Remodeling our current hospital will cost $12 Million more than building a new facility. Building a new hospital is the logical choice.

Pillar 1 explored the need for a larger, modern hospital facility.  Pillar 2 explores how to best meet this need.  Should we expand our existing hospital or build a new facility?

The answer is made clear by the cost estimates of both routes. Remodeling and expanding our current hospital will cost $12 Million more than building a new hospital1. Pursuing this path is not only more expensive but also limits future expansion options.

The more cost-effective and flexible route is to build a new hospital at Apple Blossom Center. The flat ground offers ample space for the hospital as well as room for parking, a helipad, and future expansion.  The new Columbia Valley Community Health Clinic is being constructed immediately across the street, bundling valley health care services in one location.

DETERMINING THE SPECIFICATIONS – Square footage, beds, and out-patient services

For over a decade, the hospital has recognized the need for more space. Plans to remodel the existing hospital in 2006 called for the creation of a 74,000 square-feet facility2. Current plans call for a 77,000 square-feet facility.

The number of “medical/surgical” beds, then and now, stays the same at twenty-five3. These beds will be located in single-patient rooms versus the current facility’s double occupancy rooms.  Beyond “medical/surgical” beds, there will be the addition of many additional department specific beds including:

  • Emergency department beds – increased by 3
  • Observation beds – increased by 2
  • Day-surgery recovery beds – increased by 4

Additionally, the operating rooms will expand from 300 square feet to the current standard of 700 square feet.  Finally, an additional day-surgery suite will be added to handle endoscopic procedures.

These extra beds and expanded space allow the hospital to stay current in a changing health care world.  Over a decade ago, the hospital began increasing its out-patient services (i.e. procedures not involving an overnight stay).  Presently, 70% of the hospital’s revenue comes through out-patient services4 and this is expected to continue to grow. The new beds allow for expansion of these growth sectors in out-patient care.


In 2006, a $33M hospital remodel levy failed to pass in our hospital district. This levy would have funded the expansion of the current hospital to 74,000 square feet. Outreach surveys following the vote revealed a community desire to build a new hospital and not remodel the existing facility. Heeding this input, the hospital purchased 12 acres at Apple Blossom Center in 2009.

This past year in 2016, the hospital prepared again to plan for a new facility at Apple Blossom Center. It hired The Health Care Collaborative from Portland, Oregon to create new construction numbers and generate an estimate for remodeling the current facility5. This work confirmed earlier planning estimates. Building a new hospital would cost $44M, while remodeling the current facility would cost $56M.

An intuitive examination of these two options supports the numbers. The challenges of construction on a rocky hillside while maintaining 24-7 hospital functionality leads to a high expense and the $12M differential in cost.  Building a new facility on flat ground is attractive and economical by comparison.


Even with the advantages of flat ground, the new $44M hospital at Apple Blossom Center will be built at a square foot cost of $571. This number includes all the furniture, fixtures, and new equipment (FF&E) for the hospital. However, for those unaccustomed to hospital construction figures, these prices can still seem extremely high. A review of recent Critical Access Hospital construction projects in the state confirms this cost estimate:

  • Snoqualmie Valley Hospital constructed a facility in 2015 with a cost per square-foot of $715. As a two-story hospital, this building involved more structural and mechanical elements (e.g. elevators) than Lake Chelan’s new hospital which accounts for the higher price.
  • Summit Pacific Hospital was constructed in 2013 with a cost per square foot of $489. As a hospital built on the heels of the recession and without a surgical center, the Summit facility has a less expensive price per square foot6.


Following the completion of the new hospital, the current facility will be listed for sale. It has been appraised at $2.1M. Any new owner would need to upgrade the many systems (HVAC, plumbing, electrical) that have reached the end of their functional lifetime. It is not known if a buyer would be interested in the building or just the land, but the hospital will steward the site until a new owner is found.


In review of the numbers, the clear choice for the Board of Hospital Commissioners was to pursue the $44M new hospital option at Apple Blossom Center. This route offers not only the most economical price but also comes with the benefits of ample parking, a heliport, and room for future expansions.


1 http://lakechelancommunityhospital.com/wp-content/uploads/2016/09/Comparative-Analysis-of-Facility-Costs.pdf

2 Public Hospital District Project Review Board Application Summary – Oct 10, 2006

3 Our designation as a Critical Access Hospital sets this limit.

4 Lake Chelan Community Hospital 2016 Income Sheet

5 http://lakechelancommunityhospital.com/wp-content/uploads/2016/09/ Comparative-Analysis-of-Facility-Costs.pdf ; HCG’s client list includes Swedish Medical Center, Kennewick General Hospital, Franciscan Health System, and Columbia Memorial Hospital.

6 Sources: Snoqualmie: Bond Issuance Official Statement; Summit Pacific: Hospital CEO