Hospital board weights options for remodeling project

This article submitted by Peter and Michael Jacobson on 1/26/00.

The extent and cost of a proposed remodeling project to the Paynesville Area Hospital and the Koronis Manor were the subject of a special meeting of the Paynesville Area Hospital District Board of Directors on Monday, Jan. 17.

The meeting was held in the afternoon in order to have the project's architect as well as the hospital system's financial advisors attend the special meeting.

Judged without regarding finances, on purely a basis of need, the hospital system would consider an extensive remodeling project, with additions of square footage to both the nursing home and the hospital. The total price of items on the wish list exceeds $7 million.

The hospital system hoped to receive funding through the state for the nursing home portion of the project. Because the state has so many nursing home beds, there's a moratorium on expansions. The state offers some money for remodeling projects, but the three that received the funds all reduced the number of beds in their facility. PAHCS applied for the moratorium exception, but were not selected.

With 64 beds in the Koronis Manor, a reduction of beds is not considered feasible. That size is deemed necessary to cover costs and have the facility run efficiently.

Without that exception, to do the entire project now has financial risks. The nursing home is not a high-profit part of the PAHCS operation, and borrowing money for it raises cash flow and debt leverage issues.

The hospital project-which includes an expanded operating room that could accommodate more types of surgery, an extended outreach clinic, and a new emergency entrance-is not as risky financially because those departments would generate additional income upon completion.

The proposal at the special meeting centered on doing the nursing home portion of the project in stages. The moratorium allows for up to $750,000 per year in improvements that are reimbursable over time. An alternative to doing the whole project at once is to tackle some immediate areas in the nursing home and address other areas in smaller projects over the next five to ten years.

Patient care in the Manor have been deemed the highest priority. The nursing home was designed at a time when the majority of the residents were walking but couldn't take care of themselves at home. Now, with in-home nursing and other options for mid-level care, people don't typically become residents of a nursing home until they need a wheel-chair.

Wheelchair access requires more space in the dining room, bathrooms, and tub rooms. The only addition of square footage in the pared down project at the Manor would include an extension of the dining area, according to architect Richard Engan. The project would also include larger public restrooms to accommodate patients in wheel chairs and would add two tub rooms to speed up the bathing of residents.

The current nursing station would also be renovated to make more space for equipment like computers and to provide better confidentiality.

Engan said the heating and cooling system would also be upgraded to provide fresher air.

The renovation of rooms and the creation of more private rooms would have to wait if just the pared down project is approved. Such a switch is considered necessary as baby boomers become the target patients of the nursing homes. It's felt that baby boomers are accustomed to privacy, and with more and more nursing homes having vacancies, amenities will become important in keeping a full, viable facility.

At the meeting, board member Mike Hansen asked if delaying the project for a year would aid with cash flow. While it would allow the hospital system to generate more cash on hand, inflation would be working to offset those gains.

Board member Doug Ruhland said the financial risk of the full project scared him and the pared down version seemed more reasonable.

The choice was expected to be discussed further at the board's regular monthly meeting, which had been scheduled for Wednesday, Jan. 19. That meeting, however, was cancelled due to the weather. It has been rescheduled for Wednesday, Feb. 2, and a decision about the project by the board could be reached at that meeting.

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