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New Fulton hospital will save millions

New Fulton hospital will save millions

State faces unexpected costs if facility isn't built

January 30th, 2014 in News

By 1946, the Hyde Building, located near Biggs Forensic Center on the campus of Fulton State Hospital, was used to house 250 elderly women.

Photo by Julie Smith

If the state doesn't rebuild Fulton State Hospital over the next 10 years, the sate will incur substantial additional costs, state Budget Director Linda Luebbering testified Wednesday at a Missouri House budget committee hearing.

"First, there are capital costs if we don't rebuild," she said.

She said the state would run out of room for its expanding Sexual Offender Rehabilitation Treatment Services (SORTS). The program is expected to run out of space around 2017.

"It's part of the proposal to free up room to expand SORTS," she said. "If not, it (a new SORTS facility) is an $80 million project."

She also said there's about $70 million in deferred maintenance costs to the hospital's current facility that would have to be taken care of if a new hospital isn't built.

She estimates a new facility would save the state $4 million in operating costs.

"Fulton is expensive to operate," she said. "It's old and poorly designed. Because of this, we spend more on electricity, staff and workers' compensation than we would with a new building."

Office of Administration (OA) Commissioner Doug Nelson said 1 in 3 employees at Fulton State Hospital filed a workers' compensation claim last year. The state average is 1 in 23.

According to a report OA gave to lawmakers at Wednesday's hearing, worker's compensation costs at Fulton State Hospital are $4 million annually.

"Part of the challenge is just the layout of the facility," he said. "If you go to a more current, modular setting, there will be better control, a better environment for patients and a work area much better for employees. I think we've made some progress, but a new facility would help address that."

The current estimate for the cost of a new Fulton State Hospital is $211 million.

Luebbering said not building a new facility could put the hospital's DSH (Disproportionate Share) payments from Medicare and Medicaid at risk.

DSH payments are payments hospitals receive from Medicaid and Medicare for providing care to low-income and uninsured patients. Luebbering said the hospital generates more than $50 million in DSH payments a year, which goes toward general expenses.

"That money is contingent on that building remaining certified," she said. "We are constantly at risk of potentially not being certified. We've managed to get by, but $50 million is at risk if we don't get that building fixed."

According to the report given to lawmakers, the state's Department of Economic Development (DED) did an economic analysis of how a $211 million construction project, like Fulton State Hospital, could affect Missouri.

DED estimated a project of that size would bring more than 2,500 new jobs to the area.

"There would be 1,477 direct construction jobs created over the life of the project and approximately 1,055 jobs in the supply chain and in businesses that benefit from the spending of construction workers," the DED analysis stated.

Nelson said Gov. Jay Nixon's budget for the construction is what the governor believes is the best way for the state to move forward with the project.

"This is the time, now, with the economy moving in the right direction to do this," he said.


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