Weather Forecast


Riverwood Healthcare plans $21 million expansion

AITKIN —  Riverwood Healthcare Center in Aitkin is embarking on a $21 million expansion project this spring.

A centerpiece of the 49,770-square-foot project is a plan to convert semi-private hospital patient rooms into 25 private rooms. Plans were unveiled at Riverwood’s annual meeting Thursday night at the 40 Club Convention Center in Aitkin. 

Riverwood, an integrated hospital and clinic employing 350, expects to begin construction in the spring, breaking ground in May. Plans call for a fall 2012 completion. 

“We are looking to the future and making sure we have a healthier system to meet all the community’s needs,” said Michael Hagen, Riverwood chief executive officer. 

Hagen outlined plans for about 60 people attending the annual meeting, noting he didn’t expect to be able to say a project they thought may have to be phased in during a decade would be  tackled in one 18-month project. Funding available from the American Recovery and Reinvestment Act helped fuel the project. 

Riverwood reported it applied for the U.S. Department of Agriculture’s Rural Development Community Facility Funding in 2010 and is receiving a low-interest loan (with a cap of 4 percent ) of $12 million for the expansion project. AgStar Financial is providing an additional $4 million in permanent financing. 

The funding, Hagen said, means the community will see enhancements to patient care much earlier and Riverwood will save $6 million by combining the construction phases.

Hagen said Riverwood was the only hospital in Minnesota selected to receive funding from this special USDA fund. Private contributions, including those raised by the Riverwood Foundation, are being sought for the $5 million gap in funding and a capital campaign is in the planning stages. The Riverwood Auxiliary pledged to raise $100,000 for the project.

Hagen said a chief component is the move to private rooms. He said benefits not only come from patient expectations but provide a more quiet environment and room for family. Hagen said because of infection control needs for patients recently out of surgery and gender concerns in mixing patients in the semi-private rooms now, the hospital has been full when it has 16 or 17 patients. Existing patient rooms will be remodeled to look like the new rooms. 

Arlene Wheaton, Riverwood’s public relations coordinator, said the ability to have 25 patients in Aitkin also provides the option to keep residents in the area, close to their family and friends, as opposed to transporting them farther away. 

Last fall, Riverwood collaborated with the Cuyuna Regional Medical Center in Crosby in making a music video marking a collaboration for breast health services called “Our Town” using locations in the community and residents as well as staff members. The three-minute video is online at and at Wheaton said the health care communities in Aitkin and Crosby are competitors, but have shared specialties for years and shared surgeons since the 1950s. Now Wheaton said they are coming together to combine resources and jointly buy equipment. 

“The focus is on keeping the care for patients here locally,” Wheaton said. 

Holly Torres, Riverwood chief financial officer, reported the health care center’s financial performance for fiscal year 2010 remained steady. Total operating income amounted to $44.2 million in 2010, compared to $44.4 million in 2009.

“With many critical access hospitals reporting reductions in revenue at this time, we are proud that we’ve been able to perform this well considering the economic environment,” Torres said. “Our staff has done an outstanding job of managing expenses. An increase in net assets of $3.7 million shows solid financial stability that is absolutely critical for the launch of a major expansion project.”

RENEE RICHARDSON may be reached at or 855-5852.