In 2007, some of the hospital alliances that had been created a decade or so earlier were beginning to unravel, especially the Health Alliance of Greater Cincinnati, a union of University of Cincinnati’s hospital, Christ Hospital and St. Luke Hospitals.
St. Luke, one of two hospitals in Northern Kentucky, wanted out of the alliance, and the breakup spelled opportunity for its chief competitor, St. Elizabeth Healthcare.
As chief financial officer of St. Elizabeth at the time, Garren Colvin was instrumental in bringing the two systems together in a merger that had to survive Federal Trade Commission scrutiny and the union of two hospitals that had once been rivals.
“The two systems were very fierce competitors,” Colvin said. “They lived and breathed to compete with each other.”
That merger established St. Elizabeth as the dominant health system in Northern Kentucky and the fourth-largest in Greater Cincinnati, behind Cincinnati Children’s Hospital, Christ Hospital Health Network and the University of Cincinnati Medical Center.
Fast forward to 2020. The not-for-profit has continued to expand, even during the unprecedented crisis of a global pandemic that has caused other area health systems to contract and scale back. It caused revenue declines and costs to spike at St. E and many other health systems, causing most of them to lay off or furlough employees.
St. Elizabeth, however, has had zero layoffs since Covid-19 struck and has marched forward with major expansion plans even as the coronavirus crisis continues. Colvin, promoted to CEO in 2015, has expanded St. E’s reach even in a year when hospital revenue in general has plummeted and costs have spiked.
“We had a mindset at St. Elizabeth that this wasn’t a time to step back,” Colvin said.
“This was actually a time where you had to put your foot on the gas pedal instead of on the brake. We took the mindset that we had to continue moving forward and we couldn’t afford to take a step back on anything, especially the cancer center.”
The St. Elizabeth Cancer Center is a $140 million facility on its Edgewood campus, which opened Oct. 1. It’s a six-story, state-of-the-art center whose completion date was delayed by only a month through the pandemic shutdown and recession. It will coalesce St. E’s cancer treatment in one place and bring new physicians, health care providers, clinical trials and alternative treatments to the region.
The cancer center has attracted a lot of attention in a region and state that suffer from high rates of the disease. But St. E leaders are moving ahead with another significant expansion that hasn’t attracted nearly as much notice.
In May, the system announced a foray into another state – its first full-service hospital outside Kentucky – with an agreement to acquire Highpoint Health, formerly Dearborn County (Ind.) Hospital. Highpoint’s financial situation deteriorated with the onset of the pandemic. St. Elizabeth management, already working with the leaders of Highpoint on other projects, stepped in with financial assistance to help stabilize the hospital.
“Unfortunately, the significant financial strain made it impossible for Highpoint to recover,” St. E said in making the announcement.
St. Elizabeth plans to assume operations as of the closing date and transition operations to the St. Elizabeth information technology platforms and management systems. St. Elizabeth will also operate the hospital and outpatient services under the name St. Elizabeth Dearborn, and Highpoint Health Physician Partners will join St. Elizabeth Physicians.
Over the next five years, St. Elizabeth will invest $50 million in capital projects and technology at Highpoint, officials said.
The two systems have begun planning a cancer center for Dearborn County that they plan to open by 2022. It will be considered a satellite center to the Edgewood facility.
Longer term, more investment is planned, as St. E expects to build a new medical campus in the Indiana community in the next five years.
The new hospital, as well as the cancer center, will be constructed on property St. Elizabeth owns in the Dearborn County community of Greendale, Colvin said. St. Elizabeth owns a physician clinic there and for some time has provided billing and collection services for the struggling county hospital.
Colvin said the deal is on track to be completed by Nov. 1.
“We believe health care is local,” he said. “We’ll be able to keep Dearborn County residents in Dearborn County for their health care. That is at the core of our vision.”
Colvin and his team also have a vision to bring down cancer rates, specifically for lung cancer, in Northern Kentucky.
Kentucky ranks as the worst state in the U.S. when it comes to the incidence of new lung cancers, according to the American Lung Association. The new cancer center was built with the expectation that cancer treatment will keep growing.
“The statistics here are alarming,” said Dr. Doug Flora, St. Elizabeth executive director of oncology services. “Cancer is a disproportionate problem here. When we built this building, it was with that in mind.”
Ongoing cancer treatment often requires patients to travel to different locations to meet with their surgeons, oncologists, radiologists and other caregivers. The St. E center has been designed to be a one-stop shop where the clinicians and doctors come to the patients, and patients are guided through what is often a difficult process with the help of a personal navigator.
The center will also include nearly an entire floor dedicated to providing a holistic treatment approach known as integrative oncology.
“The idea of the building is to combine the care of anyone who might need to participate in the care of a family with cancer or a patient with cancer under one roof,” Flora said. “Every aspect of this building has been to provide the best patient outcomes and greater collaboration among care providers.”
The system will eventually add a little more than 100 new jobs to staff the new center, Flora said.
The center is also a recruitment tool to bring cancer specialists to the region. Recent hires include a third oncology thoracic surgeon and three more medical oncologists, Flora said.
St. E’s employment is growing and expansion is taking place even as Colvin estimates the system will lose $125 million in revenue because of decreased patient volume, the closing of services and the cutbacks in elective procedures. At the same time, the hospital experienced enormous price increases on some supplies, up to 1,000% at one point. It’s still experiencing a 300% markup on some purchases, he said.
An existing pre-pandemic healthy balance sheet has helped the system maintain its expansion plans, as has $167 million in federal stimulus funds. St. E has been awarded $69 million in grants through the CARES Act Provider Relief Fund.
It also received $98 million in advance payments from Medicare, a sum that will be repaid over time with reduced reimbursements.
“We have to provide $98 million in services before I start getting any future Medicare checks,” Colvin said.
Revenue from elective procedures is beginning to come back, but many prospective patients are still wary because of the persistence of the coronavirus.
“We have to let our community know it’s safe to come back,” Colvin said.
The health system’s commitment tp maintaining its employment and pay during the crisis will help it build on its existing goodwill in the community, said Lee Crume, CEO of economic development group, Northern Kentucky Tri-ED.
“It’s really an impressive decision they made,” Crume said. “It speaks volumes to the quality of the organization that they are taking a long-term view of their associates and their community.”
That commitment may be due to Colvin’s deep connections in Northern Kentucky. The Ludlow native was born in a St. E maternity ward in 1964 and started working there as an accounting clerk while still in college in 1983.
He’s aligned thousands of employees behind a vision to improve the health of Northern Kentucky and beyond, a vision that has resulted in continued growth even during a once-in-a lifetime crisis. Looking ahead, Colvin sees more of the same.
“Success for us in three to five years is a growing economy in this community, a healthier workforce, a healthier community,” he said.
“That’s where we’re focusing.”