Just before Labor Day, Community Health Services (CHS) CEO Wayne Smith crept into Fort Wayne, coming in on a corporate jet, going right to a meeting, and then back to the corporate jet for a flight out of town. He could have taken time to meet with Lutheran Health Network (LHN) board members, physicians, nurses and staff to thank them for their work on his behalf, but time was short and his priorities were quite different.
Here’s what we suspect: CHS plans to tear down or “repurpose” St. Joseph’s Hospital– “repurpose” in this case meaning anything but what it is now. Profit margins are too low, even after cutting staff and allowing the Burn Center’s American Burn Association and American College of Surgeons validation/certification be degraded to “pending.” Burn units offer vital public service and are barely profitable, but this is all about money. A proposed solution would be to move the low profit Burn Center to Lutheran Hospital–expensive for deeply-in-debt CHS—and build a new hospital downtown. This requires land and perhaps tax abatements, and previous Lutheran Hospital tax relief is being considered for reversal. So, we should expect lobbyists from Indianapolis (check:done) and visits to local developers (check:done) and floating of grand plans (check:done) and promises (check:done.).
So, what’s the problem? St. Joseph’s Hospital is old and expensive to run. But so is Parnassus Medical Center in San Francisco, the #1 hospital in California, constantly operated, and improved, since before 1900. There are some differences; Parnassus, for starters, is a larger hospital in a larger city. The real difference, however is that–unlike Parnassus’ owners–CHS cut costs and did not invest in growth. It may, then, make sense for CHS to build a new downtown hospital in Fort Wayne.
But what type of facility will it be? Will the Burn Center be moved to Lutheran Hospital or housed in the new hospital? Will the new facility be built as a “micro-hospital” – a twelve-bed “neighborhood hospital” like St. Vincent’s in Indianapolis? Micro-hospitals of that type are trendy and serve a purpose, but to replace St. Joseph’s will require much more.
NICHE recalls that CHS had tentatively budgeted nearly $100 million to build downtown, but that was before they sunk into disabling debt. Before a tax abatement is considered, before a land-bank property is made available and before endorsing any CHS promises, we all need to know what the proposed hospital will look like. And we need to know when it will be built. We can imagine an empty lot and a sign proclaiming: “future site of St. Joseph’s Hospital” being the only sign of “progress” for years. Mr. Smith can be charming when he comes to town, but the deal needs transparency and commitment–and more than a quick trip in and out of Fort Wayne.