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Challenge ends over hospital's open heart unit
By JIM ROSS, Times Staff Writer INVERNESS -- The last legal hurdle is gone. Now Citrus Memorial Hospital can do what it has wanted to do for years: build an open heart surgery program for adults. The breakthrough came when a Hernando County hospital stopped challenging a state order that had given Citrus Memorial the permission it needed to build. Construction on the new unit should begin in September and be finished in late 2003, the builder told Citrus Memorial's governing board Monday night. The Robins & Morton Group, based in Birmingham, Ala., will serve as contractor. Gresham Smith and Partners, which has offices in Jacksonville, Tampa and throughout the southeastern United States, will design the project. Citrus Memorial will expand its main building and make room for specialized surgical suites and support areas. The governing board reviewed detailed layouts and cost estimates Monday evening. Construction alone will be $14.9-million, the contractor reported. The overall cost -- including design work, financing, legal services, equipment and related expenses -- will register at a little more than $28-million. About 450 Citrus residents go to Ocala or Gainesville each year for open heart surgical procedures; 800 more travel out of county for angioplasty. Despite the demonstrated need for a local unit, Citrus Memorial couldn't just start an adult open heart surgery program. It first needed to obtain a "certificate of need" from the state. The Agency for Health Care Administration doles out such certificates only after determining that a region needs such services. The goal is to control costs and prevent market saturation. Citrus Memorial won a coveted certificate in 2000, then waited for several legal challenges to play out. The final clearance came courtesy of Brooksville Regional Hospital. The hospital had challenged the state's decision to grant certificates of need to Citrus Memorial and another hospital, Oak Hill in Hernando County. Brooksville officials said they appealed because Brooksville Regional wanted to develop a heart surgery program of its own. The state, at first, had indicated only one hospital in the two counties could develop a program, so Brooksville had to oppose both hospitals' applications. Earlier this year, when it became clear that the state would allow one program in each county, Brooksville stopped opposing Citrus. In late May, for different reasons, it also stopped opposing Oak Hill. Brooksville's legal action, which was pending before the 1st District Court of Appeal, had stopped Citrus Memorial in its tracks. On June 3, following Brooksville Regional's request, the court shelved the case for good. To pay for the significant expansion, Citrus Memorial's governing board has agreed to engage in a 30-year bond issue. The hospital will receive its money up front from UBS Paine Webber, its investment banking partner. Investors will purchase bonds that entitle them to repayment, with interest, over a period of time. Citrus Memorial, using money it generates from the heart center, will provide money for the investors. That money will go through Wachovia Bank, which the board on Monday selected to serve as trustee and paying agent for the bond issue. Although the project cost is $28-million, the bond issue will be for $44.5-million. That's because Citrus Memorial seeks $2.4-million extra to buy land from First Baptist Church of Inverness and $14-million more to pay off what's left of a 20-year bond issue the hospital started in 1992, according to financial documents the board reviewed. The hospital can obtain a better interest rate now than it could when it began the 1992 bond issue, officials explained. Paying off the $14-million now and including it in the new bond issue is akin to a homeowner refinancing his or her mortgage and obtaining a better interest rate. Emery Hensley, the hospital's chief financial officer, said developing a bond issue to pay for the project and related expenses makes more sense than securing a mortgage because interest rates for a mortgage aren't nearly as favorable. -- Jim Ross writes about medical issues in Citrus County. Reach him at 860-7302 or
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