Hairy-faced New Jersey
are to join
Cooper University Hospital
George Norcross III
and other hospital leaders today to open
, a $220 million, 10-story addition to Cooper Health System's Camden campus.
The building was financed with piles of debt issued by state and county agencies, to be repaid by patient fees.
It's designed to make the fastest-growing institution in the state's poorest city a destination for all classes of medical customers, and to give Cooper a boost in competition with South Jersey's three larger hospital systems,
, which have building projects of their own. It's a medical arms race.
The Pavilion is fancy. Why the switch to private rooms? "It increases patient satisfaction," said chief nursing officer
. "It's a very healing environment."
The Pavilion was made possible by a steady improvement in Cooper's financial picture since Norcross, South Jersey's Democratic power broker, got involved in the late 1990s. The improvement included support by the state and
Commerce (now TD) Bank
. Cooper's Moody's rating rose from junk-bond "B1" in mid-2002, to investment-grade "Baa3" in 2004, said Cooper administrative officer
The hospital has borrowed more than a quarter of a billion dollars since then to fund expansion and reduce earlier debt.
But the Pavilion is opening with five floors vacant "for expansion," and into a yawning recession. Cooper's "total operating revenue was lower than budget" by $4.9 million in October alone, the hospital told its bond investors, due mostly to "lower-than-anticipated admissions and outpatient volume."
"The economy's a little on the tough side," said
Cooper's chief financial officer. "The patients are coming through - we may be the only South Jersey operation that has volume growth - but some of our payers are not paying as quickly as we expected."
Will Cooper be able to pay off the bonds if more patients aren't paying? "We're positioning ourselves for the balance of this decade and the next decade," Pettigrew said. "We feel comfortable with where we are, even with the down economy."
Hospitals from Wilmington to Reading have been adding new wings in the face of the declining economy, keeping firms and crews busy that are starved for other work.
All that cement, glass and labor will be paid for by employers, insurers and taxpayers who are, at the moment, under increased financial strain.
Costs seem to rise faster than inflation in hospitals, colleges and other institutions whose services are subsidized by taxpayers but run as private, competitive enterprises. The people who run each institution aren't rewarded for worrying about the total picture. They need to bring paying customers in the door.
says that its endowment has lost $400 million since June, leaving about $1 billion, and that it is following the
University of Pennsylvania
in slowing hiring and other expenses.
"We can expect a reduction in philanthropic support and an increase in the cost" of financial aid to students, president
told students and faculty in an e-mail.
"Effective immediately, the College will pull back from all non-essential construction work, refrain from initiating any new programs, and stringently evaluate any faculty or staff hiring. . . . We will develop a contingency plan for more significant reductions in the budget."
Cold Stone Creamery Inc.
chief executive officer
canceled his yearly franchisees' meeting in Las Vegas, put his four-person management team on a bus from his Arizona office, and is driving cross-country trying to sell 1,350 store owners on a plan to meet the expected drop in fancy-dessert spending.
"We control some of the best real estate coast to coast," including prominent corners in Berwyn, Ardmore, and other upscale zip codes. "We only really utilize about 50 hours a week, weekends and nighttime. We're busier in summer than winter."
In meetings like the one he held yesterday near Atlantic City, Beem is asking franchisees to consider adding maybe a chain candy store, maybe a lunch counter. They like the company coming to them, he said. "They want to know we have a plan."