The Norman Regional Health System is seeking City Council approval for a quarter billion dollar bond.
The bond, if approved, would be used for a project plan system administration has been working on for three years called "Inspire Health." The plan includes expanding the HealthPlex, adding an ambulatory/cancer pavilion, building an Eastside free-standing emergency department next to Highway 9 and adding behavioral health services.
Richie Splitt, Norman Regional Health Systems CEO, and other system administrators, presented the plan and bond proposal during the council's conference Tuesday night. The projects costs are estimated at $285 million, he said. Norman Regional will return to the council Sept. 24 seeking bond approval.
"We are very excited about [Inspire Health], not only for our organization, but for our community because we believe this plan will transform the way we provide care, deliver care and improve the outcomes in which we seek to improve every day," Splitt said.
This plan looks to help the system consolidate facilities and expand services. Norman Regional Health Systems has five Norman facilities, with the Porter campus established in 1946, and has nearly 400 providers and 3,150 employees.
"The challenge at the HealthPlex is we have no more room to do anything on that campus. We have to add bricks and mortar to meet the growing demand for services," Splitt said. "Right now, today, the HealthPlex has more inpatient discharges than the Porter campus."
In 1981 there were about 6,933 hospitals across America, Splitt said, and in 2016 that number reduced to 5,534 hospitals. He said there are simply fewer inpatient beds available across America, adding six Oklahoma hospitals have closed since 2010.
"I think [Inspire Health] is very innovative, [Norman Regional] has clearly done their research and work on the issue on how to best provide healthcare in the City of Norman and to surrounding cities," Mayor Breea Clark said.
The system is operated by the Norman Regional Hospital Authority, which is a public trust that functions as a political subdivision of the state of Oklahoma. Clark appoints the trustees and the City Council votes them in, which is the council's connection to the system and why it must approve the bond.
Ken Hopkins, Norman Regional Health System's chief financial officer, said they are planning to issue tax-exempt revenue bonds payable solely from hospital revenues, which means no liability to taxpayers or the city. Even if the system were to default on the bonds, he said, it would not come back on the city.
"We do not operate the hospital, we are not obligors of the debt, so the ability to make that service by the hospital is independent of any city responsibility," City Manager Darrel Pyle said.
Along with the debt proceeds from the 2019 bond issue, Hopkins said the projects are funded through existing capital reserves, investments from third parties, fundraising and earnings on funds held by the series 2019 bond trustee.
Some council members were concerned that two weeks is not enough time to review the data and project plan before voting on the bond issue. Alison Petrone, Ward 3 council member, said she found Norman Regional's presentation interesting, but feels like she has more questions than answers.
"I don't see that there's any way anyone on council could consider themselves adequately informed to make a quarter of a billion dollar decision in two weeks, when we haven't received the data yet to be support the ask by the hospital," Petrone said.
Kate Bierman, Ward 1 council member, said it seems like the start to a promising plan, but the two-week deadline surprised her because she feels like there wasn't enough information presented. A quarter of a billion dollars is a lot to vote on with only a few slides to use as the council's supporting information, she said.
Stephen Tyler Holman, Ward 7 council member, said he's not as concerned about the timeline since there is no financial obligation or liability on the cities part. He said if the administration thinks this is the right thing to do, then he doesn't have any apprehension.
"I feel like we have the information we need to make a decision and they have a well thought out plan," Clark said. "I appreciate the rest of council wanting to be thoughtful about a very big decision, but I think [Norman Regional] have shown they are financially able to handle this kind of commitment."
Paul Arcaroli, Norman resident who attended Tuesday's meeting, said he's concerned about Norman Regional's plans for the hospital, because it sounds like they are over-extending themselves. He added it seems like all of the information was presented to the council in a short timeline, and as a concerned resident he said he wants to see the supporting data for the claims the hospital administrators made Tuesday.
Norman Regional partnered with Navigant as a third-party consultant to lead them in the plan recommendations and data. Splitt said Navigant recommended they build the new facility in east Norman and consolidate their services and expand the HealthPlex location, to transform services and to transform that campus.
Splitt said Norman Regional is still unsure of what will become of the Porter campus, but they have options. He said they could reuse, repurpose or redevelop.
Sereta Wilson, Ward 5 council member, during Tuesday' meeting expressed concern of the timing of the project because she doesn't want the east side of Norman and their health care needs to be isolated. There should not be a break in service for the east side of Norman, Splitt said, as of right now the HealthPlex project and Eastside Norman project would happen simultaneously.
"One thing for certain is we are not abandoning in any way shape or form the patients and residents of east Norman," Splitt said. "We are investing heavily in services on the east side of town, making greater nodes of connectivity where they work and play, and it will be apart of the Cleveland County Healthy Living Block."