2015 Dynamic Dozen No. 2: CoxHealth

Amid a health care environment fraught with challenges, CoxHealth has found a way to grow in a time of ever-increasing need.

The health care landscape is facing aging baby boomers, rural hospitals are taking on increased technology burdens and reforms are taking hold under the Affordable Care Act.

All the while, CoxHealth is focused on expanding its reach.

The health care system is insulating itself from the cost pressures many smaller systems face as its $130 million nine-story patient tower is nearing completion at the Cox South Hospital.

With promises of over $100 million in technology and facility investments, CoxHealth merged with Branson-based Skaggs Regional Medical Center in January 2013, which has helped boost its gross revenue by around $500 million a year.

In 2012, the nonprofit system generated $2.45 billion in gross revenue, $2.99 billion in 2013 and $3.44 billion last year – a 40 percent three-year growth rate.

But the upward trajectory of its revenue comes with difficulties, according to officials.

“Our volume is up much more than our revenue,” CoxHealth CEO Steve Edwards says.

Last year, CoxHealth Chief Financial Officer Jake McWay estimated Medicare reimbursements would decrease by as much as $100 million through 2019.

Over the next 20 to 30 years, Edwards says need for oncology services are expected to climb between 30 and 70 percent in some service lines.

“We have to continue to find ways to be more efficient,” Edwards says.  

When investments in new facilities, technologies and manpower are needed, saving money can be challenging.

“Health care is a costly business,” McWay says.

“Our operating margins have been between 1 and 2 percent the past several years. It’s a difficult balancing act.”

Locally, preventing unnecessary demand is part of the strategy.

Cox recently opened three pediatric clinics to meet demand on the front end and, hopefully, keep parents from turning to emergency services as health problems emerge.

Improving the quality of care patients receive can prevent returns to the hospital.

Investments such as the $31 million renovation and addition to Cox Medical Center Branson demonstrates the effort, as has its work to become the only Springfield-area system designated a Level I stroke center, which CoxHealth achieved this year. In 2014, Cox opened its center for prosthetics and orthotics and also renovated and expanded its Cox Monett emergency room.

With no federal money coming into the state to expand Missouri’s Medicaid system, Edwards says it’s a particularly tough time for smaller health systems. He says there could be opportunities for future mergers, such as the deal with Skaggs.

“Rural hospitals are struggling the most,” he says. “We’ve had a dialogue with some and there are some attractive partners. But we’ve both got to get stronger as a result.”

As a nonprofit, CoxHealth’s growth means more local investment. Its community support of such organizations as Children’s Miracle Network and the Breast Cancer Foundation of the Ozarks now totals over $750 million a year.

“We really feel a sense of calling,” Edwards says.[[In-content Ad]]