Many hospital construction projects remain stuck in neutral as the economy slowly improves.
Economy causes many projects to stagnate
A year ago, Banner Health announced it would complete construction on its new Banner Ironwood Medical Center in Queen Creek, Ariz., but keep the facility closed until 2010 or later (Nov. 24, 2008, p. 6).
Construction on the $128 million hospital is now finished, and the board of the Phoenix-based system could decide as early as next month on when to open it. “We're actively looking at when we can open it in 2010,” said Bill Byron, spokesman for Phoenix-based Banner Health, adding that the last quarter of 2010 is a possibility.
The economy is less of a factor than a year ago, Byron said. Instead, the not-for-profit system must continue to see signs that the Queen Creek region southeast of Phoenix—hit hard by the housing market collapse—is growing, and also decide what medical services and how many beds to offer. The completed first phase of construction allows for up to 86 beds.
Meanwhile, Kaiser Permanente opened its long-awaited $500 million medical center in Vacaville, Calif., last month. The 64-bed facility was completed in July, but Oakland, Calif.-based Kaiser Permanente delayed the opening because of the economic downturn.
The managed-care giant also plans to open a replacement tower in Vallejo, Calif., in spring 2010, but construction on that project is not complete, a spokeswoman for Kaiser Permanente said.
Meanwhile, some hospital construction sites are still sitting empty. Santa Rosa (Calif.) Memorial Hospital broke ground on a $68 million emergency room and intensive-care-unit expansion a year ago, but construction was halted in the very early stages because of the faltering economy. To date, the project has not moved forward, as hospital officials continue to monitor the economic climate.
“The economic outlook has improved since the decision to postpone further construction was announced last fall, but it has not improved significantly,” said Katy Hillenmeyer, spokeswoman for St. Joseph Health System in Sonoma County, which includes Santa Rosa Memorial.
For those with projects still on the drawing board, getting them restarted remains a daunting task. “Bond market access is still very, very unwelcoming,” said Robert Gill, chief financial officer of HealthEast Care System in St. Paul, Minn. “We're still sitting here waiting for improvements in capital markers to kick our construction plans into high gear.”
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