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Salina Family Healthcare October 29, 2004 Commissioners: Enclosed is reading material for this Monday's Study Session in response to your request for follow-up information on the Salina Family Healthcare Center sales tax grant request. This item is scheduled for your discussion as the first item on the Study Session agenda. Please call if you have questions. ç¿:J ~ CITY MANAGER'S OFFICE City of !;¡ Salina TELEPHONE. (785) 309-5700 FAX . (785) 820-8532 TOO. (785) 309-5747 E-MAIL. dennis.kissinger@salina.org WEBSITE www.salina-ks.gov - Dennis M. Kissinger City Manager 300 West Ash. P.O. Box 736 Salina, Kansas 67402-0736 October 15, 2004 Salina Family Healthcare Center Attn: Marcia Hawkes and Anne Jung 501 South Santa Fe, Suite 200 Salina, KS 67401 re: Sales Tax Grant Request Dear Ms. Hawkes and Ms. Jung: Thank you for the preliminary information you have provided in the past related to your dental services initiative. Based on the City Commission direction to staff at last Monday's study session, I will need to work with you to obtain more detailed information. This can then be presented to the Commission in a follow-up report. I would suggest we meet to discuss the additional information during late October. If possible, I would like to meet on Tuesday, October 26 or Wednesday October 27. Please call Nancy Schuessler in the City Manager's Office (309-5700) to arrange a time. If we are able to meet that week, we can probably schèdule a follow-up discussion with the City Commission for their study session on November 1 st. If we cannot meet then, the following week is available, and I could schedule Commission follow-up for later in November. To assist you in preparing information for our meeting and a follow-up report, I am providing the following questions: 1. Is there is a projected time frame for beginning this service? 2. Is there a "business plan" for the dental service initiative at this time? . one-time capital cost analysis . operating cost analysis . staffing costs and projections . projections on hours, number of patients, etc. By that I mean: , Salina Family Healthcare Center Page 2 3. Besides the request for a city sales tax grant for the dental equipment, what other sources of funds have been identified for capital and operating costs? Have any funds from these sources been committed? 4. Your June 21, 2004 letter indicated the intent to use space on the third floor of Santa Fe Medical Plaza for dental care/clinic purposes. .What is the rental cost to be for this space? Do you already rent it? Source of funds for rent payments? How do you respond to those who may question the expense of a newer medical plaza space instead of using those same funds for service provision in a less expensive clinic building? 5. What is the projected cost of remodeling this third floor space for dental operations? Source of funds? 6. Is the $175,000 city grant funding for dental operatories, miscellaneous equipment and dental software 100% of the capital need, or only a portion of it? 7. If the City Commission chooses not to approve the grant request, or approves a smaller amount, what is your alternative equipment financing plan? Is the Salina dental care initiative dependent on this city grant to move forward? I trust you realize the City Commission recognizes the significant human service needs in Salina and appreciates the service provided by organizations such as yours. I hope you also understand they are attempting to address a broad range of municipal service needs and citizen expectations for the next six-years with a limited amount of funding available from this new revenue source. I look forward to working with you to assure the Governing Body has the information they need to evaluate the dental clinic initiative. Sincerely, c£L- /L1 ~ Dennis M. Kissinger City Manager KEY POI NTS OF REQU EST ~, . Request for funding from City is a one-time request that will be leveraged with funding from other sources to cover approximately 53% of startup capital expenditures. . Investment by the city will not be diminished if we move to another location. Equipment purchased with these funds will move with us. . 100% of operating expenses will be covered through clinic revenue and FQHC Grant. . FQHC Expansion Grant Funds will be requested for any additional equipment needed as we grow and are able to provide more services. SALINA HEALTH EDUCATION FOUNDATION DENTAL CLINIC ing Dental Clinic Operating Expenses 20% Investment Startup Funding 1 Awarded October 14, United Health of WHERE WE ARE - WHERE WE'RE HEADED Services Salina Cares SALINA Family 2003 HealthCARE Center Proposed 2006 Medical Office Visits - Sliding Fee Eligible 4,202 33,600 Prescription Drugs $112,892 $150,000+ Purchased for Patients Dental Visits 33 5,000 By referral In-house Mental Health Referral to CKMH 800 and CKF In-house encounters Hospital In-Kind Donations 1.1 million > 1 million LablX-ray, OP & Inpatient Care Budget $679,243 $3.4 million Office Hours 4 half days per week Monday - Friday 8-5 Monday and Thursday 6 pm until finished Patients Served 1,163 5,723 numbers, especially in the interpretive services area Providers: Part time Provide staff 4 MD Faculty Paid - MD's, PA's, NP included: 1 LSMFT 2 MD Faculty 12 Resident Physicians 3 3 rd Year Resident 6 FA's orNP's Physicians 1 Dentist 2PA's 2 LSCSW's 3 Volunteers Additional Services Family Practice SRS onsite Offered Specialty Referrals Hospital Care Limited Dental by Referral OB/GYN Mental Health by Referral OP Lab and Diagnostics Dental Health Onsite Mental Health Onsite Quality Assurance 1 Volunteers 119 non-Provider Maintain and increase WHERE WE ARE - WHERE WE'RE HEADED Services Salina Cares SALINA Family 2003 Health CARE Center Proposed 2006 Funding Sources Salina Regional Foundation KDHE Diabetes ABCD Dental Grant (Proposed) Patient Care Receivables Federal 300 Grant Funding Rural Outreach Grant Patient Care Receivables United Way Salina Regional Foundation Donations (Proposed) Fund Raising United Way Investment Income United Methodist Health Ministries State Primary Care Safety Net - If funded by legislature Community Partners Alliance for a Healthy Alliance for a Healthy Community Community Ashby House Ashby House CAPS BPHC Catholic Charities CAPS CKF Catholic Charities CKMH CKF DVACK CKMH Health Department DVACK Heartland Programs Health Department OCCK Heartland Programs Rescue Mission HRSA Salina Regional KAMU School Nurses Kansas Dental Foundation The Salina Medical KDHE Community KU School of Medicine United Way OCCK Volunteer Connection Rescue Mission Salina Child Care Assoc. Salina Regional School Nurses The Salina Medical Community United Way Volunteer Connection YMCA 2 ~~ø F~~ J,~ ~ ~ŒWD~ A !Iij¡ ~~ (.# "('fIR\ Smoky Hill Family Medicine Residency Program Salina Health Education Foundation 501 S. Santa Fe, Suite 200 . Salina, Kansas 67401 785-825-7251 . 785-826-1511 October 27,2004 Mr. Dennis Kissinger City Manager City of Salina 300 West Ash Salina KS 67401 Dear Dennis, Thank you for the opportunity to respond to City Commission's questions regarding our request for a grant of $175,000 from the quarter cent sales tax fund. This letter addresses the questions that were listed in your letter of October 15, 2004. We should be prepared to answer questions for the Commission on November 1, 2004. 1. Is there a projected time frame for beginning this service? Our goal is to have the Dental Clinic operational by the last quarter of 2005. We currently are able to offer up to 20 emergency tooth extractions per month thanks to the generosity of two oral surgeons here in Salina. We are anticipating grant funding in December. Once that has taken place we will contract for an additional twelve (12) hours of dental services in the offices of three local dentists. The dentists will donate their time and we will cover their office expenses. Services will be by referral from our Clinic. The time line for opening a dental clinic under the umbrella of our organization will depend on: 1) when the 330 grant is funded; 2) when we receive increased cost reimbursement for Medicaid and Medicare patients; 3) how quickly the lease contract is finalized, architect drawings are completed, and construction is completed. In our grant application we committed to have a dental clinic operational by year two of the grant. With the help of the City, and a commitment for additional grant dollars from United Methodist Health Ministries, we would hope to have it operational in a shorter period of time - perhaps in 6 to 8 months. Salina Health Education Foundation, dba SALINA Family HealthCARE Center A United Way Funded Program UnllIed\Yq Mr. Dennis Kissinger October 27, 2004 Page 2 2. Is there a "business plan" for the dental service initiative at this time? Yes there is a basic business plan that was completed as part of our grant application. Important components are as follows: Lease space: Our board made the decision to stay in our current location until 2008. We have signed a lease to acquire an additional 1,500 square feet of space on the 2nd floor. Construction on that space will begin next week. We have an option with the hospital to lease space on the 3rd floor of Santa Fe Medical Plaza. This is the proposed location for the dental clinic. Lease negotiations on this space will begin this week. We will discuss changes to Safe Harbor statutes, which were passed in the last legislative session, with Salina Regional. The change in these statutes may allow the hospital to lease the space to us as a FQHC (Federally Qualified Health Center) at less than fair market value. The board has expressed interest in establishing another not-for profit foundation to acquire property to house the Clinic by the end of the lease period. Fundraising efforts will need to be initiated and additional grant funding will be necessary to accomplish this goal. In the FQHC grant application we have established goals that will require us to locate larger Clinic space by the end of year three. Because of our dual mission, it will be necessary to maintain adjacency to the hospital to provide access for the Residents, and as a convenience to our low income patients who must go to the hospital to obtain free or discounted laboratory and x-ray exams. The Residency must have the ability to recruit medical students to the community. Staffing: In our proforma submitted with the grant, we have allotted grant funding for a dentist, a hygienist, two dental assistants, and a clerical person, as well as operating funds for supplies, etc. We will need to recruit this staff, and will utilize community volunteer dentists and oral surgeons to assist with the project. The grant is a renewable grant of $650,000 for each of three years. Once the grant has been in place for 18 months we may apply for expansion grants to assist with growth. The grant itself is intended to serve as approximately 25% of our operating budget. Additionally, once credentialing has been completed, we will receive increased reimbursement from both Medicaid and Medicare that will offset the discounted fees we offer to low income patients. I have also attached a letter of commitment we have received from United Methodist Health Ministries offering additional grant funds. The balance of our operating budget will be derived from graduate medical education funds that we receive through the hospital, patient service revenue, donations, United Way and other grants. We are currently in the last year of a Federal Rural Outreach Grant. , Mr. Dennis Kissinger October 27, 2004 Page 3 Based on the time frame that it took to get Rural Health Cost Based Reimbursement in place, it will be late-spring 2005 before we begin to receive the higher reimbursement level for Medicaid and Medicare patients. This reimbursement revenue stream will allow us the funds to serve the uninsured. We have researched this component of proposed services and realize that it is very difficult to make dental services break even. Kansas Association of Medically Underserved (State Primary Care Association) and the Federal Bureau of Primary Care will offer us technical assistance in establishing our program. We also have a commitment from the Community Health Center in Johnson County to provide additional technical resources. Once staffed for the proposed configuration, we should be able to see approximately 3,000 hygienist visits per year, and about 1,200-1,500 dental visits per year. The dental Clinic hours will mirror the Clinic's office hours, which are 8:00 A.M. to 5:00 P.M., Monday through Friday, and 6:00 P.M. to finish on Monday and Thursday evenings. 3. Besides the request for a city sales tax grant for the dental equipment, what other sources of funds have been identified for capital and operating costs? Have any funds from these sources been committed? We received notification on October 14,2004 that we have been awarded FQHC status. A portion of the grant funds will be utilized to operate the dental Clinic. We are a United Way Agency, and have a letter of commitment from the United Methodist Health Ministries for additional funds in the range of$50,000-1O0,000. We have requested grant funding from the hospital foundation for language assistance. We have numerous community benefactors who have donated $59,484 year to date. 4. Your June 21, 2004 letter indicated the intent to use space on the third floor of Santa Fe Medical Plaza for dental care/clinic purposes. What is the rental cost to be for this space? Do you already rent it? Source of funds for rent payments? How do you respond to those who may question the expense of a newer medical plaza space instead of using those same funds for service provision in a less expensive clinic building? We have an option to lease space on the 3rd floor of Santa Fe Medical Plaza. We will open discussions with the hospital about lease options next week. Our current lease is for 12,773 useable sq. ft., which will rent for approximately $11,708. This amount may vary slightly based on bids for remodeling our current space. The construction costs have been rolled into our lease, and rent was based on existing safe harbor statutes. We have the option to rent 4,964 rentable sq. ft. on the third floor (Exhibit C) at a cost yet to be determined. Success of the Clinic hinges on high visibility and easy access as well as adjacency to the hospital. Our dollars go farther because of utilization of Resident physicians to staff the Clinic. We must be able to recruit and meet the expectations of medical students. We will also need to be able to recruit and retain a dentist and staff. Dentists and their staff typically work only 3-1/2 days per week in very "nice" space! We must have adequate, not opulent, well-equipped space if we are going to be able to hire and retain staff. Cost of turnover in this area will sink the Clinic faster than any other factor. Many of our patients have transportation issues and simply will not follow f Mr. Dennis Kissinger October 27, 2004 Page 4 through on obtaining diagnostic services that are provided at the hospital and/or go to another location to obtain dental or mental health services if they had to travel to another location. Provider efficiency is enhanced by the adjacency as well. We can see more patients because we do not loose productivity from travel time! 5. What is the projected cost of remodeling this third floor space for dental operations? Source of funds? We do not have projected costs for the project at this time. The space was formerly used as the physical therapy department for the hospital and it is hoped that the architect will design the area to utilize much of the space as it is currently configured. Options for payments of the remodeling may be; I) accessing $150,000 of the first year grant funds that can be allocated to capital improvements; 2) rolling the improvements into the lease (generally the building owner has a build-out allowance); 3) or obtain additional grant funds. This will be a board of director decision once we have bids. 6. Is the $175,000 city grant funding for dental operatories, miscellaneous equipment and dental software 100% of the capital need, or only a portion of it? The estimates outlined in our June letter of June 21, 2004 stated: Projected costs involved in acquisition of dental operatories (four) are over $98,000. Miscellaneous equipment is projected to cost $33,000, and dental software approximately $46,000. We have identified funding sources for the salary of the dental staff. Our proposal is a rough estimate of the cost of basic equipment needed for the operatories. As we get additional technical assistance and support, it may be determined that additional funding may be needed. Grant funds from United Methodist Health Ministries would be used to supplement the City funds and perhaps fund office and reception area furnishings. Additional networking and hardware will also be purchased. We will accept Medicaid and our current billing staff will handle both dental and medical claims submission - both of which must be done electronically. City will be funding equipment that can be moved to other locations in the future. Expansion grants will fund additional operatories in the future. 7. If the City Commission chooses not to approve the grant request, or approves a smaller amount, what is your alternative equipment financing plan? Is the Salina dental care initiative dependent on this city grant to move forward? We are required as part of our FQHC status to provide some level of dental services in the community. The scope of these services will be dependent on the amount offunding that we can obtain. Part of the reason I believe that we were successful in obtaining the FQHC Grant was because of the amazing collaboration within our community. Without the Residency, the large pool of medical providers who provide care pro bono to our patients and serve as faculty for our resident doctors, and the enormous contribution of LabCorp and the Hospital to provide laboratory and other diagnostics at no cost to qualified patients, we cannot be successful in this endeavor. It is imperative that the Community at large supports the contributions that are in place within the medical Mr. Dennis Kissinger October 27,2004 Page 5 community. The hospital and medical providers cannot be expected to do this single handedly. The majority of our patients who receive discounted services are employed in the community and add enormous value to it. The health and dental status of these individuals directly affects their employability, and in the case of children, their ability to learn. This must be a continued community effort. Once again, thank you for the opportunity to present this information to the City. Please contact me if you have further questions. Sincerely, ~.~ Marcia Hawkes CEO Ene. -slw r~:-=:.:._.- ..-,......._.---,_.._. -..'.-, ., -- ---.--- ~ d ~ [1J () I- m :r: x w CV') .--j Q) :> Q) H . Salina Family Healthcare Center UNITED METHODIST Health ¡\JINIST RyFund 100 Eas(First Avenue 8 . po. Box 1384 Hutchinson, Kansas 67504-1384 (620) 662.8586 Fax: 1620) 662-8597 www.hea/thfund.or April 20, 2004 To Whom It May Concern: We would like to offer our support ofthe application submitted by: . Salina Health Education Foundation dbti SALINA FAMILY HEAL TH CARE CENTER Smoky Rill Family Medicine Residency 501 S. Santa Fe, Suite 200, Salina KS 67401. . for federal funding authorized under section 330(e) of the Public Service Act. This important initiative will bring much needed. health care services to the medically underserved in north central Kansas. . Our organization is a philanthropy related to the Kansas West Conference of the United Methodist Church and provides resources for improving health and health care throughout the StateofKansas~ with an emphasis on the western two-thirds of Kansas . (where Salina is located). Currently our funding interests are 1) oral heal~ 2) access to primary care, and. 3) healthy lifestyles of physical activity and good nutrition. I. participated in a Salina community planning meeting which analyzed community need and program organization relative to this application and amgeneraIIy infonned about this proposaL. As a foundation, we have worked with numerous groups in Saliha, including Salina Cares and the Smoky HìII Family Medicine Residency. Both agencies have been good partners in all our work together. Salina is known throughout Kansas as a place of excellent collaboration andcommuriit)i planning. The work to develop this strong application fot a community health center start-up is another demonstration of this community's ability to determine needs, develop a community response to the need and bring many people and groups together in the process. ' Because of our special'interest in oral health for the past five years, I want to comment on this aspect of the potential CRC operation. Counter to its sterling reputation as a place of collaboration, Salina is also known as a community with below average access to oral .. health services for uninsured and other low-income persons. There are very few Medicaid and SCRIP dental service providers in the area. This combines with the statewide absence of Medicaid benefits for adults to produce a very difficult access situation for oral health services in the proposed service area for this CRC. One project in Salinafor very young children's dental services access (ABCD) was unable to recruit any dentists to participate, and we and the other two funders had to tenninate the project after many months of effort. The new CHC with dental services will playa very important role in addressing this need for Salina County and neighboring counties. " 152 . . \ ' . Salina. Family Health Care Center Community Health Center Application (Section 330[e]) Page 2 Although I cannot make a firm commitment until we have reviewed a submitted grant proposal, I can express the very strong interest of United Methodist Health Ministry Fund in providing start-up financial resources (equipment, remodeling, early cash flow,ètc.) for the dental services component of a new community health center in Salina. Our. grants for projects like this have been in the range of $50-100,000. Because of the high need in the area and our interest in development of penn,anent treatment slots, I would expect our Board to view a Salina request very favorably. A federally funded community health center will significantly improve access to health care for the medically underserved in the Salina are~. United Methodist Health Ministry Fund will be- very open to considering financial support for this effort as described above. rfy~ti have~ny questions, please feel free to contact me at 800.369.7191. . 8 . ..