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HealthPartners is continuing to expand in Woodbury, breaking ground this month on a new $50.5 million clinic offering specialty care services in the east metro suburb.

The project is another sign that health systems are resuming capital investments after financial shocks from the first months of the COVID-19 pandemic and ballooning expense with ongoing staffing problems.

Based in Bloomington, HealthPartners says the new 55,000-square-foot, two-story facility is needed to keep up with patient demand in Woodbury and nearby communities. The health system expects it will be completed by winter 2024.

HealthPartners is one of Minnesota's largest nonprofit groups, with just over half its revenue coming from a large health insurance business. Its network of hospitals and outpatient centers includes Regions Hospital in St. Paul, Methodist Hospital in St. Louis Park and Park Nicollet clinics.

Hospitals and clinics have been struggling financially over the last two years due to high labor costs amid a scarcity of workers in Minnesota, although in recent months there have been signs of improvement.

Minneapolis-based Allina Health System announced in February 2022 that it was building a 10-story inpatient facility at Abbott Northwestern Hospital, a project with a $1.2 billion price tag. The Allina board this year approved an expansion for outpatient services in Eden Prairie, but the health system also paused plans for a replacement hospital in Cambridge.

Last September, the state cleared plans for Fairview Health Services and a for-profit company to jointly build a new $62 million mental health hospital in St. Paul. Construction of the new facility was expected to start in mid-2023 with an opening in the second half of 2025, the Minneapolis-based health system told bondholders last month.

At HealthPartners, the new specialty center will be located on City Place Boulevard, within a half-mile of the health system's TRIA Orthopedic Center Woodbury.

HealthPartners opened a Melrose Center clinic for eating disorder patients in 2018 in Woodbury, where the nonprofit group for many years has run a primary care clinic.

In July 2020, HealthPartners announced it was permanently closing seven clinics and a drug and alcohol treatment program at locations across the Twin Cities and St. Cloud, saying the pandemic had accelerated a shift away from brick-and-mortar clinics.

Last year, HealthPartners saw $8.22 billion revenue across its businesses, covering $8.13 billion in expenses, according to a Star Tribune review of financial statements. The remaining $87.7 million in operating income last year was lower than in 2021, when HealthPartners posted $139.7 million in operating income.