Advocate Aurora re-evaluating capital projects across health system

Cites increased operating expenses, lost revenues due to COVID-19

Aurora St. Luke’s Medical Center in Milwaukee.
Aurora St. Luke’s Medical Center in Milwaukee.

Advocate Aurora Health said it is re-evaluating capital projects across its system, citing its increased operating expenses and lost revenues due to the COVID-19 coronavirus pandemic.

The Milwaukee and Downers Grove, Illinois-based health system will also halt routine capital expenditures at its facilities for the time being. The system said it has redirected capital and operating investments to focus on battling the virus.

“During this time of re-evaluation, construction projects continue with the exception of renovation work in existing hospital facilities to prevent the spread of infection,” Advocate Aurora said Wednesday in a statement. “Where construction work is ongoing, we have instructed general contractors to ensure workers practice social distancing. We have also left decision-making to general contractors if they want to pause projects.”

Advocate Aurora representatives declined to comment on how many capital projects will be affected by the decision.

Advocate Aurora has been on a growth trajectory since leaders announced the merger of Milwaukee-based Aurora Health Care and Downers Grove, Illinois-based Advocate Health in late 2017. It has planned or completed several projects in southeastern Wisconsin since then, including a $228 million development in Mount Pleasant, which the system broke ground for in October 2019, and a $130 million health center in Pleasant Prairie. The system was prepared to open the Pleasant Prairie center in June, but has postponed its opening due to COVID-19.

Nationally, health care providers are taking a financial hit with the cancellation of elective procedures at their facilities to free up resources for COVID patients. Meanwhile, they are spending more to increase staffing levels, establish drive-through testing sites and convert existing units to be able to treat COVID patients. This week, Advocate Aurora announced it will set up emergency department overflow tents at all of its hospitals to prepare for a patient surge.

The $2 trillion CARES Act stimulus package is expected to offer some relief, with $100 billion set aside to reimburse health care providers for lost revenue due to COVID-19.

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