New Samaritan Hospital project paused
The project to replace Samaritan Hospital (pictured) with a new facility has been put on hold due to a funding gap and increased construction costs.
CHERYL SCHWEIZER/COLUMBIA BASIN HERALD
Samaritan Hospital commissioners (from left) Katherine Christian, Alan White, Tom Frick, Dale Paris and Susan Carbon listen to a presentation on the current construction market, and its effect on building a new Samaritan Hospital, during a Tuesday meeting.
MOSES LAKE — Construction of a new Samaritan Hospital has been put on hold while hospital district officials work to close the gap between the project cost and the amount of available financing.
“(The estimate) is currently sitting at $31 million over where the prior funding was anticipated or received,” Jenks Abram Jenks, one of the consultants working on the project, said.
Hospital district commissioners voted unanimously to reject a “guaranteed maximum price” proposal at the regular meeting Tuesday. If commissioners had approved the proposal, construction could’ve started this fall. Jenks said the current estimate for the total cost of the proposed new hospital is about $188.25 million.
Joe Kunkel, the lead consultant on the project, said that million estimate had a time limit.
“It expires in a week,” Kunkel said.
Over the last few months the design team worked to find ways to save costs, Kunkel said, and found some, but rising construction costs - including increased costs for materials and labor - wiped out the savings.
At the same time the hospital’s revenue is down. Chief Administrative Officer Alex Town said the hospital’s net income is in the red for 2022. For the first six months the hospital lost more than $803,000, Town said.
Part of the problem is that many of the patients have inadequate or no insurance, Chief Executive Officer Theresa Sullivan said in a later interview. Town said Tuesday night that changes in state law may lead to an increase in what is known as uncompensated care, or bad debt and charity care.
“We are going to see some more charity care based on the new legislation,” he said.
Samaritan has provided $3.73 million in uncompensated care for the first six months of 2022, Town said. He estimated the total uncompensated care for the year will be $8 to 9 million.
The hospital’s investment income also has decreased, he said.
Expenses have increased, and in some areas, they’ve increased substantially. Samaritan hires temporary nurses and other workers to supplement its own staff, and the cost of temporary help has increased. Town said temporary labor expenses were 180% higher in the first six months of 2022 when compared to the first half of 2021.
Board Chair Katherine Christian asked Town about the consequences if the project went ahead immediately, given the cost overrun and the current realities in health care.
“What is that going to do to our (debt service) ability, if everything else stays the same?” she asked. “Where are we going to be, with what we know, what we see right now?”
“Under our current financial situation?” Town asked. “Not good. Not good. You could put the organization at risk.”
Christian said that while the board wants to proceed, the project needs to be financially workable.
“We want a feasible, viable hospital at the end of the road,” she said.
“We have an obligation to the community to have a hospital,” Commissioner Susan Carbon said. “So if we put this hospital in jeopardy creating the hospital we want, we’re not being good stewards.”
Sullivan said hospital officials will be working on ways to either reduce costs further or find additional funding.
“We’re going to come together, we’re going to find a path forward,” Sullivan said.
Cheryl Schweizer may be reached at cschweizer@columbiabasinherald.com.
