Longtime Fort Wayne residents remember when Lutheran Hospital, like Parkview Health, was a nonprofit.
Authority for major hiring, firing, spending and strategy decisions rested completely in Lutheran board members’ hands. No outside approval was necessary.
Some Lutheran board members from those days recently recalled – and re-assessed – the decision to sell the hospital to for-profit owners in interviews with The Journal Gazette.
Dr. William Clark served on Lutheran’s board in the years leading up to the sale to Quorum Health Group. The retired internist remembers several challenges facing the nonprofit in the late 1980s and early ’90s.
At that time, Lutheran was on Fairfield Avenue, a land-locked location. The hospital needed more space, safer buildings and better traffic access. So the board invested $92 million – in 1992 dollars – to build the current facility off West Jefferson Boulevard, near Interstate 69.
Buying the land and building the hospital were expensive, Clark said. Lutheran slid into debt.
It didn’t help that some former patients felt abandoned by the move and chose to take their business to Parkview – at least, that’s Clark’s theory. He doesn’t have proof, but remembers that early revenues didn’t match expectations because patient volumes were down.
Board members explored various options, including a potential merger with St. Joseph Medical Center, which was also an independent nonprofit at the time. But talks broke down.
Bill Zielke, a local businessman who remains on Lutheran Hospital’s board, traced his involvement back more than 20 years, during five presidents’ tenures and ownership by three different corporations.
Quorum of Brentwood, Tennessee, bought Lutheran Hospital in 1995 for an undisclosed price. Quorum acquired St. Joe in 1998 and changed its named to St. Joseph Hospital. That’s the same year mentions of “Lutheran Health Network” started to appear in local media.
Dallas-based Triad Hospitals acquired Quorum for $2.4 billion in 2001. Community Health Systems bought Triad for about $5.1 billion in 2007. Quorum and Triad each included many more hospitals than those eight that now comprise Lutheran’s network.
There’s no question in Zielke’s mind that physicians, staff, patients and the community have all benefited from Lutheran becoming a for-profit health care provider.
“I’ve never, never considered our initial decision to be a bad one,” he said. “For-profit, not-for-profit is not the issue.”
That’s because for-profit owners Quorum and Triad invested in the operations, provided employees with professional opportunities and offered local patients access to the latest medical equipment, he said.
Things didn’t sour until after CHS took ownership, Zielke said.
Clark isn’t sure exactly when things went south. He retired from practicing medicine in 1999 but kept in touch with former colleagues. From what they said, Clark believes Quorum and Triad allowed local leaders to make major decisions and provided the necessary investment to pay for those plans.
Although CHS in May pledged to invest $500 million in Lutheran’s network over the next five or six years, some local doctors, nurses and former administrators say that’s not nearly enough to bring the system up to the standard it needs to be – much less move it forward.
“I don’t second guess what went on back then,” Clark said of the decision to sell to a corporate owner. “But I sort of wish it was still our hospital.”
Source: The Journal Gazette