Hospital board approves building new clinic in Richmond

This article submitted by Michael Jacobson on 5/19/99.

Several hospital board members stressed making a business decision Friday afternoon, and when it finally came to a vote with that in mind, the board unanimously voted to proceed with the clinic project in Richmond.

The special noon meeting of the Paynesville Area Hospital System Board of Directors was necessary because a decision needed to be made before the construction bids ran out. The bids were received on April 15 and expired on May 15. "It's now or never," said board member Bob Brauchler.

The board accepted the low bid from Gopher State Contractors of Rice. The base bid was $645,145, but the board opted to add several options that raised the total price to $664,491.

Also included were a fire sprinkling system ($13,000) that necessitated the addition of a different water service ($1,715) and a fire alarm ($4,217). Also, extra lead was added for x-rays ($414).

"I think we got a good bid," said board member Mel Jones, who noted that the actual bids were well under the projections. "If we wait*it's going to cost us."

There are some equipment costs--like computers and phone systems--that are not included in these construction costs.

Two weeks ago, the city of Richmond approved a Tax Increment Financing District for the project. That will enable the hospital district to be reimbursed for its property taxes for the clinic. Over the next nine years, the agreement calls for the district to be reimbursed with a total of $350,000.

According to hospital system financial estimates, the Richmond clinic will still lose about $63,000 annually, but clinics bring in revenue for which they are not credited--through physical therapy, x-rays, hospital admissions, etc.

"Frankly, I think we're going to do better than that," said hospital system administrator Willie LaCroix. "The projections are conservative."

The new clinic will be counted on to have more business than the current clinic building does. That means getting additional patients to come.

"Build it, and they will come," Dr. Randy Zimmerman told the board, borrowing a line from the movie "Field of Dreams." Zimmerman said the current building is very inefficient. With only two exam rooms, doctors spend time waiting for lab results instead of examining patients. An efficient doctor, Zimmerman said, would work three exam rooms at the same time, examining one patient while waiting for results in the other rooms.

The shortage of space also influences the schedule. Having multiple providers on site is even more inefficient, so the doctors end up spending half-days in Richmond and waste part of their day driving back and forth from Paynesville.

LaCroix said the new clinic would add more than efficiency space. The nicer setting would project a successful image and offer patients more privacy.

"I think a clinic of that magnitude is going to keep out competition," agreed Rosemary Devlin, clinic manager for the hospital system.

Optimally, the clinic would draw people from the entire area. "It's not just the city of Richmond," said board member Doug Ruhland. "It's the whole Chain of Lakes area."

Diane Rothstein, who represents St. Martin on the hospital board, said the Richmond clinic was used a lot by her community. For people with jobs in the area, using the Richmond clinic would enable them to return quickly to work.

"It's going to be a good project," said LaCroix. "I really think this body made the right decision."

During the first part of the meeting, the board heard a recap from a meeting the hospital system had with the city of Richmond the week before to work out a zoning issue and a road access. Representing the hospital system at the meeting were board members Doug Ruhland and Don Thomes, architect Richard Engan, and assistant administrator Bev Mueller.

The zoning issue seemed to be resolved when the hospital system agreed to move the clinic ten feet closer to the road, they reported. A Richmond city ordinance would require the new clinic to have 41 parking spaces, but the hospital board was told that the Richmond city attorney would look at revising that city ordinance.

A final issue is an approach onto County Road 9. The proposed approach would be in the center of the block, which the hospital board felt was the safest, but approval will be needed from the county, either from the county engineer or the county commissioners.

For a long time at the beginning, the meeting dwelt on potential obstacles the clinic project could still face. After apparently reaching a concensus that no insurmountable obstacle was looming, the decision turned to business considerations.

Board member Don Anderson said he had changed from believing a new clinic should be a priority three years ago to wanting to vote against a new clinic after the last hospital board meeting, when a clinic decision was tabled by the board. Putting his personal feelings aside, he took another look at the issue solely from a business viewpoint and decided that it made sense. He made the motion to accept the bid.

Ruhland said that he had covered the gamut of positions on the issue as well. While he didn't expect the obstacles to end, he supported the project, too. "There's a long-standing relationship with the Richmond clinic," he said. "I think that can only help."

"I think we can overcome all the obstacles," said board chairman Thomes in support of a new clinic. "We've done it so far. It just takes time."

"We have to be careful not to judge the entire city of Richmond by what's happened," he added later in the meeting.

*The Legislature has passed and the governor has signed special legislation that would allow the hospital board to annex the city of Richmond into the hospital district. The board will need to decide whether to accept the city of Richmond into the district. However, that issue was not put on the agenda for the special meeting, and will be adressed at a future board meeting.

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