By Katheleen Conti
Globe Staff / January 9, 2011
Come spring, Anna Jaques Hospital in Newburyport will begin a $15 million renovation and expansion project, bucking the construction cutback trend that has been sweeping across many hospitals because of the lagging economy.
Hospital officials credit a five-year master plan for helping secure a $22.5 million low-interest, tax-exempt bond from the state, which will be used in part to fund the construction of 18 new single-occupancy inpatient rooms, an energy-efficient power plant, and a new outpatient entryway.
The 15-year bond marks the last piece of the master plan puzzle, created with input gathered from community focus groups over a six-month period five years ago, said George H. Ellison Jr., chairman of the board of trustees at Anna Jaques.
“We put together a plan that was going to be our road map for who we’re going to be and where we’re going to go,’’ Ellison said. “The main goal was to bring back business and patients we had lost to other facilities. We built a road map and followed it really to the letter.’’
Among the improvements already made over the past four years is a state-of-the-art emergency room with more beds and a system to fast-track the treatment of patients coming in with comparatively minor ailments, Ellison said. Improved operating profits and fund-raising in that period put the hospital in a financial position to seek the bond and “take advantage of a very low-interest environment,’’ he said.
Mark L. Goldstein, executive vice president at Anna Jaques, credits TD Bank, which purchased the bond, for working with MassDevelopment, the state’s economic development authority, to get tax-exempt financing so the savings could be passed on to the hospital by way of a 4.2 percent fixed rate. Part of the funds, $10 million, will be used to pay off older, higher-interest debt.
The financing deal is not only good news for Anna Jaques, but for all area hospitals, said Joe Kirkpatrick, senior vice president of health care finance at the Massachusetts Hospital Association.
“We did a survey of our membership and one of the major effects of the recession and the pressures that hospitals were experiencing was postponement of pursuing capital plans,’’ Kirkpatrick said. “In many cases, hospitals had to [put plans on] hold because they couldn’t get financing or financing was interrupted. So [Anna Jaques’ financing] is a good sign for the economy as well. Many hope that this is the beginning of a trend.’’
Kirkpatrick commended Anna Jaques officials for having a master plan that caters to the 17 communities the hospital serves in the Merrimack Valley.
“It’s the whole community that will reap the benefits,’’ he said. “Hospitals have got to have master plans to be able to survive into the future, to evaluate their operations in terms of the pressures that they’re facing.’’
Construction at Anna Jaques is expected to start in the spring and continue about 18 months, Goldstein said. Hospital officials expect the expansion will create 10 jobs. To help cover construction costs and raise money for additional capital needs, hospital officials have been engaged in a fund-raising campaign for about a year and have so far raised $4.5 million, Ellison said.
For many, the most anticipated part of the project will be the new inpatient unit with single-occupancy rooms.
“That was a mandate from the community; that was something they really desired,’’ Ellison said. “When you desire to go out and get back patients who have left you for whatever reason they left you, you have to go out and listen.’’
The new power plant will house energy-generating equipment anticipated to be 20 percent more efficient than the existing equipment, which dates back to the 1970s, Goldstein said. The existing plant, by the hospital entrance, will be demolished, allowing for the renovation of the outpatient entrance.
“There is a significant amount of savings that will come in through the reduction of usage on the energy side,’’ Goldstein said. “It will [also] save several thousands of dollars annually in maintenance costs. . . . The goal of the project is to make it a better patient experience here at Anna Jaques.’’
Katheleen Conti can be reached at kconti@globe.com.
© Copyright 2011 Globe Newspaper Company
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