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October 26, 2004 > Measure FF Bonds -- Washington Township Health Care District (2/3rds Approval Required)

Measure FF Bonds -- Washington Township Health Care District (2/3rds Approval Required)

To improve Washington Hospital's capacity to provide life-saving services to heart attack victims and other critically ill patients and to make seismic upgrades for earthquake safety, reduce patient overcrowding by expanding Emergency, Critical Care, Intensive Care, and Cardiac Care units, provide additional operating rooms and patient beds, and upgrade related medical facilities and building systems, shall Washington Township Health Care District issue $190,000,000 of bonds with independent citizens' oversight and to ensure that no proceeds are used for administrative salaries?

What is Measure FF? A Conversation with Mike Wallace, Board President and Co-Chair of the Washington Hospital Bond Campaign and Kimberly Hartz, Chief of Strategic Management, Washington Hospital

TCV: Can you briefly explain the financial impact of Measure FF on residents?

Wallace: The measure is a bond measure for one hundred ninety million dollars. If it passes, property taxes of residents in the district will increase based on the assessed value of a home, not the market value. Over the life of the bonds, once they are all issued, the impact will be roughly $9.76 per year per one hundred thousand dollars of assessed value. If we round this off to $10 and the average house was assessed at five hundred thousand dollars, the average cost would be $50 per year per residence.

TCV: Why does Washington Hospital need this bond?

Wallace: The emergency room (ER) was built in 1958 and served a community (Fremont, Newark, Union City and South Hayward) of roughly 30,000 people. That population has grown to about 320,000 people. In its first year, the ER took care of less than 300 people. Each year over the past ten years, the ER has taken care of roughly 43,000 people. Not only has the population increased, but the population is aging. With an aging population, comes more demand for medical services.

The legislature passed SB1953 a number of years ago following the Northridge Earthquake. This mandates that all hospitals meet strict new seismic requirements. By 2030, all hospitals must meet these requirements. Washington hospital, because of expenditures of over $18,000,000 for upgrades and retrofits, has a "pass" until the year 2030 while other hospitals are required to do interim retrofits by 2013. The 2030 requirements are very different and it is unlikely that existing hospitals will be able to meet these standards by retrofitting. We are building a new campus in stages since it would be a tremendous task to do so all at once and we do not know what the demands will be twenty years from now. So, the board decided on a "phased" building plan. Measure FF is the first phase of that approach.

TCV: If FF passes, when will the first phase begin?

Wallace: The first drawdown of the bond will be in 2006 or 2007. We are not certain because we are regulated by the Office of Statewide Planning Development, known as "oshpod." They can take a long time just to review architectural and engineering plans. Our power plant plans have been there for thirty months! With all the hospitals in California challenged by these requirements, Oshpod which is normally slow anyhow, will be even slower. The forty million dollars from the first drawdown will be for the power plant which is designed to provide enough power for the new hospital campus and the current campus. The impact of this first phase on homeowners will be a portion of the ultimate cost when all bonds are issued - around $4 per $100,000 assessed value.

TCV: When will the new construction be completed? When would the remainder of the bond monies be drawn?

Hartz: Construction is projected to be completed in 2012. We have included inflation and interest rate factors into the costs.

Wallace: The impact on the property owner is zero in 2005 and 2006. The first impact would be in 2007 at approximately $4 per $100,000 assessed value. The next $140 million will be drawn in 2012. Those funds will be used to build a new wing of the hospital that will be compliant with all seismic requirements of SB1953.

TCV: Where will the new hospital building be located? Many hospitals are closing or reducing emergency services; why is Washington Hospital expanding at this time?

Wallace: Behind the hospital emergency room in place of the Center for Joint Replacement building. The new "wing" will have a new emergency room with 32 bays on the first floor. The ground floor will also have a catheterization lab for cardiac care patients and four new operating rooms. The second floor will have an ICU (Intensive Care Unit) and CCU (Critical Care Unit). The present facilities are very small. The third floor will have 68 new medical/surgical patient beds.

Although this facility is not as large as the current hospital, in the event of a devastating earthquake which impacted the present hospital building, the new building could care for a great number of people. Between 2012 and 2030, our expectation is to continue to build - a tower and parking structure. The present thinking is that once hospital facilities are transferred to the newer structures, the present building could be retained for medical offices. It can pass earthquake standards as an office building.

Hartz: The new emergency room will be about 25,000 square feet; four times the current size. Throughout the state of California, many emergency rooms are closing. We are a district hospital and in order to meet the needs of this community, whether in times of disaster or life-threatening emergency, it is important to have an adequate facility. Some "for-profit" hospitals are looking at the bottom line, not necessarily the community needs. Washington Hospital is a community hospital and looks at this differently.

Wallace: Our emergency room has the second highest volume of visits per year among non-Kaiser hospitals in Alameda County. We handle a wide range of emergency care. Non-hospital medical needs that come to the emergency room are treated and then referred to the Washington Clinic in Washington West, open 8 a.m. - 8 p.m. seven days a week, as an urgent care alternative. Other Washington Hospital clinics serve as urgent care clinics as well.

There is a misconception that Kaiser and Palo Alto Medical Clinic members will get no benefit from this. The hospital is a community asset that is ready to help if there is a personal catastrophe or a community emergency. Washington Hospital takes care of Kaiser patients all the time. Emergency room facilities at Kaiser in Fremont have limited services. Kaiser members have come to Washington Hospital for emergency situations like stroke and heart issues. They have been seen and many cases, operated on at Washington Hospital.

Stroke cases often need care immediately and cannot wait to be transported to another facility. Palo Alto Medical Clinic has no emergency room in this area. Also, for employees or retirees to assume that since they are currently a member of Kaiser or Palo Alto Medical Group, that will always be so, is somewhat na•ve. These things change. Washington Hospital is open to everyone regardless of the membership card they have in their wallet...or if they even have a wallet!

We are talking about the overall health of the community. Our job is to cure illness and prevent it. If you are working next to someone with a easily transmitted disease and it isn't treated, you are probably going to get it. We cannot ignore the whole community whether insured or not.

Hartz: When someone walks into an emergency room, federal law mandates treatment without regard to the type of illness, injury or insurance. We can educate people after the fact about urgent care clinics, but we are required to treat them at that time.

Wallace: Once people know about the clinic for non-hospital related emergencies, they use the urgent care facilities. It is quicker and a better experience.

TCV: Why has Washington Hospital waited until now to build a new ER?

Hartz: We have expanded the current location to its limits. About two years ago, we expanded the present ER, an eight bay expansion. We cannot go any further in the present facility. We have outgrown the footprint of the hospital.

TCV: Since the hospital is situated so close to a fault, was another location considered?

Hartz: There are no guarantees, but the most secure building techniques are used.

Wallace: These are techniques used in seismically active areas of the world. The costs of moving to another location would be enormous. Also, the hospital is located in the center of our service area.

Hartz: Even if the hospital was moved further away from the fault, in the event of a large earthquake, the result may be the same.

TCV: Will the new hospital building include additional services not currently housed at Washington Hospital?

Wallace: With the aging of our population, the need for joint surgeries is increasing dramatically. With hospital generated funds of $17 million, we will build a new Center for Joint Replacement. That money doesn't come out of the bond issue. We are continuing to focus on robotic surgery, too. Over the next ten years, we see our needs at approximately $476 million. $282 million is involved with construction of the new facilities and of that, the hospital is seeking $190 million from the bond measure. What we are asking the community to pay is a very small price for having this type of health care locally.

Hartz: It is important to note that even though the hospital is putting in the money for the programs, the additional space and beds as a result of the bond measure is necessary for these expanded services.

TCV: If Measure FF passes, who will be on the oversight committee?

Wallace: We are talking about this at the board level and considering bringing in a panel of experts who know a lot about construction and business bringing value to the process. We will look for people with construction experience, architectural experience, engineering experience and accounting experience to be on this committee.

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