- Created on Monday, 13 July 2009 15:54
Contact: Collette DuValle, 317-373-2391
Wishard to seek $703 million in bonding to replace deteriorating facilities
No property tax increase required.
Indianapolis, July 12, 2009 -- Today, Wishard Health Services announced, after years of extensive study, that a ceiling of $703 million in low-interest public bonds is needed to support building a new $754 million Wishard Hospital campus. The new Wishard will replace failing buildings that cannot be renovated and will ensure Wishard's critical and life-saving services remain available to the community.
Each of Wishard's three funding plan scenarios shows the project can be funded with current revenues and will not require any tax increase. Wishard also announced it has saved more than $150 million to put toward the project.
"Wishard has developed most probable-, best- and worst-case scenarios on the cost of a new Wishard," said Matthew R. Gutwein, president and CEO of Health and Hospital Corporation (HHC) of Marion County. "Even under the highly unlikely worst-case scenario, Wishard has adequate revenue to meet all bond obligations with no property tax increase."
Hospital officials say the most-probable scenario would result in $612.9 million in bonds. Under the best-case scenario, Wishard would lower bonding needed to $604.3 million using Build America Bonds included in the federal economic stimulus plan which is intended to encourage construction projects like construction of a new Wishard. The absolute worst-possible case, which has Wishard unable to raise any money through philanthropy and paying a full 100 basis points over the current bond rate, still leaves Wishard $6.7 million more than is needed to cover bond payments with no tax increase.
The new Wishard is planned for a site currently owned by Indiana University on IUPUI's campus. The current Wishard site would be repurposed for the university's expansion plans. The new Wishard site is ideally situated for patients, doctors, caregivers and students who practice on the IU Medical Center campus, at the RL Roudebush VA Medical Center and at Wishard.
Architectural and engineering studies determined there is no option to renovate the current Wishard Hospital. Wishard's mechanical and electrical systems are failing now - and experts say it is inevitable that in a short time they will fail completely.
Many of the buildings needed to provide life-saving care cannot be renovated to accommodate the equipment and utilities standard in a modern hospital. Room sizes simply cannot be expanded because of the position of load-bearing columns and walls. With 17 buildings, Wishard's space is inefficient, confusing and expensive to operate. More than 25 percent of Wishard's buildings were built before World War II and are 69 to 95 years old. Sixty percent were built before 1970.
"Wishard does not have the option to stay in its current facilities," said Gutwein. "Although the buildings' problems can be fixed with a bandage today, soon, they will require a tourniquet. Wishard's aging facilities are the single largest long-term economic challenge facing the health system in the next 20 years."
Wishard receives $24.9 million annually from local property taxes to help offset the cost of care to the indigent and underserved. Other funding resources for the project include federal revenue and reimbursements, and philanthropy advanced by the Wishard Foundation.
"We are grateful for the property tax support we receive from the residents of Marion County," said Dr. Lisa E. Harris, CEO and medical director of Wishard Health Services. "Careful stewardship has always been a primary focus for us, and, as we plan a new Wishard, this means meeting our community's needs without increasing our level of support from property taxes."
Those property taxes comprise a mere 5.4 percent of Wishard's $486.4 million budget - and in the past five years, HHC has reduced the percent of property taxes that contribute to Wishard's budget to nearly one third of what they were in 2004.
"Wishard is worth much more to central Indiana than it costs," Gutwein noted. "Each year, Wishard contributes more than $1.2 billion in economic impact - including $719 million in wages generated by Wishard and HHC activities. Local taxpayers receive a return on their $24.9 million that would thrill any investor."
Wishard engaged a team of national and local experts to analyze and evaluate every option to determine the most efficient, cost-effective and highest quality solution to address the failing facilities. One of the options explored was to do nothing. As buildings failed and could not be renovated, Wishard would close buildings and ultimately would be forced to shut down the hospital entirely.
"Wishard's closure would create a devastating vacuum in our community - where anyone could be in need of Wishard's services at any time, and where Marion County's underserved rely on us every day," said Harris.
Wishard is one of the five largest safety-net health care systems in the country, with more than 1.2 million outpatient visits per year. Wishard provides 64 percent of all the indigent inpatient care in Marion County - more than all the other hospitals in the county combined. Through its community based health programs, Wishard improves outcomes for vulnerable Hoosiers while reducing costs.
"Wishard has a track record as a low-cost provider of high quality care" said Harris. "A new Wishard is the lowest cost solution, the most cost-effective solution and best serves our community's needs for both health care and medical education."
Wishard has earned a reputation for providing critical care for central Indiana's most traumatic injuries and is one of only two adult Level I trauma centers in the state. Wishard has Indiana's busiest emergency department and the region's only adult burn center.
Wishard is the backbone of the state's system for educating the next generation of doctors, nurses and other care providers and serves as a center for research, with hundreds of clinical trials focused on the more effective and efficient delivery of medical care.
Wishard, one of the first in the nation to use electronic medical records more than 30 years ago, took that standard full circle just weeks ago, when it became the first in the nation to use electronic medical records in ambulances in the field to improve care for the patient prior to transport.
The new hospital facilities will include a 303-bed hospital, outpatient clinic building, power plant, parking garage and facilities for medical education and research.
Independent studies have concluded that a new Wishard will reduce the total space by nearly one third from 1.7 million square feet to 1.2 million square feet, serve more patients and save 45 percent in utility costs.
HHC will participate in a county-wide referendum on November 3, 2009 to obtain approval to issue bonds. More information is available for the public at WishardFacts.org.