Smaller expansion at Regions Hospital moves forward

With the legislative session wrapping up this weekend, a scaled down proposal to add beds at Regions Hospital in St. Paul was moving at the Capitol even as critics speculated the expansion could harm nearby St. Joseph's Hospital.

On Wednesday, the House approved a plan that would allow Regions to add 76 licensed hospital beds, including a provision that makes construction of some beds contingent on the hospital adding capacity for mental health patients.

The bill from Rep. Joe Schomacker, R-Luverne, prevailed despite an attempt by another Republican lawmaker to scale back the plan to just 30 beds. Rep. Roz Peterson, R-Lakeville, proposed the smaller expansion because Fairview Health Services was concerned "we won't be able to have a viable hospital at St. Joe's if this legislation moves forward," she said.

Minneapolis-based Fairview owns St. Joseph's Hospital. In an interview, Schomacker pointed to recent reports that Fairview is spending $111 million on a renovation project at the University of Minnesota Medical Center.

"They have the ability and funding to do that," Schomacker said. "If they did think that this was a crisis, they could have reexamined that before making that kind of announcement."

Late last year, Regions proposed adding 100 hospital beds by 2040 to add capacity at a facility that officials said is too full to efficiently handle projected growth from an aging population and sicker patients. Since 1984, Minnesota law has blocked construction of new hospital beds due to concerns that overcapacity can drive up costs in health care.

Hospitals can seek exceptions to the moratorium, but the process includes a Health Department report about whether proposals are in the public interest. A preliminary report from the state agency earlier this month found the full Regions proposal was not in the public interest, but suggested there was merit to aspects of the plan.

Schomacker's bill would let Regions add a total of 76 beds in two phases within 10 years. The first phase would allow 12 beds for medical/surgical patients, 20 beds for obstetrics and 20 beds for mental health.

Hospitals tend to lose money on patients in mental health beds, Schomacker said, so the 12 medical/surgical beds would provide a margin to essentially pay for the mental health beds. Once the mental health beds are certified by the state, Regions could build another 24 medical/surgical beds — enough capacity for revenue-generating patients to satisfy the hospital's financiers, Schomacker said.

"We had to pay for it somehow," Schomacker said. "They came down quite a bit from what their original request was."

The Legislature is facing a deadline of midnight Sunday to pass bills this year. Sen. Michelle Benson, R-Ham Lake, said she hoped to bring the Regions measure forward for a vote in the Senate. Schomacker said he believed the Senate might take up the issue Saturday.

At the St. Paul province of the Sisters of St. Joseph of Carondelet, the religious order that founded St. Joseph's Hospital in the 19th century, leaders said Friday they have concerns about the House bill.

"Our understanding is that the most recent House amendment does not allay Fairview's financial concerns for St. Joseph's Hospital and that ultimately could reduce care options for what is a growing need in our community — mental health and chemical dependency beds," said Ann Thompson, a spokeswoman for the Sisters of St. Joseph of Carondelet.

"The sisters still believe there is room for compromise," Thompson said. "If a compromise can't be reached, we wonder if there might be a short-term solution possibly granting Regions a few beds … and then return to this issue in the next [legislative] session."

A Fairview spokeswoman did not respond to an e-mail Friday afternoon seeking comment. A spokeswoman for Regions said Friday that the House bill passed with bipartisan support.

Christopher Snowbeck • 612-673-4744 Twitter: @chrissnowbeck