Wednesday, June 10, 2009

Verification of our strategies and focus

We recently reviewed data on where health system revenue is being generated and a chart showing the increasing shortfall in payments relative to costs for Medicare and Medicaid. This reaffirmed for CHRISTUS Health that our strategy to transition our portfolio to become one-third acute care in the U.S., one-third non-acute care in the U.S. and one-third international, is undoubtedly the right direction.

In addition, because we recognize that our ability to increase our revenue from “same-shore” business is virtually impossible, particularly from our Medicare and Medicaid books of business, our focus on becoming one of the high quality/low cost providers is clearly the best strategy to guarantee long-term sustainability for our health and wellness ministry.

Clearly, a major task for hospitals and health systems is striving to balance their revenue with their costs, an increasingly complicated task because of such factors as the continuing shift to outpatient care (which CHRISTUS has been predicting and planning for) and the expanding payment shortfall relative to costs for Medicare and Medicaid. In addition, CHRISTUS Health has many facilities and programs in Louisiana and Texas, two of the states with the lowest Medicaid payments. These findings are verified in the charts depicted below:

As we continue our Journey to Excellence, attaining our goal to be one of the highest quality, low-cost health and wellness providers appears to be within our reach.

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