Modified CON for New Hospital Approved

At its September 21 meeting, the Maryland Health Care Commission approved the Western Maryland Health System's request to modify its Certificate of Need because the construction costs for the new hospital have increased by $41 million since the application was submitted last year.

"This approval of the modification of our Certificate of Need is an essential step that takes us closer to the start of construction," said Barry Ronan, WMHS President and CEO. "We appreciate the staff at the Commission reviewing our request so quickly so that we can move forward with getting started as soon as possible."

When the Health System submitted the application for our Certificate of Need in November 2005, the construction costs were estimated at $228 million. The total amount of the Certificate of Need approved by Maryland Health Care Commission in March 2006 was $359 million, which included the $228 million for construction costs and additional money to cover interest, financing costs, refinancing of existing debt and many other expenses associated with this project.

Based on booming commercial construction across the state, including $3.3 billion in projects for Maryland hospitals, and the increasing costs of raw materials used in building supplies, construction costs for the new hospital are now estimated at $268 million. This change required the Health System to ask the Maryland Health Care Commission to modify its Certificate of Need to reflect today's costs. The revised amount of the Certificate of Need is now $406 million, which includes the new construction cost of $268 million and the rest of the funds needed for the project, which increased slightly due to the higher construction costs.