GALENA, Kan. —
Galena’s medical presence in the area is preparing to grow with the construction of Stateline Specialty Hospital, a specialty surgical hospital.
Dirt work has started for the hospital, which will be built just south of the existing Orthopaedic Specialists of the Four States building.
Joe Caputo, chief administrative officer of Orthopaedic Specialists of the Four States, said the 65,000-square-foot building would have four operating rooms and 16 inpatient beds, with room for future expansion. He talked about the plans Wednesday night at a Galena City Council meeting.
The construction cost is an estimated $13.5 million, with an additional $4.5 million for equipment and furnishings.
Caputo said the hospital will employ about 50 people.
“We’re excited about the project,” Caputo said. “We’re excited to be in Galena.”
Mayor Dale Oglesby said he, too, was excited.
“We love having you guys here,” Oglesby said. “The things that are happening because of your presence in our city are historic in proportion.”
Ortho Four States and its doctors will finance the building and equipment, but under a contract expected to be approved today by the City Council, the city will own the building and lease it to the doctors.
City Attorney Kevin Cure, at Wednesday night’s meeting, said federal law prohibits doctors from receiving Medicare or Medicaid payments from patients at a hospital the doctors own. He said that made it necessary for the city to own it.
Cure said potential revenue to the city from the hospital operation is conservatively estimated at $177,000 in the first year to $1.6 million in year 10.
“Does it have the potential to profit the city?” asked Oglesby. “I think it does.”
He said that was secondary to the improved quality of life it will provide to residents.
Ortho Four States opened its existing 52,000-square-foot building at the end of 2009 in Galena, with a construction cost of $8 million. Stateline Surgery Center opened later in the building. Caputo said during construction that a surgical hospital likely would be in the future plans.
Cure said under the arrangement, the city would appoint a board of directors to supervise the hospital.
“Essentially, it’s going to be another branch of our government that we’re operating,” Cure said.
He said the contracts he has worked out with Ortho Four States protects the city from liability. To be approved today are a lease contract and a management contract.
The city also will pursue licensing the hospital with the Kansas Department of Health and Environment.
Because the city will own it, the new building will be exempt from property taxes.
Caputo said an opening is planned in December 2012 or January 2013.
Ortho Four State currently has nine doctors in its group. Caputo said a foot and ankle surgeon will join the group in February 2012; a foot and ankle surgeon in August 2012; and an additional spine surgeon in August 2013.
Also planned is a medical office building owned by other doctors, Caputo said.