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A Healthy Expansion: Golden Valley Memorial Healthcare

Located in west central Missouri, Golden Valley Memorial Healthcare (GVMH) is a nonprofit health care organization that consists of a 56-bed hospital, a home health service and physician and outpatient clinics that offer more than 40 providers and 15 specialties. GVMH aims to provide its largely rural patients with big city services, living up to the Truman Lake-adjacent community’s slogan, “great people, by nature.” GVMH was named one of the “150 Greatest Places to Work in Healthcare” in 2014 by Becker’s Hospital Review and won the Missouri Quality Award in 2013.

Over the past few years, GVMH has experienced a significant increase in the demand for outpatient services and was looking to fund an approximately 100,000 square foot expansion to accommodate that demand as well as future growth. In addition, GVMH was looking to renovate a significant portion of existing space at the hospital and fund the acquisition of two medical office buildings that it was leasing.

The Financing

Working with its investment bank, GVMH’s board and leadership evaluated multiple financing options to identify a funding structure that would best meet the organization’s objectives. At the time, GVMH held Series 2006 variable-rate demand revenue bonds (VRDBs), backed by a letter-of-credit (LOC), that it was considering refinancing as a part of the transaction. It was decided that if the LOC could be extended on the bonds, they would be kept in place, allowing GVMH to maintain an appropriate blend of fixed and variable debt.

GVMH’s investment bank was able to extend the LOC on the Series 2006 VRDBs for an additional five years with the existing LOC bank and recommend a private placement to fund the renovation. The privately-placed, tax-exempt bond structure was selected because it provided several benefits, including: a low, fixed interest rate, the ability to incorporate a draw-down structure and a significant reduction in interest expense during construction.

“The $36.2 million financing allowed GVMH to initiate its building expansion and acquire the two medical office buildings it had been leasing,” said Mike Ashley, vice president with Lancaster Pollard in Kansas who worked with GVMH to complete the financing. “Its plan to expand its footprint and modernize its current facility to handle growth within outpatient services was underway.”

Brick by Brick

On Sunday, July 24 2016, GVMH introduced its new 93,000 square foot expansion. What began in 2014 as a project dubbed “Building a Healthier Community . . . Brick by Brick” was now a brick and mortar reality.



The 93,000 square feet of new space includes a larger emergency department, six new surgery suites, an expanded imaging department, and an expanded Outpatient Treatment Center, which houses specialty clinics, an infusion room and a cardiac rehabilitation area. The expansion also includes a spacious lobby and a hospital-owned bistro for the convenience of patients and their families.

 

“Improving care delivery for our patients has been our constant focus,” said Randy Wertz, chief executive officer. “We could not be more pleased with the many ways we will improve access to services. The new Outpatient Services Area and Emergency Department not only are comfortable, efficiently designed spaces but also simplify how patients access care.”

As part of the grand opening in July, GVMH opened four new expansive, state-of-the-art surgery suites with two more expected to open by year-end. When all six suites are complete the staff will have 23,000 total square feet—nearly double the space from before the expansion. GVMH offers general and specialty surgery services, such as orthopedics, ophthalmology, obstetrics and gynecology, ear/nose/throat, cardiology, podiatry and urology.

 

In designing the new facility, GVMH put an emphasis on ease of navigation. Several of the clinics are now conveniently located on the ground floor inside the Outpatient entrance. The addition of 155 parking spaces on the hospital campus also helps.

“Parking is nearby and there are no stairs or elevators,” said Craig Thompson, Chief Operating Officer. “Patients no longer need to navigate their way through the hospital to find their outpatient services.”

The end result is efficient and easy access with the comfort of the patients and their families at the forefront.

The Growth Continues

The new outpatient expansion and all its amenities cost $30 million of the $36.2 million financing. The remainder of the financing was used to purchase two clinics that GVMH had been leasing in the nearby communities of Warsaw and Windsor. That acquisition provided additional operating efficiencies, particularly in Warsaw, as the financing funded renovations to accommodate another provider.

Going forward, leadership at GVMH plans to continue growing in order to best serve the community. In fact, there are two areas that were built as part of the expansion with the intention of being developed at some point in the future. Specific service lines, although not yet identified, will be patient-driven and added in response to patient need. As is its way, everything GVMH does revolves around putting the patients’ needs first. 

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