Madison Valley: Hospital aims for August groundbreaking

By Keeley Fitzgerald for the Three Rivers Edition - 03/06/2007

Fundraising efforts for the new Madison Valley Hospital and Clinic facility are expected to escalate in the upcoming months as the goal for an Aug. 1 groundbreaking nears.

“We are making a concerted push to raise $500,000 by Aug. 1,” said Sam Korsmoe, executive director of the Madison County Economic Development Council. “The pitch is that if we don’t raise the money by Aug. 1, we risk pushing back the start date which will then push the costs up by another half a million dollars.” To date, MVHC has raised $1.9 million for the project since receiving its first gift in March 2005. Project Giveback has raised approximately $935,000 for MVHC since first initiated in July 2006. Approximately $435,000 of the funds raised for Project Giveback have come in the form of cash and pledged donations from the Madison Valley community. The other $500,000 has been donated by Sun West Ranch Developers Ted and Heidi Gildred.

The Gildreds have also committed to another $500,000 pledge, extending Project Giveback into a second phase. This phase challenges the community to match the Gildreds’ pledge dollar for dollar making the phase worth $1 million.

Heidi Gildred, also a member of the Hospital Foundation Board, says fundraising for the new facility has reached a critical point. With just under six months before a projected groundbreaking, Gildred hopes Project Giveback continues to motivate the community to donate.

“We have a sense of urgency here,” she said. “We are very hopeful that we can really get people to reach into their pockets to get this hospital started this year.” As far as fundraisers go, Project Giveback has been a model for success. Much of its success can be attributed to the fact that people feel good about giving to a worthwhile cause, says Gildred.

“The biggest thing that sets it apart is that people feel good about the project and the fact that their contribution is going to be matched dollar for dollar,” Gildred said. Since July 2006, some 360 checks have come in — a number Gildred is pleased with. Gildred now hopes this momentum continues.

“We want to express our thanks to the community for helping make Project Giveback a success,” she said. “We didn’t do this alone. A lot of people helped make this a success. However, we can’t rest on our laurels yet. We have a lot of work to do in the next three or See HOSPITAL, Page 3 Hospital...

Continued from Page 1 four months.” CAH Designation helps MVHC Building a new medical facility in Ennis has been on the minds of many for years. With an outdated and out of code facility, MVHC is more than ready for its new top-notch medical center.

The $8.5 million needed to build the hospital and clinic will be generated through a combination of loans and donations. Two and a half million dollars will be secured through donations while the remaining $6 million will be secured through loans.

Just how does a small rural hospital and clinic like Ennis’ afford an $8.5 million dollar facility? Simply put, the hospital’s designation as a Critical Access Hospital (CAH) makes building a new, multi-million dollar facility possible.

In order to be designated as a CAH, a rural hospital must have less than 25 beds and be at least 35 miles from an alternative medical facility. CAHs receive cost-based reimbursements from Medicare-reimbursements that help keep rural hospitals solvent and often times in existence.

According to Korsmoe, it is this CAH designation that makes borrowing $6 million dollars possible. The loan will initially incur about $450,000 in debt service per year. Approximately $400,000 of those expenses will be reimbursed by Medicare annually leaving the hospital with only $50,000 left to pay each year. Over the life of the loan, payments made to principal and interest will adjust similar to a home mortgage.

“It’s an interest free loan essentially because Medicare is paying so much,” said Korsmoe. “If we were not a CAH there is no way we could be borrowing this type of money. Medicare’s formula for reimbursements is going to pay off half that debt.” The CAH program has roots dating back to the 1970’s when rural hospitals started going under due to a combination of shrinking populations, decreased revenues, and escalating costs. As of March 2006 there were 1,279 certified CAHs in the U.S. According to the Montana Health Research and Education Foundation, Montana currently has 45 certified CAHs. Other nearby hospitals with CAH status includes those in Sheridan, Dillon, and Livingston.

Building a new hospital and clinic is important in keeping Madison Valley Hospital’s critical access status and accompanying Medicare reimbursements. Outdated and out of code, the current facility no longer meets Medicare’s criteria for reimbursements. Without Medicare reimbursement and CAH status, MVHC would most likely cease to exist.

“The facility is very old,” Korsmoe said. “It has expanded in a way that doesn’t mesh whether it is plumbing related, electrical, or otherwise. The way it grew, it grew out of code. If those codes aren’t met, the first thing we lose is our Medicare reimbursement.” Korsmoe adds that an Aug. 1 groundbreaking is essential to keeping the project on budget. If groundbreaking is delayed, the cost of building increases an estimated 1 percent per month.

“If we can’t start this August we will have to wait until April or May 2008,” he said. “Waiting comes with a price tag of an estimated half million dollars or more.” The good news, says Korsmoe, is that the construction company selected (Dick Anderson Construction, Inc.) has a good reputation for being on time and on budget. With an estimated build time of 14-months, Korsmoe says the facility opening is not far off.

“If everything goes as planned, we could be opening the doors of the new facility in October 2008,” he said.