Becker's Hospital Review

8 CFO / FINANCE Why this system is investing in a 'loss-leading' service many hospitals are abandoning By Alan Condon S ince joining North Kansas City, Mo.-based NKC Health in 2021, Senior Vice President and CFO Austin Jones has steered the organization through a 40% growth in net patient service revenue and he's not afraid to invest in areas many hospitals are abandoning. One of those investments is labor and delivery care, a loss-leading service for many hospitals, particularly in rural areas, where nearly 40% report losses on obstetrics programs. But at NKC Health, the decision to maintain and strengthen these offerings reflects a broader, community-first mission, and one Mr. Jones says is already yielding returns. at commitment aligns with a broader transformation: North Kansas City Hospital and Meritas Health recently united under the NKC Health brand to improve care coordination, enhance the patient experience and strengthen the system's regional presence. NKC Health comprises the 451-bed North Kansas City Hospital, 35 care facilities and a workforce of more than 4,700 — including 600 physicians. Mr. Jones joined the "Becker's CFO + Revenue Cycle Podcast" to discuss NKC Health's recent growth, how the system is navigating workforce and financial pressures, and why investing in loss-leading services can still be the right strategic move. He also shared insights on outpatient expansion, partnering with Mayo Clinic Care Network, and what's next for the health system over the next 12 to 24 months. Editor's note: Responses were lightly edited for length and clarity. Question: There are many challenges ahead for health systems, but there are also opportunities. What are you most excited about when you think about the future of NKC Health? Austin Jones: I think there are a number of things, but from a macro perspective, since I arrived in 2021, NKC Health has seen 40% growth in net patient service revenue. We're growing in the outpatient area, and we're the second-largest inpatient hospital in the city — second only to the University of Kansas Health System. Our emergency department is by far the busiest. We had 83,000 ER visits last year; the closest competitor was around 65,000. at tremendous outpatient growth gives us a lot of encouragement. On the inpatient side, we're kind of maxed out. We run at about 80% capacity, which is ideal. It allows us to flex up during high-volume seasons, such as January, while keeping things efficient and offsetting overhead. Outpatient growth, though, has been tremendous. We've invested heavily in our cancer center, interventional radiology, cardiology, outpatient imaging, rehab and lab. We've even invested in labor and delivery services, which many hospitals are divesting from, because our community needed it. It's typically a loss leader, but we are community-focused — from the board of trustees to the front line — and we heard the need. at investment is paying dividends. We also heard from the community that they wanted top-tier cancer care, so we affiliated with the Mayo Clinic Care Network to give our patients instant access to world-class expertise. If someone needs a really complex procedure, it might require a trip to Rochester (Minn.), but all the testing and consults stay here. It's a tremendous opportunity for patients to have access without leaving town. On top of that, for decades our brand was split. North Kansas City Hospital had strong recognition and support, while Meritas Health — our physician enterprise brand — wasn't as widely recognized. Only 26% of the community knew it was a wholly owned subsidiary. By bringing them together under NKC Health, we've had tremendous support. Q: To what do you attribute that substantial 40% growth in nearly four years? AJ: ere are a few things, and I'll say upfront this isn't attributable to my leadership. When I came here during the thick of the pandemic, our hospital did things a little differently. First off, they didn't lay off or furlough anyone. It cost us dearly: they dipped deep into reserves UT Health, UT San Antonio complete merger By Madeline Ashley T he University of Texas at San Antonio merged with The University of Texas Health Science Center at San Antonio on Sept. 1 to become The University of Texas at San Antonio. The University of Texas System shared plans to merge the two entities into a unified institution in late August 2024. The institution, which is now Texas' third-largest public research university, comprises 15 colleges and schools across six campuses, around 40,000 students, 17,000 employees, more than 320 undergraduate and graduate degrees, $486 million in annual research expenditures and a $1.3 billion endowment, according to a Sept. 1 news release. The new entity is expected to contribute up to $7 billion annually in support of San Antonio's $41.1 billion biosciences and healthcare sector. UT Health San Antonio sees over 2.5 million patient visits per year and is expected to train more than 1,000 fellows and residents. "UT San Antonio students have access to an education of the highest quality in disciplines ranging from science, engineering, business, education, humanities, social sciences, architecture and the arts to biomedical sciences, medicine, public health, dentistry, nursing and other allied health professions," the release added. n

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