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Saint Louis University

GC: The Health Sciences Center appeared to be doing fine. Why were changes necessary?

Kimmey: We were doing fine. In fact, we were doing quite well when the trend among both community hospitals and academic health care centers has been for them to do poorly financially. But as managed care grows, and the St. Louis market is one of the fastest growing managed-care markets in the country as of last year, it becomes increasingly difficult for physicians to refer patients to the institutions of their choice. They are required to refer patients to the institutions that contract with their managed care plans. The plans seek the least expensive hospital options and give little weight to the extra costs incurred by teaching hospitals. To survive as a health care institution, we need to be included in as many of those plans as possible. Although we contract with virtually all managed-care plans in St. Louis, we do not have our own base of primary care providers. That base generates referrals and is essential in today's environment. Without a change in our costs and in our relationships with other providers, we were faced with a situation in which income surely was going to decline.

GC: What was the first step taken to avoid that decline?

Kimmey: When we began assessing our options five years ago, we realized our hospital was relatively expensive due to the type of specialized care we provide and our commitment to teaching and research. We also realized we were having difficulty contracting with managed-care organizations because we did not have one unified approach with them. We had 14 different medical departments and a hospital all contracting separately. Therefore, our first step was consolidation. We consolidated those 14 departments into a multispecialty group practice known as the University Medical Group (UMG). Our second step was integration of the UMG with Saint Louis University Hospital to create a single business entity known as SLUCare. So now we have single-point contracting with managed-care organizations. We can offer an array of services through one contract, which is fairly unique among academic health centers. Most are divided along department lines or between departments and hospitals. Basically, we have become a leaner, more attractive provider with the creation of SLUCare.

GC: What benefits have been derived so far from creation of SLUCare?

Kimmey: SLUCare has been an unequivocal success by all accounts. The concept has been marketed much more aggressively than we have marketed ourselves in the past. Our managed-care contracts have nearly tripled in the last three years. We went from approximately 47 contracts to more than 100 currently. According to community surveys, our name recognition is very high. We think it was a good move and it positions us for the third step in our strategy, which is networking. From the very beginning, we knew we needed to network our hospital with other providers or with a larger health care entity to maintain and expand patient referrals and to gain access to the capital needed to support state-of-the-art education for our health professions students and residents.

GC: You have said that networking is even more critical for academic health care centers than for non-academic health care centers. Why is that?

Kimmey: Academic health care centers serve society in a very different way than community hospitals. They provide training for the physicians, nurses and other health professionals for the future. They are the sites for most of the research efforts that enhance detection and treatment of illness. They provide higher levels of care to the medically indigent than do community hospitals. All of these benefits come at a cost. Tuition cannot begin to meet the real cost, and government has been unwilling to do so. Therefore, we subsidize expansion in our schools and in our research programs with clinical dollars, dollars that come to us from our physicians' practice and from the hospital. In fact, about 60 percent of our medical school budget is supported by clinical activity. Think of it this way. Patients who come here participate in teaching and research in two very different ways. On the one hand, they are active participants in our teaching programs. The residents and students are involved in their care. On the other hand, the payment for their care helps fund our education and research programs. Over time, medical schools have become increasingly dependent on these dollars because society has not found a way to provide direct support for medical education. So when these clinical dollars are threatened by managed care and by the federal government reducing Medicare and Medicaid programs, education and research are directly threatened. We are directly threatened. You can see there is a definite link between the provision of patient care at the Health Sciences Center and the preparation of physicians and technicians for the next century.

GC: Some groups believe too many physicians and technicians are being prepared for the next century. The Pew Charitable Trusts, for example, is suggesting one-quarter of all medical schools close and the survivors train fewer specialists. What do you think of this as it relates to the University's School of Medicine?

Kimmey: It is interesting. Pew is saying close medical schools, but students are not getting the message. Last year we had 8,000 inquiries for 150 places in our medical school class. Most other medical schools are having similar interest expressed in medicine as a profession. I agree we have more medical schools than we need and we certainly have an excess of physicians, but they are not in the areas of greatest need, such as inner cities and rural areas. We recognize that medical schools have to evolve. We cannot do what we have done for years and continue to survive and produce the kind of physicians society needs right now. That is why we already have undertaken change in our medical school at Saint Louis University. Our strategy for success involves a massive restructuring of the curriculum in order to make it more relevant to the real world of practice. We require that third-year students study family practice, and we provide them with opportunities to get hands-on training throughout the course of study. We revised the curriculum for the first two years and have gone to a problem-based learning sequence that is less about memorizing scientific facts and more about learning the sciences based on real patient problems. We are changing because we feel we have to differentiate ourselves from other medical schools if we are going to be a success in the future.

GC: What about the other schools under the Health Sciences Center umbrella: the School of Nursing, the School of Allied Health Professions and the School of Public Health? Do you anticipate changes in those schools as well?

Kimmey: Definitely, and many of the changes are well under way. Over the last two years, the School of Nursing has made a major effort to begin training nurse practitioners. The school trains family nurse practitioners, pediatric nurse practitioners and geriatric nurse practitioners. These are graduate programs that are preparing professionals who can help meet that primary care need I mentioned earlier. You do not have to be a primary care physician to fill the void. A nurse practitioner can do the job. In the School of Allied Health Professions, the physical therapy and physician assistant programs are almost as competitive as medical school in terms of the number of applicants, test scores and grade-point averages. The school's occupational therapy program started three years ago, but it already has reached the enrollment projections for its fifth or sixth year. The School of Public Health probably is the University's biggest success story in a number of years. Starting in 1991, the school achieved accreditation quicker than any other public health school ever. It has managed to attract research grants in amounts far beyond what was anticipated. The school attracted more new research dollars last year than all but one department in the School of Medicine. So you can see, all of the schools at the Health Sciences Center are doing quite well in terms of attracting students and producing new knowledge through research. But the fundamental thing they all need is access to patients and secure financial support. That carries us back to finding a way of networking our system in order to secure the future of health professions education here at Saint Louis University.

GC: We have heard so much about mergers, buyouts and networking lately: Local hospitals are clustering, Boatmen's Bank becomes NationsBank, Boeing merges with McDonnell Douglas. How do you maintain your identity in this mix?

Kimmey: It becomes more difficult, to be sure, but if we were to enter into a networking relationship, the physician practice, the heart of what makes this an academic health care center, is not going to merge or be sold. So SLUCare as an entity will not go away. It may change, but it will not go away. Maintaining our educational mission is the critically important thing. We have had relationships in the past with hospitals we do not own. For example, we networked with Cardinal Glennon Children's Hospital for pediatrics. We networked with St. Mary's for obstetrics and with St. John's for certain surgical subspecialties. You do not have to control an institution to partner with it in pursuit of an education and research mission such as that of the Health Sciences Center.

GC: The Health Sciences Center and the University as a whole have other well-known missions, such as remaining committed to the city and to providing services to the underserved. What impact might the strategy for success have in these areas?

Kimmey: As we discuss networking, the next step in our strategy for success, it is important for the community to understand that the University never would network with an organization or an entity that would not agree to maintain our community service programs. We would not network with someone who would not agree to maintain the level of indigent care we offer here, which is reasonably high among institutions in this country. We would not network with anyone who would move us out of the city. We need to be here. It is very much a part of who we are. We would not network with anyone who would not follow the ethical and religious directives of the Catholic bishops. This is a Catholic university, a Catholic health care center, and even if the hospital were under other than Catholic auspices, our expectations and requirements would be that it follow the health care principles laid down by the Church.

GC: It must be difficult at times to reconcile the differences between the University's Jesuit mission and the increasing focus on the bottom line in heath care.

Kimmey: It is. But the only way we have been able to maintain our commitment to the underserved is by maintaining a healthy bottom line supported by income from patients who can pay or have bills paid on their behalf. If that income stream goes away, our ability to serve the underserved goes away. Mission and income are linked. Over the last five years, Saint Louis University Hospital provided an average of $12 million in charity care. We remain committed to this type of outreach. But if we lose income and have to start carving out services, eventually we get past the skin and muscle to the bone. The bone here is our mission. We do not want to put ourselves in a position where we cannot carry out our mission. If we get to that point, then we do not belong in this business. That is why it is vital that we continue to move consistently through our strategy for success: integration, consolidation and networking.