HAWARDEN—Hawarden Regional Healthcare will begin the process of securing bond for an $11.2 million hospital expansion project following approval by Hawarden City Council at its May 25 meeting.
The vote took place after a presentation of the proposed hospital project by the hospital’s CEO, Jayson Pullman.
According to Pullman, the hospital is looking to expand its emergency and radiology department and build a new clinic that would still be connected to the current hospital facility.
Two emergency room bays would be added, along with a place for the doctor to sleep and more space for pain management services. Preliminary plans also include space for the new MRI machine.
According to preliminary plans, the new clinic space is 11,800 square feet located east of the existing hospital, on the same land but with a new address, new construction helping to transition the new clinic space in the existing hospital.
The project could be tendered as early as this fall, with the first stages of construction beginning in the spring of 2023.
“The good thing about this project compared to other projects we’ve done at the hospital is that we really don’t need to move anyone. It’s kind of a clean build that way,” Pullman said. “We wouldn’t have to disrupt what we’re doing right now.”
Regarding plans for the existing clinical space after construction, Pullman said it was still usable and moving administrators and support staff there would free up more space in the hospital for him. -same.
“If we transfer all administrative and support services to the clinic, we can use it to generate income either through the Senior Life Solutions program or through physiotherapy or speech therapy or l occupational therapy,” Pullman said.
The city council approved a motion allowing the hospital to sue the liaison for the project, 4-1, with council member Monte Harvey voting against.
Status of rural clinic
The Hawarden Clinic practice, which is a Certified Rural Health Clinic, is a joint venture with MercyOne Siouxland Medical Center in Sioux City. Ownership of the practice is shared 50/50 between the hospital and MercyOne, but the hospital owns the building.
There, the clinic has four providers, but the space is designed for three; Pullman noted that the hospital is hiring for two other positions, one of which will replace a retiring physician.
“There’s just enough space,” Pullman said.
The importance of being designated as a rural health clinic is due to reimbursement rates.
“This improves reimbursement rates for Medicare and Medicaid patients. It’s a big problem. We get a little more reimbursement for each clinic visit than we would as a normal, stand-alone clinic,” Pullman said.
One of the tricky aspects of the Hawarden Clinic’s move is that its CHR status was previously tied to Sioux County being designated as a health professional shortage area. Even though Sioux County lost that status in 2011, the Hawarden Clinic has been able to grandfather as an RHC every year since then as long as it remained at its address of 1122 Ave. L. Moving from there could jeopardize his RHC status.
“I’ve been working with the state for about five years trying to separate Hawarden by township into its own separate HPSA in Sioux County,” Pullman said. “The reason I know it can be done is because it is done in Lincoln County where the northern part of the county is in Sioux Falls, SD. They separated the lower part of the county so that they are finally HPSA.
His efforts paid off in August 2021, with Hawarden gaining its own HPSA status separate from the rest of the county. This is a four-year designation, and within that time, the hospital can move its RHC clinic from its 1122 Ave. L while maintaining its RHC status.
“So in August we burned a year off that certification and we would have three official years left,” Pullman said. “We were determined to try to move forward quickly enough to make plans to change the location of this clinic.”
One of the challenging elements of the proposed project is the continued increase in the cost of supplies and the impact of inflation. The cost of the project is estimated at $9.7 million with a 10% contingency and a 5% inflation contingency, giving an overall estimate of $11.2 million.
To fund the project, the hospital board has the ability to apply for tax-exempt bonds for $8 million as long as city council gives its approval.
The hospital has approximately $5-6 million set aside for capital improvement projects, and these funds can be used to complete the rest of the project.
“Ultimately, the environment is very volatile with rising funding interest rates. We would like to start moving towards tax-exempt bonds for $8 million to help fund the project. We would also like to move on to construction documents so that we can get this project up and running,” Pullman said. “At the end of the day, … we are in a good financial position, so we believe we can manage the rest of the costs.”
According to Hawarden City Administrator Wanda Woodley, the bond would not interfere with the city’s other fundraising efforts for other projects, such as street work, because it falls on a different calendar year.