CARTHAGE, N.Y. — The CEO of Carthage Area Hospital anticipates the organization should find out “sometime in July” if the state approves funding to help pay for a consolidated medical campus.
Hospital officials recently announced they are considering a plan that would consolidate the 53-year-old hospital, two of its outpatient-clinic facilities, and administration building on a new medical campus.
The organization is pursuing $25 million in funding from the New York State Department of Health’s statewide health-care facility transformation program, it said in a June 1 news release.
That funding would cover a portion of the total project cost, says Richard Duvall, CEO of Carthage Area Hospital, who spoke with CNYBJ on June 4.
The construction cost for a new building is about $49 million. “In addition to that, there’s about $15 million of other costs for furniture, fixture, and equipment,” Duvall adds.
When asked how the organization would finance the project outside the state funding, Duvall replies that the “vast majority” would be through commercial lending. “We would also do a capital campaign through our foundation,” he adds.
Carthage Area Hospital will use a request-for-proposal process to select an architect, a contractor, and a lender for the project, according to Duvall.
Meanwhile, the hospital’s board of directors is still reviewing the project and the hospital’s conversations with local, regional and state leaders also continue.
Deciding to pursue project
The proposal calls for construction of a replacement hospital and an attached rural health center. Hospital officials are evaluating the “best possible site” for the campus, according to the release.
The plan follows a review of current hospital facilities that began in 2016 at the request of the hospital’s board of directors.
While examining options to renovate the hospital, board members and leadership quickly realized that it “wasn’t the most sustainable path to take,” the release stated.
Renovations would cost $44 million, the hospital said. The work would include service-line disruption over a phased, 10-year timeline, which would “jeopardize patient care and risk the loss of much-needed revenues to maintain [operations.]”
After considering all the facts and the $44 million renovation cost versus the $49 million new construction cost, Carthage Area Hospital opted to pursue the new building.
In the release, Duvall pointed to a 2016 presentation by Stroudwater Associates that hospital leaders heard during the National Rural Health Conference in Kansas City, Missouri.
Portland, Maine–based Stroudwater Associates is the same consultant that the New York State Office of Rural Health retains, the hospital notes.
Its presentation outlined the “impressive results achieved” by 172 “new build” critical-access hospitals across the country. Duvall called the presentation “the most convincing evidence” for pursuing the new building.
Carthage Area Hospital “would be the first New York State critical-access hospital to follow this proven replacement model,” the organization said.
MSA challenge
One challenge that hospital officials face while evaluating locations for a new campus is a “newly defined,” federally designated metropolitan statistical area (MSA), “which exists from Watertown to Carthage and Fort Drum,” the organization said.
An online document by the U.S. Department of Commerce’s Bureau of Economic Analysis lists the area as the Watertown–Fort Drum MSA. The MSA’s 2016 population was 114,006, which ranked 336th in the U.S.
As Duvall explains it, an organization can’t have a rural health clinic designation if it’s located within an MSA.
“We’re looking to get our primary-care clinics designated as rural health clinics, which [allows for] enhanced reimbursement methodology. But you can’t do that if you’re inside of an MSA,” says Duvall.
So, Carthage Area Hospital will look for a 12-15 acre site outside the MSA, he adds.
Aging systems
Many of the organization’s “major” physical-plant systems are “either at or past end of effective use and need costly overhaul and attention.”
The systems include electrical; heating, ventilation, and air conditioning, and water and sewer, the hospital said.
In addition, as the hospital has expanded services across the twin villages to operate in four different buildings, it has had “inefficiencies that a consolidated medical campus would correct.”
A modern facility would employ highly efficient building design and technology that would improve patient care and flow.
About the hospital
The hospital also operates a network of community-based clinics, including its Philadelphia Medical Center, Family Health Center, Pediatric Clinic and Women’s Way to Wellness, per its release.