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On Sunday, the Journal Gazette printed the letter below from Jerry Henry, Jr., Chairman of the St. Joseph Hospital Board of Trustees. Some background:

– The share price of Community Health Services (CHS,) owner of Lutheran Health Network and St. Joseph’s, has been steadily declining as reported in this Modern Healthcare article:…/investor-buys-6-8-of-chs-…. CHS CEO Wayne Smith said recently in answering an analysts’ question during an investors’ conference call that “we are doing everything right in Fort Wayne” (read the entire transcript here:…/4119847-community-health-systems…). But investor confidence appears weak.

– It seems true that CHS is investing more in Lutheran Hospital, and NICHE has positive but unconfirmed reports of hiring. It has long been true that LHN earnings would support a new St. Joseph’s were they spent here and not taken to corporate CHS.

– That said, the hospital world, in general, is troubled. An October 17 Harvard Business Review article by Jeff Goldsmith (…/how-u-s-hospitals-and-health-systems-can-…) noted: “While some of these (hospital) financial problems can be traced to troubled IT installations or losses suffered by provider-sponsored health plans, all have a common foundation: Increases in operating expenses outpaced growth in revenues. After a modest surge in inpatient admissions from the Affordable Care Act’s coverage expansion in the fall of 2014, hospitals have settled into a lengthy period of declining hospital admissions.”

– If CHS should fail financially, to do so over a period of two or three years would be quite harmful to Fort Wayne. The loss of human capital–physicians and nurses–would be difficult to replace. The best case scenario is that CHS invests in LHN, including the replacement of St. Joseph’s Hospital, now rather than waiting (as CHS has done in replacing a hospital in Knoxville.) NICHE has long said that immediate and more sizeable investments in quality made locally can still turn the tide of declining earnings.

– Everyone sees the trend from hospital beds/inpatient treatment toward ambulatory care. No one seems to know what happens next as the healthcare system reacts to more expensive insurance, uncertain regulatory change, and political infighting. For management, the difficulty is that despite uncertainty, the time to act is now. NICHE fully supports Jerry Henry’s view.

New St. Joseph adds to area’s momentum

The recent announcement of Lutheran Health Network’s decision to build a replacement facility for St. Joseph Hospital in downtown Fort Wayne is an important milestone for our community as it continues to gauge how fully committed it is to revitalizing the heart of the city. The announcement of this exciting project was a result of more than a year of thorough planning to determine how best to meet the needs of patients living and working in an area of the city that remains medically underserved.

As our city continues to gain momentum, it’s only fitting that the creation of this state-of-the-art medical campus will bolster the tireless efforts of so many who correctly understand how important economic development in downtown Fort Wayne is to the entire region. At the same time, we are gratified to represent a hospital that chose to maintain its clear mission to serve the central city long before that was fashionable. While much is changing, the commitment of its physicians, nurses and other caregivers is St. Joe’s true legacy. That emphasis on doing the right things for the right reasons will be carried to the state-of-the-art new hospital.

This is an exciting time to be a part of Fort Wayne. Speaking for my colleagues on the St. Joe board, we appreciate the positive feedback so many of you have shared with us after learning of this plan, news that has become such a source of pride for countless unsung heroes whose only objective is to provide outstanding care when and where it’s most needed. As the board moves forward with hospital and network leaders to finalize a building site so we may begin construction next year, we are eager to provide updates on our progress.

Jerry Henry Jr.
Chairman, St. Joseph Hospital Board of Trustees