Nearly as old as the railroad that slices through this southern Illinois city just east of the Mississippi River, St. Elizabeth’s Hospital has been a downtown bedrock since 1875.
Started by three nuns from a Franciscan order in Germany, the Catholic hospital still seeks “to embody Christ’s healing love” to the sick, the aged and the poor, according to its mission statement. It is so tied to the city that when the local economy slumped in 2009, the nonprofit St. Elizabeth’s gave $20 to every employee to spend on Main Street, sending hundreds of shoppers out to the mostly mom- and pop-owned stores.
But St. E’s, as locals call it, now faces its own financial troubles, largely a result of the costs of maintaining an obsolete facility and of treating more low-income and uninsured patients from Belleville and neighboring East St. Louis, one of the poorest cities in the Midwest.
After a decade of losing money, St. Elizabeth’s officials are taking a radical step: Like a small but growing number of hospitals around the country, they plan to close the 303-bed hospital and move elsewhere. They are seeking state approval to build a $300-million facility seven miles northeast, in O’Fallon, a wealthier city that is one of the fastest-growing communities in the St. Louis region with new subdivisions, proximity to a regional mall and quick access to Interstate 64.
Describing plans to leave behind some services, including a walk-in clinic, St. Elizabeth’s CEO Maryann Reese insists the hospital is not abandoning the city or the poor.
But that’s exactly how many residents, community leaders and clergy see it. If St. Elizabeth’s leaves downtown, they say, it will limit care for many poorer residents, especially those dependent on public transportation, and lead to overcrowding at the city’s one other hospital, which is downsizing. Many also worry about the loss of jobs and of the visitors to the hospital who patronize local shops and eateries.
Geri Boyer, who runs a bed and breakfast and an engineering firm on Main Street, said that as a Catholic, she’s “appalled” by the hospital’s plan. “I do think they are putting profit motivations over the mission of serving the poor. I am upset and embarrassed for [them].”
“Communities can be tipped by the loss of a vital medical institution,” Belleville Police Capt. John Moody II wrote in a scathing letter about the plan to a state review board. “There is too much at stake and the loss will be catastrophic and I fear unrecoverable.”
Geography Is Destiny
Hospitals have moved to follow population migrations before, but the relocations are becoming more common. That’s partly due to the aging of many facilities built in the 1950s and 1960s, and the desire to attract better-paying patients. A 2012 Health Affairs study found that hospitals in 12 markets used geographic expansion strategies, including building new hospitals or adding freestanding emergency departments, to “capture” well-insured patients.
“Where you choose to place new facilities almost always involves moving to an area where there is a substantial privately insured population,” said Paul Ginsburg, chairman of medicine and public policy at the University of Southern California.
Currently, hospital relocations are planned or underway in South and Central Florida, eastern Tennessee, central Georgia, Birmingham, Ala., and northeast Ohio. Some have stirred controversy, as in Belleville:
— Just west of Fort Lauderdale, HCA Inc., a for-profit hospital chain, plans to close Plantation General Hospital and open a new hospital seven miles away in more affluent Davie, near a medical school. “It’s all about greed,” said Plantation Mayor Diane Bendekovic. When HCA offered to keep some outpatient services in town, she told them: “Don’t throw Plantation any crumbs.”
— Tennova Healthcare is moving its flagship Physicians Regional Medical Center near downtown Knoxville, Tenn. closer to higher-income suburbs eight miles west. “Clearly …they want to be near the better zip codes” said Tony Spezia, CEO of Covenant Health, owner of Fort Sanders Regional Medical Center, which will become the last general hospital downtown. Tennova is owned by Community Health Systems, a large for-profit hospital system.
— Just outside Cleveland, Lakewood Hospital in Lakewood, Ohio, which is managed by the Cleveland Clinic, is slated to close in 2016, and patients will be directed to the Clinic’s newer Fairview Hospital three miles away or to another facility being built in Avon, 13 miles away. Both Fairview and Avon are higher-income towns. Lakewood officials say losing the hospital and its 1,000 employees could have a prolonged impact.
Hospital officials point to their aging, landlocked facilities and argue it is cheaper to build, rather than renovate. What they don’t say publicly is how geography is often economic destiny for a hospital, especially at a time of increasing financial pressure as a result of Medicare funding cuts, including penalties that may result from new pay-for-performance measures in the Affordable Care Act.
By moving to wealthier areas, hospitals can reduce the percent of uninsured and lower-paying Medicaid patients, while increasing the proportion of privately insured patients – what hospitals refer to as attracting better “payer mix.” That’s also why they locate outpatient centers and medical offices in affluent suburbs. But relocations often spark anger from those left behind, who worry about loss of jobs and of access to care, particularly for the poor.
When the hospitals are nonprofits, like St. Elizabeth’s, questions loom larger because they are exempted from taxes in exchange for providing benefits to the community. “Hospitals were established in inner cities where the greatest needs were and now, essentially, that charity obligation has gone by the wayside as they are looking at their bottom line,” said Gerard Anderson, director of the Center for Hospital Finance and Management at the Johns Hopkins Bloomberg School of Public Health.
Even nonprofit hospitals want to be near wealthier residents. “You move to where the money is,” he said
This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.