Hospital feasibility study is completed

The feasibility study for a county health care facility is complete, and Valencia County commissioners are looking at next steps.

County Commission Chairman Gerard Saiz said the board is working to move forward quickly on the long-delayed project, but not so quickly as to repeat mistakes of previous commissions.

“There have been a lot of challenges and I feel confident we’ve learned a lot and will be able to create a (request for proposal) that will be good for the community,” Saiz said.

Before the RFP for a provider is issued, the chairman said the county will need to have a grant agreement in place with the New Mexico Department of Finance and Administration to secure the $50 million up for grabs for an acute care hospital.

In December, Gov. Michelle Lujan Grisham signed legislation allocating $50 million for construction of an acute care hospital in a county with a population of less than 100,000.

During the second 2021 special legislative session, New Mexico legislators approved House Bill 2, which made a one-time allocation of $50 million to DFA to plan, design, construct, equip and furnish an acute care hospital in a county with a population of less than 100,000, according to the most recent federal decennial census.

The appropriations in HB 2 are for fiscal years 2022 through 2025; any unspent or unencumbered money at the end of the 2025 FY will revert to the appropriation contingency fund.

Valencia County has a population of 77,454 people, according to the 2020 census, making it one of 28 counties in the state eligible for the money.

“We reached out to DFA once the Legislature was able to secure the $50 million for a hospital and asked about the process to secure the funding,” the chairman said. “We met last week and they were so positive; they were great to work with.”

Saiz said DFA staff are in the process of drafting a grant agreement for the county to secure the funding for construction of a hospital. He estimated the county should receive a draft agreement from DFA in three weeks to a month.

“They were very supportive and excited to work with us,” he said. “Once we’ve received the grant agreement and all parties have signed, we will move forward with an RFP for a provider.”

The RFP will incorporate the recently-completed feasibility study so potential providers can evaluate the findings themselves.

A second RFP will be issued by the county for architectural services, engineering and construction, Saiz said.

“Since the county will own the facility, the provider will buy the land and sign it over to the county,” he said. “We can’t put a building up on someone else’s property due to the anti-donation clause.”

Once the facility is complete, the provider will lease it from the county.

Right now, the county has what Saiz described as a skeletal draft of an RFP that will soon be in the hands of the five commissioners.

“Then we can set up workshop so we can sit down and have a discussion on the RFP,” he said. “We want to move fast but we want to make sure the commission has ample time to make suggestions. We want to work on this fairly quickly once we get the DFA agreement signed.”

The commission contracted with Kulik Strategic Advisers last March to develop a comprehensive market assessment, clinical service needs and feasibility study for a health care facility in Valencia County.

The scope of the project was to develop a comprehensive market assessment examining population and demographic trends, and current and future health care demands.

To make the recommendations more flexible to a future provider, the study did not look at a possible location for the facility, nor make any recommendations for staffing, provider coverage, operational budgets or detailed managed care rates since a provider or health care system hasn’t been selected at this point.

An analysis of Valencia County zip codes by KSA and it’s consultant, Huddy Healthcare, show a projected total of 36,000 total emergency department visits coming from those specific Valencia County locations.

Assuming people who live closer to Albuquerque will continue to use Albuquerque emergency departments and those with high acuity issues and traumas will also use Albuquerque hospital emergency departments, the study projected between 18,000 to 22,000 mid-to-lower acuity emergency department visits could potentially use an emergency care facility in Valencia County.

In terms of inpatient volume for a county facility, the numbers are much smaller, the study concluded.

“Micro-hospitals and smaller, rural hospitals usually focus on ‘general medicine’ patient types with limited ability to provide specialty clinical services and the associated specialty-based health care providers,” the study reads. “With the assumption that only selected ‘general medicine’ inpatients may utilize a Valencia County inpatient facility, the data forecasts an estimated need of only four inpatient beds for the area.”

The study does note if a health system decided to provide other specialties beyond selected general medicine inpatient services, that bed number could increase to six or eight, or more, based on number of specialty services provided.

Programming and planning of a flexible facility may allow a health system to phase-in a licensed inpatient “hospital” by initially creating a free-standing emergency department facility with some observation beds designed to inpatient standards, but not initially licensed as inpatient beds.

“Then, should volumes grow as inpatient service needs start to grow, the observation beds could become licensed beds and the facility expanded to meet hospital standards,” the study reads.

Funds for the pending operation and maintenance of a hospital facility have been collected from county taxpayers in the form of a mill levy that was collected from 2007 to 2014. So far, it has amassed more than $26.6 million in an interest-bearing account at Bank of the West.

VC Hospital Feasibility Study 2022