Sisters of Charity Health System: Sister Judith Ann Karam, President & CEO

by HCE Exchange on August 19, 2010

Catholic healthcare has strong roots in Northeast Ohio. The Sisters of Charity Health System can trace those roots back to 1851 when four Sisters of Charity of St. Augustine arrived in Cleveland, Ohio, from France to become the city’s first public health nurses.

Established in 1982, the Sisters of Charity Health System now operates five acute-care hospitals with a total of 1,480 licensed beds. The organization also has three residential care facilities, three community physician practices, and three grant-making foundations. Other ministries include transitional housing for homeless men, a fatherhood initiative, early childhood program and a statewide program that provides medical care, psychological care, and glasses to children who would not quality for state support, but their families do not have enough resources to have access to healthcare.

“I really believe there is a strong need for Catholic healthcare in the United States,” says Sister Judith Ann Karam, CSA, President and CEO of the health system since 1998. “I think the complexity of the healthcare environment today, requires that we have an excellent team that is the best as far as running the business, and that we run the business in a framework of service to the people. If we do not have that service to people aspect of it, there’s no need for the Sisters of Charity Health System to be in the business.”

As a nearly billion-dollar enterprise, the Sisters of Charity Health System follows the Catholic social teaching model in all of its organizations. “Catholic social teaching helps us understand our priorities. We are operating multi-million dollar businesses, but at the same time we are operating a ministry and a mission, so we have a matrix that we use as we’re making decisions. It might be a compelling business decision that we’re making, but we want to make sure that we pause and reflect on what it means to our mission and who we are,” says Sister Karam.

DEFINING CATHOLIC HEALTHCARE

The five hospitals of the Sisters of Charity Health System are located in Canton and Cleveland, Ohio, and in Columbia, South Carolina. These hospitals carry forward the healing ministry of Jesus to serve the many needs of the community. Those community needs are not just material, but also can be spiritual or physical in nature, says Sister Karam.

In many ways, Catholic healthcare is countercultural to the market-driven healthcare model, balancing the need to improve and increase access to those who are underserved or who cannot pay in a time of diminished reimbursement. “It is mandated that we operate this mission-driven ministry using sound business acumen. On the other hand, we have an ideal opportunity to serve God’s people at a precious moment in their lives,” she says.

Healthcare and the delivery of that care are ever-changing. And yet the Sisters of Charity Health System is committed to delivering the best quality of care, regardless of a person’s ability to pay.

“This year is pretty challenging. We are facing everything from decreased reimbursement to a state hospital franchise fee in Ohio as the state works to balance its budget. Many of our communities are really seeing the effects of the down economy. Any one of those areas alone can impact our bottom line, especially when individuals question whether or not to have an elective procedure. The charge at all of our hospitals is to get the word out to our patients and our communities that we are devoted to providing care that combines the best in clinical excellence and human compassion.”

BUILDING A VISION FOR THE FUTURE

“We are living in challenging times. The economy has forced us all to make hard decisions about our operations and our support of worthy initiatives,” says Sister Karam. “While we are doing our best to weather the economic storm, we also are on the cusp on some exciting opportunities at the health system. We have been working toward a vision of the future that enables the Sisters of Charity Health System to better leverage its collective strength in the areas of health care, social services, advocacy and elder care services.”

To that end, the health system is making significant investments at all of its hospitals. These strategic capital investments totaling more than $350 million over the next five years are designed to improve facilities and strengthen key service lines. “Beyond these strategic investments, our hospitals are maximizing efficiencies by working together on a range of services such as information technology, supply chain, fund development, business development, physician alignment and palliative care.”

In the past 12 months, the health system has added several key leaders in the areas of finance, business development, physician alignment, project management, IT, construction services and fund development to support these critical initiatives designed to strengthen and grow Catholic healthcare in the communities it serves.

“One of the primary areas of Catholic social teaching is to care for the poor and increase access to care. But we also know that without dollars, we don’t have a mission,” says Karam. “To that end, each of our hospitals has a strategic plan in place that focuses on top-line revenue growth. Our newly established project management office has developed tools for tracking the tactics that are going to ensure our goals and objectives are met in real-time. Because we are tracking so closely, we are in a position to discover the obstacles and adjust based on the data.”

“We also know we have to modernize our facilities,” says Sister Karam, who also serves as president and CEO of St. Vincent Charity Medical Center in Cleveland. At that urban campus, the health system is looking to create all private rooms and enhance access to its campus through improved parking. It recently renovated its medical and psychiatric emergency departments, cath lab and hyperbaric medicine center. Three buildings dating from the early 1900s are slated for demolition in May in order to make room for close-in parking and, eventually, a new surgery center.

At Mercy Medical Center in Canton, plans are underway to expand the emergency department. “Business is booming as far as our emergency department in Canton is concerned, and it is not built for the volume that we are receiving,” says Karam. “We’ve just collected bids on a new emergency department that is large enough to handle the patients in that community.”

At Providence Hospital and Providence Northeast in Columbia, South Carolina, plans are underway to modernize the downtown hospital by converting to private rooms and modernizing surgery and the emergency department. The suburban Northeast facility has embarked on a major expansion to add 40 additional patient beds and four new operating rooms to better meet the needs of the community.

Partnering for Better Service

The organization has done some experimenting with joint ventures in the past. Those joint ventures and strategic alliances, which were so prevalent in the 1990s, provided opportunities that reflected a response to the demands of managed care and to rapidly improve hospital information technology systems.

Early efforts made growth difficult. But that initial joint venture did result in some positives. “It brought us our foundations that are doing a lot of wonderful work and are really trying to impact the lives of the materially poor,” says Karam.

In 1999, the Sisters of Charity Health System created a joint venture with Cleveland-based University Hospitals. It provided a local alliance with a responsive community partner that enabled the two health system to leverage services in a manner that was beneficial to both.

However, as the healthcare environment continued to change and as the economic downturn required more nimble organizations in order to respond to the unique needs of each market, the Sisters of Charity Health System and University Hospitals made the decision to restructure their relationship. Under that restructuring, which was completed on Dec. 31, 2009, the Sisters of Charity Health System returned to sole ownership of Mercy Medical Center and St. Vincent Charity Medical Center. It was already sole owner of Providence and Providence Northeast.

For the suburban market west of Cleveland served by St. John Medical Center, both organizations determined that it made sense to continue the 50:50 joint venture, but with the exception of streamlining the decision-making process by giving University Hospitals responsibility for day-to-day management of the hospital. Strategic and capital plans of up to $100 million are also in the works for that campus.

“At the very core of the restructuring of our ownership and management was how we could further our mission and improve the manner and speed in which decisions can be made to best serve these individual communities,” says Sister Karam.

-by T.M. Simmons

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