Low costs make a new hospital the best option

opinions

July 15, 2010 - 12:00 AM

“This is the year of the hospital,” Allen County’s three commissioners pronounced at the Thrive Allen County annual meeting last fall.
Chuck Wells emphatically agrees.
Speaking at a very well attended public meeting Tuesday night in La-Harpe, Wells said the present hospital “is at the end of its useful life.”
Wells is a consultant who specializes in helping rural communities build hospitals suited to their needs. In a wide-ranging discussion, he said the county should build new rather than attempt to remodel. He also said financing new construction is not only possible but can be ac-complished readily.
He put the cost at $30 million, including $5 million in operating capital. He advocated the issuance of public building commission bonds, such as the county did for the construction of the jail.
Wells calculated that profit from operations, plus revenue from a modest county-wide tax, would be sufficient to retire the debt. Tax revenue of about $750,000 a year would be required, he estimated. County Commissioner Dick Works, who was present at the meeting, said a half-cent sales tax would generate about $900,000 annually. Ten years of the additional tax should be sufficient, Wells said. Added to the $1.6 million in profits now being realized, and available federal subsidies that would be enough to retire the debt.
Wells was optimistic about future hospital revenues. He said Allen County Hospital presently is attracting only 40 percent of its potential patronage. With a new hospital, it should be able to raise that level to 60 percent. Attracting a resident surgeon would help reach that goal, he said, implying that a new hospital would make adding to the hospital staff easier.
A sense of urgency pervaded his presentation.
There will never be a better time to build, he stressed. Building costs are low due to the recession, which has hit the construction industry hard. He said building costs are down almost one-third from just two years ago. Interest rates also are historically low. He guessed that the bonds could be sold at an interest rate between 4.25 and 4.5 percent. Building now would guarantee that those benefits would be realized. Postponing construction would run the risk of pushing up both construction and interest costs as the economy recovered and inflation returned.

STEP ONE must be termination of the lease with Hospital Corporation of America to put the county back in the driver’s seat. Step two would be hiring architects and asking Allen Countians for the full support of this critically important investment in their future. The year of the hospital is under way. Let’s turn the calendar pages faster.

— Emerson Lynn, jr.

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