Petersburg’s only hospital is gearing up to apply for federal funding through a new, five-year program meant to improve rural health care across the U.S.
Alaska will receive $1.3 billion dollars in federal funding over five years through the Rural Healthcare Transformation Fund, which was created last year as a part of President Trump’s “One Big Beautiful Bill.” The federal government will be disbursing $50 billion across all fifty states. Per resident, Alaska is one of the top funding recipients.
While the state has not yet opened up a process to apply for grants, the Petersburg Medical Center is extremely interested in the funding. But administrators cautioned that the program won’t solve the hospital’s infrastructure problems, and the opportunity comes with a quick timeline.
Not a perfect fit for Petersburg’s new hospital project
As more information about the funding has come out, Petersburg Medical Center CEO Phil Hofstetter said one big restriction stands out.
“The one thing that’s disappointing to me is construction itself is not allowable,” Hofstetter said.
Petersburg’s aging hospital is due for replacement, and Hofstetter and other hospital administrators have repeatedly voiced concerns about the current facility and its failing infrastructure.
The Petersburg Medical Center has been working toward building a new facility for several years, but the project still needs millions of dollars in funding.
“What I explained to the state is, we’re not going to have a facility if we are to continue down this path,” Hofstetter said. “So we won’t even be able to do any innovation projects if we don’t have a building to operate out of.”
There may still be a way to use the program to fund the new hospital. Petersburg Medical Center’s grants director, Katie McKay Bryson, said that while construction isn’t allowed under the grant, planning is. She’s looking into ways that it could cover planning costs for the new hospital.
A lot of promise, but a challenging timeline
McKay Bryson said many of the hospital’s programs are strong contenders for the funding.
The state’s funding priorities include projects that expand access to health care, strengthen the workforce, and invest in technology. McKay Bryson said the hospital is interested in applying for funding that would expand home health and telehealth services, build out Petersburg’s new MRI services, and bring in new medical equipment and training.
But there’s a tight timeline to use the money. The state has until October to allocate this year’s $272 million, and then one more year to spend it.
At a work session on Jan. 26 between the hospital and the Petersburg Borough Assembly, McKay Bryson said that timeline has benefits and drawbacks.
“I think while getting things moving is not a problem and could often be beneficial, rushing into things rarely saves money,” McKay Bryson said. “But it is the situation we have.”
McKay Bryson said this year’s proposed projects are only the beginning, and the hospital plans to be involved with the Rural Healthcare Transformation Fund for all five years. She said that once it’s possible to apply for funding, the hospital will be ready.
Hofstetter stressed that it will be important to be intentional during the Rural Healthcare Transformation Fund’s five-year window.
“The last thing we want to do is waste the money,” he said.
