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Consultants: Hospital has not proven proposal is cost-effective

October 08, 2003|by SCOTT BUTKI

scottb@herald-mail.com

In answering questions posed by a state commission, the Washington County Hospital has failed to demonstrate that its proposed move to land adjacent to the Robinwood Medical Center is cost-effective, two city consultants told the Hagerstown City Council Tuesday.

Instead, the consultants said, documents submitted to the state by the hospital suggest the proposed site outside the city limits is the most expensive of several options considered by the hospital board.

The city has retained David Funk, a Baltimore lawyer, at $200 an hour, and an expert in the field, Hal Cohen of Baltimore, at $250 an hour to ask the Maryland Health Care Commission to deny a certificate of need for a planned hospital on Robinwood Drive.

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The Health Care Commission grants certificates of need based on several criteria, including cost-effectiveness. The hospital must have the certificate to make the move.

The city's position is that a new hospital is needed but that the hospital has not proven why the selected site is the best one.

The commission instructed the hospital to answer questions on a variety of issues, with some queries overlapping ones the city submitted to the commission. The consultants and city officials on Tuesday said the hospital has not answered the questions adequately.

For example, the commission asked how a new hospital would be funded if a planned rate increase was not approved, Finance Director Alfred Martin said. The hospital said a feasibility study based on that possibility is premature, he said.

A hospital spokeswoman said Tuesday night that the hospital had no comment because nobody was at the council's work session.

The city and state commission asked the hospital to detail what analysis led the board to decide to propose building a new hospital at Robinwood as opposed to renovation or, as the city suggests, building a new hospital near the existing site.

Funk said he and Cohen believe the hospital's application to the commission remains defective because it does not answer those and other questions.

In its submitted response, the hospital said it considered three options that involved renovating and demolishing some of the buildings.

The renovation proposals were estimated to have total capital costs ranging from $58 million to $81 million, while a "proximate replacement" was estimated at $144 million. The total capital cost of a replacement at Robinwood was estimated at the time at $142 million but the proposal submitted to the commission gives an estimate of $164.3 million.

In its responses, the hospital said renovations were not pursued as an option because of the hospital's inefficient floor plan, the age of the structures and other problems.

The hospital had a consultant perform a Life Cycle Operating and Maintenance Cost Analysis, which estimated utility and maintenance costs over a 30-year period would be about $122 million for new construction or renovation at the existing site, compared to $70 million for a replacement at Robinwood and $62 million for a proximate replacement.

But even with that addition, Martin said, the estimated cost of the Robinwood site was $213.8 million compared to $206 million for a proximate replacement, and $180 million to $203 million for the three renovation proposals.

The actual combined cost will be closer to $235.2 million when the revised total construction estimate is used, Martin said.

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