SIDNEY -- Sidney Health Center is undergoing a three-year, $20 million upgrade that will update the hospital's surgery center, expand the intensive care unit and provide every patient with a private room.

It will be the first major work done to the 25-bed, critical-access hospital in eastern Montana since it opened in 1970.

Brian McGinnis, chairman of the medical center's board of directors, said small hospitals have been receiving higher reimbursement rates from Medicare and Medicaid lately, making it a good time to spend money on improvements.

''I tell people it's kind of like making hay while the sun shines,'' McGinnis said.

In the first phase of the project, workers will overhaul and centralize the medical center's surgical unit, which will have two operating rooms, a procedure room, a recovery area, 10 outpatient rooms, a nurses' station and a family waiting area.

More than 100 people a month undergo surgery at the center, said Rick Haraldson, the health center's chief executive officer.

''The lifeblood of a rural hospital really is its operating room,'' Haraldson said. ''It means a lot to what we can provide for services.''

The hospital admits about 1,200 patients a year and employs more than 500 people.

Its three-bed intensive-care unit will be expanded and modernized during the renovation, making way for new technology that will help recruit and retain physicians.

The final stage of the project will be an overhaul to patient rooms, all of which will become private.

''People want to be in a room and have family around and not worry about other people,'' Haraldson said.