University of Colorado Health is pouring millions into Memorial Hospital — capital projects, new hires, new technology.
It’s a necessary expense, leaders say, because they have plans for the local hospital system to become the southern flagship as UCH pushes into New Mexico and Kansas.
That’s good news for Colorado Springs as the money poured into the system bolsters the city’s economy. Memorial is still struggling to regain its market share after years of declining patient volumes, uncertainty and sometimes-acrimonious political wrangling.
UCH leased the hospital system last October, and in the first four months, put in an electronic records system worth $40.1 million, hired 14 cardiologists, two breast surgeons, two neurosurgeons, one trauma surgeon, two cardiothoracic surgeons and more than 75 additional staff members to support the new doctors.
It’s working on replacing boilers, at a cost of $2 million and is adding a new PET imaging scan for $2.1 million. It has installed a new surgical imaging system for $1 million and a da Vinci surgical robot for $2.2 million.
UCH will spend more than $90 million — not including the medical records system — in the next two years. The lease agreement says it is required to spend $28 million annually, but more capital money is needed up front, said UCH CEO Bruce Schroffel.
“Some of the buildings were built in 2007, but some were built in 1907,” he said. “We plan to spend money on infrastructure — it’s going to be pretty capital intensive at first.”
And the result of all that effort? In the first four months of the lease, the hospital’s patient volumes have gone up 1.5 percent.
“We’d like it to be higher,” he said. “I’m always impatient. But it’s been four months, and we’re already making progress.”
When the city first began discussing Memorial’s future in 2009, the hospital system had 57 percent of the market share for Colorado Springs. Today, Memorial CEO Mike Scialdone says that the two competing hospitals split the market share in the Springs equally.
When UCH took over, patient volumes were running 11 percent behind 2011 numbers. They haven’t made up the difference, but any progress is important, he said.
“The emergency department is still growing,” Scialdone said. “It’s one of the busiest in the state. Everything else is trending upward too, and that’s a reversal after months and months — years, really — of declines.”
Making up for losses that stemmed from the recession, fewer people opting for elective surgery and the uncertainty of Memorial’s future will be the major goal of the next few years, Schroffel said.
And for good reason — hospitals can no longer survive as stand-alone systems.
“I think there’s some fear,” Schroffel said. “All hospitals have it. No hospital wants to — or will be able to — stand alone in the future. There are economies of scale that make it important to partner and to merge.”
Since leasing Memorial, UCH has added another partner hospital in Wyoming. Poudre Valley Health System is also a partner in the venture. And they’ve been approached by other community hospitals.
“We’re going to be expanding, going to be growing,” Schroffel said. “All hospitals are seeking partners, in the uncertain environment.”
Health care reform, combined with ever-rising prices, mean that hospitals must band together to share the load of increasing expenses. But it also means they can work together to create efficiencies and develop best practices.
“Every hospital you go to has a different way of doing things — and sometimes that way isn’t the best way,” Schroffel said. “What we want to do is create best practices for all the hospitals. We’re going to share data and work quickly to develop best practices.”
Both Scialdone and Schroffel say the money being spent won’t equal higher health care costs for Springs residents or for insurance companies. That’s because the system can combine forces to create economies of scale.
“It’s about finding efficiencies that work in all four hospitals and combining the best practices that drive quality but keep prices down,” Schroffel said. “We believe we can do that.”
Both UCH and Memorial carry the additional burden of uncompensated care. Memorial spends about $74 million annually on uninsured and uncompensated care, and UCH has even more than that — around $100 million.
“It’s unsustainable,” Schroffel acknowledges. “The biggest problem right now is the high-deductible health care plans. People get less expensive premiums in exchange for plans with $5,000, $8,000 or $10,000 deductibles. People don’t have that kind of money when there’s an emergency.”
UCH is currently developing a strategic plan for Memorial, detailing the hospital’s goals, Schroffel said.
First off, it plans to work on the academic side — helping create the Colorado Springs branch of the University of Colorado Medical School. UCH is providing $3 million a year to create the branch campus, which will be housed at the Lane Center for Academic Health Sciences at the University of Colorado Colorado Springs.
Second, the system will focus on improving quality of care at Memorial. The hospital received primary stroke certification from the Joint Commission, the major accrediting body for hospitals in the nation. It’s also seeking chest pain center accreditation from the Society of Cardiovascular Patient Care and magnet status from the American Nurses Credentialing Center. If it’s successful, it will join only 5 percent of hospitals nationally with the magnet status.
Finally, UCH plans to expand clinical trials to all the partner hospitals — particularly in the areas of cancer treatment.
“We’re going to take advantage of the strengths of the system,” Schroffel said. “But you always can get better. We’re going to learn from each other. And we’re going to grow more, all four hospitals. There’s no doubt in my mind that Memorial will become the best place for health care. This isn’t just another hospital to us. And it’s in our DNA not to be just a good hospital system, but the best hospital system in the nation.”