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With regards to the Lutheran Hospital purchase

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Contributed by: Fran Miller on 1/3/2008

The possibility of Lutheran Hospital being merged into the multi-hospital system of the Sisters of Charity of Leavenworth, Kansas, which also governs Exempla and Saint Joseph Hospital, deserves one last comment. I hope you will allow me the privilege. I would not have intruded into your otherwise meditative state from my observation point in Parker, but when the local Denver newspapers began to weigh in, I decided to join the food fight.

During my 30-year career in public accounting and management consulting, I had the privilege to have worked with every hospital in the metro area, including Lutheran. While on the Colorado Health Data Commission and president of the Colorado Business Coalition for Health, I sifted through detailed information on the issues of costs, quality and efficiency that compared all of the members of the Colorado Hospital Association, including Lutheran. I know the parties and have seen them in their underwear.

During the last decade, Colorado health care has witnessed the coalescing of independent hospitals into multi-hospital health systems. It is striking that when I arrived in Denver in 1971, most hospitals still maintained their unique ethnic and religious identities. That evaporated as the need to access capital and improve management increased with the advent of managed care.

But, the more things change, the more they also remain the same. It is my perception that if you compare Saint Joseph Hospital and Lutheran Medical Center, for example, there is a chasm of difference between the two. Now, let me first say that I would not hesitate to be admitted to either hospital for any condition. Both institutions have great doctors and nurses and they do their communities proud. But, observing Saint Joes and Lutheran is like watching the New England Patriots for a season versus the Broncos. We love the Broncos and want them to do well, but when it comes to professional execution and a 17-0 season, you put your money on the Patriots.

Saint Joseph Hospital began computerization nearly 10 years before Lutheran discovered that computers had been invented. Saint Joes was out front by an entire technological generation for as long as I can remember, and if that gap has been closed, it is only due to the Exempla organization. When it came to health reform in the 1980s, again, Sister Mary Andrew embraced it and moved rapidly to implement quality measurement systems in advance of mandates. Lutheran resisted, hired attorneys and engaged in sabotaging purchaser's desire for more transparency.

And, when it became obvious that capitation and managed care would replace fee-for-service and cost-based reimbursement, Saint Joes developed a relationship with the Kaiser HMO and learned how to transform the way a hospital is run. The differences between the two hospitals over the past 30 years is as striking as the difference between how General Motors makes cars and how Toyota runs its business.

If you sit down and make a list, with two columns comparing the institutions, you are destined to come to the same conclusion I have. The reason for the difference between the two institutions is not in the bricks and mortar, or the medical and patient care staff, but that Saint Joes was part of a system and Lutheran was off on its own, like some rural hospital. Saint Joes, in large part is due to the legacy of Sister Mary Andrew and the Sisters of Charity of Leavenworth. The Sisters of Leavenworth are a powerful force to contend with. They went into America's western frontier in the 19th century and by the sheer force of will and intelligence built a dozen hospitals and over 20 schools. There is not a layman who has worked closely with them who would not tell you they are absolutely amazing women. I have profound respect for them.

But, the Sisters of Charity have done something very few owners would do. They hire the best lay administrators they can recruit and they pay them top dollar. I have known Jeff Selberg, president of Exempla (the holding company for Saint Joes and Lutheran) for nearly 30 years, and he is one of the best executives you will ever find. But, the sisters of Charity also have guys like Bill Murray, James Paquette, Bob Boysen and many others who are the creme de creme of hospital management. They have forged a system that has the capital, management expertise and multi-hospital systems ability to manage health care in the 21st century.

My guess is that if the secular progressives within the Lutheran community really don't want it to be a part of the system, the Sisters will let them go their own way. In fact, if I was on Jeff Selberg's board, I would be questioning whether the capital required to fund Lutheran wouldn't be better spent on new facilities out in east Aurora or down south. Lutheran is in a mature area and may eventually experience declining demographics. It is going to require hard work to keep Lutheran competitive.

I am not going to be so presumptuous as to suggest that Lutheran should count itself lucky that the Sisters of Charity is willing to merge the hospital into its system and capitalize its needs into the future. I think it would be a win-win for both parties and for the Denver metro area. We need a strong Exempla system to rival Health One. No one is doing anyone a favor here. But, Lutheran should seriously think about what its future will be like in a world where it is not a part of a bigger system. Its access to capital will be severely restricted and it would bring little to the table when it comes to managed care contracts. It would likely lose many of its best docs over time and would be vulnerable to the external strategic moves of bigger players.

This is really not about abortions, vasectomies and tubal ligations. Those services have been and always will be widely available. They will eventually be provided in outpatient clinics and doctor's offices as the technology allows. The non-observant, secular progressive minority who wants to get up on a soap-box and make this into a religious issue should be shunned by the majority who knows this merger is for the common good.

The Northbound Train is about to leave the station. It is time for everyone to make up their mind and decide whether they are on-board. As regards the Denver newspapers whose wisdom on this matter is as poorly reasoned as their understanding of health reform, I say this may be one of the reasons newspapers are becoming irrelevant to modern society.

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CONTRIBUTOR INFORMATION

Fran Miller

Parker , CO

Fran Miller has posted 120 stories and 15 comments since joining on 9/28/2007. Fran Miller 's average story rating is 4.78.

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