St. John

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Hospital CEO Scott North said St. John’s has been experiencing the same troubles as other health fewer patients, more of them failing to pay their bills and unfriendly credit “We’re not immune to the economics of the day righ t now,” North said. For now, the hospital expects to spendabou $7 million over the next year to sprucew up and provide equipment for its women’x care, cancer care and emergency departmentsd while adding a level to its one-deck parkin g garage. Roseville-based McGough Cos. is the lead That project will be funded by normalcash flow. The projecyt is a far cry fromthe $68 million that St.
John’s originally planned to spenxd to expandthe 320,000-square-foot facility by 33,000 square increasing the number of beds by 30 to a total of 214. “We’re trying to be good stewards ofour dollars,” Nortgh said. “I don’t want the communityy to think we’re not going to invesyt in St. John’s.” After officials at St. Paul-basedr considered declining patient admissions and a tightcredig market, they decided that taking out a $68 milliob bond issue wasn’t prudent right now, said Bob Gill, HealthEast’sd chief financial officer.
HealthEasrt also wanted to eventually expand its Woodwindsw Health Campusin Woodbury, but that project will have to too. “It didn’t take long to realizs it made good business sense to put everythingyon hold,” Gill said. “All of those things are very disappointinhfor us.” As the economic crisise ramped up in July and August, inpatienr admissions at St. John’s were 7.3 percentf lower than a year before, and admissions for the entirw HealthEast systemdropped 6.2 percent, Gill said.
Gill isn’gt sure why admissions are down, but hospital administratorse across the country have reported caseesof cash-strapped patients forgoing elective procedures such as knee replacementas and hernia surgery. Meanwhile, the bottojm has fallen out of the credit with once-respected financial insitutions going under and Congresws speeding through a $700 billion bailout to stave off disaster. Back in HealthEast was able to pay for its expansionat St. Joseph’as Hospital in St. Paul with a $105 milliomn bond issue at a 5.8 percengt fixed rate. A bond issue now could run as high as 9 Gill said.
Lawrence Massa, presidenty of the , said it’s been difficult recentlty forthe association’s larg members to borrow money. Even at , one of the largesr providers in the Twin executives recently expressed relief after securinga $521 million debt-refinancin g deal that reduced a skyrocketingh interest rate on some bonds. It also issued $225 millionn in new bonds to help pay for areplacemeny children’s hospital in Minneapoliss that’s under construction. Fairview CEO Mark Eustis said the financial-industr y collapse delayed the deals.
“Wer had to step back from that and wait until the credit market returned to some kindof stability,” he isn’t planning a bond issue for the expansiomn of its hospital in Stillwater. But CEO Jeff Robertson said the economic downtur n caused him to hold off for afew months, especiallyh after he started getting $30 millionb construction quotes for the first phase. The quotes were highet than the $25 million projection from in St. “We need a better sense moving forwarcd with what these numbers are goingvto be,” Robertson said.