For Discussion Purposes Only
New DMH Psychiatric Hospital

New Hospital basic information:

•	New hospital capacity: 320 beds (260 adults, 60 adolescents)
•	Cost: $302 million
•	Building size: 428,000 square feet
•	Estimated completion date: 2012
•	Worcester State Hospital current capacity: 126 adult beds
•	Westborough State Hospital current adult capacity: 162
•	Westborough adolescent unit: 30

Systemic Efficiencies

The new DMH psychiatric hospital encompasses the most current thinking about care for individuals with serious mental illness. The building is flexible; it is patient centered and staff enabling; it focuses on the Department of Mental Health’s goal of recovery; it does the work of a hospital without feeling like a hospital.

Substantial systemic benefits: 
•	Average patient length of stay is expected to reduce from more than 700 days to 365 days 
•	Better post-discharge success in the community with fewer and shorter readmissions
•	The hospital will provide treatment and promote recovery, so that patients can return to and remain in the community

Operating Cost 

•	Operating costs will be reduced in the new facility due to systemic efficiencies realized through the design through maximized use of modern therapeutic space, meal service, staffing, etc., 
•	Operating costs are also reduced due to savings in "overhead" costs such as administrative salaries, medical and nursing administration, the result of consolidating two facilities into one.
•	An energy-efficient enclosure and modern mechanical systems will permit the introduction of air conditioning at less cost than is presently necessary to provide only heating. 
•	Utility costs will be reduced by the inclusion of a 266kw co-generation plant. This unit captures “waste heat” or thermal energy generated by the production of electricity and utilizes it to produce hot water for use throughout the Facility.
•	Domestic water use will be reduced through the inclusion of an underground system of rain water collecting cisterns. The Campus’ irrigation system will utilize this rainwater, instead of domestic water, to irrigate the Campus’ lawns and gardens.
•	Utility costs will be reduced through the use of solar photovoltaic technology which utilizes solar power to operate some Campus Lighting and building systems.
•	The Facility’s power plant is designed to operate on bio-diesel as well as natural gas. This will reduce the consumption of petroleum based fuel to heat the Facility.
•	All utility systems have been designed to operate 20% more efficiently than current industry standards. We have worked closely with National Grid and energy modeling to optimize building envelope, lighting systems, insulation, water consumption. 
•	The existing Westborough and Worcester State Hospital facilities are at the end of their useful lives, and at risk of forfeiting their JCAHO accreditation and CMS certification due to non-compliance with current federal conditions of participation for the Medicare and Medicaid programs. Certification is required for federal reimbursement. 

The estimated annual savings are summarized as follows:

Annual Capital Maintenance Cost Avoidance	$4.30 million
	
Operating Annual Savings (including)	$4.15 million
	
Total Annual Savings
(excluding annual capital cost of funding the new building)
	$8.45 Million	
One-time Avoidable Capital Cost  
(less demolition & remediation costs)	$100 Million

Cost of Construction

It is important to note that the cost for building the new DMH hospital comes from a funding stream separate from the Department’s general appropriations.  General Obligation bonds provided through the legislature, and supported by the Governor, provide the $302 million capital funding for construction of the new hospital.

The Total Project Cost is summarized as follows:

Hard Construction Costs	and CM Fees		$259.4 million
Including demolition, site work, all other hard costs,
and Construction Manager/GC costs

Design and construction oversight			$  30.4 million
Includes design fee, DCAM oversight, 
program manager and commissioning consultants

Moving Costs and Furnishings/Equipment		$12.2 million

TOTAL PROJECT COST                                    $302 Million