SoutheastHEALTH to expand heart program, move psychiatric unit

Editor's note: This story has been edited from its original version to correct the name of Regions Bank.

Pending final approval, SoutheastHEALTH will expand its cardiovascular program in Cape Girardeau and relocate its psychiatric unit to the SoutheastHEALTH Hospital in Stoddard County, Missouri, as part of a significant emergency department expansion there.

The board of directors of the Industrial Development Authority (IDA) of Cape Girardeau County on Thursday approved a resolution authorizing the IDA to issue and sell bonds for the purpose of making a loan to SoutheastHEALTH in an amount not to exceed $24 million, which includes $18 million in bond refinancing.

The IDA Board is appointed to issue bonds for the development of commercial, industrial, agricultural and manufacturing facilities in Cape Girardeau.

The resolution will go before the SoutheastHEALTH board next week.

"We anticipate approval," Ken Bateman, president and CEO of SoutheastHEALTH, said.

The resolution adds new money to a pre-existing 2013 bond issue.

The need for additional funding arose when funds approved by the Stoddard County IDA were frozen by Regions Bank.

In the original financing, Regions Bank had approved SoutheastHEALTH to build a new emergency department in Dexter, Missouri.

But when SoutheastHEALTH missed its bank covenant in 2014, Bateman said in an interview after the IDA meeting, the funds were frozen.

The hospital organization fell on hard financial times in the last couple of years, due in part to a new electronic billing system that mishandled a large number of bills.

The organization has turned around its financial outlook, however, operating in the black in 2015, officials have said.

The system made numerous cuts throughout the organization, including several executives, and reworked contracts and services as part of the financial overhaul.

Because of the frozen funds, SoutheastHEALTH was planning to scale back the emergency department project in Dexter with a facelift renovation.

"But when we looked at the facelift renovation, it was compounded with lack of square footage," Bateman told the IDA board. "That emergency department is about 2,400 square feet, and it does about 11,000 ER visits a year. So it not only needed a significant facelift, it was also woefully undersized."

In addition to improvements in Dexter, officials at SoutheastHEALTH wanted to focus on expanding the cardiovascular program in the Cape Girardeau facilities. Moving the psychiatric program would provide the bed space needed. All other units -- obstetrics, neurology, orthopedics -- are intertwined, Bateman said, and couldn't be pulled out to make space.

"So what this will do collectively is it will give Dexter the initial square footage and a state-of-the-art emergency department to support that hospital in that community," Bateman said before the IDA Board. "The psychiatric program and that revenue will then support that project, and the expansion of cardiology here in Cape will support the renovation of that unit."

The funds approved Thursday will be used to renovate the Cape Girardeau facility.

Next week, a resolution will go before the Stoddard County IDA to provide SoutheastHEALTH with new funding for the Stoddard County facility, refinance Regions and build the new emergency department, Bateman said. The new facility will be 14,000 square feet.

The relocation of the psychiatric program, Bateman said, is an enhancement to both facilities, because SoutheastHEALTH does not have a screening and holding area for psychiatric patients, and there is not space for such an area in the Cape Girardeau facility.

A new holding area will be installed as part of the Dexter emergency department, providing a safer environment for patients and staff, Bateman said.

The restructuring of the psychiatric department will not result in layoffs.

"The plan is to move the entire staff to that unit," Bateman said.

The IDA may issue bonds for the purpose of acquiring land, constructing buildings and facilities or purchasing equipment at a borrowing cost that is often below the cost of conventional financing, according to application guidelines.

In making a decision, the IDA considers the applicant's financial responsibility, the type of business activity, the marketing of the bonds and the benefits to the county.

The IDA board is composed of Adriane Toole, Dennis Marchi, Jon Rust, John M. Thompson, Adam Kidd, Dan Driskell and Rex Meyr. Neither Kidd nor Thompson was in attendance at Thursday's vote on the resolution. Jon Rust, publisher of the Southeast Missourian and co-president of Rust Communications, attended but abstained from the vote.

bbrown@semissourian.com

(573) 388-3630

Pertinent address:

1200 N. 1 Mile Road, Dexter, Mo.

1701 Lacey St., Cape Girardeau, Mo.