Prosser Memorial Health plans to break ground this spring on a $78 million hospital complex on 33 acres north of Interstate 82 and to begin seeing patients there in 2024.
Its aging hospital at 723 Memorial St. in Prosser will close when the new one opens and eventually will be demolished.
A $57.5 million U.S. Department of Agriculture loan (40 years at 2.2% interest) will offset much of the cost, with about 20% coming from PMH and $2 million from the hospital foundation, half of which is already raised. Hospital officials aren’t asking voters for a levy or bond.
“Prosser Memorial Health has been conservative with our money and expenditures anticipating the need to make a significant investment in a new hospital facility. It is important for the community to know the hospital will not bring a levy or bond to taxpayers to fund this project. One hundred percent of our financing will come from the USDA and our own cash contribution. We are growing to meet the growing health care needs of the communities we serve with new services and providers and a new hospital is needed to meet these needs effectively,” said PMH CEO Craig Marks.
The state Department of Health pointed out that PMH’s certificate of need application for the new hospital is unusual for several reasons: It’s the only replacement facility of its size reviewed in many years; similar-sized replacement facilities were hospitals that leased the new facilities back to other entities; and it is only the second new or replacement hospital reviewed in many years that wasn’t part of or subsidized by a larger system.
The state noted that PMH, or rather its parent, Prosser Public Hospital District, cannot rely on the borrowing capacity of a large health care system. It must incur debt on its own behalf.
The hospital district collected $862,000 in property taxes in 2021.
Anticipating the need for a new facility, PMH bought 33 acres north of I-82 for $1.7 million in 2017. It’s across the interstate from the Prosser rest area and about 3 miles from the existing hospital.
Prosser Mayor Randy Taylor said Prosser Memorial Hospital has a great reputation in and outside the community of 6,200 people.
“They’ve recruited top-notch specialists and doctors. They’ve got the right combination of skill. Their facility is a little old and dated. This is going to bring them up to modern times, not that they’re not now but this will be a huge improvement. They’ve got the right administration, the right doctors and nurses and care, and wherever I go, people talk about that hospital. I think it’s just fantastic that they’re building a new one,” he said.
Features of the new PMH complex, to be located on North Gap Road in city limits, include:
PMH leases a medical office building adjacent to the existing hospital from the Yakima Valley Farm Workers Clinic. PMH plans to move its patient financial services department there.
Prosser Memorial Hospital will remain a 25-bed acute care hospital.
Several letters of support were included in the state application, including from U.S. Rep. Dan Newhouse, R-Sunnyside, and state Sen. Maureen Walsh, R-Walla Walla, and Rep. Bill Jenkin, R-Prosser.
The existing hospital celebrates its 75th anniversary this year. It opened its doors in 1947 as a 19-bed facility dedicated to the memory and service of World War II veterans.
Since then, the hospital has grown and expanded services.
PMH employs 325 full-time staff and pays $35.3 million in annual salaries and wages.
Marks noted in a recent newsletter that 2021 saw a record number of inpatients, outpatients, ER visits and babies born at the hospital.
PMH’s net profits totaled $10.2 million in 2021, up from $3 million in 2020 and 2019, according to its certificate of need application to the state. PMH expects to receive forgiveness for the $6.4 million it received from the federal Paycheck Protection Program in 2020 during the start of the pandemic, noting the influx of cash helped avoid layoffs and staffing disruptions.
PMH revenues from payers are nearly evenly split between Medicare, Medicaid and commercial insurance, with a small percentage coming from self-pay.
Hospital admissions and outpatient services have increased since 2015. Births have increased 24% since 2013. In 2021, more than 583 babies were born at PMH.
PMH doctors performed 1,418 surgeries in 2019. In 2020 that number declined slightly due to the Covid-19 shutdown of surgery cases. PMH performed 2,148 surgeries in 2021.
From 2019-20, PMH’s digital imaging volume grew 15%, to 27,538 procedures performed. It performed 35,907 procedures in 2021.
PMH performed 141,216 laboratory procedures in 2020, up 6% from 2019. It performed 171,918 procedures in 2021.
The hospital recorded 13,258 emergency room visits and 1,397 inpatient admissions in 2021.
“We continue to grow even in the pandemic. One of our best years ever was 2021, adding specialties and adding them in a strategic and mindful way so that it does serve a need in a community,” said Shannon Hitchcock, PMH’s spokeswoman, who also serves as executive director of the PMH Foundation.
PMH wants to position itself to serve even more patients, she said.
Tri-Citians and those living in Yakima County seek care at PMH because it can take a long time to get an appointment to see specialists closer to home, Hitchcock said.
PMH recently opened a digestive health center, offering upper endoscopies, colonoscopies and more, and a dermatology center in Benton City, offering a blend of medical and cosmetic services.
PMH operates primary care clinics in Grandview, Prosser and Benton City, as well as a Women’s Health Center on Chardonnay Avenue in Prosser.
The existing hospital can’t expand at its current location.
Built on a hillside surrounded by residential neighborhoods, the PMH campus is boxed in and has no room to grow. It lacks adequate parking.
Its medical staff meetings must be held off site to accommodate all the providers.
By the end of 2026, PMH plans to add 37 staff, the majority in its clinics, according to its state application. In 2021, it recorded 55,882 clinic visits.
The facility is not compliant with the Americans with Disabilities Act and struggles to meet state and federal regulations for hospitals. To make improvements wouldn’t be cost effective, Hitchcock said.
Additions made over the past 70 years have created inefficiencies, safety and security concerns and other problems.
Merry Fuller, a registered nurse who serves as PMH’s chief nursing officer and chief operating officer, wrote in her letter of support about the challenges of working in an aging and undersized facility.
“Patients and staff share corridors with the public; certain departments are undersized; we lack the space for staff to coordinate during shift changes; many areas are required to limit families because of space; and inefficiencies in staffing result because of the physical layout,” she said, noting that research supports the link between patient experience and outcome to their physical environment.
Brian Sollers, PMH’s chief medical officer who is an obstetric provider, said in his letter of support it’s nearly impossible to find space to meet privately with patients and their families. “The bottom line is that the hospital has reached the end of its useful life,” he said.
Hitchcock said PMH reached out to long-term care, mental health and substance abuse providers to gauge their interest in the old hospital.
“Nobody is interested in the existing building,” she said.
She said PMH would hold onto it for a while, but it plans to spend a couple million dollars to knock it down, raze it and turn it back over to residential property.
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