Grand View Health is tapping the bond market to pay for a $184 million patient pavilion that will allow the nonprofit in Upper Bucks County to convert to 100% private rooms.
The decision to construct the six-story, 190,000-square-foot building — expected to open in July 2023 — is part of a years-long effort to halt a decline in its share of hospital patients in parts of Bucks and Montgomery Counties, according to Grand View’s Feb. 12 statement to investors.
The effort also included the construction of additional outpatient centers to attract patients for X-rays, tests, and other services, and an alliance with Penn Medicine in cancer, orthopedics, and trauma. A seventh outpatient office is scheduled to open in April in Dublin Borough, Bucks County.
Grand View has had increasing operating losses for three years in a row. In the year ended June 30, when many health systems lost money because of COVID-19 restrictions on the services that could be provided, Grand View had an operating loss of $13.8 million on $199 million in revenue.
Grand View plans to borrow a total of $261.6 million. In addition to the new building, the money will be used to refinance older debt and to pay off Citigroup and Deutsche Bank under a complicated interest rate agreement unfavorable to the hospital. The hospital had an $11.2 million liability under those agreements on June. 30.
With the new patient tower, Grand View joins a health-care building boom in the Philadelphia region. Jefferson Health has patient towers under construction in South Jersey at hospitals in Washington Township and Cherry Hill, as well as a major outpatient tower in Center City.
The University of Pennsylvania Health System will open a $1.5 billion patient pavilion at the Hospital of the University of Pennsylvania this year, and recently completed a major expansion at Chester County Hospital. Main Line Health is building a replacement patient pavilion and other facilities at Riddle Hospital in Delaware County.
Grand View’s 59-acre main campus is in West Rockhill Township, Bucks County, just outside Sellersville and a mile from Route 309. A three-story medical office building will be demolished to make space for the new pavilion.