Granite City medical center is weathering the economic storm, says its CEO
This article first appeared in the St. Louis Beacon, May 8, 2009 - In good times, Gateway Regional Medical Center is Granite City's third-largest employer, but recent layoffs in the steel industry have bumped the 950-employee facility into first place -- a distinction CEO Damon Brown noted during a recent interview.
The hope is that the move-up in the rankings will be short-lived.
Gateway, a full-service 416-bed facility with more than 150 physicians on staff, has served as a community anchor for more than 100 years. In 2002, Community Health Systems, which operates or leases 120 hospitals nationwide, bought the then-St. Elizabeth Medical Center from the Sisters of Divine Providence, an order of Roman Catholic nuns who had operated it since 1921.
Brown says his institution is financially strong and secure, but he is keeping a watchful eye on the local layoffs, including 2,000 steelworkers from the hospital's neighbor, U.S. Steel's Granite City Works. Some of those workers will lose their six-month health benefits in June.
"Specifically, the steel workers have not had an immediate impact on us yet," Brown said. "Those employees currently have benefits, but that is coming to an end in June. So, the loss of health insurance is going to hit us downstream."
Because Gateway Regional is part of a large health-care system, the medical center is better positioned to withstand an economic downturn than free-standing hospitals, Brown said. And he points to other factors: Although many patients come from Granite City, Madison and Venice, the hospital pulls about 30 percent of its patients from a wider region. And, he adds, the steel mills aren't the only employers in town.
"We'll have to weather the storm like every other business in the area," Brown said. "But we're unique because we have to be here to take care of people."
Patients reflect national trends
At this point, the recession's impact on Gateway Regional has been felt largely through the state's delayed Medicaid payments, Brown said. About 20 percent of Gateway's patients are covered by Medicaid.
"The payment cycle, once a claim is filed with Medicaid, can take anywhere from 90 to 150-plus days to get a check," he said. "And we have claims that go back to last year."
Brown said that Illinois has begun to speed up its payments. To qualify for federal economic stimulus money for Medicaid, states must reduce their payment cycle to 30 days or less by June 1.
Another cause for concern is that insured patients are taking longer to pay their share of medical costs, including rising deductibles and co-pays, Brown noted.
"People just don't have the cash flow -- or they're hoarding their cash," he said. "We may get the insurance company portion at some point, but it's more and more difficult to collect the patient portion of the payment."
Also reflective of national trends: Brown says people are putting off preventive health care and elective procedures.
"The health-care area is very cyclical," he said. "What's unique this year is twofold. We didn't have a flu season, so January and February were down. Second, you have the economy tacked on to that. People are canceling doctor's appointments or not getting their prescriptions filled. What we're seeing is that when people come to our ER, they're sicker. They're not doing the preventive things. They're not going to see their doctors."
In recent weeks, though, the hospital has seen an upturn in patients scheduling colonoscopies and other procedures before their health benefits run out, he said.
Looking to the future
Brown notes that the hospital had fallen on hard financial times and was in danger of closing when his company purchased it in 2002. It was a worrisome time for the city: Granite City Steel, then owned by National Steel, was in bankruptcy.
Community Health Systems has recruited physicians and upgraded the facility, including restoring the exterior of the building and embarking last year on a $15 million capital improvement plan.
"When I pulled up to this hospital, I couldn't believe it," said Brown who was appointed in November 2007. "When you got inside, it was nice, but we had peeling paint on the outside. And to get to the emergency room, you drive through the steel mill on this bumpy road and you think, 'What in the world? Where are we?' "
Brown said the hospital strives to offer residents excellent care and top physicians, close to home. He notes that the hospital's orthopedic surgeons were trained at the Mayo Clinic.
"We're definitely a regional medical facility," he said. "The only thing we don't offer is neurosurgery and open-heart surgery."
Still, Brown says, the facility battles perceptions, and long-range plans call for building a new facility in a different location.
"We're not in the best location, perhaps, next to the steel mill. It's a dirty industry," he said. "But when you come into the hospital, we have excellent doctors. The exterior is nice and modern; it is an older building, but it's been updated."