By Gerardo R. Partido
Variety News Staff

STAKEHOLDERS interested in improving Guam’s health care gathered yesterday at the Hyatt Regency to hear the business plan for the establishment of a new hospital on island.
The Guam Hospital Development Forum, a private sector initiative that wants to develop a privately owned and managed hospital on island, presented a detailed business plan which seeks to find investors for the project.
The proposed hospital, with initial financing of up to $126 million depending on equipment start-up costs, will have a capacity of up to 200 beds. It will feature medical and special health services currently not available on Guam.
Sites being considered for the new hospital include property on the University of Guam campus and the Guam Community College campus in Mangilao, as well as the Leo Palace Resort in Yona.
Pete R. Sgro Jr., chairman of the Guam Hospital Development Forum, said the intent is not to replace the Guam Memorial Hospital, but to supplement and complement the services already offered at Guam’s only civilian hospital.
In his opening address, Sgro recalled his own sad experience when his mother had to stay in the GMH emergency room for two days instead of immediately being rushed to the intensive care unit simply because there were no beds available.
“This personal experience created a passion in me for change,” Sgro said.
But rather than feel embittered by the experience, Sgro decided to act and help GMH by coming up with a plan for a new hospital that would mitigate overcrowding at GMH.
“Throughout our meetings in the forum, there was never any criticism of GMH for GMH is truly a place of heroes who save lives every day though they don’t have the adequate tools. I witnessed that when my mother was there,” Sgro said.
The business plan projects the potential hospital bed need for the Guam community at 317 additional beds.
With a projected increase in the civilian population of 15,000 to 20,000 people to support an estimated $15 billion military buildup over the next 10 years, Sgro said the potential hospital bed need and overcrowding conditions already existing at GMH will continue to grow.
To alleviate this, the business plan suggests a development strategy that includes two separate 50-bed phases for a total of 200 beds over a 15-year period.
The plan also includes the financial viability of a proposed 100-bed hospital.
Depending on the initial equipment start-up costs, profits during the first full year of operation are projected to be $12.6 to $14.4 million, with the return on investment over 15 years ranging from 175 percent to 202 percent, and an internal rate of return over 15 years of 8 to 9 percent.
Sgro said these numbers are based on a bond-financing scenario that uses a high interest rate factor of 14 percent to demonstrate the long-term viability of the project, despite a higher interest cost.
The business plan, however, suggests other methods of financing which offer potential investors much more attractive financing terms such as funding from the U.S. Department of Agriculture’s Rural Development or the Federal Housing Administration.
“We recognize that any potential investor will undertake their own due diligence to determine the feasibility and viability of the hospital development proposed in this business plan. The Guam Hospital Development Forum is available to provide investors with any additional information they may need during this process,” Sgro said.
He added that members of the Guam Hospital Development Forum and those that have supported it, being well attuned to the needs of Guam and the economic factors impacting this project, will be available to serve as a liaison to the Guam community.
Sgro said the project would not have been possible without the help of the members of the GHDF, which represent a cross-section of the Guam community with varying types of expertise and knowledge of the various components of hospital development.
“This project took months of hard work by the members. But ultimately, this effort is much bigger than the members and requires the support of the whole community,” Sgro concluded.