STATE OF ILLINOIS HEALTH FACILITIES AND SERVICES REVIEW BOARD PROJECT NO:

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1 52 DOCKET NO: H-3 BOARD MEETING: October 3-31, 212 FACILITY NAME: St. Alexius Medical Center PROJECT NO: CITY: Hoffman Estates PROJECT COST: Original: $4,577,328 Current: TYPE OF PROJECT: Non-Substantive HSA: VII DESCRIPTION: The applicants (St. Alexius Medical Center, Alexian Brothers Health System, and Ascension Health) are proposing to add 8 Neonatal Intensive Care Beds ( NICU ) to an existing 8 bed NICU category of service. The total cost of the project is $4,577,328. The anticipated completion date is October 31, 213. Page 1

2 EXECUTIVE SUMMARY PROJECT DESCRIPTION: The applicants (St. Alexius Medical Center, Alexian Brothers Health System, and Ascension Health) are proposing to add 8 Neonatal Intensive Care Beds ( NICU ) to an existing 8 bed NICU category of service. The total cost of the project is $4,577,328. The anticipated completion date is October 31, 213. WHY THE PROJECT IS BEFORE THE STATE BOARD: The applicants are before the State Board because the number of beds requested exceeds the 1% or 2 bed rule every two years. The applicants have added beds as part of Permit #9-54 and the beds have not been operational for two years. PURPOSE OF THE PROJECT: The applicants are proposing this NICU addition to address the need for this service in the far northwestern suburbs. BACKGROUND/COMPLIANCE ISSUES: St. Alexius Medical Center and Alexian Brothers Health System received a CON Permit (#7-146) on April 8, 28 to establish an eight-station neonatal intensive cans unit ("NICU") at St. Alexius Medical Center; and that program became operational in July 21. On March 2, 21 the applicants received a CON Permit (#9-54) for a $117 million modernization project at St. Alexius Medical Center; and that project is anticipated to be completed during the first quarter of 214. On December 6, 211 the State Board approved a change of ownership for this facility to Ascension Health The State Board Staff notes the applicants are compliant with all reporting requirements and for past projects and clinical data. PUBLIC HEARING/COMMENT No public hearing was requested and no letters of support or opposition were received by the State Board Staff. FINANCIAL AND ECONOMIC FEASIBILITY: The applicants have an A or better bond rating and audited financial statements were provided as requested. The applicants have sufficient funds to fund the project. CONCLUSIONS: The applicants have documented that they are operating at or above the State Board s target occupancy of 75% since the inception of the NICU service. The applicants have met all of the requirements of the State Board to add beds to the NICU service. The applicants addressed a total of 13 review criteria and have met all of the criteria related to the addition of NICU beds. Page 2

3 STATE BOARD STAFF REPORT St. Alexius Medical Center #12-64 APPLICATION SUMMARY Applicants St. Alexius Medical Center, Alexian Brothers Health System, Ascension Health Facility Name St. Alexius Medical Center Location Hoffman Estates Application Received July 26, 212 Application Deemed Complete July 26, 212 Scheduled Review Period Ended September 26, 212 Review Period Extended by the State Board Staff No Public Hearing Requested No Applicants Deferred Project No Can Applicants Request Another Deferral? Yes Applicants s Modified the Project No I. The Proposed Project The applicants (St. Alexius Medical Center, Alexian Brothers Health System, and Ascension Health) are proposing to add 8 Neonatal Intensive Care Beds ( NICU ) to an existing 8 bed NICU category of service. The total cost of the project is $4,577,328. II. Summary of Findings A. The State Board Staff finds the proposed project appears to be in conformance with the provisions of Part 111. B. The State Board Staff finds the proposed project appears to be in conformance with the provisions of Part 112. III. General Information The applicants are St. Alexius Medical Center, Alexian Brothers Health System, and Ascension Health. St. Alexius Medical Center is located at 1555 N. Barrington Road, in Hoffman Estates in the HSA-VII hospital health service area and the HSA 6789 Neonatal service area. The operating entity is St. Alexius Medical Center and the owner of the site is Ascension Health. Page 3

4 There are 19 additional hospitals with neonatal intensive care units located in the HSA-6789 neonatal planning area. The State Board does not calculate a bed need for neonatal intensive care beds. Target occupancy for neonatal intensive care service is 75%. No land was acquired for this project. Per 77 IAC this is a non-substantive project subject to both a Part 111 and Part 112 review. Project obligation is contingent upon permit issuance. The anticipated project completion date for the Project is October 31, 213. CY 211 Hospital profile for St Alexius Medical Center is included at the end of this report. Summary of Support and Opposition Comments A public hearing was offered on this project; however, no hearing was requested. The State Board Staff has received no support or opposition letters regarding this project. IV. The Proposed Project - Details The applicants (St. Alexius Medical Center, Alexian Brothers Health System and Ascension Health) are proposing to add 8 Neonatal Intensive Care Beds ( NICU ) to an existing 8 bed NICU category of service in 7,618 GSF of modernized space. The total cost of the project is $4,577,328. V. Project Costs and Sources of Funds The proposed project is being funded with cash and securities totaling $2,988,65 and other funds and sources of $1,588,678. Table One outlines the project s uses and sources of funds. The other sources of funds represents the cost of the "core and shell" for the space to be used for the additional eight NICU stations, per Application #9-54. The space was initially designated as "nonclinical", and the associated "core and shell" cost is being included in this project cost. The State Board Staff notes the project has clinical components only. TABLE ONE Project Uses and Sources of Funds Uses of Funds Clinical Total Preplanning Costs $25, $25, New Construction Contracts $1,588,678 $1,588,678 Page 4

5 TABLE ONE Project Uses and Sources of Funds Uses of Funds Clinical Total Modernization $1,462,2 $1,462,2 Contingencies $73, $73, A & E Fees $168,8 $168,8 Consulting and Other Fees $8, $8, Movable or Other Equipment $1,179,85 $1,179,85 TOTALS $4,577,528 $4,577,528 Sources of Funds Cash and Securities $2,988,65 $2,988,65 Other funds and sources $1,588,678 $1,588,678 TOTALS $4,577,328 $4,577,328 VI. Cost/Space Requirements Table Two displays the project s cost/space requirements for the clinical and non clinical portions of the project. TABLE TWO Cost Space Requirements Departments Cost Existing GSF Proposed Total GSF New Mod. As Is Vacated Clinical NICU $4,577,328 2,742 7,616 4,874 2,742 Clinical Total $4,577,328 2,742 7,616 4,874 2,742 VII. Safety Net Statement/Charity Care The project is classified as being non-substantive, and a safety net impact statement was not required. The applicants did provide its Charity Care Data for 29, 21, and 211 in Table Three below. TABLE THREE St Alexius Medical Center Charity Care Information Net Revenue $34,415, $31,498, $327,217,8 Amount of Charity Care $29,56, $31,191, $4,593, Cost of Charity Care $4,435,21 $7,29,198 $8,618,783 Page 5

6 % of Cost of Charity Care to Net Revenue 1.46% 2.32% 2.63% VIII Project Background Purpose and Alternatives A. Criterion (a) - Background of Applicants The criterion reads as follows: 1) An applicant must demonstrate that it is fit, willing and able, and has the qualifications, background and character, to adequately provide a proper standard of health care service for the community. [2 ILCS 396/6] In evaluating the qualifications, background and character of the applicants, HFPB shall consider whether adverse action has been taken against the applicants, or against any health care facility owned or operated by the applicants, directly or indirectly, within three years preceding the filing of the application. A health care facility is considered "owned or operated" by every person or entity that owns, directly or indirectly, an ownership interest. If any person or entity owns any option to acquire stock, the stock shall be considered to be owned by such person or entity (refer to 77 Ill. Adm. Code 11 and 113 for definitions of terms such as "adverse action", "ownership interest" and "principal shareholder"). The applicants have provided the necessary documentation as required by the State Board rules. The applicants provided a listing of facilities currently owned/operated by the applicants, and attestation that no adverse actions have been taken against their facilities owned and/or operated by the applicants during the three years prior to the filing of the application. The application also contains authorization permitting HFPB and Illinois Department of Public Health (IDPH) access to any documents necessary to verify the information submitted. B. Criterion (b) Purpose of the Project The criterion states: Page 6

7 The applicants shall document that the project will provide health services that improve the health care or well-being of the market area population to be served. The applicants shall define the planning area or market area, or other, per the applicants' definition. The applicants state the following in regards to the purpose The proposed project, which is limited to the addition of eight neonatal intensive care unit ("NICU") stations at St Alexius Medical Center ("SAMC"), will improve access to this service for newborns by reducing travel times to other NICUs when St Alexius Medical Center's unit is operating at capacity. As of the filing of this application, Alexius NICU has been operational for 23 months. The State Board s 75% target utilization level was surpassed during the initial 12-month period, as has been the case during the subsequent eleven months. In fact, a sufficient number of NICU patient days of care were provided during that 11-month period to ensure that the target utilization level will be surpassed during the second twelve months of operation. Also significant is the payor mix of newborns admitted to the N1CU. 34.2% of all non Medicare recipients admitted to St. Alexius in 211 were Medicaid recipients. During that same period, 47.5% of the newborns admitted to the NICU were covered by Medicaid. It is anticipated that the planning or service area will not change appreciably from the existing services area, which is comprised of the far northwestern suburbs. Newborns from throughout the far northwestern suburbs are routinely admitted to St. Alexius Medical Center Level III nursery following delivery at the hospital (St. Alexius Medical Center does not operate a transport program for newborns from other hospitals), with twenty-three ZIP Code areas accounting for 82.52% of the admissions. Each of those ZIP Code areas accounted for a minimum of 1.% of the NICU admissions during the twelve month period. The measurable goals of the project, which are intended to be reached within three months of the project's completion are: 1) the elimination of the need to refuse admission to the NICU due to a lack of available stations, and 2) the lowering of the NICU's occupancy rate, consistent with the State Board standard. C. Criterion (c) Alternatives to the Proposed Project The criterion states: The applicants shall document that the proposed project is the most effective or least costly alternative for meeting the health care needs of the population to be served by the project. The applicants state that they considered the following alternatives: 1. Do nothing 2. Add four stations Page 7

8 3. The proposed project The applicants rejected the first two alternatives because they did not address the need identified by the proposed project. IX. Section Project Scope and Size, Utilization and Unfinished/Shell Space A. Criterion (a) - Size of Project The criterion states: The applicants shall document that the amount of physical space proposed for the project is necessary and not excessive. The proposed gross square footage (GSF) cannot exceed the GSF standards of Appendix B, unless the additional GSF can be justified by documenting one of the following: 1) Additional space is needed due to the scope of services provided, justified by clinical or operational needs, as supported by published data or studies; 2) The existing facility's physical configuration has constraints or impediments and requires an architectural design that results in a size exceeding the standards of Appendix B; 3) The project involves the conversion of existing bed space that results in excess square footage. The applicants are proposing 7,616 GSF for 16 NICU beds. This equates to 476 GSF per bed. This is within the State Board standard of GSF per bed. The applicants have met the requirements of this criterion. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT APPEARS TO BE IN CONFORMANCE WITH THE PROJECT SIZE CRITERION (77 IAC (a)). B. Criterion (b) - Project Services Utilization The criterion states: Page 8

9 This criterion is applicable only to projects or portions of projects that involve services, functions or equipment for which HFPB has established utilization standards or occupancy targets in 77 Ill. Adm. Code 11. The applicants shall document that, in the second year of operation, the annual utilization of the service or equipment shall meet or exceed the utilization standards specified in Appendix B. The applicants provided copies of physician referral letters and have provided evidence that the proposed 16 bed NICU unit will be at 75% target occupancy by the second year after project completion. See page of the application for permit. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT APPEARS TO BE IN CONFORMANCE WITH THE PROJECT UTILIZATION CRITERION (77 IAC (b)). X. Section Neonatal Intensive Care A) Criterion (a) - Staffing 1) The applicant must document that the personnel possessing proper credentials in the following categories are available to staff the service: A) Full-time Neonatal Director a neonatologist as defined in Section B) Full-time Subspecialty Obstetrical Director an obstetrician certified by the American Board of Obstetrics and Gynecology in the subspecialty of Maternal and Fetal Medicine or a licensed osteopathic physician with equivalent training and experience and certified by the American Osteopathic Board of Obstetricians and Gynecologists. C) Other neonatologists and obstetricians sufficient in number to serve the projected number of maternal and neonatal patients to be served by the facility and to ensure adequate back-up to the neonatal and obstetrical directors Page 9

10 so that there will be continuity of patient care and consultation. D) Full-time Nurse-Director of the obstetric-newborn nursing service who is experienced in perinatal nursing, and preferably holds a master's degree. E) Other nurses adequate in number to serve the projected number of maternal and neonatal patients to be served by the facility. F) Board-Certified Anesthesiologist with training in maternal, fetal and neonatal anesthesia (24-hour availability). G) One or more licensed social workers. H) Respiratory therapists with experience in neonatal care and adequate in number to ensure availability of a minimum of one respiratory therapist for every four patients on mechanical ventilators. I) Registered dietician with experience in perinatal nutrition. 2) Documentation shall consist of: A) letters of interest from potential employees; B) applications filed with the applicant for a position; C) signed contracts with required staff; or D) a narrative explanation of how other positions will be filled. The applicants have provided the necessary documentation to address this criterion at pages of the application for permit. The applicants state The NICU nursing staff consists of 35.1 FTE RNs, and routinely "floats between the NICU and the Level I nursery, resulting in both a Level I nursing staff more highly qualified than typical and a larger pool of qualified RNs to staff the Level III nursery. With the proposed addition of eight Page 1

11 Level III stations, 13.8 additional PTE RN positions will be filled. St. A!exius does not anticipate any unusual difficulties in attracting high caliber staff for these positions. As is the norm at SAMC, the positions will initially be made available to qualified candidates from the two Alexian Brothers Hospital Network general hospitals through in-house postings, after which neonatal recruitment avenue such as advertisements in local newspapers and professional publications which will be utilized, The active recruitment process will be initiated 2-3 months prior to the opening of the incremental Level III stations, with on-site orientation taking place in the existing NICU. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT APPEARS TO BE IN CONFORMANCE WITH THE STAFFING CRITERION (77 IAC (a)). B) Criterion (b) - Letter of Agreement The applicant must document that a letter of agreement with the regional perinatal center for neonatal intensive care services has been signed. Such letter of agreement must fulfill the conditions for such letters found in the Regionalized Perinatal Health Care Code (77 Ill. Adm. Code 64) and be approved by the Department of Human Services. A copy of the letter shall serve as documentation. The appropriate letter has been provided as required. The applicants have met the requirements of this criterion. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT APPEARS TO BE IN CONFORMANCE WITH THE LETTER OF AGREEMENT CRITERION (77 IAC (b)). C) Criterion (c) - Need for Additional Beds 1) The applicant must document that the proposed neonatal intensive care beds are needed. Bed need may be documented by any of the following: A) no neonatal intensive care services exist within the planning area; Page 11

12 B) that for each of the last two years for which data is available, the yearly occupancy rate for the service at the affiliated perinatal center has exceeded the target occupancy rate; C) existing providers of the service within the planning area cannot provide care to a patient caseload due to a limitation on funding for care providing; or D) that for each of the last two years for which data is available, the yearly occupancy rate for the service at the applicant facility has exceeded the target occupancy rate. The applicants stated the following: St. Alexius Medical Center's NICU admitted its first patient in August 21 and surpassed the 75% target occupancy rate on a monthly basis two months later in October 21, when its occupancy exceeded 85%. During the NICU s first twelve months of operation, 2,354 patient days of care were provided, resulting in an 8.6% occupancy rate. During the subsequent eleven months (August 1, 21I-June 3, 212), 2,316 patient days of care were provided) resulting in an average daily census of 6.93 patients during that period. Even if no NICU patient days of care were to be provided in July the occupancy rate for the second twelve-month period following the NICU's opening (August 1, 211- July 31, 212) would be 79.3%. As a result, the threshold for need addressed in Subsection lll.93 has been surpassed in the initial 24 months of operation. It appears the applicants have met the requirements of this criterion. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT APPEARS TO BE IN CONFORMANCE WITH THE NEED FOR ADDITIONAL BEDS CRITERION (77 IAC (c)). D) Criterion (d) - Obstetric Service The applicant must document the availability within the facility of an obstetric service capable of providing care to high-risk mothers. Documentation must include a detailed assessment of obstetric service capability. This requirement does not apply to a facility dedicated to the care of children. Page 12

13 St. Alexius Medical Center has an obstetrics service, including the ability to provide services to high-risk mothers. During 211 nearly 3,2 babies were born at the Medical Center. The high-risk staff includes four maternal fetal medicine specialists and a geneticist. These physicians are supported by specially-trained nurses and other personnel. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT APPEARS TO BE IN CONFORMANCE WITH THE OBSTETRIC SERVCICE CRITERION (77 IAC (d)). XI Availability of Funds The applicant shall document that financial resources shall be available and be equal to or exceed the estimated total project cost plus any related project costs by providing evidence of sufficient financial resources from the following sources, as applicable: a) Cash and Securities statements (e.g., audited financial statements, letters from financial institutions, board resolutions) as to: 1) the amount of cash and securities available for the project, including the identification of any security, its value and availability of such funds; and 2) interest to be earned on depreciation account funds or to be earned on any asset from the date of applicant's submission through project completion; b) Pledges for anticipated pledges, a summary of the anticipated pledges showing anticipated receipts and discounted value, estimated time table of gross receipts and related fundraising expenses, and a discussion of past fundraising experience. Provide a list of confirmed pledges from major donors (over $1,); c) Gifts and Bequests verification of the dollar amount, identification of any conditions of use, and the estimated time table of receipts; d) Debt a statement of the estimated terms and conditions (including the debt time period, variable or permanent interest rates over the debt time period, and the anticipated repayment schedule) for Page 13

14 any interim and for the permanent financing proposed to fund the project, including: 1) For general obligation bonds, proof of passage of the required referendum or evidence that the governmental unit has the authority to issue the bonds and evidence of the dollar amount of the issue, including any discounting anticipated; 2) For revenue bonds, proof of the feasibility of securing the specified amount and interest rate; 3) For mortgages, a letter from the prospective lender attesting to the expectation of making the loan in the amount and time indicated, including the anticipated interest rate and any conditions associated with the mortgage, such as, but not limited to, adjustable interest rates, balloon payments, etc.; 4) For any lease, a copy of the lease, including all the terms and conditions, including any purchase options, any capital improvements to the property and provision of capital equipment; e) Governmental Appropriations a copy of the appropriation Act or ordinance accompanied by a statement of funding availability from an official of the governmental unit. If funds are to be made available from subsequent fiscal years, a copy of a resolution or other action of the governmental unit attesting to this intent; f) Grants a letter from the granting agency as to the availability of funds in terms of the amount and time of receipt; g) All Other Funds and Sources verification of the amount and type of any other funds that will be used for the project. The proposed project is being funded with cash and securities totaling $2,988,65 and other funds and sources of $1,588,678. The applicants have an A or better bond rating. The applicants have met the requirements of this criterion. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT APPEARS TO MEET THE REQUIREMENTS OF THE AVAILABILITY Page 14

15 OF FUNDS CRITERION (77 IAC ) XII Financial Viability a) Financial Viability Waiver The applicant is NOT required to submit financial viability ratios if: 1) all project capital expenditures, including capital expended through a lease, are completely funded through internal resources (cash, securities or received pledges); or HFSRB NOTE: Documentation of internal resources availability shall be available as of the date the application is deemed complete. 2) the applicant's current debt financing or projected debt financing is insured or anticipated to be insured by Municipal Bond Insurance Association Inc. (MBIA), or its equivalent; or HFSRB NOTE: MBIA Inc is a holding company whose subsidiaries provide financial guarantee insurance for municipal bonds and structured financial projects. MBIA coverage is used to promote credit enhancement as MBIA would pay the debt (both principal and interest) in case of the bond issuer's default. 3) the applicant provides a third-party surety bond or performance bond letter of credit from an A rated guarantor (insurance company, bank or investing firm) guaranteeing project completion within the approved financial and project criteria. b) Viability Ratios The applicant or co-applicant that is responsible for funding or guaranteeing funding of the project shall provide viability ratios for the latest three years for which audited financial statements are available and for the first full fiscal year at target utilization, but no more than two years following project completion. When the applicant's facility does not have facility specific financial statements and the facility is a member of a health care system that has combined or consolidated financial statements, the system's viability ratios shall be provided. If the health care system includes one or more hospitals, the system's viability ratios shall be evaluated for conformance with the applicable Page 15

16 hospital standards. The latest three years' audited financial statements shall consist of: 1) Balance sheet; 2) Revenues and expenses statement; 3) Changes in fund balance; and 4) Changes in financial position. HFSRB NOTE: To develop the above ratios, facilities shall use and submit audited financial statements. If audited financial statements are not available, the applicant shall use and submit Federal Internal Revenue Service tax returns or the Federal Internal Revenue Service 99 report with accompanying schedules. If the project involves the establishment of a new facility and/or the applicant is a new entity, supporting schedules to support the numbers shall be provided documenting how the numbers have been compiled or projected. c) Variance Applicants not in compliance with any of the viability ratios shall document that another organization, public or private, shall assume the legal responsibility to meet the debt obligations should the applicant default. The proposed project is being funded with cash and securities totaling $2,988,65 and other funds and sources of $1,588,678. The applicants have an A or better bond rating. The applicants have met the requirements of this criterion. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT APPEARS TO MEET THE REQUIREMENTS OF THE FINANCIAL VIABILITY CRITERION (77 IAC ) XIII. Section Economic Feasibility A) Criterion (a) - Reasonableness of Financing Arrangements Page 16

17 The applicant shall document the reasonableness of financing arrangements by submitting a notarized statement signed by an authorized representative that attests to one of the following: 1) That the total estimated project costs and related costs will be funded in total with cash and equivalents, including investment securities, unrestricted funds, received pledge receipts and funded depreciation; or 2) That the total estimated project costs and related costs will be funded in total or in part by borrowing because: A) A portion or all of the cash and equivalents must be retained in the balance sheet asset accounts in order to maintain a current ratio of at least 2. times for hospitals and 1.5 times for all other facilities; or B) Borrowing is less costly than the liquidation of existing investments, and the existing investments being retained may be converted to cash or used to retire debt within a 6- day period. The proposed project is being funded with cash and securities totaling $2,988,65 and other funds and sources of $1,588,678. The applicants have an A or better bond rating. The applicants have met the requirements of this criterion. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT APPEARS TO MEET THE REQUIREMENTS OF THE REASONABLENESS OF FINANCING CRITERION (77 IAC (a)) B) Criterion Conditions of Debt Financing This criterion is applicable only to projects that involve debt financing. The applicant shall document that the conditions of debt financing are reasonable by submitting a notarized statement signed by an authorized representative that attests to the following, as applicable: 1) That the selected form of debt financing for the project will be at the lowest net cost available; Page 17

18 2) That the selected form of debt financing will not be at the lowest net cost available, but is more advantageous due to such terms as prepayment privileges, no required mortgage, access to additional indebtedness, term (years), financing costs and other factors; 3) That the project involves (in total or in part) the leasing of equipment or facilities and that the expenses incurred with leasing a facility or equipment are less costly than constructing a new facility or purchasing new equipment The proposed project is being funded with cash and securities totaling $2,988,65 and other funds and sources of $1,588,678. The applicants have an A or better bond rating. The applicants have met the requirements of this criterion. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT APPEARS TO MEET THE REQUIREMENTS OF THE TERMS OF DEBT FINANCING CRITERION (77 IAC (a)) C) Criterion (c) - Reasonableness of Project and Related Costs The applicant shall document that the estimated project costs are reasonable and shall document compliance with the following: 1) Preplanning costs shall not exceed the standards detailed in Appendix A of this Part. 2) Total costs for site survey, soil investigation fees and site preparation shall not exceed the standards detailed in Appendix A unless the applicant documents site constraints or complexities and provides evidence that the costs are similar to or consistent with other projects that have experienced similar constraints or complexities. 3) Construction and modernization costs per square foot shall not exceed the standards detailed in Appendix A unless the applicant documents construction constraints or other design complexities and provides evidence that the costs are similar to or consistent with other projects that have experienced similar constraints or complexities. Page 18

19 HFSRB NOTE: Construction and modernization costs (i.e., all costs contained in construction and modernization contracts) plus contingencies shall be evaluated for conformance with the standards detailed in Appendix A. 4) Contingencies (stated as a percentage of construction costs for the project's stage of architectural development) shall not exceed the standards detailed in Appendix A unless the applicant documents construction constraints or other design complexities and provides evidence that the costs are similar to or consistent with other projects that have experienced similar constraints or complexities. HFSRB NOTE: Contingencies shall be limited in use for construction or modernization (line item) costs only and shall be included in construction and modernization cost per square foot calculations and evaluated for conformance with the standards detailed in Appendix A. If, subsequent to permit issuance, contingencies are proposed to be used for other component (line item) costs, an alteration to the permit (as detailed in 77 Ill. Adm. Code ) must be approved by HFSRB prior to that use. 5) New construction or modernization fees and architectural/engineering fees shall not exceed the fee schedule standards detailed in Appendix A unless the applicant documents construction constraints or other design complexities and provides evidence that the costs are similar to or consistent with other projects that have experienced similar constraints or complexities. 6) The costs of all capitalized equipment not included in construction contracts shall not exceed the standards for equipment as detailed in Appendix A unless the applicant documents the need for additional or specialized equipment due to the scope or complexities of the services to be provided. As documentation, the applicant must provide evidence that the costs are similar to or consistent with other projects of similar scope and complexity, and attest that the equipment will be acquired at the lowest net cost available, or that the choice of higher cost equipment is justified due to such factors as, but not Page 19

20 limited to, maintenance agreements, options to purchase, or greater diagnostic or therapeutic capabilities. 7) Building acquisition, net interest expense, and other estimated costs shall not exceed the standards detailed in Appendix A. If Appendix A does not specify a standard for the cost component, the applicant shall provide documentation that the costs are consistent with industry norms based upon a comparison with previously approved projects of similar scope and complexity. 8) Cost Complexity Index (to be applied to hospitals only) The mix of service areas for new construction and modernization will be adjusted by the table of cost complexity index detailed in Appendix A. The costs identified below are for clinical expenses only. Preplanning Costs These costs total $25,. These costs are less than 1% of construction, modernization contingency and movable equipment. This appears reasonable when compared to the State Board Standard of 1.8% New Construction These costs are $1,588,678 or $ This appears reasonable when compared to the State Board standard of $ This represents the cost of the "core and shell" for the space to be used for the additional eight NICU stations, per Application #9-54. The space was initially designated as "non-clinical", and the associated "core and shell" cost is being included in this project cost. Modernization and a share of contingency costs These costs are $1,535,2 or $ This appears reasonable when compared to the State Board standard of $ Contingencies This cost is $73, or 5.% of modernization and costs. These costs appear reasonable when compared to the State Board Standard of 1%-15%. Architectural and Engineering Fees This cost is $168,8 or 5.4% of construction, modernization and contingency. This appears reasonable when compared to the State Board standard 7.2%-1.54%. Page 2

21 Consulting and Other Fees These costs total $8,. The State Board does not have a standard for this cost. Movable or Other Equipment These costs total $1,179,85. The State Board does not have a standard for these costs. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT DOES APPEAR TO BE IN CONFORMANCE WITH THE REASONABLENESS OF PROJECT COSTS CRITERION (77 IAC (c)). D) Criterion (d) Projected Operating Costs The applicant shall provide the projected direct annual operating costs (in current dollars per equivalent patient day or unit of service) for the first full fiscal year at target utilization but no more than two years following project completion. Directcosts means the fully allocated costs of salaries, benefits and supplies for the service. The applicants are projecting direct costs of $2,37 per adjusted patient day. The State Board does not have a standard for these costs. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT APPEARS TO MEET THE REQUIREMENTS OF PROJECTED OPERATING COSTS CRITERION (77 IAC (d)) E) Criterion (e) - Total Effect of the Project on Capital Costs The applicant shall provide the total projected annual capital costs (in current dollars per equivalent patient day) for the first full fiscal year at target utilization but no more than two years following project completion. The applicants are projecting capital costs of $264 per adjusted patient day. The State Board does not have a standard for these costs. THE STATE BOARD STAFF FINDS THE PROPOSED PROJECT APPEARS TO MEET THE REQUIREMENTS OF TOTAL EFFECT OF THE PROJECT ON CAPITAL COSTS CRITERION (77 IAC (e)) Page 21

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23 Hospital Profile - CY 211 St. Alexius Medical Center Hoffman Estates Page 1 Ownership, Management and General Information Patients by Race Patients by Ethnicity ADMINISTRATOR NAME: Edward M. Goldberg White # 61.3% Hispanic or Latino: 13.4% ADMINSTRATOR PHONE: Black # 4.9% Not Hispanic or Latino: 78.4% OWNERSHIP: Alexian Brothers Health System American Indian #.% Unknown: 8.2% OPERATOR: St. Alexius Medical Center Asian # 8.9% IDPH Number: 4994 MANAGEMENT: Church-Related Hawaiian/ Pacific #.% CERTIFICATION: HPA A-7 # Unknown: 24.9% FACILITY DESIGNATION: General Hospital HSA 7 ADDRESS 1555 N. Barrington Road CITY: Hoffman Estates COUNTY: Suburban Cook County Clinical Service Medical/Surgical -14 Years Years Years Years 75 Years + Pediatric Intensive Care Direct Admission Transfers Authorized CON Beds 12/31/ Peak Beds Setup and Staffed 191 Admissions Inpatient Days Observation Days 11,451 51,47 5,997 Obstetric/Gynecology ,42 8, Maternity 2,914 7,467 Clean Gynecology 488 1,38 Neonatal Long Term Care Swing Beds Acute Mental Illness Facility Utilization Data by Category of Service Peak Census ,419 8,264 3,377 14,52 2,35 9,53 3,62 19, ,919 1,658 1,728 7, ,728 7, ,379 Staff Bed Occupancy Rate % Rehabilitation.... Long-Term Acute Care.... Dedcated Observation Facility Utilization 31 17,684 72,26 7, Inpatients Outpatients (Includes ICU Direct Admissions Only) Inpatients and Outpatients Served by Payor Source Medicare Medicaid Other Public Private Insurance Private Pay Charity Care 34.8% 21.%.% 39.5% 1.1% 3.6% Totals 17, % 21.%.% 56.6% 1.8% 1.7% ,221 Financial Year Reported: 1/1/212 to 12/31/212 Inpatient and Outpatient Net Revenue by Payor Source Total Charity Charity Care Expense Medicare Medicaid Other Public Private Insurance Private Pay Totals Care 9,172,583 Inpatient Expense 35.8% 13.2%.% 45.1% 6.% 1.% Revenue ( $) Outpatient Revenue ( $) Average Length of Stay Average Daily Census CON Occupancy 12/31/ ,399,779 19,755,439 67,291,912 8,887, ,334,783 5,3, % 1.1%.% 59.% 14.8% 1.% 28,599,529 17,985,22 6,449 14,989,631 26,31, ,882,297 3,872,57 Total Charity Care as % of Net Revenue 2.8% Birthing Data Number of Total Births: 3,186 Number of Live Births: 3,169 Birthing Rooms: Labor Rooms: Delivery Rooms: Labor-Delivery-Recovery Rooms: 11 Labor-Delivery-Recovery-Postpartum Rooms: C-Section Rooms: 2 CSections Performed: 187 Newborn Nursery Utilization Level 1 Patient Days 6,181 Level 2 Patient Days 2,786 Level 2+ Patient Days Total Nursery Patientdays 8,967 Laboratory Studies Inpatient Studies 599,675 Outpatient Studies 629,534 Studies Performed Under Contract 78,431 Organ Transplantation Kidney: Heart: Lung: Heart/Lung: Pancreas: Liver: Total:

24 Hospital Profile - CY 211 St. Alexius Medical Center Hoffman Estates Surgery and Operating Room Utilization Surgical Specialty Operating Rooms Surgical Cases Surgical Hours Inpatient Outpatient Combined Total Inpatient Outpatient Inpatient Outpatient Total Hours Cardiovascular Dermatology General Gastroenterology Neurology OB/Gynecology Oral/Maxillofacial Ophthalmology Orthopedic Otolaryngology Plastic Surgery Podiatry Thoracic Urology Totals SURGICAL RECOVERY STATIONS Stage 1 Recovery Stations 16 Stage 2 Recovery Stations 24 Page 2 Hours per Case Inpatient Outpatient Procedure Type Gastrointestinal Laser Eye Procedures Pain Management Dedicated and Non-Dedicated Procedure Room Utilzation Procedure Rooms Surgical Cases Surgical Hours Inpatient Outpatient Combined Total Inpatient Outpatient Inpatient Outpatient Total Hours Cystoscopy Hours per Case Inpatient Outpatient Minor Procedure Multipurpose Non-Dedicated Rooms Cardiac Catheterization Labs Cardiac Catheterization Utilization Total Cath Labs (Dedicated+Nondedicated labs): 2 Total Cardiac Cath Procedures: 1,346 Cath Labs used for Angiography procedures 2 Diagnostic Catheterizations (-14) Dedicated Diagnostic Catheterization Labs Diagnostic Catheterizations (15+) 91 Dedicated Interventional Catheterization Labs Interventional Catheterizations (-14): Dedicated EP Catheterization Labs Interventional Catheterization (15+) 322 Emergency/Trauma Care EP Catheterizations (15+) 114 Certified Trauma Center Yes Level of Trauma Service Level 1 (Not Answered) Level 2 Adult Operating Rooms Dedicated for Trauma Care Number of Trauma Visits: 354 Patients Admitted from Trauma 99 Emergency Service Type: Comprehensive Number of Emergency Room Stations 33 Persons Treated by Emergency Services: 54,426 Patients Admitted from Emergency: 1,44 Total ED Visits (Emergency+Trauma): 54,78 Cardiac Surgery Data Total Cardiac Surgery Cases: Pediatric ( - 14 Years): Adult (15 Years and Older): Coronary Artery Bypass Grafts (CABGs) performed of total Cardiac Cases : Outpatient Service Data Total Outpatient Visits 256,736 Outpatient Visits at the Hospital/ Campus: 245,957 Outpatient Visits Offsite/off campus 1,779 Diagnostic/Interventional Equipment Examinations Owned Contract Inpatient Outpt Contract General Radiography/Fluoroscopy 22 27,798 52,757 Nuclear Medicine 3 2,263 3,123 Mammography ,128 Ultrasound 9 6,88 22,862 Angiography 1 Diagnostic Angiography Interventional Angiography Positron Emission Tomography (PET) Computerized Axial Tomography (CAT) 4 9,242 19,96 Magnetic Resonance Imaging 4 3,325 8,21 Treatment Equipment Owned Contract Therapies/ Treatments Lithotripsy Linear Accelerator 1 6,19 Image Guided Rad Therapy Intensity Modulated Rad Thrpy High Dose Brachytherapy Proton Beam Therapy Gamma Knife Cyber knife Source: 211 Annual Hospital Questionnaire, Illinois Department of Public Health, Health Systems Development.