Editor’s note: This article has been updated to correct the date of bid for the hospital construction project and to clarify the date of substantial completion.

Central Peninsula Hospital will be under construction this summer as contractors tear down part of the building in preparation for renovation and expansion.

The hospital administration is preparing for the first stage of its Phase VI construction project, a nearly $40 million endeavor that includes the construction of a new catheterization lab and obstetrics wing. The Kenai Peninsula Borough, which owns the hospital facility, is overseeing the project, which is financed by bonds the Kenai Peninsula Borough Assembly approved in October 2016.

The oldest part of the hospital, the area where most of the administration is housed, will be torn down, so the staff has been moving around, said Bruce Richards, the Government and External Affairs Manager for the hospital.

“We’ve moved a lot of people around, and it’s been kind of challenging to get people moved, shoehorned into other spaces,” he said.

The borough is planning to open bids for the project April 5, with an expected notice to proceed at the end of April or so, said John Hedges with the borough’s purchasing and contracting department. The borough expects the project to be substantially completed around November 2019, though that’s subject to change a little, Hedges said.

The obstetrics wing is the oldest part of the hospital and has long been in need of renovation, for both space and security reasons. The catheterization lab will provide new services for the hospital, including the ability to conduct angiograms and pacemaker installation. Right now, patients have to go to Anchorage for those services.

The hospital has been working in partnership with the Alaska Heart and Vascular Institute to expand its cardiology services, which were identified in the 2016 Community Health Needs Assessment as a major area of need, along with Alzheimer’s Disease services and alcohol and drug abuse treatment services. Central Peninsula Hospital CFO Lance Spindler told the Kenai Peninsula Borough Assembly during a Feb. 6 presentation that the hospital is looking forward to having the facility to provide the services for conditions diagnosed by the Alaska Heart and Vascular Institute physicians who work in Central Peninsula Hospital’s specialty clinics building.

“We can’t do those (procedures) here because we don’t’ have the proper facility yet,” he said. “… When that happens, then those same patients who have cardiac concerns who need procedures won’t have to travel up to Anchorage or out of the area to receive those services. They can receive them right here.”

Keeping patients in Soldotna versus having them travel to Anchorage helps support the hospital financially as well. In fiscal year 2017, the hospital saw a sharp drop in net revenue, in part attributed to a decrease in outpatient surgeries and declines in Medicare, Veterans Health Administration and Medicaid reimbursement rates. Gross patient revenue was about 11 percent higher in the first two quarters of fiscal year 2018 as compared to the previous year, Spindler said in his Feb. 6 presentation, connected to the hospital seeing 11 percent more patients and conducting 25 percent more inpatient surgeries.

The Kenai Peninsula Borough Assembly is also considering an ordinance to approve the hospital spending about $587,100 from its Plant Replacement and Expansion Fund to update a mammography machine to a 3-D imaging machine. Richards said at the assembly’s March 6 meeting that it would update the hospital’s technology and help keep people coming to Soldotna to receive services versus going to Anchorage or Homer, where South Peninsula Hospital already has a 3-D mammography machine. The assembly will consider the ordinance at its April 3 meeting.

Reach Elizabeth Earl at eearl@peninsulaclarion.com.