Search for cheaper hospital expansion urged
Building new UNMH may turn out to be too ambitious, chancellor says
The University of New Mexico’s effort to build a new hospital picked up momentum last year when regents voted to proceed with architectural planning — a significant step forward for a project that had stalled once before.
But now the head of UNM’s Health Sciences Center says the university should at least consider some less costly expansion alternatives, including an addition to the existing hospital.
Dr. Paul Roth, the chancellor of the Health Sciences Center, said UNM’s hired architect would still design the 120-bed “modern medical facility” originally proposed for university-owned land north of Lomas near University. UNM has pitched that as the first phase of a larger development that could eventually replace all of the adult care units at the UNM Hospital’s 1950s facility.
However, Roth said last week that he would like the planning process to include consideration of less expensive ways to address the hospital’s chronic capacity challenges.
A bed shortage forced UNMH in the last year to deny 1,000 patient transfers from other hospitals around the state. UNMH is the state’s only Level 1 trauma center.
Roth said UNM is still intent on some form of expansion, but he said ongoing changes in the health care landscape may mean the financial projections buttressing the replacement hospi-
tal plan are less reliable. Roth said the need for additional beds “remains probably greater than it was before,” but UNM needs to review all financial forecasts before making any key decisions.
“I’m less convinced that we can project out five to 10 years with as much confidence as we had in the past,” Roth told the regents last week at UNM’s annual budget summit.
UNM has estimated it would cost $230 million to $250 million to build the 120-bed facility. It has banked more than $200 million that could help pay for it, though officials had not determined any specific financing structure.
Roth said UNMH should have a clearer revenue picture over the next year and “have a little bit more confidence coming back to the regents with a specific project.”
HSC officials told regents multiple factors could affect UNM Health System revenue in the near future, including the upheaval in New Mexico’s Medicaid insurer mix.
With the Jan. 1, 2019, start of “Centennial Care 2.0,” the state is adding a new managed care organization and dropping two of its four existing Medicaid administrators. UNM must negotiate new reimbursement contracts with the three Medicaid organizations by July 1.
Dr. Michael Richards, UNM’s vice chancellor for clinical affairs, told regents the increased emphasis on value-based care means more revenue will be dependent on measures such as patient satisfaction and outcomes.
Medicaid covers about 45 percent of UNM’s patient volume, he said.
In an interview, Roth said that UNM remains “absolutely committed” to increasing capacity but that he wants to be cautious.
“I tend to be relatively financially conservative, so I would rather be on just a little bit more firm ground before we commit huge resources of the hospital to a project,” he said.
UNM issued the request for hospital architectural and planning proposals last fall and intends to select a firm in the next 60 days, according to a spokeswoman.
Roth said he wants to increase the “scope of deliverables” to include other proposals that would still increase the total number of beds and operating rooms. He said that might include adding another wing to the current UNMH, though he said that isn’t ideal given that it’s already “hard to get from one place to the next” in the existing labyrinth.
HSC officials have for years pushed for a new hospital, saying it could not accommodate statewide demand and that its current facility is outdated and inefficient. A 96-bed proposal died at the state Board of Finance in 2012, when the Gov. Susana Martinez-led panel never held a vote on it.
UNM introduced a new, 120-bed proposal last year. The regents last August voted to allow UNM to proceed with advanced design. However, UNM would still have to get many additional approvals — including from the Board of Finance — before it could proceed with construction.