BEND, OR -- St. Charles Health System is taking a hard look at plans to build a new patient tower at the Bend hospital due to shrinking profits. Chief Financial Officer Jan Welander says there are two big steps St. Charles is taking to try and rein in expenses. "We are taking a second look, or a fresh look, at some of our larger capital projects – the investment in the building that we’re doing. That does include the north, or the 'ICU Tower,' as it’s often called. Our design team is reviewing the scope of the building and we’re trying to determine if there are some modifications that are warranted, given our economic condition."
She says funding the $66-million project has been secured and the budget isn't changing. The original plan was for two- to three-dozen Intensive Care beds, replacing the 18 currently available at the Bend hospital; and shelled-out space for future use, including more medical beds. Welander says the team is now looking at increasing efficiencies to lower operating costs, "Is there a different way to think about how, if we scale the shelled out space differently, how many beds can we make operational within the $66 million so that community has faster access to those? Our dialog, though, remains a complete commitment to the ICU beds, so that’s not a component of the project that we’re asking the team to look at."
The company is also evaluating every new and replacement job opening. Welander says both moves are a response to deteriorating financial performance. "The trend started last fall and is like what many other health systems in the state and the country are experiencing. Compared to last year, so far, year-to-date through April, we have a very tight operating margin at .3%; so we’re barely making more money than we’re spending."
She believes the industry is seeing shrinking profits partly because rising deductibles force people to think twice before seeking treatment and, a number of hospital reimbursements provided under the Affordable Care Act are starting to sunset. Welander tells KBND News, "Our focus is on the best care for the best value. We understand that we have to make healthcare more affordable to make it sustainable and this is simply the new normal. I think it’s good for us to recognize St. Charles and other healthcare providers are going to be having ongoing conversations in this vein, and focusing on quality and eliminating waste from healthcare."