Central Peninsula Hospital is moving forward with the plans for an expansion of its obstetrics wing and the construction of a new catheterization lab.

The Kenai Peninsula Borough Assembly approved the bonds for the project — about $39 million in total — in October 2016. The first issuance went out last week, said Central Peninsula Hospital CEO Rick Davis in a presentation to the assembly Tuesday.

“We’re starting some interior work preparing for that,” he said.

The hospital received its certificate of need from the Alaska Department of Health and Social Services, a document certifying that the new construction is needed and can earn enough revenue to stay afloat, on Nov. 13. Once the bonds clear, the bid will go out in January and the construction will likely begin as soon as the ground thaws in 2018, Davis said.

The Certificate of Need document estimated the project cost at about $32.1 million total, with 28,727 square feet of new building space and 26,000 square feet of renovated and replacement space. The most recent estimate from the hospital places it at just under $39 million, Davis said.

The project is meant to meet a longtime need for renovation in the obstetrics wing as well as add a new service. The obstetrics wing is the oldest part of the hospital nd has not been renovated since the original construction. It occupies the central part of the hospital between the administrative area and the specialty clinic building, with multiple doors requiring security clearance between. One of the needs inspectors from the Joint Commission, a hospital accreditation nonprofit, have pointed out is for he addition of more security for newborns. The obstetrics wing will move into a newly constructed area.

The catheterization lab will be a first for the peninsula, providing services like pacemaker implantation and angiograms. One of the justification for the project given by former borough mayor Mike Navarre’s administration during the discussion over the bonds was that building the expansion now, before health care reform continues to push revenues for the hospital downward, will help keep more health care spending on the peninsula rather than going to Anchorage.

The expansion will also provide the hospital with a few additional beds, Davis said. Right now, the hospital — which has 49 inpatient beds — is often operating at capacity, he said. The current hospital pharmacy will relocate to another space and the intensive care unit will move in, providing space for three additional beds in that unit.

Moving the obstetrics wing closer to the inpatient bed area also allows the hospital to flex its beds back and forth depending which beds are vacant, he said.

“We actually have been completely at capacity fairly often over the past several months,” he said. “Last week, we were clear full. And we still had a few (obstetrics) beds available, but it’s the other end of the hospital, so it’s not really the best to run (inpatient) patients clear across the hospital.”

The old obstetrics unit will also be available for observation beds, allowing for patients only kept for observation to be moved there and clear up other inpatient beds for other patients, Davis said. The expansion will also provide the benefit of completing a back-of-house corridor for staff moving patients and materials, keeping them from having to move through the main public area when crossing the hospital, he said.

“People getting wheeled from the ER to the OR for emergency trauma surgery, let’s say, have to get wheeled right through the public corridor,” he said. “This project completes that back-of-house corridor to remedy that issue.”

After a year that saw the hospital’s net income drop drastically, it is recovering some. Through Sept. 30, the hospital saw a 208 percent increase in net income over the previous year, bringing in approximately $3.37 million. Through its third and fourth quarters of fiscal year 2017, the hospital saw year-over-year net income drops of 91 and 93 percent, respectively.

The hospital’s charity care and bad debt also increased through Sept. 30 by about 6.8 percent over the previous year, Davis said. The hospital is projected to carry about $11 million in uncompensated care this year, a 13.2 percent increase over fiscal year 2017, he said. That doesn’t entirely come off the hospital’s bottom line, though, and the hospital’s charity care has dropped significantly over the past few years, he explained.

However, the upward trend may continue, he said.

“I would anticipate that that trend would continue, probably,” he said. “…The drop was mainly from the Affordable Care Act insurance exchanges coming online and the Medicaid expansion that Gov. Walker … to the state.”

Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.