St. Patrick Hospital CEO - The Coming Healthcare Recession

St. Patrick Hospital is Missoula's largest healthcare facility, employing over 1,400 people and nearly 300 doctors, but Chief Executive Officer Jeff Fee said on Thursday, October 31, that big changes are coming to his hospital, and hundreds more across the country.

"Healthcare is entering into a recession and a period of contraction right now, rather than expansion," Fee said. "A lot of that is being driven by demand, with market forces putting a lot of pressure on our revenues. What we're seeing across the industry and what we're experiencing here in Missoula is a tremendous amount of pressure on our cost structure. That ultimately means you have to enter into periods of austerity where you really have to look hard at what you're doing and get down to what your core business is, and oftentimes that does mean that jobs are impacted."

Fee said it would be unfair to his employees to reveal any plans for layoffs to the press before fully informing those that may be involved.

"We're not in a position to share that information right now," Fee said. "Obviously, it would not be consistent to our core values of respect and compassion to announce through the media that we're looking at doing something different without letting those individuals in those areas know. We've talked very openly with our staff about some programmatic discernment that we're entering into. As you can imagine, they can be pretty disruptive within the staff, but at the same time, they recognize the reality of the environment we're working in, and they understand that, just like at home, when times get tight, you look at cancelling your cable bill."

Fee said the very system of delivering healthcare is being transformed before the eyes of hospital administrators.

"That transformation is almost an evolution away from the current model to another model, and it's incredibly disruptive," Fee said. "I'd like to see an era where my leading indicator for success is not necessarily the number of patients I have in the hospital, but instead how many patients I've been able to successfully keep out of the hospital. So, it's going to be a process that will evolve over the next three to four years, so I don't really have a timeline as to when any announcements will be made. There's just going to be a lot of change in the healthcare delivery system over the years to come."

Fee said the change to high-deductible insurance policies will force people not to seek hospitalization.

"People are really much more deliberate in terms of the types of services that they're accessing," Fee said. "Especially when the money is coming right out of their pocket, they're going to deal with their sore knee at home. They'll just suck it up and not have it worked on if it's going to cost them significant dollars out of their pocket. So, we do think the adoption of high-deductible policies has had a significant impact on demand."

Fee did express his personal commitment to retaining St. Patrick Hospital's emphasis on trauma care.

I have a personal and selfish interest to keep trauma," Fee said. "Mostly because I love going downhill very fast on skis and mountain bikes, and someday I know I'm going to need them. So, there is a level of infrastructure that we absolutely have to protect, and we certainly intend to do that."