After more than a century as a single-hospital town, Bloomington, Ind., witnessed the opening of 32-bed Monroe Hospital in mid-October 2006. The $35 million hospital with all-private rooms was designed to give residents a modern alternative to Bloomington Hospital, a 295-bed facility founded in 1905 that has had the market to itself for a century.
But just six months after Monroe opened in a fast-growing area south of downtown Bloomington, Monroes owners are struggling to survive in the states seventh-largest town. They are now being forced to rely on a loan from the hospitals developer, Medical Properties Trust, to help tide them over until they can sort through their financial difficulties.
Dean Melton, Monroes president and chief executive, said the owners have tried without success to link up with an outside company that manages or purchases hospitals. Now, he said, the 53 investorsincluding many physiciansare dependent on the loan to keep the hospital solvent.
The project was undercapitalized from the start, and the amount of capital needed to work through the hump at the start was misjudged, Melton said.
Melton said that he is confident the hospital will survive while it juggles the lag time between reimbursement from managed-care plans with the high cost of operating a hospital. We have had a lot of expenses and very little income until recently, Melton said.
He said Monroes survival is important because it provides residents in the southern part of town with an alternative to Bloomington Hospital. He suggests the competition will make Bloomington a better hospital. Officials with Bloomington Hospital declined to comment on the competition issue.
Melton did not provide details on the amount or type of loan provided by Medical Properties Trust, a Birmingham, Ala., real estate investment trust that develops and acquires healthcare facilities. Officials with the REIT did not return calls. Investors in Monroe owe $2.9 million in the first year of a 15-year lease that includes escalating annual payments, Melton said.
All of our utilization trends are moving in the right direction, he said. Wed like for them to move a little more quickly, but theyve definitely been going up.