How one hospital invested tens of millions to preserve its community – and won.

In by Leave a Comment

Peter F. Nichol MD/PhD is Associate Professor of Surgery at the University of Wisconsin School of Medicine and Public Health. Edited by David S. Seres, MD. Associate Professor of Medicine and a Clinical Ethicist at Columbia University Medical Center.

Peter F. Nichol MD/PhD is Associate Professor of Surgery at the University of Wisconsin School of Medicine and Public Health.                                        
Edited by David S. Seres, MD. Associate Professor of Medicine and a Clinical Ethicist at Columbia University Medical Center.

A dear friend, Richard, who is many years my senior recently remarked that he has stopped watching television. “I’m tired of seeing all the bad s%&$t that’s happening in the world.  I know it’s happening, but I can’t do much about it and it makes me depressed. I want to hear some good news stories.”

As with Richard we all could use a good news story or two.

Gundersen Health’s flagship Hospital in Lacrosse,

Gundersen Health’s flagship Hospital in Lacrosse

To be sure, our news media has evolved into a machine that, as in Don Henley’s song Dirty Laundry, will “Kick ‘em when they’re up, kick ‘em when they’re down…” to drive up electronic traffic in the never-ending media cycle of talking heads. But even so, one hopes there is one story out there, somewhere, that makes us feel good.

So, Richard and everyone else, let me introduce you to Gundersen Health System, the best healthcare system you’ve never heard of because it is located in the city of Lacrosse in the western side of the very rural state of Wisconsin.

Jeff Thompson at the Paris Climate Talks in 2015.

Jeff Thompson at the Paris Climate Talks in 2015.

Over the last 15 years Gundersen has been a trail-blazing healthcare organization driven by values and a mission to “enhance the health and well-being of (their) communities while enriching every life (they) touch, including patients, families and staff.”

Until recently, Gundersen was led by an energetic neonatologist turned visionary healthcare execute named Jeff Thompson. Jeff took them from a good organization to a great one. During his tenure Gundersen Health won every award imaginable.

Not only did they become national leaders in clinical outcomes, they transitioned to renewable energy and dropped their green house gas production by over 90%. Today, Gundersen uses nearly all-renewable, locally sourced energy and saves money in the process.

This last feat is so impressive that they were the only healthcare system invited to speak in the central blue zone at the Paris climate talks in 2015. Jeff, a life-long Badger fan, was there in the capital of haute couture sporting, of all things, a Wisconsin baseball cap.

Mississippi Riverfront view of Logistics Health during winter.

Mississippi Riverfront view of Logistics Health

But there is another story about Gundersen, which virtually no one knows about, and one that leaves you with a sense of overwhelming goodness.

There is a company named Logistics Health that was started in Lacrosse in 1999 “to address critical military medical readiness concerns, beginning with mass immunization of Service members against anthrax”.  At that time only 25% of our soldiers were getting the necessary vaccinations and exams before being sent over seas. Logistics Health rose to meet this critical and obvious need.

But despite the critical nature of their work, a crisis struck and new investors planned to relocate Logistics Health out of state. Sensing the regional economic devastation that would ensue, the former governor, who had also served as the Secretary of HSS along with Logistics’ CEO approached Jeff Thompson and Gundersen’s senior VP for Business, Jerry Arndt, for help. “Is there anything Gundersen can do?”

After several months of intense study and due diligence Jeff took it to Gundersen’s board.  It was not a unanimous vote. The ask was big: tens of millions of dollars with an uncertain 3-year horizon. After heated debate, a consensus was reached. Gundersen would take a portion of its savings and instead of keeping it in the usual stocks, bonds, T-bills etc. they would buy a near majority share to keep Logistics Health in Lacrosse.

Things went much better than anticipated. Gundersen sold its shares 16 months later and eventually made a massive return on its investment. This money was then used to keep prices down and to reinvest in the community. Logistics stayed in Lacrosse. It is, to this day, one of Lacrosse’s biggest employers.

So what is the moral of this story?

In hindsight it is obvious. Hospitals and healthcare organizations are community assets.

There are times when they must step outside their normal business of taking care of patients and lead outside their four walls. In these instances they must reach out and take care of their communities to achieve their mission. Losing Logistics Health would have added more stress to a shaky economy and the health of Gundersen’s communities. People would have lost jobs. House values would have decreased. Gundersen’s economic viability and thus the ability to care for its communities would have been lessened. In short Lacrosse would have been economically damaged and emotionally deflated. And, as Jeff Thompson is fond of pointing out, poverty is the main threat to our health.

Instead, because of Gundersen’s huge investment in the community, Lacrosse’s riverfront and downtown are undergoing revitalization in large part due to the growth and corporate citizenship of Logistics Health and the vision of the Gundersen Board.

We are in an age of healthcare acquisitions, mergers, and multi-million dollar executive salaries. Many healthcare systems are remotely controlled by business people living 3 states away with no connection to the communities they serve. In this era, the Gundersen – Logistics Health story is refreshing, and unfortunately novel.

Because Gundersen is locally grown, locally owned, and locally engaged, it was able to rapidly pivot to protect the health of its community in a way that that most healthcare organizations would never consider. This is the ultimate expression of accountable care that all healthcare systems should be striving to achieve. And one we can all feel good about.

 


We would love to keep you informed about new entries from our physician contributors.

Please let us know your email address to subscribe to the blog.

Please follow and like us:
onpost_follow