Aspirus Health: Building, expanding and betting on inpatient care

It’s been an active couple of years for Aspirus Health, and the system has some other notable projects in the works.

Aspirus Health CEO Matthew Heywood says the Wisconsin-based system is successfully integrating St. Luke's in Minnesota, and is preparing for future growth.

Last year, Aspirus completed the acquisition of St. Luke’s in Duluth, Minnesota, a system operating two hospitals. With the deal, Aspirus, based in Wausau, Wisc., currently operates 18 hospitals and a host of other healthcare locations in Wisconsin, northeastern Minnesota, and Michigan’s upper peninsula.

Aspirus isn’t done yet. The system is planning to build a small hospital in western Wisconsin, in a region where two hospitals closed last year.

The system also just announced a $227 million expansion project of Aspirus Wausau Hospital to accommodate anticipated growth.

Matthew Heywood, president and CEO of Aspirus Health, says the system has planned for growth carefully, and it is preparing for the possibilities of other acquisitions in the future. He tells Chief Healthcare Executive® that there’s nothing imminent in the works, but he says the system is poised for additional growth.

“We have three thoughts about our future, and that is, one, you’ve got to manage your costs real tight. Two, you're going to have to continue to grow with your existing assets,” he says.

“And then, if we're doing our job well, we'll have opportunities to pick some people up that might want to join an organization that can provide that rigor and that future benefit to them,” he continues. “And so we're preparing that there might be something. We don't know what it could be, but we're preparing for it.”

In a recent interview, Heywood outlined the recent moves, the upcoming projects, and his thoughts on the hospital industry.

Adding more beds

Most hospitals are shifting their focus onto expanding outpatient capacity and services. It’s not hard to see why, since many people would prefer to avoid an overnight hospital stay, if possible.

Aspirus Health is also aiming to provide more outpatient services, but Heywood also is looking to add more inpatient capacity because he says it’s needed. That’s a driving reason behind the expansion of Wausau Hospital, which will add 48 intermediate care beds, a 16-bed observation unit, expanded surgical facilities, and more.

Heywood notes that Wisconsin has an aging population, but he also sees the system as being ahead of the curve in focusing on inpatient care.

“Many systems are literally spending all their energy on the outpatient side and just maintaining their inpatient side,” Heywood says. “And you might ask, why are we building a $227 million expansion on the inpatient side? What we're finding is that the world has probably miscalculated.”

Heywood says he sees potential in ramping up more inpatient beds.

“We believe that inpatient is going up, not down, that as a population ages, their comorbidities and their challenges, maybe also with additional length stay as they get older and more sick, is going to require more inpatient buying than people think,” Heywood says.

“We didn’t make that decision lightly, but we do believe we're leaning more into the inpatient than others right now, even though we are focusing on outpatient, too,” Heywood says.

Planning a new hospital

Residents in western Wisconsin bemoaned the closure of two hospitals last year. The Hospitals Sisters Health System, which operated Sacred Heart Hospital in Eau Claire and St. Joseph’s Hospital in Chippewa Falls, shut down the facilities in March 2024. HSHS cited cost pressures in the market when it announced plans to close the facilities in January.

Aspirus is building a small, 10-bed hospital that is slated to open in the first half of 2026, Heywood says. Heywood estimates the cost of the project to be $30-$35 million. Before the COVID-19 pandemic, he says the project would have cost about 60% of that figure, reflecting the higher construction costs hospitals are facing today.

“That is an example of when you want to grow, accretive to your existing footprint,” Heywood says. “We want to go into markets that are grown, markets that need us, that need that skill set we bring, need that quality of care we can bring.”

The system looked at the two closed HSHS hospitals, but Heywood says it wasn’t feasible to take them over. He cites challenges with the facilities, including the size.

“We feel that by coming in with this hospital, it's more right sized, better location, better point of care, so we could bring the care to those communities,” Heywood says.

Heywood says the hospital is starting with basic care, including an emergency department and the ability to stabilize patients.

Over time, Heywood sees the potential to add services, but he said the system is aiming to get a small hospital established as quickly as possible.

“We're excited about getting into that community and helping them fill that void in the community,” Heywood says. “Our goal is to try to do it rapidly, and then as the community needs more services and the things they need, we'll work with the community to slowly, over time, grow the hospital to meet their needs. But we're going in as fast as we can with what the community needs, most of all, which is access to beds, an ED and clinical care at the basic level.”

Another group, the Chippewa Falls Health Cooperative, a local, nonprofit organization, is planning to build an independent, nonprofit hospital in Lake Hallie, part of the Eau Claire metropolitan area. The group says it’s aiming to build a $158 million hospital with 48 beds, including 12 intensive care unit beds. Officials say they hope to open the hospital in 2027.

Heywood says the plans for the other hospital won’t affect or deter Aspirus Health from opening its hospital. He also says he tells his team to be aware of the system’s competitors, but to be more aware of market forces shaping the industry.

“We're more aware of them, we’re not focused on them,” he says. “And then we're focused on how we do our job, care for our patients, our community, and do it effectively in the environment we see.”

Integrating St. Luke’s

Since completing the acquisition of St. Luke’s in Duluth last year, Aspirus has been integrating the hospitals and clinics into the system. Heywood is pleased with the progress.

By April 1, the St. Luke’s facilities should be integrated on their electronic health system, which is Epic’s platform. “We're moving pretty rapidly, and they're handling it pretty well,” Heywood says.

Aspirus has taken on other facilities in recent years. In 2021, the system purchased seven hospitals from Ascension Health. But the deal with St. Luke’s marked a different step for Aspirus, with the system going outside of its core market.

Since the completion of the deal, Aspirus is seeing progress in boosting the financial performance of the St. Luke’s hospitals, with patient admissions rising 7-10%, Heywood says. They’re also pulling in millions of dollars more in revenue.

While Aspirus is bringing St. Luke’s into the system, Heywood says the goal is also to respect the differences in the markets.

“There are going to be some unique differences, and our team is trying to flesh that out, because we want to get the maximum value of an integrated system,” Heywood says. “But you want to make sure that that market, which is different, has some nuances that you shouldn't probably change, and you need to leave them different. We're working through that.”

Aspirus has created “a very thorough network model” for hospital performance and services, and Heywood says the model is proving to be successful. The experience of integrating St. Luke’s is valuable, since Aspirus is looking to grow and would likely have to look to acquire other providers outside its service area. Heywood says the system wants to strike the balance of using its model while understanding the nuance of other markets.

“If we grow further, most likely, most of our growth would be in another market,” Heywood says. “It wouldn't be our traditional, contiguous growth. It would be another market. And if it's another market, we would have these same learnings from St Luke's that we'll be able to apply.

“So it's a little bit of a transitional learning for the organization, but we're preparing for further growth,” he adds. “So it's a good foundation effort to kind of learn what we would have to do if we go into a new market.”