Assembly approves expansion to Sitka Hospital’s clinic

The space designated for a $400,000 modular unit that attaches to the clinic, which the Sitka Assembly approved at their meeting Tuesday night (08-22-17). (Emily Kwong/KCAW photo)

Sitka Community Hospital is getting the office extension it asked for, but not without some big picture questions from the Sitka Assembly Tuesday night on how it will stay financially solvent into the future. The modular unit will expand the physical size of the clinic, allowing for more providers to see patients.

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The main tension in the Sitka Community Hospital conversation is between facts and assumptions.

Fact: the waiting list for the clinic is long. Hospital leadership told the Sitka Assembly that’s because the building for Mountainside Family Healthcare is too small to accommodate all the patients and staff. Two staff members are without a desk and others are cramped in close quarters.

Steve Hartford, the hospital’s director of operations, told the Sitka Assembly the clinic is projected to see 2,000 more clinic visits by next summer. Each one of those visits adds juice to the hospital’s finances.

The average net receivable from a clinic visit is $190 per visit. Back of the envelope calculations would suggest an infusion of nearly $380,000 over last year’s revenue should the clinic have all the space and all the systems in place to keep up with this projected demand.

At least, that’s the assumption — one that CEO Rob Allen said is backed by data.

“Every time we open up additional appointments, it fills. And that has been the case the past couple of years,” Allen said. “We’re certainly seeing it in all of our outpatient volumes across the hospital — not just in the clinic, but in rehabilitation and home health. We’re seeing that demand there and we’re working to meet it.”

With this modular unit, which is essentially a fancy trailer that connects to the current facility, there will be more exam rooms, urgent care services six days a week, and room for two more providers. Doctors Jeff Bentley and Jason Koskinen will begin in September.

Harford said this will allow the clinic to see twelve additional patients a day. The modular unit will be paid for out of the hospital’s own funds. They needed the Assembly’s authorization to appropriate $400,000 from the hospital’s unassigned fund balance to purchase and install the unit.

On second and final reading, the Assembly approved the hospital’s project. Some pushed back on assumptions that this clinic was the answer to all the hospital’s problems.

Deputy Mayor Bob Potrzuski agreed there’s a need for more space, but he felt the hospital’s long-term plan – built upon suggestions from an outside consultant, Stroudwater Associates – lacked detail and scope. Several of its suggestions for financial solvency require approval from the hospital board or the state. SEARHC’s Mt. Edgecumbe Hospital is also actively competing for Sitka Community Hospital’s patients.

“I need to know if the penny if I can and to the period, what the plan is moving forward. And I’ll be your biggest supporter,” Potrzuski said.

Three years ago, the city had to extend the hospital’s line of credit by $1 million to keep going. That’s an act of giving that would be tough to repeat — not with the price of oil squeezing the state and the Blue Lake dam debt squeezing Sitka.

Potrzuski spoke at length, for five whole minutes, about why he’s approaching these decisions with caution.

“When I hear that the Assembly is hurting morale, that’s painful to me,” Potrzuski said. “We don’t want people to lose their jobs. We don’t want people to lose their hospital. That’s not our motivation. Our motivation is what’s best for the city today, tomorrow, and into the future,” he said.

Meanwhile, fellow Assembly member Steven Eisenbeisz was satisfied with the hospital’s plan for its future and all for tacking on a modular unit.

“If we don’t give them the basic clinic space, which to me has the potential to become more profitable than a full service hospital into the future, we’re basically shutting it down and selling it at that point,” Eisenbeisz said. “So I’ll be voting in favor of this.”

Even though at one point, Eisenbeisz added, “I was a very large opponent of this building.”

When it comes to the hospital, the Assembly voices a lot of skepticism but have so far backed current leadership when it comes time to vote. The Modular Unit was approved unanimously, by a vote of 5-0.

Mayor Matthew Hunter and Assembly member Tristan Guevin were absent.

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