Local health care leaders discuss state of industry

Regional health care leaders discussed navigating a complex, evolving industry during the Southeast Entrepreneurship and Economic Development Symposium (SEEDS) on Nov. 30 at Drury Plaza Hotel Conference Center in Cape Girardeau.

During the event, four leading figures in the industry featured in a round-robin discussion moderated by Jon K. Rust, publisher of the Southeast Missourian and president of Rust Communications.

The panelists were Ken Bateman, chief executive officer of Southeast- HEALTH; Justin Davison, chief executive officer of Saint Francis Healthcare System; Jason Schrumpf, chief executive officer of Missouri Delta Medical Center; and Chris Wibbenmeyer, the administrator of Mercy Hospital Perryville.

Challenges

Bateman cited the labor market as the biggest issue impacting health care, and said it was part of the reason SoutheastHEALTH joined with Mercy.

Since the coronavirus pandemic, more health care workers have been retiring, leaving to raise their children, or taking traveling nursing jobs, he said.

SoutheastHEALTH raised base payroll by 15% and has increased incentives to retain staff, but they have had to spend more on outside labor.

Historically, Bateman said his system has had to spend $7.5 million annually on outside labor. That number has skyrocketed to $30 million.

"That is a huge increase that there's no way to offset with revenue," he said. "That's when I started having conversations with my board about (needing) to be part of a larger system with larger scale, because our labor challenge is not going to be solved in the next year or two."

Schrumpf and Wibbenmeyer agreed that revenue does not keep up with expenses. Since 2020, Schrumpf said Missouri Delta has experienced a 19% increase in input costs but only around a 7% increase in revenue.

Big business

When asked whether big business was the future of the health care industry, Davison said it was not a matter of size as much as resources.

He said while there are benefits to size, nationally there is not a correlation between the size of a system and its financial stability.

Instead, he said Saint Francis' approach of intentional collaboration can offer the broadest services for the longest amount of time. The system has signed various agreements with nearly 40 health care organizations.

"We're seeking expertise, we're seeking support, we're seeking collaborations," he said.

Bateman said there are fewer independent hospitals than in the past and that large corporations such as Amazon seek out the biggest health care providers when moving into markets, so any hospital would want to be the provider of choice when something like that occurs.

"Some of it is just market forces, you've got to deal with bigger competitors, but we also have to deal with new entrants into the health care market," he said.

Schrumpf agreed with Davison that most acquisitions don't lead to increased efficiency.

"We're happy at Missouri Delta with more of an intimate facility, more of a family-oriented culture ..." he said. Patients and providers like that feel, he added, and it allows a committed local board more versatility to execute various strategies.

Education

Davison supported health care systems fostering deeper relationships with local schools.

"We employ chefs, cooks; we employ accountants; we employ attorneys. Each of these require a different type of educational preparation," he said.

Bateman agreed, adding most people who think about entering the field view it solely through the lens of nursing when it encompasses workers from several industries.

He suggested high schools could add electives to help students learn more about health care.

Technology

Bateman said the SoutheastHEALTH board decided to join Mercy in part because the company is close to "big players" in the AI space.

"When they talk about some of the predictive medicine that's coming our way, we're not talking years off. We're talking about its in current development now and being rolled out now. That's what's going to change a lot of the health care in how we practice medicine and the cost of medicine," he said.

Wibbenmeyer noted how AI could help physicians become more effective such as programs to anticipate when patients might try to get out of bed.

"There's just such a huge spectrum of it. I think it's endless where it could go, and I think it could apply to these larger organizations ... or it can apply to these smaller organizations," he said.

Schrumpf discussed how his system is already using AI to preemptively detect signs of lung cancer in patients. Missouri Delta is also using it on the revenue front, he said, for insurance verification and cost estimation, which has increased revenue and decreased bad debt.

Local health

Davison said increased access to resources can drive economic development, while Bateman said more transportation and internet services will give people better access to health care.

Wibbenmeyer discussed how Mercy Hospital Perryville worked on major projects to promote housing development and to raise funds to create mental health awareness events in local schools.

"That collaboration where we're kind of breaking down the barriers between those organizations and bringing everyone together ... that's kind of where we're at in Perry County," he said.

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