With its financial performance exceeding expectations, St. Francis Hospital & Health Centers will resume construction on a $265 million, 221-bed patient tower at its Indianapolis campus, the hospital system announced Thursday.
Work never technically stopped on the project, but slowed to a near halt in March as the Catholic hospital system sought to preserve cash in uncertain economic times.
St. Francis and Clarian Health both halted construction projects this year after massive investment losses—at least on paper. In March, St. Francis officials said they wanted to make sure the network's balance sheet was strong and the investment market was rational before pumping more money into the project.
Also scaring hospitals at the time were dips in patient volumes, some spikes in unpaid bills and the specter that galloping unemployment would cause both to worsen.
But the year has turned out pretty well for St. Francis—all things considered. Through June 30, the Indianapolis hospital had income from operations of $33 million. Its operating margin actually increased from the same period a year ago, to 9.2 percent, according to a financial report by its parent organization, Mishawaka-based Sisters of St. Francis Health Services Inc.
In Indianapolis, St. Francis has had substantially fewer inpatient stays than it budgeted for this year, but substantially more outpatient visits.
“Today the situation has improved,” said St. Francis Hospital CEO Bob Brody in a statement. “After careful and ongoing evaluation of key economic indicators and the financial performance of the hospital, the Sisters of St. Francis Health Services Board of Trustees voted to resume the project at full steam ahead.”
The expansion is about 40 percent complete, roughly the same as it was when construction was stalled in March. It is now scheduled to be finished in the first quarter of 2012, more than a year later than originally planned.
The expansion project will allow St. Francis to expand its emergency department. The network is expanding the Indianapolis campus in order to fold most of its Beech Grove hospital into the one location.