Capital Needs

June 2022 | 1
“Someone is sitting in the shade today because
someone planted a tree a long time ago.”

- Warren Buffet

Page 2
Our tree was planted many times before us …

Page 3
What trees should we plant today?

Expansion of Critical Care Bed

Capacity

Surgery and Interventional –

Hospital and Ambulatory

Neighborhood Health Center -

Central

Children’s Inpatient, Surgery, and

Emergency Department Growth

Cancer Center

Page 4
Crisis in Critical Care
60 ICU / Intermediate Care capable beds available (prior to the opening of COVID emergency beds in 2021).

12 are Cardiac ICU Beds

8 are Neuro ICU Beds
2 are Epilepsy Monitoring Beds
(not true critical)

8 are Intermediate Care Beds

(not true critical)

30 are General Med/Surg ICUs

Confidential, for Internal Use Only Page 5

Crisis in Critical Care

From June 2019 to March 2020 at

midnight (293 nights), on average there
were:
1.8 beds available on the Cardiac ICU
0.7 beds available on the Neuro ICU
0 available EMU beds
0.8 Intermediate Care Beds (not true critical)
3.8 beds available on the Med/Surg ICU
6.8 beds available total (average night on
each unit doesn’t occur at the same time)

Confidential, for Internal Use Only Page 6

Crisis in Critical Care
 On a typical day
 =6.8 critical care beds are available across the institution.
 = 30 patients are admitted through the ED and 15 through surgery (daily)
 About 25-30 percent of these (11-14 patients) will be indicated for critical care.
 25% of the time = no bed available for a cardiac emergency – “elective” cases canceled
 40% of the time = no bed available for a neurological emergency – “elective” cases canceled

**Scheduled cases halted.

Page 7 Source: Internal UMC Nursing Unit Census Data.
Crisis in Critical Care Leads to Crisis in the Emergency Department
When beds aren’t available, two things happen. First, admitted patients get backlogged in the emergency
department.
Prior to COVID, it was not unusual for 20 or more admitted patients to be holding in the ED’s 48 treatment
rooms, reducing its effective capacity by half. COVID has made the situation far worse.

None of these patients belong

in the emergency department.
These are the numbers of
patients who have been waiting
at least four hours after a
physician determined they
required critical care or med/surg
care.
2021 Average census: 36.2
On average, in 2021, 75% of
2020 Average census: 19.6
UMC’s ED treatment positions 2019 Average census: 9.9
were unavailable for
emergency care

Page 8
Crisis in Critical Care Leads to Cancellations of Transfers and Scheduled Cases
Second, scheduled cases are canceled and transfers from other hospitals are deferred.
 Transfers from other hospitals are critical to maintaining nursing competencies in our highest acuity
programs and for providing good teaching opportunities for our medical educational programs
 Local providers who choose to bring their scheduled patients here do so for the higher level of care
we provide. Canceling these cases threatens our ability to continue to provide these higher-level
services and delaying care causes patient harm.

Page 9
When COVID is Over, Aging Will Exacerbate the Bed Shortage
El Paso is significantly younger than the US population as a whole. El Paso is growing the fastest among the
65-74 and 75+ age cohorts (14% over the next 5 years).

El Paso County Population Pyramid, 2020 US Population Pyramid, 2020 Service Area Discharges per 1,000
Age 0-4 Age 0-4
Population by Age Cohort
Age 5-9 Age 5-9
Age 10-14 Age 10-14 550
Age 15-19 Age 15-19 500 5X
Age 20-24 Age 20-24
450
Age 25-29 Age 25-29

Discharges per 1,000 Population

Age 30-34 Age 30-34 400
Age 35-39 Age 35-39 350 3X
Age 40-44 Age 40-44 300
Age 45-49 Age 45-49
250
Age 50-54 Age 50-54
200
2X
Age 55-59 Age 55-59
Age 60-64 Age 60-64 150
Age 65-69 Age 65-69 100 .75X X
Age 70-74 Age 70-74 .5X
50
Age 75-79 Age 75-79
Age 80-84 -
Age 80-84
0 - 17 18 - 44 45 - 64 65 - 74 75 - 84 85 +
Age 85 and Older Age 85 and Older

Female Male
Female Male

Page 10
UMC Procedural Areas: Surgery and Cath/Interventional Services
Future Demand: Operating Rooms
Factoring in growth associated with the new technology requirements for high-end programs, recruitment of
surgeons to serve the District’s patients, and aging/population growth, UMC will need an additional 9 operating
rooms, 3 in the hospital and 6 in the ambulatory surgery center. This includes:
 At least one additional OR equipped with advanced imaging (a “hybrid room”). The second operating room
would be burn-surgery capable, and the third OR would be for surgical robotics.
 A new ambulatory surgery center to facilitate the shift of some outpatient cases out of the main hospital
(such as gynecology) and to grow service lines (orthopedics, ENT, breast, spine, and urology).

OR Demand, Assuming Targeted On-Peak Surgical Minutes, 2015-30

25.0

20.0

15.0

10.0

5.0

-
2015 2016 2017 2018 2019 2020 2021A 2025 2030

UMC Main OR Trauma OR New ASC

Page 12
Procedural Expansion – Why It’s Important
Some of the tertiary programs that UMC is growing require specialized technology/space in the OR.
 “Hybrid” ORs - None of UMC’s ORs is large enough to accommodate the equipment/care team for
these advanced procedures.
 Burn operating rooms require higher temperatures and higher humidity

UMC operating rooms are full, and ambulatory, scheduled cases are getting crowded out; the ASC has only
one operating room.
 Limits recruitment and retention for certain specialties (ENT, urology, breast, hand, foot and ankle).
 Absence of these specialties creates healthcare disparities and limits TTHSC’s ability to train the
next generation of surgeons.
 Trauma hospital surgical departments are not an efficient (or patient-friendly) place for scheduled,
ambulatory surgeries – an ambulatory surgery center is needed.

Page 13
The District Lacks Access to Key Ambulatory Services
Rooms are at capacity, and ambulatory surgeries are crowded out.
 Ambulatory surgical cases are growing, but since there isn’t
capacity, almost 25% of case minutes are being
performed during weekends or evenings.
 This should be no more than ~5%.
Off-hours makes good use of the physical space, but this is at a
cost.
 Patient dissatisfier – patients get cases pushed to the
evening
 Surgeon dissatisfier and quality risk – studies show
errors are common when surgical team is fatigued.
 Expensive – UMC pays surgical and anesthesia teams
overtime.

Page 14
Invest in Our Immediate Neighborhood
Central Service Area Demographics
The Central/Mission Valley service area has the highest number of seniors. Eighteen percent of the service
area residents are age 65 or older.
2021 Est. Population and Growth, 65+, 2021-2026 UMC Service Area

Senior Population (65+), 2022-27 and Proportion of

Seniors by Service Area
50,000 25.0%
45,000
40,000 20.0%
35,000
30,000 15.0%
25,000
20,000 10.0%
15,000
10,000 5.0%
5,000
- 0.0%
y e ty s t ty s do
lle si d un ea un en or
Va st Co rth Co ab og
n Ea a No a /F m
is s io Fa
r An An io Al
a
/ na na iz ar
/M e Do Do El
ra
l s id n n n
nt st er er Sa
Ce Ea uth rth /
So o ro
/ &
N
cor
id
e es So
ts uc
es sC
r
W La

2022 2027 Proportion of Seniors

Page 16 Source: Claritas, Halsa Advisors analysis; Maptitude.

Map of Urgent Care Providers – Mission Valley

There are no urgent care

services in 79905, 79915, or
79907.
Outside of UMC, there are also
no emergency departments in
the area. Del Sol’s ED is the only
other proximal ED.
This area has Bridge of the
Americas, I-10, 375, and the US-
Mexico border as its boundaries.

Page 17
Scope of Services
UMC’s Neighborhood Health Clinic – Central On-site diagnostic services provide a convenient
location for patients while also ensuring that
Focused on geriatrics, the clinic includes a 50-exam clinicians have the diagnostic tools available to
room practice that includes primary care and a new make clinical judgments
urgent care center.
 Laboratory services (blood draw, urinalysis)
 Radiology
Percent Time Exam Rooms Total Exam
Primary Care Providers in Practice per Provider Rooms  X-ray
Family Medicine
and Geriatrics 6 100% 3 18  Ultrasound
Obstetrics &
Gynecology 2 50% 3 6  Pulmonary function testing and spirometry
Urgent Care 2 100% 4 8
Pre-Admission  EKG
Testing 2 100% 2.5 5
Employee Health 1 100% 3 3
 Pharmacy
Future Expansion 2 100% 4 10
Total Exam Rooms       50

Page 18
Invest in Our Children
EPCH Bed Capacity – Why It’s Important Survival Rate of Extremely Premature Infants
Nearly 30% of El Pasoans are under age 18. Though 90%
the fastest growth is in patients over age 65, the 80%
70%
children’s population is growing, too.
60%
EPCH serves the sickest children in El Paso, and while 50%
40%
few children are hospitalized, the ones who require 30%
hospitalization are sicker and more complicated than in 20%
the past. 10%
0%
 37% of US children have at least one underlying 22 weeks 23 weeks 24 weeks 25 weeks 26 weeks
condition.
Early 1980s Early 1990s Mid 1990s Late 1990s
 Children with complex or multiple health issues Early 2000s Mid 2000s Mid 2010s
require a team of providers across specialties to
Example Health Problems Associated with
treat their issues, and EPCH has the most robust
Extreme Prematurity
staff of pediatric specialists in El Paso.
Vision problems / blindness Infections and immune system problems
Much of the need for pediatric hospital beds is the Hearing loss / deafness Cerebral palsy
Heart problems Growth issues
result of improvements in fetal viability – babies who Breathing problems and asthma Metabolic problems
wouldn’t have survived 20 years ago are surviving, Behavior or learning problems Anemia and jaundice
often with lifetime chronic health issues. Dental problems Early onset of chronic “adult” health
Neurological disorders issues
Page 20 Sources: “Changing Epidemiology of Children’s Health,” doi: 10.1377/hlthaff.2014.0832 HEALTH AFFAIRS 33,
NO. 12 (2014): 2099–2105; "Outcomes for Extremely Premature Infants” doi: 10.1213/ANE.0000000000000705
EPCH Serves the Sickest Children in El Paso
EPCH provides comprehensive, multi-disciplinary, and high complexity care to more children than all other El
Paso hospitals combined. The EPCH provides:
 El Paso’s only pediatric trained neurosurgeon

 The only children’s cancer center in El Paso certified by the Children’s Oncology Group
 The region’s only multi-disciplinary cranial and facial program

 A critical care transport team equipped to transfer pediatric trauma and neonatal patients from over a
350-mile radius
 Pediatric patients from UMC’s Level I Scherr LegateTrauma Center are served by EPCH, after an
initial assessment

Page 21
EPCH Projected Bed Demand

EPCH requires an additional 22

beds by 2025, 26 beds by 2030, to
keep up with population growth and
increases in demand.
The 8th floor of the EPCH tower can
be fit out to accommodate an
additional 26 beds.

Page 22
EPCH Emergency Department Expansion
EPCH’s ED requires expansion.
EPCH’s ED has good treatment rooms, but there aren’t enough
of them, and there isn’t enough departmental support space.
 The department has 10 treatment rooms + 3 Fast Track
EPCH
rooms; it should have 22-24 treatment rooms to meet Emergency
Department
community need. 6,500 DGSF

 The department requires additional space for family

members and clinical support staff space EPCH Projected ED Demand
Historical Projected Existing
Emergency departments are the “front door” of the hospital – an LTM 2016 LTM 2017 LTM 2019 2024 2029 Rooms
EPCH ED Visits - Baseline 21,238 22,798 24,259 24,788 25,329 14
undersized ED is a significant barrier to growth. EPCH ED Visits - Strategic Growth 38,049 38,879
Estimated ED Market Share
Est. Peds Population 283,462 281,027 279,928 286,035 292,275
Est. Peds ED Market 94,267 93,457 93,091 95,122 97,198
Est. Mrk Share - Baseline 23% 24% 26% 26% 26%
Est. Mrk Share - Strategic Growth 40% 40%
Projected Demand ▲

Total EPCH ED Beds Needed - Baseline 15.3 15.6 (2)

Total EPCH ED Beds Needed - Strategic Growth 21.7 22.2 (9)

Estimated Annual Throughput Assumptions

Operating Days per Year 365
Peak Hours per Day 24
Utilization Efficiency 50%
Average Visit Length (hours) Visit Length Throughput
Annual Throughput per Rm 2.7 1,622
Page 23 Annual Throughput per Rm 2.5 1,752
Cancer Center

Page 24
Cancer Incidence
2022 ESTIMATED NEW U.S.
Cancer is the second leading cause of death in the United CANCER CASES*
States
Prostate 27% 31% Breast
 Almost half of men and about 40% of women will be Lung & bronchus 13% Lung & bronchus
diagnosed with cancer 12% 8% Colon & rectum
 5% of Americans are cancer survivors Colon & rectum 8% 7% Uterine corpus
Urinary bladder 6% 5% Melanoma of skin
Melanoma of skin 4% Non-Hodgkin
Based on 2019 statistics from the National Cancer Database 6% lymphoma
(most recent year available, Texas sample), an estimated: Kidney/Renal 5% 3% Thyroid
Non-Hodgkin 3% Pancreas
 66% have a surgical procedure
lymphoma 4% 3% Kidney/Renal
 23% are treated with radiation therapy Oral Cavity 4% 3% Leukemia
 27% are treated with chemotherapy Leukemia 4% 21% All other sites
Pancreas 3%
Men Women
 30% are treated with some other form of systemic All other sites 20%
983,160 934,870
therapy
* Excludes basal and squamous cell skin cancers and in situ
carcinomas except urinary bladder
Sources: American Cancer Society, 2022.

Page 25
Cancer Incidence in El Paso County
The age-adjusted incidence rate of invasive cancer has been relatively flat in El Paso County since 2010 while statewide incidence has
declined. The age-adjusted incidence in the neighboring New Mexico counties are substantially higher than in El Paso County.
 Age-adjusted incidence rate of El Paso County is 392.6 per 100,000 population, about 5 percent lower than age-adjusted incidence
for the state of Texas
 Age-adjusted cancer incidence in nearby Hudspeth, TX is considerably lower (309.8 per 100,000)
 The lower age-adjusted cancer incidence rates in the area might indicate disparities in detecting cancers in the local population.

El Paso County, Annual Invasive Cancer Incidence, All Sites

440 3,500

3,143 3,167 3,203 3,173

3,098

New Cases per 100,000 Population

420 3,029
2,919 3,000
2,838
2,764

Total New Cancer Cases

400

2,500
380

360
2,000

340
1,500
320

300 1,000
2010 2011 2012 2013 2014 2015 2016 2017 2018

Total Cases Crude Rate

Age-Adjusted Rate Statewide Age-Adjusted Rate

Page 26 Source: Texas Cancer Registry, Cancer Incidence File, February 2021
El Paso Lacks a NCI-Designated Comprehensive Cancer Center

• El Paso is one of the largest

metropolitan areas that does not have
a comprehensive cancer center within
a two-hour drive.
• While NCI designation is not an
immediate goal, addressing this gap
should be a long-term objective to
ensure the provision of high-quality,
coordinated, and cutting-edge
services in El Paso.

Page 27
Cases at UMC are Growing
From 2013 to 2019, the number of analytic cancer cases diagnosed or treated at UMC increased 49% from
820 to 1,222. The number of brain cancer cases speaks to the strength of UMC’s neurosurgery program.
Digestive disease cancers and leukemias, lymphomas, and myeloma have also experienced strong
growth.
Lung cancer, usually one of the “big four” cancers (second to Breast), is increasing.
UMC Cancer Cases by Primary Site, 2013-2019
250
200
150
100
50
0
T E L I
AS T M
TE
M US ER RU
S
NA
A
EA
S
OI
D ER OG
Y
M
A
IV
E
HE
R
E TA TU S CH LIV E RE OM R R U T L LO ST T
BR OS RE
C SY N U T PH N C
TH
Y
IX C O YE IG
E L O
PR L US BR
O & Y& M PA RV ON M D AL
EX
C O & US NE LY CE N ER
RV P D D H
ON E NG R KI AN GY OT
OL R
N LU CO IA HE
R
C HE M T
O T
U KE O
N
& LE
AI
BR

2013 2014 2015 2016 2017 2018 2019

Page 28 Source: UMC cancer registries, 2014-2019; analytic class categories: 0-14 and 20-22.
Comprehensive Cancer Program: a Growth Opportunity
El Paso County use rate data suggests UMC treats about
UMC
32% of incident cancer diagnoses, with strengths in gyn- El Paso
oncology, brain, breast cancer, and pancreatic cancer, and Invasive Cancer
Incidence
Crude % Surgery % Chemo % Rad T Est. Cases
Rate (Texas) (Texas) (Texas) in El Paso 2019
Implied
Share
relative weakness in lung and urologic cancers. All Sites 368 66% 27% 23% 3,763 1,222 32%
Breast 57 72% 22% 31% 583 194 33%
Increasing share to 40% would generate 1,561 cases in 5
Colon & Rectal 34.8 65% 40% 10% 356 130 37%
years, factoring population growth and aging. Lung 27.4 20% 39% 31% 280 64 23%
Prostate 51.3 53% 1% 17% 525 74 14%
Based on ratios in treatment courses, this would lead to:
Kidney 21.8 74% 8% 3% 223 64 29%
 960 surgical procedures annually (+193) Brain 6.1 36% 19% 21% 62 73 118%
Corpus Uteri & Gyn 24 85% 19% 15% 245 109 44%
 391 patients beginning chemotherapy (+86 new Pancreas 10.4 24% 42% 9% 106 37 35%
patients, +103 including repeats) Others 135.2 66% 27% 25% 1,383 477 34%
+5 Year Annual
 335 patients beginning radiation therapy (+73 new Forecasted Annual Patients Patients
Invasive Cancer Cancer Cases at Starting Starting Rad
patients, with a 20 percent repeat rate about 400 Incidence Mkt Cases UMC Surgeries Chemo Therapy
All Sites 3,956 1,561 960 391 335
patients per year will have radiation therapy) Breast 613 245 177 54 76
Colon & Rectal 374 168 109 67 17
Threshold to support radiation oncology is about 250 Lung 295 118 24 46 37
Prostate 551 110 58 1 19
patients per year. Kidney 234 94 69 7 3
Brain 66 78 28 15 16
Corpus Uteri & Gyn 258 116 99 22 17
Pancreas 112 50 12 21 5
Others 1,453 581 384 157 145

Page 29 Sources: Texas Cancer Registry (El Paso County); National Cancer Data Base (Texas);
UMC cancer registry, 2019; analytic cancer case categories 0-14, 20-22
Coordinated Care is Critical for Cancer Diagnosis, Treatment, and Aftercare
Many providers are engaged in care
delivery for cancer patients. Multi-
disciplinary collaboration is more
challenging when care delivery is
fragmented.
Radiation oncology is missing from
the EPHD’s continuum. This
reduces coordination of care for
brain cancers and lung cancer,
where radiation is often one of the
treatments.
No cancer program in El Paso
provides a full continuum of
supportive services and aftercare in
a coordinated center.

Page 30
 EPCH, TTHSC-EP, and UMC are better
positioned than anyone to develop a
comprehensive cancer center in the Paso del
Norte region

Page 31
Economic Impact

Page 32
Strategic Facility Master Plan
University Medical Center Capacity Project Budget
El Paso Children's Hospital Capacity Project Budget
Relocation of Endoscopy Unit Enabling Project Eighth Floor 26 Patient Bedrooms
Conceptual relocation of Administration, renovates 11,750 sf 8th Floor Thomason Tower for Inpatient $ 12,448,000 Build out shell space on the Eighth floor of EPCH, adding 26 beds $ 17,504,000
(and Outpatient Advanced) Endoscopy.
 
  Expand Emergency Department to add nine new Treatment Rooms  
Critical Care Beds Thomason Tower Third Floor   12,600 SF Construction and Renovation $ 11,753,000
Renovate 3rd Floor North Tower for 23 Intensive Care Beds $ 24,978,000  
  EPCH Hybrid OR  
Surgery Expansion   Create Hybrid Operating Room by expanding OR 4 into two adjacent LDR Bedrooms $ 7,446,169
$ 26,764,000
Add three Operating Rooms (including Hybrid, Burn)  
Renovate portions of existing Surgery to expand Pre-Op and PACU units TOTAL El Paso Children's Hospital $ 36,703,169
Replace sterile processing equipment and provide new cart washer
 
   
Two New Cath Labs  
Cancer Institute  
Conceptual relocation of first floor services to accommodate the addition of two new Cath Labs $ 14,265,000 Cancer Treatment facility with 36 exam rooms and 30 infusion seats. Included in medical equipment costs $ 78,938,000
  are: a PET CT, cyber knife, radiation and Brachy therapy, a CT sim, and a linear accelerator + shell for
  2nd Linear Accelerator
Neighborhood Health Clinic & Urgent Care Center
$ 32,835,177  
35 Exam Room Clinic and 15 Treatment Urgent Care
  Property and Land Acquisitions  
  Acquisition of of Texas Tech properties including TTUHSC Academic Education Center @ 4800 Alberta
Ambulatory Procedure Center Ave. & TTHUSC Health Sciences Center @ 4801 Alberta Ave. $ 54,477,000
6 Operating Rooms, 2 Procedure Rooms $ 39,952,000
 
 
Imaging Medical Equipment $ 9,362,000
 
Information Technology $ 15,000,000
 
TOTAL University Medical Center $ 175,604,177

GRAND TOTAL $ 345,722,346

Page 33
Pro-forma Bond Issue Assumptions & Tax Rate Impact Analysis
 $345M bond issue

a) 25-year Level Amortization

b) 25-year Split Amortization (10 years for equipment and 25 years for bricks and mortar)

 No impact on current Hospital District’s bond-ratings. Would only use 2 Rating Agencies for upcoming
bond issue
 Interest rate assumptions
 Current interest rates
 50 basis point increase by October 2022 (CO bond issue)

Page 34
Certificate of Obligation, $345M, issued in October 2022
 Current Tax Rate
 M&O $0.210760
 I&S $0.047385
 Total $0.258145
 25-year Split Amortization (10-years for Equipment and 25-years for Bricks and Mortar)

 Tax Rate impact of $0.0554, for an estimated I&S Rate of $0.1001 for ten years
- Annual impact on $100,000 home of $55.40, monthly impact of $4.62
 Tax Rate impact of $0.0274, for an estimated I&S Rate of $0.06 for years eleven through twenty-
five
- Annual impact on $100,000 home of $27.40, monthly impact of $2.28
 Total Debt Service of $544M

Page 35
Questions and Discussion

Page 36