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NON-PROFIT "BJC isn't headed for the poorhouse. In fact, the nonprofit's billions in reserves have been the subject of national scrutiny. It settled a lawsuit alleging the hospital billed uninsured patients unfairly, often charging them two or three times as much as those with insurance." Wednesday, Sep. 10 2008, ST. LOUIS POST-DISPATCH By Mary Jo Feldstein A drive down Highway 40 might be all one needs to see BJC HealthCare's dominance in the local medical market, but the area's largest health care system provider laid out its financial position and plans for the future in a recent bond filing. In an interview, the hospital system's chief executive, Steve Lipstein, offered more detail. About one in three admissions to a local hospital go to one of BJC's nine area hospitals. It's a market dominance that hasn't changed much over the last 10 years, Lipstein said. Maintaining that position requires constant investment in new technology and new facilities, a strong physician referral system and a profitable mix of patients. The system's most recent new hospital, ProgressWest in O'Fallon, Mo., lost nearly $19 million in its first year, the bond filings show. But Lipstein said the loss was expected. He doesn't anticipate the hospital will break even until 2014. So far, ProgressWest is doing better than expected. For the first six months of 2008, the hospital lost about $7.1 million; it was budgeted to lose $7.8 million during the period. "We anticipate that hospital will grow as the community grows," Lipstein said. BJC also recently purchased land near Shiloh, but the bond filings don't mention any plans for the site. Lipstein said there's nothing planned for the Shiloh property "for the next couple of years." He doesn't expect BJC would build anything there until the population grows and ages. "I honestly couldn't tell you when that would be," Lipstein said. "If it was going to look like a hospital, it wouldn't be for a very, very long time. I'm thinking the first physical structure on that site will be more ambulatory than inpatient." Until building begins, Lipstein said the system is focusing on building a strong physician base in the area. Its largest relationship with physicians, through Barnes-Jewish Hospital's partnership with Washington University Medical School, costs about $100 million a year, including payments for services, leases and supplies. Despite the cost, Lipstein said he thinks the partnership is "forever." When a hospital's financial team looks at its patients, it sees service lines and payor mix: What are patients coming to the hospital for? And how are they paying for the service? BJC's payor mix has been relatively stable over the last several years, but it expects a slight increase in payments by Medicare and Medicaid over the next decade as the population ages. BJC isn't headed for the poorhouse. In fact, the nonprofit's billions in reserves have been the subject of national scrutiny. It settled a lawsuit alleging the hospital billed uninsured patients unfairly, often charging them two or three times as much as those with insurance. The hospital's policies on charity care have changed. It also has seen levels of charity care increase, more bad debt and smaller payments from Medicare and Medicaid. In the end, that has led to a shrinking of the hospital system's profit per admission, to about 3.5 percent in 2007 from nearly 7 percent in 2005. Still, no one is questioning BJC's financial strength. Instead, questions have focused on whether it's using that strength in the best interest of the community. Lipstein describes it as a balance. Some critics think the system should spend more on charity care. Others think it should spend more on new technology and equipment. Others think it should focus on improving the quality of existing services through information technology and better infection control protocols. BJC tries to spend about 9 percent of revenue on capital, Lipstein said. It spent less than 1 percent of revenue on charity care in 2004, the most recent year available. Lipstein said that figure has since increased and doesn't take into account patients who don't qualify as charity care but cannot or do not pay their bills. "There are lots of good things we could do, we try to do them all in moderation," Lipstein said. "I do think it's important to save a little, to spend a little, to give something back to our community." To read this story online: www.stltoday.com/stltoday/business/columnists.nsf/maryjofeldstein/story/1308F12B5AE354DA862574C0000793A4 » Post Comment
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