CPH moves to issue $43 million in bonds

Three-story specialty clinics expansion planned for spring 2014

Central Peninsula Hospital is expected to edge closer to the specialty health care business on Tuesday when the Kenai Borough Assembly introduces a resolution to sell $43 million in bonds as a base to finance the expansion.


The assembly will consider the 23-section Resolution 2313-072, which raises money for the design and construction of an 80,000-square-foot medical center to be attached to the newly opened radiation and oncology unit.

The expansion is considered Phase V of the hospital’s growth plan established in 2003 and since updated.

The recent effort has been in the works for about a year, said Rick Davis, CPH chief executive officer. He sees it as a way for the borough-owned medical center to keep pace with the increasing medical needs of a growing and aging community.

“Ultimately, the failure to engage in long term planning will result in a large financial burden to taxpayers, a loss of local control of a community asset, or closure of the facility,” Davis wrote in his application seeking a Certificate of Need from the Alaska Department of Health and Social Services.

Before any action can be taken, the borough must earn a Certificate of Need from DHSS.

Prior to the regular assembly meeting Tuesday, the resolution will be considered during the finance meeting at 4:30 p.m. in the Assembly Chambers.

The CPH Service area board approved their own resolution recommending that the assembly approve the bond issue.

According to wording in the resolution, the hospital expansion is expected to pay for itself.

A call for comment from the board was not returned on Friday.

Under the current plan, construction would begin next spring following a February bond sale. The hospital expects to open the center in December 2015.

According to a memo from Kenai Peninsula Borough Mayor Mike Navarre’s office, several proposed clinics are planned such as a spine center, orthopedic, neurology and an obstetrics clinic. Also mentioned are massage and occupational therapy clinics among others.

The three-story addition would open space for up to five clinics, hold a 10,000-square-foot spine center and have one 5,100-square-foot procedure room on each floor. Two hospital-owned clinics and one private spinal surgeon are expected to make the move. Proximity to the hospital is a primary concern for specialty doctors , Davis said.

“You want pain services and surgical services connected,” he said as one example.

According to the 2013 Central Peninsula Community Needs Health Assessment — based on a survey results of 599 central peninsula households, health data and an advisory work group — the Central Peninsula population has aged during the last decade and faces a constant increase in retired age citizens during the coming years.

Nearly half the local population is 45 or older and the largest medical needs identified collectively, according to a community perspective, are cancer care, Alzheimer care, cardiology and dialysis services.

Davis’ CON application lists cancer care as the number one priority of the expansion.

Davis said that space is paramount and there is no more medical office space in the area. New doctors, when attracted, have no place to set up shop.

The move to offer more services locally through CPH mirrors an overall national trend among rural hospitals, according to the American Hospital Association.

“Rural hospitals are often the sole site for patient care in the community, they also are more likely to offer additional services that otherwise would not be accessible to residents,” reads a 2011 AMA Trendwatch report.

According to Alyssa Shanks, an economic research analyst with the Alaska Department of Labor, health care has been driving the economy on the Kenai Peninsula, in terms of growth, for several years. Without the growth in healthcare during recent years, the Kenai Peninsula economy would have shown job losses in years that otherwise have data that show modest growth.

Only outpaced by oil and gas, which added 300 jobs so far in 2013, local healthcare services added 200 jobs during the same time period, Shanks said.

“Larger than any borough so far,” she explained to a gathering of the Alaska Industry Support Alliance Friday.

Reach Greg Skinner at greg.skinner@peninsulaclarion.com.


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