, and utility lines were laid. “All we need to do is build the building.” The site is northwest of the current hospital.
Trustees appointed a steering committee to investigate building such a complex.
Even if a new building were to occur, the existing medical arts building could still be used for other services including home health and the wellness program provided by Southeast Kansas Mental Health Center.
“My vision is that the existing building would be fully utilized by services that are not better utilized at the hospital,” said Harry Lee, board chairman.
LITTLE by little the hospital is chipping away at the loans owed to build and manage its new hospital.
“We started out with nothing,” Larry Peterson, the hospital’s chief financial officer, reminded trustees.
“No accounts receivables. No cash. No building,” referring to when the hospital pulled out from its management lease with Hospital Corporation of America.
To get the ball rolling, trustees took out a $5 million operational loan in 2013 from Security Bank of Kansas City. Payments on the loan average $15,000 a month, Peterson said. Today, $4,190,000 remains on the loan at an interest rate of 3.5 percent, up from its original 2.4 percent.
Peterson expects monthly payments will increase to $30,000 with plans to refinance the loan when it comes due May 1, 2018.
“We won’t be able to retire this debt on time, but probably will be able to refinance a portion of it when the time comes up. There’s a chance we could retire half of it by 2018,” Peterson said.
Lee, a former high school math teacher, noted it would require $175,000 monthly payments to retire the note on time.
“That’s not going to happen,” Peterson responded.
Simultaneously, the hospital has two bond series obligations due. To build the hospital, trustees took out issues of $10 million and $15 million for 10 and 15 years respectively. Including interest, the two issues amount to almost $43 million, toward which the hospital has paid about $7,380,000.
The hospital receives $41,000 a month from Allen County sales tax receipts and another $25,000 a month from Iola sales tax receipts.
Administrators are expecting several things to enhance hospital revenue in the coming year. The addition of Sarah Clift, a physician’s assistant, and Dr. Brian Neely, to the hospital’s clinic are bringing more patients the hospital’s way. They joined Dr. Wes Stone and Margaret Lesher, a nurse practitioner.
The hospital also plans to add a pulmonary clinic two days a month, bring changes to its pain and wound clinics and expand its outpatient services in orthopedics.
For 2016, the hospital will not raise its rates for services, Peterson said. A modest 2 percent increase will be leveraged for services at its clinic and for those charged by Allen County Surgical Associates. Fare served at the cafeteria also will be raised by 2 percent.
Inadequate staffing among registered nurses and medical technologists in the laboratory has plagued the hospital this year, Peterson said.
A study of wages and salaries at neighboring hospitals shows ACRH is behind the curve, said Thompson.
If wages were raised the hospital could attract more reliable staffing, he said.
For this year, the hospital has spent more than $888,000 for contract labor. Payroll is about $6.6 million a year, with another $2.5 million for benefits.
Thompson said 3 percent raises for 2016 have been budgeted for certain positions and that all staff, “with acceptable evaluations,” can expect to see an uptick in pay.
