Newport Hospital plans 3-story expansion if $51 million bond passes on August ballot

Newport Hospital will build a three-story addition if its $51 million bond is approved this summer.

The proposed new wing of the rural hospital would include a larger emergency room, more surgical operating rooms and increased imaging, laboratories and rehabilitative therapy services.

Approval for funding of the new project will need 60% of the vote of the Pend Oreille Public Hospital District, which covers the southern half of the county .

"Quite frankly, we've hit our capacity within our current facility," hospital CEO Kim Manus said.

Cost to taxpayers within the public health district would be $1.47 per $1,000 of assessed property value. The bond would generate $51 million with an estimated 4.75% to 5.5% interest in the up to 30-year bond term.

Newport can send a bond for taxpayer approval because it is a public entity. Approximately half of the hospitals in the state are public in some form, but it is "not common" for these hospitals to request bond approval, said Association of Public Hospital Districts Executive Director Matthew Ellsworth.

"Hospital districts don't take this lightly. This is a once in a generation thing they do because it's a large amount of money and bonds are restricted to building buildings, and that's not something that a hospital does quite frequently," Ellsworth said.

Other recent hospital bonds include in Moses Lake and in Pullman, which involved building new facilities in their hospital. A little over half of the hospital bonds in the state have been approved in the past five years. Ellsworth described Newport's bond as "a little on the low side," compared to other similar bonds. Moses Lake approved a $140 million bond to replace their hospital.

Asked if she were confident the bond will be approved, Manus said that "people know how important their health care is."

If the bond passes, property taxpayers within the public hospital district can apply to waive as much as $500 medical bills at the hospital. The amount of relief received is based upon the amount of property taxes that went toward the bond that year from a given individual.

The renovations would demolish a section of the building constructed 68 years ago, replace it with a new three-story wing and relocate the main hospital entrance. Many services currently provided in that section of the building have no ability to grow or sustain current patient flows, Manus said.

"Our rehab therapy has outgrown that building. We're out of room of our lab and our electoral system can no longer support the technology used in the lab," she said." We do wound care here, and we could do more, and there's a need to do more. We also would like to do more with infusion therapy because we're pretty limited due to our space constraints. We want to schedule more surgeries, but we cannot accommodate them."

The expansion also would create a bigger emergency room additional space for outpatient services. The hospital consists of two buildings constructed in 1958 and 1993. The renovations would move the main hospital entrance to make access to both buildings and parking easier.

Planning for the bond started after a 2025 market study found demand for the hospital would be outmatched by the current space available.

According to the report, projected volumes in the emergency would require between 10 and 12 beds as well as specialty rooms for behavioral health, pediatric and patients under isolation precautions. The ER has approximately 10,000 patients a year, and it currently accommodates up to seven patients at a time. Annual emergency room visits are expected to increase by another 2,000 patients by 2035.

If funding is approved on the August ballot, construction of the new section will take approximately three and a half years to complete. The hospital will not shut down during renovations.

Manus said the hospital is on a strong financial footing, and state financial data shows the hospital has lost money only one year this decade, at a time when many other hospitals are struggling.

Situated on the border with Idaho, Newport hospital officials have said their finances are strained by charity care being used by Idaho residents, which ultimately are paid for by Washington taxpayers. A bill banning out-of-state residents from using charity care was introduced but did not pass the state Legislature earlier this year. According to the market assessment approximately 30% of patients at the hospital live in Idaho.

But if Newport officials were worried about the sustainability of the budget, they would be looking to pass a levy rather than a bond, Ellsworth said.

"Newport going for a bond is not to solve money and financial challenges. A bond is about expanding care in their community," he said.

While a bond is limited to capital projects, levies can be used for many purposes. Easier to pass and limited to 75 cents per $1,000 of assessed property value, many struggling public hospitals have passed levies in recent years, Ellsworth said. Approximately 76% of these levies have been approved but the funds they raise are on average only 2.2% of hospital revenues.

"Operational levies are a tool to improve hospital operations. Not only are more hospital districts asking for it, but they are asking for the maximum allowable rate," Ellsworth said.

East Adams Rural Healthcare was at risk of closing last year and put two levies on the ballot to keep that from happening. Voters in Ritzville rejected one levy and approved another for emergency medical response in the county.

By expanding the hospital Newport is hoping to avoid getting to a point of financial insolvency seen in other rural hospitals.

"We know that there's going to be changes in healthcare, but what we have found is that growing is our best strategy, as opposed to pulling back or staying the same is the way to do things right now," Manus said.

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