Ardent Healthcare System Boosting Area’s Economy

Associate Editor

HEALTH TEAM: David T. Vandewater, left, and Kevin Gross outside an entrance to the First United Methodist Church, where the Rotary Club of Tulsa holds its weekly meetings. Vandewater, the president and CEO of the Nashville-based Ardent Health Services, spoke to the Rotary Club about health care issues and Ardent’s role in the Tulsa area. Gross is the president of the Oklahoma Division of the Ardent Health Services and also serves as the president and CEO of the Hillcrest HealthCare System.

GTR Newspapers photo

“The state of healthcare will change only when you [business leaders] decide to make it change,” said David Vandewater, president and CEO of Nashville-based Ardent Health Services, in a recent talk before the Rotary Club of Tulsa. “Employers pay the majority of the bill for employee health care through insurance premiums. I challenge each of you to look at those expenses and look for ways to help your employees become more engaged in managing their health.”

Ardent is the parent company of Tulsa’s Hillcrest HealthCare System and currently operates 34 hospitals in 13 states nationwide.

In commenting on industry trends, Vandewater said the challenges faced throughout the healthcare industry directly impacts local businesses.

“Hospitals collect funding through three primary sources – Medicaid, Medicare and private insurance,” he said. “The federal government historically does not raise reimbursement rates to match inflation and often state legislatures look to the Medicaid budget as one that can easily be cut. That leaves private insurance to picking up the tab for the un-reimbursed costs associated with those two programs as well as those of the uninsured or underinsured.

“That makes private insurance rates go up which impacts business.”

Treating the uninsured and underinsured remains one of the most critical causes of rising healthcare costs, Vandewater said. It is estimated that 48 million Americans lack health insurance and that nearly one in five Oklahomans are uninsured – one of the highest rates in the nation.

“In the last 25 years, those expenses have risen from five to eight percent to about 15-20 percent today,” he said. “Can you imagine if this were your business and you knew that you were not going to get paid for 15-20 percent of your work or the services you provide?”

He said that 84 percent of the uninsured are employed full or part-time and 60-70 percent live above the poverty level but simply can’t afford the cost.

The costs for these persons are passed on to the paying population and those who have insurance in Oklahoma pay, on average, an extra $1,700 to cover the costs of caring for the uninsured.

“We should all be concerned about that.”

Ardent and Hillcrest remain strongly committed to serving both the uninsured and underinsured in Oklahoma, he said.

“We have a number of preventive and educational programs and community health partnerships at work to help address these concerns,” he said.

Vandewater praised the Oklahoma legislature for recently taking steps to improve the reimbursements for Medicaid providers and for their efforts on workers compensation.

“The cost savings from this legislative session’s workers compensation initiatives are estimated at $60 to $100 million annually,” he said. “This equates to a 15 to 18 percent savings on premiums paid by businesses.”

Another challenge for the healthcare industry is caring for an aging population, he said. The number of citizens over age 65 will increase by 62 percent by the year 2020, consuming even more of the limited health care dollars and taxing an already burdened system of care.

“The ‘baby boomers’ have boomed,” he said. “If you just turned 50, you have only spent about 20 to 30 percent of your lifetime medical spending. You have that remaining 70-80 percent ahead of you.

“At the same time, end-of-life care will cause additional burdens to the workforce as the baby boomers are forced to devote more of their time in caring for their parents – meaning more time away from work,” he said.

As career opportunities for women have increased over the years it has created a shortage of nurses, as the field remains predominantly female.

“The average age of a nurse today is 45 years old and 95 percent of them are female,” he said. “Our industry must find a way to attract more males to the profession and make sure that nurses are focused on delivering patient care rather than doing menial tasks.

“This is one of the objectives of programs recently launched at Hillcrest.”

Ardent acquired Hillcrest HealthCare System in August of 2004 and so far has invested $41.9 million in various growth initiatives. The company committed to invest a minimum of $100 million in the system in the first five years as part of the purchase agreement.

“The purchase also moved Hillcrest from a tax-exempt health system to one contributing an estimated $4.6 million in property taxes to the City of Tulsa,” he said. “With the completion of the Bailey Medical Center in Owasso this fall, we will be contributing some $315,000 in property taxes to that community while employing 175 professional staff with a $10 million annual payroll.”

Other coming capital improvements include a new, leading-edge heart hospital tower at Hillcrest Medical Center in 2007 and a state-of-the-art orthopedic wing at Hillcrest in 2006.

Another commitment made as part of the purchase agreement was to continue to support the Graduate Medical Education programs operated with OU, OSU and In His Image Family Practice residency program. Together, Hillcrest helps train some 200 medical residents each year. Additionally, Hillcrest has recruited and placed 26 physicians this year primarily in rural Oklahoma communities.

“We take great pride helping Oklahomans living in our rural communities get good, continued, local healthcare,” he said.
On the horizon in healthcare will be increased focus on empowering consumers to become more active participants in managing their health, increased public reporting of quality outcomes by the healthcare system and increased use of telemedicine.

“No doubt there are growing challenges ahead but the fact remains that most Americans and Oklahomans have timely access to the most technologically advanced medical community in the world.

“At Hillcrest, under Ardent’s leadership, we plan to remain at the forefront of modern medicine.”

Updated 06-30-2005

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