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2008 Movers and Shakers

The standouts of the 2008 Top 250 list.

(page 2 of 6)

 

St. Francis Healthcare Systems

Sister Agnelle Ching,
CEO, St. Francis Healthcare
System of Hawaii

DOWNSIZING

St. Francis Healthcare
System of Hawaii

’06 Gross Sales $219.5 million
’07 Gross Sales $122.7 million
Down 44.1%

Renewed Vision

These numbers would get most executives fired. In 2006, St. Francis Healthcare System of Hawaii reported $219.5 million in gross sales; in 2007, sales dropped by 44.1 percent to $122.7 million. But according to the leaders of St. Francis, that’s simply a reflection of a new strategy: The healthcare system is rebranding itself as a senior community healthcare provider and that means shedding some of its services.

That’s why, in January 2007, St. Francis sold its two acute-care facilities in Liliha and Ewa Beach to Hawaii Medical Center for $68 million. A year earlier, it had sold its renal dialysis program to Liberty Dialysis-Hawaii LLC. The company downsized from 1,841 employees in 2006 to 239 in 2007. Many former employees were absorbed by the new companies. With those facilities transferred, St. Francis lost major revenue streams, but now attends to its core markets: preventative care and post-acute care.

Since coming to the Islands to care for Hansen’s Disease sufferers in 1883, the mission of the Sisters of St. Francis has always been to help the poor and underprivileged. But with reimbursements for acute services declining, it became harder to do so. Jerry Correa, chief administrator for St. Francis and its five subsidiaries, says selling the acute-care services “was a strategic decision that, if there is no margin in health care, then there is no mission.”

Today, caring for Hawaii’s aging population is its top priority. Most of the operations fall under its St. Francis Community Health Services entity, including home health care on Oahu and Kauai and mobile healthcare services on the Big Island. Both of St. Francis’s freestanding hospices in Nuuanu and Ewa Beach will undergo $3 million renovations to upgrade rooms and equipment. Under the St. Francis Residential Care Community entity, it has started a concierge service for seniors called “Stay Healthy at Home,” which works as a referral line for services such as medicine pickup and yard work.

Dr. Satoru Izutsu, senior associate dean at the University of Hawaii’s John A. Burns School of Medicine, says other companies have been deterred from long-term care. “There have been a number of companies that have been investing, but the reimbursements and how to balance the budget is very difficult,” Izutsu says. Long-term healthcare facilities like Kauakini Medical Center and Palolo Chinese Home are maxed out, he adds.

The need for long-term community health care is there. According to the UH medical school, the nationwide average is 57 nursing-home beds per 1,000 residents age 65 years and older. In Hawaii, it’s 32 nursing-home beds for every 1,000 senior residents.

“I think one of the things we’ve always tried to do is meet the needs of the people of this state, even when this was not a state,” says Sister Agnelle Ching, chief executive officer of St. Francis. For preventative care, St. Francis has been going to private and public schools to teach children how to eat healthily to combat a nationwide trend of childhood obesity and diabetes. “So on the other end of the pendulum we’re taking care of the elderly, but I think we also have to look at, if we did it even further back, it would really help us in terms of wellness and prevention and teaching them good habits about health,” Ching says.

For 2008, Correa says the company has budgeted for a 10 percent increase in revenue. Most expansion will be in its home hospice service, including hiring more nurses in that area. This fall, St. Francis will unveil Telehealth for home health care. Instead of nurses visiting a patient’s home a few times a week, patients can be monitored remotely. This can also provide better statistical tracking, as vital signs are recorded daily rather than weekly. Plans are still ongoing for Franciscan Vistas Ewa, a master-planned senior residential community which includes a senior center and 148 affordable rentals for seniors 62 years and older. St. Francis also plans to expand into palliative care, which focuses on reducing the severity of a disease rather than curing it, and respite care, which provides backup home care for seniors when their primary caregiver is unavailable.

– By Jason Ubay
 

Hawaii Business magazine invites you to comment on our articles and the issues they raise. Comments are moderated for offensive language, commercial messages and off-topic posts and may be deleted. Some comments may be chosen for inclusion in the magazine on the Feedback page.

Sep 3, 2008 02:02 am
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