Our View of Presbyterian Health System’s Plans for Expansion – What it will mean for us, and for Northern New Mexico.
There’s been a lot of discussion in our community recently about Presbyterian Health System’s plans to expand its existing Santa Fe clinic and to construct a new $135 million hospital and outpatient surgical facility on the city’s south side. Many are wondering what sort of impact this facility will have on CHRISTUS St. Vincent, and what benefits it might bring to our local economy.
With an “insider’s view” on the business of health care within our local market, we’d like to share our perspective of what the future may hold. We’ll also explain CHRISTUS St. Vincent’s role as a community healthcare provider and the challenges that we believe Presbyterian Health System’s expansion may bring to us and our community as a whole.
The Impact of Local Competition.
As the landscape of U.S. health care continues to evolve, organizations nationwide are facing big challenges. Beyond caring for patients, hospitals must now continuously adapt to changes in insurance, legislation, funding, and market competition in order to meet the needs of their individual communities.
This is to say that competition is a part of the reality of today’s complex health care world -- one that we are familiar with, recognize the benefits of, and are well equipped to manage
That said, it’s easy for us to see that in a community such as ours, where the population is not actually growing, but slowly growing older, adding another major health care facility will mean there will be fewer patients and qualified healthcare workers to go around. While increased competition will create more consumer choice and job options for Santa Fe residents, it will not actually fuel the Santa Fe economy. It will simply move patients and workers around.
Based on Presbyterian’s announcements, their approach to this market will be quite different from ours.
For 150 years, CHRISTUS St. Vincent has provided a full spectrum of services to Northern New Mexico -- making decisions based on the needs of people, irrespective of profitability, and providing many beneficial services not typically available in a small community of our size.
Operating on only a 3-4% margin, we are able to ensure care is not only provided to profitable health plan members, but to all members of our community, making CHRISTUS St. Vincent the regional safety net hospital for Medicaid, Medicare, underinsured, uninsured and self-pay populations.
As Presbyterian makes plans to bring healthcare services to Santa Fe that further strengthen their bottom line (i.e. higher profit margins), their entrance into this market signals an attempt to serve only the most profitable patients. Further, as a health system with a well-established health plan, their ability to direct Presbyterian Health Plan members to their own providers is a well-oiled machine, incentivizing members to use their health system, while allowing them to keep revenue streams within their own system.
The consequence of this targeting will be that CHRISTUS St. Vincent will begin to experience a shift in volume of commercially insured patients, and a decreased demand for profitable services. This will happen while it continues to be the only regional safety net hospital that, more and more, will be the primary caregiver for the lower paying Medicaid, Medicare, underinsured, uninsured and self-pay populations.
CHRISTUS St. Vincent must maintain its current volume profitable services and commercially insured patients in order to be able to sustain the less profitable, but essential services our community needs while simultaneously ensuring access to quality care for our lower paying populations.
While we will continue to rely on our partnerships with other commercial insurers to effectively manage the cost of care, a significant reduction in commercially insured patients and will require CHRISTUS St. Vincent to make difficult decisions about the types and complexity of services we provide and subsidize. Currently at CHRISTUS St. Vincent, Presbyterian Health Insurance accounts for 15% of all payers and 23% of commercial payers.
To make this situation more challenging, we also anticipate a significant Medicaid reimbursement reduction given the State’s inability, so far, to secure enough dollars to match available federal funds. While this will impact hospitals across the State, we expect that this too will impact our ability to provide the full spectrum of services that we have made available.
As Presbyterian further expands its service offerings, our community, especially those without Presbyterian insurance, will also have to decide where to get their primary care. While we are not yet sure of the potential impact, it should be no surprise if both primary and specialty care services are affected. A reduction in locally provided services could mean a loss of local physicians, and losing any Santa Fe physician, independent or employed, would be a huge loss to our community.
We Remain Committed to Investing in Our Community’s Health
CHRISTUS St. Vincent’s commitment to our community remains strong. Our focus is to be the best place for physicians to practice, employees to work, and patients to seek care. We will continue to reinvest profits in care and services that benefit the people of Northern New Mexico, and to make the types of deep investments that are improving the patient experience at all levels of our organization.
A few examples of our more recent investments include:
- Our Clinician Driven Performance Improvement Program, a clinician-led development program designed to increase patient satisfaction and outcomes, has introduced new services and protocols that have already significantly reduced infection and readmission rates, decreased length of stay and increased patient satisfaction. Today, we are healing our patients faster and getting them home more quickly than ever before.
- The CHRISTUS St. Vincent Nurse Residency Program, and an active partnership with Santa Fe Community College to train the next generation of nurses.
- And our $44 million expansion and renovation project that will result in all private patient rooms, creating an environment more conducive to healing.
We want you to know, that no matter what challenges or difficult decisions we may face as an organization, our mission will always be to ensure Northern New Mexico has access to the very best care.
Exceptional Medicine. Extraordinary Care. Every Person. Every Day.