PORTLAND, Ore. (AP) -- Oregon Health & Science University has decided to halt plans to expand its Kohler Pavilion wing because of the credit crisis.

In an e-mail sent last week to OHSU employees, Chief Financial Officer Brad King said the hospital's plan would have required $350 million in bond financing.

But the university says that's unrealistic given the turmoil in financial markets and the possibility that an economic downturn will reduce expected patient numbers.

In a harsh economic climate, prospective patients can lose their health care insurance or choose to go without it.

King told The Oregonian that the hospital did not want to get locked into a project it would eventually have to shelve if the economic decline continues.

"If this lasts for a year or two that's one thing," he said. "But if it lasts four or five, it's quite another."

King told employees that while OHSU remains financially stable, a number of factors could hurt the university if the economic downturn continues.

Falling personal incomes, for example, would effect the state and federal budgets and as a result reduce Medicaid, higher education and research funding.

Also, banks may be less willing to lend to OHSU students.

OHSU already has begun to feel the pain of the credit crunch, paying interest rates as high as 13 percent on some of the $240 million in variable-rate bonds that it issued to pay for past projects.

And OHSU has few attractive options in the current market to refinance the so-called auction-rate bonds, which have taken a hit as investors shy away from them.

OHSU is Portland's largest employer. It relies on profits from its hospital operations to offset education and research costs.