Springfield's $1 Billion Health System Expansion

While they lead their respective companies through ongoing multimillion-dollar capital improvement projects that together will cost close to $1 billion, their focus is more on the future – five years, 10 years and even 20 years down the road.

With the explosive and continued growth in Springfield, where the population has increased 31 percent since 1990 and is aging fast, the local health care industry is fighting to stay one step ahead of the demand.

“We’re spending a lot of money, but it’s not about building buildings,” St. John’s CEO and President Kim Day said. “What we’re really trying to do is get ourselves set up for the next 15 or 20 years, particularly in this … growth market. Today, we have a lot of demand for our services, and we have a hard time just keeping up.”

Both Day and CoxHealth CEO and President Bob Bezanson say most of their time is spent with planning committees, deciding how to design facilities for future expansions and how to anticipate the extent of those expansions.

Healthy outlooks

St. John’s is five years into its master site plan, having spent $300 million already on projects that included an ambulatory surgery center, a new emergency room, new outpatient imaging, a new surgical intensive care unit and a new coronary care unit.

Day estimates master-plan expenditures through 2011 will total another $300 million.

Construction is under way on a new 310,000-square-foot inpatient tower, with completion aimed at November 2007. And a new cancer center is scheduled to open in March.

Meanwhile, CoxHealth is undergoing its own transformations.

In February, the health system initiated its 15-year $250 million-to-$300 million master plan, the first phase of which is a $55 million renovation of its north campus.

The new north campus will house the Cox College of Nursing and Health Services, a new behavioral health center and a family medicine residency facility with 24-hour urgent care.

Currently under construction is a new trauma center on the south side of Cox South, which will double the size of its existing trauma center at a cost of between $28 million and $32 million, Bezanson said.

Hiring on the horizon

Springfield is a medical Mecca where 25,000 people make their living in health services. That’s roughly 12 percent of the area’s work force, according to Greg Williams, senior vice president of economic development at the Springfield Area Chamber of Commerce.

The industry alone is growing at a rate of 4.5 percent per year, Williams said.

“Health care has a major impact on this community’s economy, and I think that’s an understatement,” he said. “Just simply the growth of this market in the last 20 years and the expected continuance of that growth is the primary reason that we’ve developed such a niche in health care services.”

Cora Scott, director of media relations at St. John’s, and Laurie Cunningham, vice president of corporate communications at CoxHealth, both say they anticipate intense hiring efforts as each health system adds services and positions. No specific hiring plans have been made.

Leah Fazzino, director of operations at Medical Employment Directory of Springfield, said her recruitment team is prepared.

The agency always has served a more-than-average need for health care workers in the area, she said, but that need is only a hint of what is to come – based on the industry growth seen so far.

“We’re starting to get out in the market more,” she said. “We do attend job fairs and advisory board meetings, trying to get the graduates in here.”

‘Tremendous economic impact’

As the city’s top two employers, St. John’s and CoxHealth had a combined payroll of about $410 million in 2004, according to a Missouri Hospital Association report released in May.

“If you consider how many times that turns within the community, that’s a tremendous economic impact,” Bezanson said.

The two systems together pumped an estimated $219.5 million into the community in 2004, according to the report. Approximately $35.6 million of that was for uncompensated care, while $57.4 million was spent in 2004 on taxes alone.

St. John’s in 2004 had total net revenue of $518.3 million, the report states, and CoxHealth had revenues of $668 million.

A large portion of community benefit is in Medicaid shortfalls – the costs of providing care that the government does not reimburse, Day said.

Both St. John’s and CoxHealth also offer a number of charity-care services in the area.

Mary Becker, senior vice president of Missouri Hospital Association, said she has taken note of Springfield’s status in the last two decades and said she thinks that status has earned the city a communitywide trust.

“(Springfield) has developed a reputation for delivering very high quality medicine in an area of the state that prevents people from having to drive to the larger metropolitan areas,” Becker said. “You see that people are comfortable receiving their health care close to their home.”

State of the art

St. John’s Day said the largest and always increasing expense is buying and replacing equipment.

Among dozens of other new technologies to surface at St. John’s, the system recently purchased a 64-slice CT scanner and imaging equipment that minimizes the amount of invasive procedures needed to make a diagnosis. Also new to the system is a Cyberknife, a radiosurgical piece of equipment used for treatment of brain and spine tumors.

CoxHealth also has been furiously adding state-of-the-art equipment, recently purchasing green-light laser equipment for treatment of prostate cancer and making improvements to its BrainLab. Flat screens are being installed to streamline the hospital admitting process, and plasma screens at nurses’ stations will more efficiently keep track of beds and cleaning schedules.

“Technology changes, and significant changes in medicine impact how you deliver it,” Bezanson said.

St. John’s Day said that planning for future technology needs is extremely difficult.

“Our biggest challenge is trying to sort through how quickly do you make the change when a new technology comes out,” Day said. “How proven is it? When do we need to make that change? How far into its lifecycle do we want to jump in?”

Though costs of technology and new facilities are high, Day said those investments translate into more efficient and consolidated services that, in turn, help lower the cost of health care.

“It would appear that would cause the cost of health care to go up, but it actually helps us keep the cost down,” he said. “We’re finding that we’re able to consolidate our services in such a way that our staff positions can be a lot more productive and efficient.”

However, Gordon Kinne, president of Med-Pay Inc., a third-party health care benefits administrator in Springfield, said local health care expenditures – particularly in new equipment – may hurt the economy in the end.

“It’s going to bankrupt the city,” he said. “We can’t afford all these things they’re bringing in. It’s becoming convenience-store medicine, and the consumer needs to wake up.”

Then and Now: Springfield health care

Approaching a Billion

CoxHealth and St. John’s Health System are in the midst of multiyear master plans that together may reach $1 billion.

St. John’s (5 years into 10-year plan) CoxHealth (launched 15-yearplan in February)

Spent so far: $300M N/A

In 5 years: $300M $55M

In 15 years: N/A $250M

Total: $905M