AUGUSTA — A new regional hospital will rise and two medical facilities in Waterville will shrink or close after a proposal from MaineGeneral Medical Center won a conditional go-ahead from state regulators Thursday.

A final decision by the commissioner of the state Department of Health and Human Services is expected in the next few weeks.
The new MaineGeneral Medical Center will have up to 226 beds and create a regional medical campus next to the Harold Alfond Center for Cancer Care on Old Belgrade Road in north Augusta.

The new hospital will combine inpatient services currently offered at the hospital’s Thayer campus and the Augusta hospital on East Chestnut Street. The proposal also calls for the closing of the hospital’s Seton campus and the in-town Augusta hospital.
Hospital administrators say the new regional facility will provide better service to residents and help the company attract and retain top doctors.

“It’s been an eight-year journey,” said Scott Bullock, president and chief executive officer of MaineGeneral Health, the hospital’s parent company. “We’ve stuck to it, and we’re very pleased with the recommendation.”

The state’s Certificate of Need Unit personnel began reviewing the extensive application in December 2009, following a letter of intent submitted by hospital officials on Sept. 29 of that year. After a public notice and a 10-business-day period for public and hospital comment, the unit will forward its recommendation to DHHS Commissioner Brenda Harvey, who has the final say.

According to the application, the regional hospital will cost $312 million to construct and equip, with an additional $10 million in new renovations for the MaineGeneral Medical Center Thayer campus in Waterville, which will be converted to an outpatient center with a 24-hour emergency room. That will leave Inland Hospital as the only inpatient
hospital in Waterville.

The final cost of the entire project will end up nearing $428.5 million with interest on financing costs and adjustments for inflation, according to the application.

Among the conditions imposed on approval, the state wants 34 fewer inpatient beds in the new hospital, and will require it to be fully accessed by Interstate 95 prior to the closing of inpatient operations at Thayer.

Bullock said the reduction in inpatient beds is a significant condition.

“We will work with the department over the next two weeks and hopefully work this out and make sure this is done in the most efficient manner,” Bullock said Thursday. “We’ve done extensive planning and believe it’s in our best interest and the region’s best interest to build the size facility we’ve proposed to build.”

Bullock said the cost to add beds later — as happened at MidCoast Hospital in Brunswick — is significant.

“It costs twice as much to add,” Bullock said. “We’re trying to plan for the future and we think its prudent to build the size facility we propose to build.”

Bullock said the hospital continues to work with the state Department of Transportation to finalize another potential hangup: planning a new I-95 interchange at Exit 113 — at a cost of $11 million.

“We’re close to reaching final agreement on cost-sharing the project,” Bullock said.

Because that project is dependent on federal highway funding, he added: “We appreciate the help we’re getting from (congressional) delegation.”

He said conditions that the interchange be completed before Thayer’s inpatient services are discontinued amount to a significant challenge.

However, Bullock said the timing of both the new hospital and interchange projects is fortunate, citing the potential economic effect and the availability of historically low interest rates.

“This project is going to employ hundreds of people in the construction project and will be a most significant development project for the region,” he said.

The expanded Exit 113 interchange would allow motorists quick access to the hospital from I-95 via Old Belgrade Road. The plan calls for a new connector from the Route 3 exit.

To ease transportation for people in Waterville, the hospital will pay for additional KV Transit runs and, later, an additional bus.

The conditional approval also says the inpatient services at Thayer must remain available until the interstate work is finished. The hospital’s application projected the roadwork to be completed by fall 2013.

A state-issued Certificate of Need is one of several permits required before hospital construction can begin. Other agencies whose permits are needed include the city of Augusta, state Department of Environmental Protection, U.S. Army Corps of Engineers, and the state Department of Transportation.

MaineGeneral applied for the certificate of need in December 2009 after studying a number of options for seven years. At that time, officials told community members the new facility could open in 2015.

MaineGeneral’s application outlined benefits of the new, consolidated regional hospital:

• reduce physician coverage requirements from two hospitals to one;
• recruit and retain primary-and special-care physicians;
• reduce labor and supply expenses by $7.1 million annually;
• reduce licensed hospital beds by 61, with the two existing hospitals currently licensed for 287 beds;
• allow studies to improve care; and
• increase capacity to handle deliver babies at 34 to 36 weeks, rather than refer women out, by providing a Level II nursery to serve premature infants.

The project “takes a bold step to address clinical manpower shortages through service reconfiguration and regionalization, create a single culture and standard for accountable practices, reduce preventable utilization of services, and stem the tide of travel to Portland, Bangor and Lewiston for services that could and should be provided within the region,” according to the application.

On Thursday, Bullock termed as “reasonable” conditions involving the emergency department at Thayer.

“An off-campus emergency room is something new for the state, but it’s done in other parts of the country,” Bullock said.
The hospital also will have to report progress on the ability to recruit physicians.

“Last week we welcomed 29 new physicians to our medical staff,” Bullock said. “That’s the best year we’ve had since plans were announced and the Alfond cancer center is fully staffed for medical oncology.”

Gaining the Certificate of Need will bring the project another step closer to accessing a $35 million donation from the Harold Alfond Foundation: The project will receive $25 million if the new interchange is built and match another $10 million in community donations.
“So many of us in the community are dedicated to making this project possible as soon as possible,” said Peter Thompson, president of the Kennebec Valley Chamber of Commerce. “I’m glad to see that they move forward in getting the very intensive study completed and made a decision to forward decision to commissioner.”

Thompson said he has worked with state, federal and local people to get the Exit 113 access completed.

“We’re trying to replicate what we’ve seen successfully at the Alfond cancer center and believe prompt completion of this facility will serve to meet the long-term health care needs of the people in the region in the best possible manner,” Thompson said on Thursday.

The region is no stranger to hospital consolidations. In Waterville, Thayer and Elizabeth Ann Seton hospitals merged in 1976 to become Mid-Maine Medical Center. In Augusta, Augusta General and Gardiner hospitals merged in 1980 to become Kennebec Valley Medical Center. Those two medical centers consolidated in 1997 to become MaineGeneral Medical Center.

The hospital’s parent group is MaineGeneral Health, which also operates rehabilitation and nursing care serves, as well as hospice and other residential facilities and retirement housing.

Betty Adams — 621-5631
badams@centralmaine.com