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Rebuilding from the Inside

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A Washington hospital's energy renovations carry a cost-saving guarantee.

It's no secret that critical-access hospitals struggle with funding even in the best of times. Though they're supported by a better Medicare reimbursement rate than many of their bigger brethren, many still soldier on with their mission to provide healthcare in rural areas with outdated buildings and equipment.

Some of the buildings have been standing since the Hill-Burton Act of 1946 first provided funding for their construction. That means that in addition to being outdated, they're extremely energy inefficient, says Mark Barglof, the administrator of 25-staffed-bed Odessa (WA) Memorial Healthcare Center.

Odessa, typical of many Hill-Burton hospitals, opened in 1950, and two substantial additions were built in the 1960s. Since then, not much has changed--and that includes the buildings' outdated guts. When a cost analysis determined that the cost of building new would be prohibitive, Barglof and his board took the next best step: infrastructure replacement. And thanks to a renovation guaranteed by a performance contract that promised substantial energy savings, not only did Barglof find budget space to renovate the existing buildings, but Odessa's amenities now rival new construction in many ways, Barglof says.

The $2.9 million infrastructure rebuild included a new roof, window replacement, a new electrical service, and fire protection for the hospital. Those items were benefits in themselves, but one of the key selling points of the general contractor, TAC, a division of Schneider Electric, was the promised energy savings Odessa would experience from the electrical portion of the project. The new computer-controlled heating and ventilation systems replace a mid-20th-century system that was inefficient and couldn't control temperature for any patient rooms.

"Stressing the comfort of patients was the real driving force," Barglof says. As a Level 5 trauma center, Odessa depends on patients recovering from major surgery, such as hip or knee replacements, who can't yet go home. Therefore, their comfort is paramount.

But the project couldn't increase costs. In fact, it had to save on energy to justify its price tag. To alleviate concerns, TAC guaranteed in its contract a certain percentage of energy savings that Odessa could expect. Since late 2006, when the project was completed, Odessa has saved about $42,000 on its yearly energy bills--18 percent more than the TAC guarantee.

-Philip Betbeze

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