CoxHealth has budgeted $130 million toward expanding its south Springfield flagship hospital.
The project would add a nine-story, 310,000-square-foot patient tower attached to the northwest portion of the hospital.
CoxHealth CEO Steve Edwards said the health system likely would break ground in May with a goal to open the new tower by Thanksgiving 2014. He said a general contractor hasn't yet been selected to build the facility designed by Dallas-based The Beck Group.
The tower, which was announced to the public this afternoon, would house a women's and children's hospital, a neuroscience hospital and include room for future expansion.
Edwards said about 80 additional patient beds in the tower would allow Cox South to transition its semiprivate rooms to private rooms. He said the hospital could revert back to semiprivate rooms in case of an emergency.
"In terms of actual inpatient beds, this is the first material project on this campus since 1985, when the first beds were built," Edwards said.
"As long as I've been in health care, I've never understood why at the worst state of your wellness, that you'd have a roommate. We do what we can to assure private beds for people, but that's not always the case," he added. "There's a lot of signs that say nosocomial - hospital-borne infections - are reduced with private beds. Meyer Orthopedic Hospital is all private beds, and patient satisfaction is in the 90-plus percentile."
CoxHealth is issuing $200 million in bonds, $115 million of which would fund the Cox South patient tower. Edwards said the health system is anticipating construction savings and would fund the rest of the expansion cost through operating cash and donations. He noted the bonds are being priced today.
Edwards said it's a strategically advantageous time to launch an expansion, given low market interest rates and recent bond ratings of A from Fitch and A2 from Moody's.
"The bond market may be the best I'll ever experience in my career. If interest rates went up a point and a half, it would cost us $43 million more," Edwards said. "I think there are few economists out there that would argue they're going down; they're going up probably, so that's a motivator for us. That's why we're acting now."
Edwards said the remaining bond funds would be used toward Cox Medical Center Branson, the former Skaggs Regional Medical Center the Springfield health system purchased last year.
Of the remaining funding, officials would use $25 million to refund CoxHealth for the donation it made to the Skaggs Foundation as part of the acquisition agreement, $25 million to perform facility improvements in Branson and $30 million to refinance debt incurred by Skaggs. Edwards said projects to be funded in Branson have not yet been finalized.
In late 2010, the Springfield Contractors Association named CoxHealth Developer of the Year, after the health system utilized $120 million in bonds to help cover the cost for the construction of the $52.2 million emergency department, $22 million surgery center, $24 million renovations to the Meyer Orthopedic Center, a $12 million parking garage expansion and $7.4 million in improvements to the Walnut Lawn and south campus central utility plants, according to Springfield Business Journal archives.