COLUMBUS (COLUMBUS BUSINESS FIRST) — Ohio State University’s Wexner Medical Center projects continued record revenue – $4.6 billion this year growing to $4.8 billion in fiscal 2022 – even though it’s treating fewer patients than expected.

The health system expects it can keep millions in federal coronavirus relief funds despite its healthy operating margin, CFO Mark Larmore told medical center trustees this week.

The medical center is tracking for a $340 million surplus for the year that ends June 30 and is budgeting for that to shrink to $287 million next year as it spends cash on the $1.8 billion replacement main hospital tower.

Meanwhile, plans are stirring for the next big project: Trustees are being asked to approve the purchase of one block of Hughes Street from the city of Columbus, immediately west of OSU East Hospital. That would provide the acreage needed for a replacement hospital there, too. Officials years ago said East’s distinctive round 16-story tower, dating to 1971, eventually will have to come down.

Ohio State received $145 million in coronavirus relief last year as hospitals nationwide canceled nonemergency procedures and faced added expenses caring for patients with Covid-19. An additional $23 million came in the fiscal year that started in July 2020, but hasn’t been booked as revenue until the medical center is sure the government won’t demand its return, Larmore said.

“We feel we ultimately will be able to keep that money,” he told trustees in a hybrid virtual and in-person meeting. “We’ll be able to justify our revenue decline is greater than the amount of money we received.”

The “decline” means that the 5% growth so far in fiscal 2021 would have been even greater, but volumes have not yet bounced back to expected levels.

The six-hospital system and physician practice had net income of $331 million on a record $4.33 billion revenue in fiscal 2020 despite the pandemic.

Inpatient admissions are below budgeted projections for fiscal 2021, but revenues are up because those patients are more ill than expected.

OhioHealth Corp. is experiencing the same pattern so far this year, according to the Columbus system’s reports to bondholders.

Ohio State is planning public service announcements urging people not to skip preventative cancer screenings because of the pandemic. Office visits have not bounced back despite increased availability of vaccines.

Construction started last year on the 820-bed tower, the largest capital project in university history. It’s expected to open in early 2026.

Funding will be a mixture of operating cash, philanthropy and debt. Capital expenditures in fiscal 2022 will rise to $658 million, more than the routine of about $140 million annually, because of the hospital and other strategic projects, Larmore said.

The medical center’s considerable cash on hand of $1.78 billion is projected to decline by $216 million, because part of the capital expense doesn’t show up in the profit and loss statement until the projects open.

Ohio State expects to issue bonds for the project sometime next year, Larmore said. Medical center long-term debt is projected to be $660 million by June 2022; typically it pays down $40 million to $50 million in principal annually.

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