Brief

Mayo Clinic plans $70M upgrades

Dive Brief:

  • Spending on construction projects at the Mayo Clinic hospital in Mankato, Minnesota will include $65 million on expansion of a surgical suite and a new gastrointestinal endoscopy center, the health system announced.

  • An additional $5 million will be used to renovate the orthopedic and sports medicine clinic, which will double in size and include 20 patients rooms, on-site radiology services and a minor procedure room.

  • More than 80% of hospitals in the U.S. will either maintain or increase their capital spending from 2016 levels despite uncertainty caused by plans to reform healthcare, according to a 2017 analysis from Allianz Global Investors.

Dive Insight:

Many in the healthcare industry have attributed recent growth in capital spending to the ACA. While impending legislative action could cause healthcare organizations to pull back, the move by Mayo Clinic indicates that at least some are willing to forge ahead with capital projects.

From 2012 to 2015, more healthcare organizations developed plans to invest in capital projects, according to a 2015 report from Fitch Ratings. Only 45% of hospitals had planned to increase capital spending in 2012 compared to 53% in 2015. “Increased certainty” about recent changes to health policy was cited as a reason for the bump in capital spending.

President Donald Trump administration's plans to repeal-and-replace the ACA has caused a lot of uncertainty in the industry in terms of financials and operations. While some in the hospital industry have move forward with plans to upgrade or expand their facilities, recent financial challenges facing hospitals across the U.S. have led to the closures of numerous health clinics, as well as care units and facilities, particularly in rural areas. 

Filed Under: Finance Hospital Administration
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