SSM delays plans for Janesville

By JIM LEUTE ( Contact )   Wednesday, Feb. 18, 2009
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Podcast Episode


WCLO's Beth Wheelock reports SSM Health Care officials blame the economy.

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— Unfavorable credit markets will delay but not destroy plans for a $140 million hospital and physicians complex in Janesville.

Officials of SSM Health Care of Wisconsin and Dean Health System said Tuesday the new complex on Janesville’s east side likely will not open until 2011, up to a year later than initially planned.

“We remain fully committed to build St. Mary’s Janesville Hospital,” said Mary Starmann-Harrison, SSM’s president. “However, we find ourselves in an unprecedented economic time that is affecting new construction in all sectors, including hospital projects across the country.

“We will go forward with this project, but the timing has to be that it makes sense.”

Starmann-Harrison said the delay is strictly tied to the system’s ability to obtain financing at favorable interest rates. SSM is including the Janesville project with other SSM projects in one larger bond issue.

Last April, SSM and Dean announced plans for the $80 million hospital and $60 million physician office complex near the intersection of Interstate 90/39 and Highway 11. The project is expected to provide 344 direct and 155 indirect jobs and have a $164 million annual economic impact.

Two months later, General Motors announced that it would end SUV production in Janesville, but hospital and clinic officials have remained steadfast in their commitment to the Janesville project.

“The need for a new hospital and medical complex in Janesville remains as strong as ever,” said Craig Samitt, president of Dean Health System. “We will continue to finalize our plans and meet with the community and will be poised to aggressively begin construction once the economy becomes more favorable.”

Samitt and Starmann-Harrison have said surveys indicated the community demanded choice and competition in the local health care market and drove the decision to build the new hospital and a doctors’ office complex.

Mercy Health System has a hospital and numerous clinics in Janesville.

Starmann-Harrison is well aware that Janesville has been ravaged by job losses that go well beyond the auto industry.

She’s also aware that some residents will blame the delay on cold feet and jump to the conclusion that SSM and Dean will never build in Janesville.

“That would be absolutely wrong,” she said. “The St. Mary’s Janesville Hospital remains the top priority for SSM Health Care.

“This is not a local, Janesville economic issue. It is simply a national economic issue: The credit markets are not at all favorable for hospital projects.”

In the interim, progress is being made, she said. A site plan and the design of the facility are complete, and Kerry Swanson has been hired as president of the new hospital.

Officials broke ground for the project in November, but no other site work has taken place since.

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(18)
gmaof3
Feb 25, 2009 at 5:46 a.m.
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I sooo hope they are able to build soon. The Mercy ER is an absolute joke! My daughter needed treatment 10 days ago for an asthma attack / anxiety attack that we couldn't get under control with her inhaler. She had felt as if someone was standing on her chest.

I took her to the ER - as most of you will have experienced... even with only a couple of people to be seen, I waited with her for an hour, while she struggled to breathe.

I finally went back up to the desk, and while the "staff" was giggling and laughing and talking about their latest escapades with boyfriends and such, my daughter was crying from fear she would suffocate! I asked them how much longer it would be before she could be seen. The gal said they were busy. (There was NO ambulance in the bay, no one else had come in) I asked "Its not going to be another hour, is it?" She said "quite possible".

That was it! I pulled her out of there, drove up to Edgerton (who DID have an ambulance in the bay). She was seen IMMEDIATELY! She was treated within 10 minutes.

Now I know better than even attempt Mercy's ER. I've NEVER been able to get the service that Edgerton offers. I just needed her to be seen. As it turns out, she had to suffer an extra 1-1/2 hours for treatment.

Javon Bea should be so proud!

I for one, can't wait to see SSM open their doors here in Janesville!!!

jk940
Feb 19, 2009 at 6:48 p.m.
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Change really scares some of you people, don't it? (At least thats how it looks in the previous blog about the Dean St Mary delay.) When many people should be upset, because this is a city that needs some jobs created and this hospital would create jobs.

bigbro
Feb 19, 2009 at 5:57 p.m.
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what about ssm's plan to build new edgerton hospital with edgerton?

newsreader
Feb 19, 2009 at 6:59 a.m.
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My bet is that they are using this an a convenient excuse to delay a project that was a tad "iffy" in the best of circumstances. Unfortunately for Dean Insurance, they have apparently low-balled contracts with local employers to gain a captive market base for the new hospital. With the delay, it must now put up with those rates for a longer period of time than expected without a new hospital to steer patients to. Too bad for the patients if this means they may have to go to Madison for services that could be done in Janesville.

And, yes, it is a common practice to use profits from one hospital to bankroll another, but Dean-St. Marys, for whatever reason, has chosen not to do so in this case.

Letitsnow
Feb 19, 2009 at 5:04 a.m.
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Just a clarification because I'm a nerd. SSM does enjoy profits. A more appropriate title is "not-for-profit" instead of non-profit. The difference between revenue and expenses is still their profit margin just like any for-profit company. The difference is that, unlike a for-profit, they don't have to pay shareholder dividends. The idea for a not-for-profit is that all profits get reinvested in the organization to address community need.

Also, there should be no problem with sharing profit between entities within a system so SMJ could use $ from Madison.

Stu_Pedasso
Feb 18, 2009 at 6:11 p.m.
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I would say they are looking to tap into some cheap or free money that will be coming to the State via the ecomonmic stimulas package signed the day before. Give it a week and you will see them leveraging the move with the promise of how many construction jobs and full time jobs this project will create.

janesvillean
Feb 18, 2009 at 12:30 p.m.
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llund22 probably means this WSJ article:
http://www.madison.com/wsj/home/local/43...
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SSM says they used cash generated by St. Mary's in Madison to fund that hospital's addition, but they don't have cash reserves from Janesville because they don't have a hospital here. (Dean is an affiliate partner, not a subsidiary.) It wouldn't be prudent to take cash reserves from another hospital (if that is legally possible, which it may not be) to build this one. They expected to be able to borrow money at around 5% but instead that has shot up to 9%, because the entire banking industry is leery of construction at this time.
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(SSM has issued bonds before and there is money flowing toward bonds right now, but I don't know what sort of interest rate they would have to guarantee.)
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SSM is also a non-profit. They may have higher per-patient revenues but that isn't the same thing as profit.
http://www.guidestar.org/pqShowGsReport....

Placebo
Feb 18, 2009 at 12:26 p.m.
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Great job with your last victory SSM. Even with loaded hands Margarito couldn't touch you. Take your time coming up here from Cali, it's still cold up here. Sugar Shane Mosley, I can't wait.

KateM
Feb 18, 2009 at 12:18 p.m.
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I think they are making a wise business decision in this current economic climate. Many businesses are revisiting projected growth and future plans - it just makes good business sense.

support_local_racing
Feb 18, 2009 at 12:15 p.m.
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llund22, my guess is it has more to do with the construction company's ability to get credit to buy materials to build the thing. Strong, proven construction companies all across the US are having difficulties getting materials because the line of credit with the bank has disappeared.

JoeSchmo
Feb 18, 2009 at 12:11 p.m.
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How can they be concerned about money and credit? There was just an article in the paper that they paid CASH for their enormous new addition at St Mary's in Madison. The article also stated how St Mary's was making a lot more profit than other local hospitals.
I hope they don't decide later to cancel their plans altogether. It would be good for Mercy and for Janesville to have some competition in the healthcare market.

gabby06
Feb 18, 2009 at 12:02 p.m.
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I agree cappyman. I had Dean insurance and paid half of what I pay for Mercy. And I work in the Mercy system. Its ridiculous what you have to pay for insurance anymore, no matter what company you have. I had a much much better plan with my Dean insurance though, I was very sad when I had to switch to Mercy and get all new doctors.

dkush21
Feb 18, 2009 at 11:08 a.m.
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I've had several problems with MercyCare changing the way they bill the insurance companies and because of the changes with wording, the insurance companies will not pay for something that was covered prior to the change.

rooster
Feb 18, 2009 at 10:55 a.m.
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don't get sick.

cappyman
Feb 18, 2009 at 10:54 a.m.
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we changed our insurance to dean and pay half of what mercycare was. we need this competition. no more strangle hold for mercy

Irishlady4ev
Feb 18, 2009 at 10:10 a.m.
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Res we need a new hospital so the monopolizing can end and give people a better choice for better health care.

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