New facility to be done 3 to 5 years, buyer says


A sign of impending change: The the sale of Hillsboro Community Medical Center assets should be final in late summer or early fall. The buyer, HMC/CAH Consolidated Inc. of Kansas City, Mo., intends to start construction on the new facility at the intersection of U.S. Highway 56 and Industrial Road in August.

Area residents can expect a new, state-of-the-art hospital in Hillsboro in the near future.

That?s the contractural guarantee of HMC/CAH Conslidated Inc., a Kansas City-based company that will acquire the assets of Hillsboro Community Medical Center from the city of Hillsboro, and construct the new 15-bed, critical-access hospital over the next three to five years.

The acquisition was approved by the Hillsboro City Council at a special meeting Wednesday afternoon, June 18.


The proposed site for the new medical facility

?I think that when the new hospital is built, we?ll be really glad we were here today and agreed to do this because I think it is a big step forward for our community,? Mayor Delores Dalke said at the end of the meeting.

In addition to representatives from HMC/CAH, the meeting was attended by about 30 business and community leaders as well HCMC and local medical providers.

Following extended explanation and public questions, the council approved the sale by a 2-0 vote with councilors Shelby Dirks and Bob Watson voting in favor.

Though not a voting member of the council, Dalke voiced her personal endorsement of the proposal following the vote.

Councilor Byron McCarty attended the meeting, but abstained because of a conflict of interest?his wife is an HCMC employee. Councilor Shane Marler was out of town.

Before it becomes official, the agreement, which reverts technical ownership of the current facilities from the Public Building Commission to the city of Hillsboro, will be reviewed by the Kansas attorney general.

Dalke said she expected final closing will occur in late summer or early fall.

Larry Arthur, president of HMC/CAH, said he hopes construction on the new facility will begin in August. Until it is complete, HCMC will continue to operate in its current facility, which the company will lease from the city for a nominal fee.

The new facility, requiring an estimated investment of $10 million, will be located at the intersection of U.S. Highway 56 and Industrial Road, on land purchased within the past four years by the city of Hillsboro.

Key components

At the start of Wendesday?s special meeting, J.T. Klaus, the city?s bond attorney, explained the key componets of the transaction:

  • HMC/CAH will purchase all of the HCMC assets located at 701 S. Main, except for the real estate itself, which the city of Hillsboro will contine to own.

  • The city will sell 14 acres of land to HMC/CAH at the U.S. 56 and Industrial Road intersection, where HMC/CAH will build the new hospital.

  • The new hospital will comprise about 25,000 square feet and have 15 beds inititally; the capacity can be expanded to 25 beds, which is the limit for a criitical-access hospital.

  • The new hospital is expected to include emergency services, surgery, physical therapy, radiology, respirtatory therapy, outpatient clinic, dietary, nursing, cardiac rehabilitation and laboratory facilities ?to serve the citizens of Hillsboro and Marion County.?

    It will not offer obstetrics services, Arnold said later. ?It?s very difficult for a rural hospital to offer obstetrics just because of the liability issues associated with it,? he said. ?You have to have a farily substantial volume (of deliveries).?

  • During the three to five years needed to complete construction of the new facility, HMC will lease the existing hospital from the city for a nominal fee of $100.

  • The city will continue to lease the nursing-care wing of the existing hospital to Salem Hospital Inc., which will continue to operate the elderly-care component of the existing hospital.

  • Salem Hospital Inc. will lease the existing medical clinic at 704 S. Main to HMC during this transition period.

  • HMC is ?generally agreed? to maintain all of the existing hospital employees within their existing status.

  • HMC will pay the city of Hillsboro the full amount necessary to retire the city?s indebtedness associated with the hospital, which consists of about $1.175 million worth of Public Building Commission revenue bonds, plus interest.

  • The city will retain for other uses the revenue generated by a 5-mill local assessment established as a property and equipment reserve fund for the benefit of HCMC.

    Questions and answers

    When Dalke opened the meeting to public questions, several other aspects of the proposal were addressed.

  • HCMC has been operating ?pretty positively? over the past three or four years, according to Mike Ryan, chief exeuctive office.

    However, he added: ?Access to this kind of capital (for a new facility) would have been a lot more years down the road if we did not have this kind of opportunity,? Ryan said.

  • The current HCMC/Salem Hospital Inc. board of directors will serve as an advisory board for the new owners; the board will retain operational jurisdiction of the current elder-care unit.

    ?The worst thing we can do is be absentee owners that are basically not sensitive to the community needs,? Arthur said. ?We need to meet community needs in order to make this work.?

  • There is no plan at this point for the future use of the existing hospital facility once the transition to the new one is complete. Ownership of the real estate reverts to the city.

  • HCMC will continue to provide support services, such as swing bed, that it currently offers.

  • The current facility has 16 beds; the hospital?s maximum patient census in recent years has been 12, while the average daily census has been around three patients.

    ?Hopefully, we?ll change that just by keeping people who are traveling out (to urban hospitals) at home in the future,? Arthur said. He said the new facility will feature private rooms, each with its own shower.

    ?It will be as nice as anything you can get in your car and drive to, hopefully,? Arthur said.

  • HMC/CAH plans to include a medical building on campus, so the providing physicians are close to it, according to Arthur. The future use of existing medical buildings will need to be addressed by the local advisory board.

  • HMC/CAH has no plan at this point to bring in its own medical providers from the outside.


?It?s not our intent to bring in providers to compete with our exisiting physicans and providers,? Arthur said. ?If we do that, it will be over a period of time and with the consent of existing medical staff.

?The one thing we do not want to do is to interrupt what you?ve already created as a solid base of operations to begin with. We want to build on what you have, not necessarily tear down what you have.?

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