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F I S C A L I M P A C T R E P O R T

SPONSOR Tsosie

ORIGINAL DATE

LAST UPDATED

2/9/06

HB

SHORT TITLE McKinley County Cancer Center

SB 578

ANALYST Lewis

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

3,500.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB581 (Cancer Prevention, Research & Education).

Relates to SB470 (Cancer Prevention, Research & Education).

Relates to HJM 31 (UNM Cancer Treatment Center, in Recognition).

SOURCES OF INFORMATION

LFC Files

Responses Received From

Health Policy Commission (HPC)

Higher Education Department (HED)

Department of Health (DOH)

SUMMARY

Synopsis of Bill

Senate Bill 578 appropriates $3,500,000 from the general fund to the Higher Education Depart-

ment for expenditure in fiscal year 2007 to meet the required state match, contingent upon the

award of federal funds, for the establishment of a clinical cancer center in McKinley County and

for health-related courses at the Gallup branch of the University of New Mexico.

FISCAL IMPLICATIONS

The appropriation of $3,500,000 contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of fiscal year 2007 shall revert

to the general fund.

Senate Bill 578 – Page

2

SIGNIFICANT ISSUES

According to a December 5, 2005 article in the Gallup Independent (web edition), two organiza-

tions, the University of New Mexico (UNM) and New Mexico Oncology Hematology (NMOH)

are “vying for the privilege” of building a new cancer center in Gallup, and the state has asked

the McKinley County Board of Commissioners for its preference. The McKinley County Devel-

opment Foundation, a local non-profit that helps bring new businesses to the area, has backed

NMOH. Gallup’s Rehoboth McKinley Christian Hospital, which says it doesn’t have the funds

to build its own cancer center, has taken a position in support of UNM.

The Gallup Independent article concludes that, whichever organization proceeds with the new

cancer center, “A cancer center in Gallup would cut down the time local cancer patients have to

travel to receive most of their treatment. Cancer patients in Gallup must now make the two-hour

drive to Albuquerque for radiation treatment. For patients on the reservation, it can take even

longer.” (

http://www.gallupindependent.com/2005/dec/120505cncrcntr.html

)

According to the Department of Health (DOH),

New Mexico Oncology Hematology (NMOH), a

private medical specialty practice in Albuquerque, is planning to provide fully integrated oncol-

ogy services in the Gallup area, including radiation therapy with an on-site state-of-the-art linear

accelerator. Ground has been broken on a 14,000 sq-ft cancer treatment center, which should be

completed by August 2006 with clinical services available in September 2006. The NMOH busi-

ness plan includes contracting with Medicaid, Medicare, Indian Health Services, and providing

20% of services to the uninsured at no cost.

DOH expresses concern that the appropriation in SB 578 appears to fund a second comprehen-

sive cancer center which may not be viable for the area.

According to the Higher Education Department (HED),

this request was not in the list of priority

projects submitted by UNM to HED for review. Consequently, this request was not included in

the Department’s funding recommendation for FY07.

HED offers no information about UNM/HSC’s plans for a cancer center in McKinley County, or

about the need for additional health-related courses at UNM-Gallup.

ML/nt