Health-care providers giving themselves a booster shot

Melissa Westphal

The country’s reeling financial markets may be taking a toll on businesses all over the world, but at least one industry is booming:

Health care.

And it’s expected to go nowhere but up.

Driven by aging baby boomers, the Rock River Valley’s Big Three health-care systems are expanding — making changes to facilities, putting up new ones, adding specialized services to compete for patients, and ramping up recruiting efforts for doctors and nurses.

It’s just good business.

Health-care spending rose 3.5 percent in 2005, the most recent figures available, according to the Bureau of Labor Statistics’s Consumer Expenditures Survey.

People younger than 25 raised their health-care spending that year to an average of $700.

Those 65 and older? More than five times that amount: $4,193. Fifty-five- to 64-year-olds spent nearly $3,500.

“Our reality is that the baby boomers are consuming an ever-increasing portion of the health care,” said David Schertz, CEO of OSF Saint Anthony Medical Center. “People who are now in their 50s and 60s are not going to have the same care their parents did.”

The growth factor

The future, especially for the rest of 2008 through early 2009, translates into continued growth for the region’s health systems.

SwedishAmerican Health System is spending about $20 million to renovate the old Highland Hospital in Belvidere to include an emergency room, inpatient beds, imaging services, a sleep lab, physical therapy services and, eventually, outpatient surgery. The facility will be known as SwedishAmerican Medical Center/Belvidere and will offer health-care options that residents haven’t had for nearly a decade.

The group also owns 150 acres on Illinois 173 near Interstate 90, and CEO Bill Gorski said officials will address plans for that site after the Belvidere facility is complete. The system also plans to expand its Brookside Campus on North Alpine Road.

Rockford Health System, happy with the success of its Rockford Health Physicians satellite in Winnebago, is taking its expansion plans west, south and north. CEO Gary Kaatz said hospital officials closed a facility in Byron a few years ago, but they’re considering reopening the site in 2009 with a still-to-be-determined set of services.

“Everybody looks east, east, east, but we like Winnebago,” Kaatz said. “We’re really studying the Byron community to determine the need. We’re also looking at Roscoe.”

The health system also plans to expand its 40-bed neonatal intensive care unit to 44 beds, open a new surgical wing and add specialty suites to Rockford Health Physicians-Perryville, which offers physical therapy, neurology and cardiology. Officials also will open a satellite this month in Poplar Grove.

And OSF Saint Anthony Medical Center plans to open its OSF Center for Health-Rock Cut in stages starting this year, with a grand opening planned early in 2009. The center at the busy Perryville Road-173 intersection, will feature a full-service lab, medical imaging, primary care, pediatrics and prompt care. Total estimated cost on that building is $34.5 million.

“The whole idea of care is to go where the population is growing, go to a major traffic thoroughfare and buy a big enough chunk of land so it can grow into whatever you want it to be and staff it from Day One,” Schertz said.

OSF also plans to add enough beds to its main medical center on East State Street in Rockford to eventually become a fully private-room hospital. The hospital is licensed for 280 beds, and officials hope to add about 100, which will require an addition.

OSF is in the final stages of opening three or four primary-care satellite locations in the area, but Schertz is staying mum on the details.

Targeting baby boomers

All of these changes are driven in part by the millions of baby boomers, the generation born between 1946 and 1964, who will consume more health-care resources in the next few decades.

One of the trends they are driving is the idea of one-stop-shopping for health care, Schertz said. They want primary-care physicians to refer them to a specialist down the hall, at one facility close to home.

They also want more specialty rehabilitation facilities because improvements in technology have led to shorter hospital stays.

The goal, health officials agree, is to create a balance between traditional primary and specialty care. Gorski said intense scrutiny of health care is appropriate to improve patient quality and safety.

The health systems have ramped up their orthopedics, cardiology and neurology departments, forseeing increased need in those areas. Rockford Health System continues to explore much-desired minimally invasive procedures using robotic surgery methods, from removing cancerous prostates to performing hysterectomies.

Kaatz wants Rockford Health System’s future to follow that all-in-one notion.

“What we’re putting together here is this concept of a medical home,” he said. “We will take responsibility for patients and their families for all of their needs, whether it’s home care, hospitalization, ambulatory care, specialist care. The whole idea is that we’re a home, and we take responsibility for every aspect of our patients.”

‘Scary shortages’

One of the biggest priorities for the health systems is filling staffing shortages caused by retiring doctors and nurses.

Schertz said the national average shows the need for 1.4 health-care workers to replace one baby boomer. That’s in part because boomers eventually will need more critical care and because new physician and nursing graduates, on average, are spending less time on the job to avoid burnout and spend more time with their own families.

“We’re looking at the most acute physician shortage that we’ve seen in awhile,” Kaatz said. “I think we’re looking at some scary shortages, especially in certain specialty or subspecialty fields, and general surgeons, cardiologists, internists — kind of the bread and butter of the health-care system.”

OSF is adding 11 primary-care physicians to its Rock Cut medical center: seven who will relocate and four new hires.

SwedishAmerican has recruited neurosurgeons, neurologists, cardiologists, endocrinologists and rheumatologists in the past year. More than half of the most recent recruits have been women.

Lifestyle has become increasingly important for recent recruits, so keeping them in the area means providing a good professional environment and promoting community attributes, Gorski said.

Rockford Health System took aim this year at the nursing shortage by introducing a critical-care training program, which directs experienced nurses into the neonatal ICU, emergency department, adult intensive care, post-anesthesia care, progressive care and cardiac telemetry.

“The key there is that you can’t hire just any nurses for those areas,” Kaatz said. “You’re putting nurses into an environment where they’re treating the sickest of people. You’ve got to not only identify and hire a really good nurse, you have to make sure that nurse has a skill level that’s very advanced and that he or she is comfortable with.”

Kaatz said other shortages will be seen in pharmacy, all types of therapy (physical, speech and occupational), ultrasonography, radiology and interventional radiology.

“Those are positions that are sought after by everyone. And on top of that, take physical therapy and pharmacy, the entry level degree is the doctorate. They’ve lengthened the training program, which has decreased supply, essentially. The demand has continued to soar on top of that.”

Closing the referral gap

About 3,000 people a year seek medical care outside the region, a trend called outmigration, according to a 2000 study by the University of Illinois College of Medicine at Rockford. Most of those patients are seeking higher-level and more profitable procedures at places like the University of Wisconsin Hospital and Clinics in Madison and Northwestern Memorial Hospital in Chicago.

Patients who outmigrate, but could stay here for treatment, are more difficult figures to grasp, Gorski said.

Health officials have increased education and awareness efforts, in part through collaboration, to keep patients in town. But there are still cases, such as organ transplants and complex oncology issues, that require out-of-town treatment.

Gorski said SwedishAmerican has focused on improving heart and oncology offerings. He is chairman of the Rockford Health Council, which he said is the only venue in town where a variety of health-care businesses can talk strategy.

Kaatz said Rockford Health System has advanced in neurology, high-risk obstetrics and orthopedics.

OSF has hired new orthopedic trauma surgeons and neurosurgeons, and Schertz said the medical center is recruiting a stroke neurologist and an interventionalist neurologist.

“As a Level 1 trauma center, we’ve really ramped up our services in the past five years,” Schertz said. “We’ve seen some more complex pelvic fractures that before had to leave town. But now with three ortho trauma surgeons, there’s somebody here all the time. Those are the people who do the complex work.”

Part of closing that referral gap is increasing patient and provider education regarding the services available.

“We have a renewed emphasis on regional development,” said Mike Robinson, director of marketing and communications for OSF Saint Anthony Medical Center. “We are making a concerted effort with physicians in the area to make them aware of what we have available here to increase referrals, and that program is still in its infancy.”

Robinson said two OSF employees dedicated to regional development are visiting 25 to 40 doctors each week in Rockford and stretching to Boone, Winnebago, Ogle, McHenry and DeKalb counties to educate them on what the hospital has to offer.

“Sometimes we assume the patient knows everything,” he said. “The patient can only react or do something based on the knowledge that’s provided to them. So what we’re doing is providing their physicians with that information and helping patients make a more intelligent decision about their health care.”

Reach staff writer Melissa Westphal at (815) 987-1341

Facts and figures

OSF HealthCare

Main Rockford campus: OSF Saint Anthony Medical Center, 5666 E. State St.; 815-226-2000

Founded: 1899

Licensed beds: 254

Annual patient visits: 36,000

Medical staff: 440

Hospital CEO: David Schertz

Employees: 2,094

Known for: Pioneering care in a Level 1 trauma center, Regional Heart Institute, Center for Cancer Care, Illinois Neurosciences Institute and Women’s Center, Diabetes Center, Center for Sports Medicine and Health Fitness, leading-edge orthopedic services, accredited as a chest-pain center, Lifeline helicopter and ambulance services, nursing college

Net patient revenue:¹ $284.1 million

All other revenue: $10.1 million

Expenses: $283.4 million

Net income (profit): $10.9 million

Rockford Health System

Main Rockford campus: Rockford Memorial Hospital, 2400 N. Rockton Ave.; 815-971-5000

Founded: 1885

Licensed beds: 396

Annual patient visits: 47,000

Medical staff: 450

System CEO: Gary Kaatz

Employees: 3,000

Known for: Level 1 trauma center, children’s medical center (pediatric intensive care unit and Level 3 neonatal intensive care unit) heart and vascular center, brain and spine center, patient safety, Visiting Nurses Association, Van Matre HealthSouth Rehabilitation Hospital, critical-care nurse training, da Vinci Surgical System

Net patient revenue:² $368.9 million

All other revenue: $60.4 million

Expenses: $395.9 million

Net income (profit): $33.3 million

SwedishAmerican Health System

Main Rockford campus: SwedishAmerican Hospital, 1401 E. State St.; 815-968-4400

Founded: 1911

Licensed beds: 357

Annual patient visits: 56,000

Medical staff: 350

System CEO: Dr. Bill Gorski

Employees: About 3,000

Known for: Level 2 trauma center, cardiac program (The Heart Hospital), regional cancer center, home health care, clinical quality and excellence, designated a Top 100 and a distinguished hospital in the U.S., teaching hospital affiliated with the University of Illinois College of Medicine

Net patient revenue:³ $345.4 million

All other revenue: $21.1 million

Expenses: $334 million

Net income (profit): $32.5 million

¹ Because it cares for fewer Medicaid-covered patients than the others, OSF Saint Anthony Medical Center paid $1 million more into the provider tax than it received.

² The Medicaid provider tax netted RMH $8 million in revenue. An additional $16.5 million in net revenue came from an accounting change in how the organization reports its capital gains for securities on paper.

³ Without the $31.6 million in net revenue from the provider tax, SwedishAmerican would have only made $956,000 last year.

Sources: Hospitals’ consolidated financial statements for fiscal 2007,,,,,, RHS annual report 2006