Unanswered Questions from 3/30 Community Forum

Question:

Where are other Critical Access Hospitals (CAH)?

Answer:

There are 39 critical access hospitals in WA.  They are distributed around the state.  A map of all 39 CAH’s can be found at this link on the Department. of Heallth website:

ftp://ftp.doh.wa.gov/geodata/layers/maps/CAH_8.pdf

Question:

There have been a lot of numbers thrown out there, $170, $149 million, 47 million, 44.5 million, 7 million, 20 million. What is the actual cost to the voters?

Answer:

A new hospital for our community will cost $44.5 million. This is how that cost is distributed amongst the community:

  • $20 million from a voter-approved bond
  • $22.5 million from the Lake Chelan Community Hospital using USDA loan
  • $2 million from grants and the Lake Chean Hospital Foundation

Just like with buying a house, loans must be paid back with interest.  However, the total cost with interest is NOT what opponents claim it is. Final amounts can’t be calculated until the interest rates are locked in, but it will be approximately  $70 million.

Question:

If all we do are rehab projects which provide a new road, life safety improvements and parking, can we provide space for emerging technology and emerging treatment systems, i.e., imaging equipment?

Answer:

The simple answer is “no”. If $14 million was spent to upgrade the HVAC, sewer, plumbing and electricity, that still wouldn’t pay for a new access road, new parking, or any additional space inside the building for patient care in the ER, surgical recovery, private patient rooms, or additional space for the laboratory, pharmacy, imaging equipment, or Physical Therapy/Occupational Theraphy departments.  Nor would our facility have any ability to grow with the community and the changing needs of medicine over the coming years.

Question:

What happens to 3rd floor residents?

Answer:

In the current facility, the majority of the 3rd floor is occupied by the Sanctuary, a dual-diagnosis chemical dependency rehabilitation unit.  There is also a clinic for visiting specialists in a separate part of the 3rd floor.  The Sanctuary will move to the   new facility, as will the clinic space for visiting specialists.

Question:

With the decreasing net profit shown in the last few years how do we continue to go forward with ever decreasing profits? Is it true we are in the red $200,000 so far this year?

Answer:

First of all, it is not true that the hospital will be in the red for 2016. Final cost report accounting is still being done.  LCCH will show $200,000-300,000 in net income for 2016.

Second, gross revenues have continued to increase over the past 5 years. In 2014, LCCH purchased Lake Chelan Clinic, and has invested significant financial resources in the clinic over the past 2 years. That increase in expenses has put a dent in net income, but these investments are beginning show a Return on Investment.  Clinic revenues are projected to climb in 2017. Remember, net income = revenues – expenses.

Keep in mind that net income is what is left over after ALL the bills are paid. LCCH makes a debt payment now that is more than the projected debt payment on loan for the new hospital. LCCH has not had any difficulty repaying it’s debt over the last 8 years.

Question:

What percentage of hospital beds are drug/alcohol designated? Are all the drug and alcohol bed on the top floor? Originally it was a 34 bed facility on the 2nd floor. Many rooms have been turned into other uses. Why can’t some of the double person rooms be turned into private rooms?

Answer:

A critical access hospital can have no more than 25 inpatient beds. Currently, that is divided up as 11 medical/surgical beds (2nd floor) and 14 beds in the Sanctuary unit (3rd floor). The 2nd floor also has 2 labor and delivery rooms, 2 observation status beds (1 room), 3 bays for pre-and post-op (1 room) patients, and 5 beds in the ER.  All other rooms on the 2nd floor that were once patient rooms have already been re-purposed. For example, the hospital pharmacy is in what was once a patient room, another one houses our ultrasound machine, another one houses our DEXA scanner, our treadmill for cardiac stress tests, and our pulmonary function testing equipment which must be conducted in what used to the toilet/shower of the patient room.

Of the 11 medical/surgical beds, 8 of those beds are in double-occupancy rooms. If all 4 rooms were converted to private patient rooms, LCCH would only have 7 beds available. Those 7 beds would have to cover mom/newborns, swing bed stay patients (often stay for weeks getting physical therapy before they can go home), sick patients, and surgical recovery patients. While most of our surgical patients go home the same day, they do recover for several hours in a hospital bed. This would likely create increased wait times to be seen in the ER, because patients who need to be admitted from the ER to the medical/surgical floor would be waiting for a bed in the ER for hours – creating less room to see other patients.

Question:

Why will the clinic continue to grow with the new clinic coming?

Answer:

Columbia Valley Community Health (CVCH) is giving up their old space in the school district office building for a new clinic they are building across the street from the site of the proposed new hospital.  Both Lake Chelan Clinic and CVCH have been experiencing increasing patient volumes as more people relocate to our community and more people from nearby towns choose to get their medical care in Chelan (Mansfield, Omak, Brewster, Pateros, Bridgeport, and Entiat).

Patients are already experiencing increasing wait times to get in to see their physician because of how busy the clinic is now.  The clinic has enough patients to hire another provider, but there is no space in the current building to place one. As more people move here or get around to switching their healthcare from the west side to their new hometown, this problem only grows and grows.

Question:

Why does LCCH avoid publishing salaries and benefits of its top people? The PUD does. What are the salaries/benefits of the top 4 people?

Answer:

Salaries of public hospital employees are not a secret they are a matter of public record.. They have been published in the past and are available upon request.  Hospital management and physicians are paid at about the 50% percentile for their industry.  (What does this mean)

Question:

What additional revenue is expected from the 2016 cost report?

Answer:

Final cost report accounting is still being finalized.  When the numbers are finalized we expect LCCH will show a net income of $200,000-300,000 for 2016.

Question:

Do you understand depreciation? They are no book $.

Answer:

Depreciation is a commonly used accounting tool to allow a business to monetize its assets and estimate their value over time, which typically decreases. The benefit to LCCH is that we can include the depreciation in our cost report and be reimbursed for it as a part of doing business to care for patients.  These increased reimbursements will come to LCCH because of building a new facility.

Question:

How many times in the past 5 years have you been a patient at LCCH? Asking the 2 gentlemen on the NO side.

Answer:

This isn’t a question for us, but we’re curious as to the answer.

Question:

To the No slide what is your vision for healthcare? What is the plan to fix the current problems?

Answer:

This isn’t a question for us, but we too are interested in their answer!

Question:

How much time and money was spent by both sides to influence the vote?

Answer:

The Citizens for a New Hospital Now campaign is registered with the Public Disclosure Commission (www.pdc.wa.gov), and files reports with them weekly. These reports are a matter of public record.  The campaign is 100% community run and funded. There are public planning meetings every other Monday evening at the fire station where work is divided up and completed by various members of the committee.

Question:

How long does it currently take to get to the airport to transport someone critically ill?

Answer:

The most honest answer is “it depends.” In a scenario in which a critically ill patient is at LCCH and requires transport and has first been stabilized, the next question is where is the closest medically appropriate facility?  Is it Wenatchee, or is it Seattle/Spokane?  This depends on the nature of the illness/injury. The next step is contacting that facility to ensure they will accept transfer of the patient. Once we have an accepting facility/physician, and assuming this is a patient that meets medical criteria for air transport, MedStar will be contacted. Their response time to our facility depends on their current location, whether they are already responding to a call, and the weather. Once they are en route, they will land at the airport where one of our ambulances will meet the crew to pick them up and bring them to the hospital for patient transfer. It takes some time for them to assume care of the patient, hook up any necessary monitoring devices and medications, and then head back out to the airport for transport to another facility. Total response time can be 60-90 minutes+, assuming good/clear weather and no other delays.

Question:

So on 3 previous bonds did it fail or did we not have a 60% majority?

Answer:

2006: unavailble at the time of writing

2012: “yes” had 57% of the vote, 3% shy of the necessary 60% majority

2014: “yes” had 58% of the vote, missing victory by about 85 votes

Question:

Mike S said depreciation goes away in 8 years. You will always have depreciation because of constantly buying new equipment therefore you will always have depreciation.

Answer:

To simplify things – yes.  Every fisical asset associated with the existing hospital or with a new hospital can be depreciated.  Each item will have its own depreciation schedule.  The statement by the opposition that depreciation goes away in 8 years is not true.  The opposition has also said that the new hospital building is depreciated over 25 years.  In fact, according to IRS rules the building is depreciated over 40 years.

When a new clinic is built, new equipment is purchased, or other expansions or renovations are needed over time to accommodate the needs of our community, then they will be added to the depreciation according to IRS rules.

Question:

The NO group spent all their time criticizing. What is your plan?

Answer:

This isn’t a question for us, but we too are interested in their answer!

Question:

For the NO side: Is there anything that could bring you over to the YES side? Would even a near death trauma and a 45 minute ride to Wenatchee have any influence with you?

Answer:

This isn’t a question for us, but we too are interested in their answer!

Question:

If you stabilize and ship do you lose critical access?

Answer:

Yes.  One of several requirements is that the hospital must provide inpatient services in addition to an ER, and remain open 24 hours/day, 7 days/week for 365 days per year to qualify as a critical access hospital.

Question:

Why don’t the doctors and highly paid employees co-sign on the loans? So they share in the risk and care about costs. The public has never helped fund any private business.

Answer:

LCCH is not a private business.  As a public entity, a private citizen cannot sign or co sign a loan.

The hospital is a not-for-profit entity owned by the voters residing within the boundaries of the public hospital district.  As such, they have a say in how the facility is run, as exemplified by the board of commissioners. And the hospital has a duty to respond to the needs of the community, as exemplified by our annual community needs assessment survey. They also play a role in financially supporting the hospital’s maintenance and are called upon for large capital improvement projects, such as a new hospital. There is no role for individuals to co-sign on federal loans to hospitals.

Question:

How many private beds in the new hospital compare to what it has currently?

Answer:

The hospital would still have 25 “inpatient” beds, divided between medical/surgical needs and the Sanctuary. However, in addition a new facility would add:

  • 3 more beds in the ER
  • 2 more observation status beds
  • 4 more surgical recovery beds

Additionally, the delivery suites will be larger and the operating rooms (2) will expand from 300 sq. ft. to the current standard of 700 sq. ft. Finally, an additional OR-like room will be added for endoscopic procedures.

Question:

What is the cost to fix? Is it feasible to have just an emergency room? What visiting services come to Chelan such as orthopedic and what would we lose?

Answer:

It is estimated to cost $14 million just to upgrade the HVAC, sewer, plumbing, and electrical, and fire protection systems to current codes.  That would not provide the building with any further space, private rooms, or other needed improvements.

It is not financially feasible to only have an emergency room. Stand alone Emergency Rooms typically lose money, and in a rural setting, would require much more financial support from the community than is needed for a new hospital. Standalone Emergancy Rooms just cannot financially support themselves.

Orthopedics is a Chelan-based service, and not a visiting service. This is in addition to gynecology, general surgery, and family medicine including obstetrics. Currently, podiatry and sleep medicine also provide consults on a visiting basis.

If a new hospital isn’t approved, there are many services that could be pared down or lost over time. In addition, family physicians could leave the community decreasing the amount of primary care available locally as well.

Question:

Given the fact that the income of the hospital was only $13,000 last year, where is the money coming form to pay +/-260,000 per year for the USDA loan?

Answer:

First, the final net income for 2016 is going to beteen $200-300,000.  Even if that wasn’t true and the net income really was only $13,000 that would still be AFTER the hospital paid all its bills, including a nearly $300,000 loan payment.

Critical access hospitals enjoy a cost based reimbursement structure. As our expenses rise with building a new facility, so too will the reimbursements. This is explained in detail on our website, www.newhospitalnow.com, especially in the Pillar 3 section.  Taking this all this into account, as the hospitals accountants have done, it becomes clear that these additions to the cost report translate into paying 93% of the debt payment in 2020, and 99% of the debt payment in 2022.  In other words, the vast majority of the debt payment is paid for by the depreciation of the building itself.

Question:

Why can’t we move the recovery units on the 3rd floor to another building and in doing so free up more beds?

Answer:

Insurance reimbursement rules require that the Sanctuary be a part of the hospital campus.  There is no room at the current location to build another building to house the Sanctuary, without sacrificing parking and access. And even if there were, the entire 3rd floor would need to be gutted and remodeled for medical use.  And that still wouldn’t solve the problems of space for the laboratory, radiology, ER, ORs, PT/OT, or have room for a clinic or future expansion based on community needs.

Question:

As a 6th generation lifetime resident of Chelan, my family and others who have resided here have paid for and built this community’s present infrastructure? My question to transplants whom have chosen to relocate here, with intentions of developing and exploiting this valley to their own personal bottom line, why do you want to hamstring this community and not support something that is going to benefit every man, woman, and child here? Why do you not want to contribute your fair share?

Answer:

The “transplants” pay the same property taxes as any other property owner in the hospital district.  However, they cannot vote!  Based on the value of properties in the hospital district these “transplant” property owners will pay more than 50% of the cost of the bond.  The residents of the hospital district who can vote are being asked to pass a Bond for $ 20 millions of which they will only be responsible for paying $10 million.  The transplants will be paying more than their fair share.