Kremmling citizen not sold on medical center
July 7, 2010
By Tonya Bina
KREMMLING – Jane Land of Kremmling wants a guarantee.
She asked if Kremmling Memorial Hospital District board members would consider signing a binding agreement to ensure the Kremmling hospital would still provide its services for the next decade.”I’d like to know that when I come here in 2020 I can expect those same services,” she told board members at the district’s most recent monthly board meeting, June 24.
Land said she wanted to see the hospital remain in Kremmling even if a new $20 million, 40,000-45,000 square-foot Middle Park Medical Center is built in Granby.
The project is pending financing, and hospital officials say they could have the funding go-ahead by August.
One-by-one, board members said they intend to keep the hospital and its services.
“That’s my desire,” one board member said. “That’s the goal,” another voiced. “I hope so,” said another.
It is their hope, said president Kent Whitmer, to also have a replacement hospital in Kremmling by the end of the decade.
But board members said they wouldn’t sign a contract to that effect.
The district’s Chief Financial Officer Cole White suggested a contract already exists with the hospital’s service agreement, which is a promise to taxpayers that certain services will be provided at the hospital.
“I find that very interesting,” Land said. “It’s OK to have this (Middle Park Medical Center) in this county for $21 million without some guarantees, but you wouldn’t guarantee the hospital would be here in the future.”
Land, a former member of Grand County Rural Health Network and Kremmling Memorial Hospital District boards, said she couldn’t accept the district’s explanation that the Center was needed for the salvation of the hospital.
“That’s not enough for me. That’s not garnering my support. That’s garnering my anger,” she said.
Raising capital by selling federally subsidized Build America Bonds to build the new Granby center is a way to “get around the public,” in Land’s view, “and TABOR.” Land advocated instead putting resources and energy into making the existing hospital more successful.
“I can probably say, I was the one who was dragging my feet the worst of the new board members because I didn’t understand it,” new hospital district board member Brenda Bock said of reasons behind project plans. “The more I sat here, the more I came to terms with it – that this is something we have to do. If we don’t move on this, we’ll lose what we have here.”
The new medical center is proposed on 10 acres of land donated by Granby Ranch in 2009. The site is an open field off of U.S. Highway 40 southeast of the highway bridge, between the Fraser River and Ten Mile Creek.
The District has retained the design-build healthcare-facility specialist The Neenan Company of Denver, which had already completed some work on the project.
“This (Kremmling) hospital has saved my family members more than once, and so I’m real sincere and compassionate about keeping it here. And I think everybody on this board feels the same exact way,” Bock said.
Whitmer cleared up what he believed to be a misunderstanding in the community about the project. The hospital budget would not be subsidizing the new center, he said, rather the two “stand-alone” facilities would “run independently and support themselves.”
Funding presently is being secured to build the new center, and a $1 million Department of Local Affairs grant was given to the district specifically for the Granby project. Of that amount, $300,000 already has been spent on feasibility studies, engineering, civil engineering and consulting, with another $200,000 spent out of district budgets in prior years. The district now awaits the audit confirmation of a “managements feasibility report” that could trigger financing.
Hospital officials have said the new Granby project is needed to augment district services as a whole and to attract more Grand County users to KMHD facilities.
In a hospital audit report presented by EideBailly Partner Richard Wagner, CPA, of Golden, the district’s net operating loss in 2009 amounted to $1.7 million, much of which was backfilled in property taxes.
Net assets decreased by 11 percent, or $442,000 in 2009, and net in operations decreased by $672,000.
The district’s cash flow had a decrease of 20 percent, or about $30,000, in 2009.
Factored into the financials is a new 16-slice CT scan that replaced the hospitals older single-slice CT, and a $543,000 DOLA grant that was expensed through 2009, affording the district the implementation of electronic medical records.
The hospital operates on an 80 percent fixed expense, Wagner explained, meaning with hospital doors open 24/7, 365 days per year, that percentage in expenses is locked in for providing needed care, equating to about $7.8 million to $8.3 million a year. Overall, expenses were similar from year-to-year.
Inpatient volume, which includes acute care, skilled nursing and long-term care, made a significant rebound at the hospital, but outpatient volume “is not coming up as fast,” Wagner said, an indicator of a sluggish economy.
Wagner said the hospital’s objective in the upcoming year will be to “cut everything without damaging any of the services.” There also exists the hospital’s opportunity to cost-shift to gain more reimbursement from Medicare.
The goal of the hospital is to “gain a little more cash in operations and let tax revenue pay for equipment and debt payments,” Wagner said.
“There is nothing in the financials that I would say is ‘crisis,’ ‘urgent,’ or ‘sky-is-falling’ kind of thing,” he said. “It’s pretty normal for critical access hospitals such as yours.
“The best thing you could do is talk around town and tell people to use the facility. ‘You have a facility here, use it,'” he said, citing research that has been done on how hospitals can be the largest economic driver in a community.
“If you look at places that don’t have a hospital, economics go down,” he said.