Hospitals

University of Minnesota pursues big hospital expansion projects

It seems like just yesterday the Minnesota Nurses Association packed up the picket signs and cut a deal with six hospital chains in the Twin Cities for a new contract. Within the last few days, the University of Minnesota has launched efforts to fund two major hospital projects in Minneapolis. Wasn’t it Fairview and Children’s Hospital that argued they couldn’t afford big raises or the staffing ratio plans demanded by the nurses during the strike?

It seems like just yesterday the Minnesota Nurses Association packed up the picket signs and cut a deal with six hospital chains in the Twin Cities for a new contract.

For the University of Minnesota, though, it’s certainly back to business — or more specifically, back to the future.

Within the last few days, the school has launched efforts to fund two major hospital projects in Minneapolis. Last week, the university and Fairview Health Services officially kicked off a $175 million campaign to back the new University of Minnesota Amplatz Children’s Hospital.

The 185,000 square foot facility, which will open in early 2011, includes 96 acute care hospital beds, state-of-the-art medical/surgical units, a pediatric intensive care unit and a dedicated pediatric emergency room, in addition to transplant services units and Minnesota’s only pediatric dialysis unit.

On Monday, the university’s Board of Regents approved a move to issue up to $150 million in bonds to finance a new 405,000 square foot, $250 million Academic Ambulatory Center equipped with a comprehensive cancer care center, ambulatory surgery center, orthopedics, ophthalmology, urology and imaging services. Fairview and the University of Minnesota Physicians group will pay off the bonds.

Boy, if you are a Twin Cities nurse, you must wonder whether the past several months happened. Wasn’t it Fairview and Children’s Hospital that argued they couldn’t afford big raises or the staffing ratio plans demanded by the nurses?

First, some caveats. The hospital projects were in the pipeline long before the labor dispute. And money for long-term capital projects is completely separate from operating expenses like nurses’ salaries.

But this stuff matters for a couple of reasons, both practically and symbolically. A major reason the hospitals dug themselves into a financial hole in the first place was overexpansion and too much reliance on volatile investment income.

Of course, one could argue the hospitals, with their shiny new buildings and services, are trying to generate more operational revenue. If that’s the case, good for them. But that means managing their finances better and approaching the new facilities as businesses rather than real estate. What is the return on investment? What kind of marketing should we do? If the patients don’t show up, what is Plan B?

As for symbolism, well, spending hundreds of millions of dollars on new buildings in a weak economy — and immediately after a bitter labor dispute — is not exactly good public or labor relations. If I was a nurse, I’d be pissed off too, especially when “victory” in contract negotiations meant a 3-percent raise over three years.

One also has to wonder about the timing of these events. Would the university, Fairview and Children’s Hospital have launched these high-profile  fundraising efforts during the labor dispute?

I doubt it.