New partnerships with doctors, an expansion into new areas and integration of services are all helping Penrose-St. Francis stay competitive.
New partnerships with doctors, an expansion into new areas and integration of services are all helping Penrose-St. Francis stay competitive.

Memorial Health System recently unveiled a roadmap for its future, but its rival, Penrose-St. Francis Health Services, might get there first.

While the Memorial Citizens Commission debates the pros and cons of various paths for the hospital system, Penrose is already doing nearly everything in Memorial CEO Larry McEvoy’s plan: creating partnerships with doctors and other health systems, expanding its market beyond Colorado Springs and delivering what’s known as integrated health care.

The citizens commission has been meeting since February to determine the future of Memorial, which includes the potential of selling the system or turning it into an independent community nonprofit. Its final recommendation is due to the City Council in November.

Whatever happens, Penrose-St. Francis CEO Margaret Sabin seems certain of one thing:

“Memorial, when it’s set free (from city control), wants to be Penrose-St Francis,” she said. “That’s what they want, when this is all said and done.”

And, as in all matters in the free enterprise system, when all is said and done, whoever grabs the biggest share of the market wins.

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Penrose in just the first six months of this year has gained 2 percent of the market from Memorial. It now holds 41 percent of the market, while Memorial claims 57 percent. The remaining 2 percent represents patients who seek care at Denver hospitals.

Memorial knows the clock is ticking. When he announced his plan, McEvoy said he wished the commission was moving more quickly. “We don’t have a lot of time,” he said.

Here’s a look at what Penrose is already doing that Memorial hopes to pull off.

Partnerships with doctors

Centura hired Jackie Driscoll, as chief business development officer, earlier this year to reach out to doctors in the local community and beyond. Driscoll is responsible for recruiting doctors and crating wellness partnerships with local business. Even before she joined the team, Penrose had added partnerships with emergency-room doctors, cardiologists and trauma surgeons.

Those kinds of partnerships are vital to a hospital’s financial health because the nation’s health care reforms mean big changes in the reimbursement process. Doctors and hospitals will no longer be reimbursed on a per-patient basis, but must cooperate to be eligible for bundled payments that are based on coordinated treatment.

Recruiting doctors requires a soft touch, because many doctors view hospitals as competition, Sabin said.

“In the past, it’s been, ‘The giant is getting all our profits,’” she said. “We’re working to change that, to get doctors on board.”

In part, the rocky relationship between doctors and hospitals is rooted in perceived inequities in public and private insurance reimbursement rates. There’s hope that the reforms adopted this year will ease those tensions.

Sabin said Penrose’s goal is to focus on creating more coordinated “systems of care,” so health care reform becomes a less bumpy road for doctors and hospitals alike.

“We know this is coming, so we’re going to get all the obstacles out of the way, so we can focus on how to create the system for bundled payments when it occurs.”

Removing these obstacles also could mean finding ways to ease the burden on family doctors — especially because there is a national shortage of general practitioners.

“We don’t want more people accessing care to break the back of the system,” Sabin said. “We believe there’s a better way — a way to get people healthier even when they are pre-symptomatic.”

Sabin’s vision includes providing nutritionists and exercise coaches to patients, allowing them to make small yet important changes to become healthier.

At the moment, Memorial is limited in the kinds of partnerships it can strike, McEvoy said. One reason: there are two levels of management at Memorial: its board of directors and the city council. That subjects the system to sometimes conflicting priorities, he said.

“We’re reaching out, in a limited way,” he said earlier this year. “But we have to wait to take bold steps until the process is finished.”


Even if Memorial eventually breaks its ties to the council, creating a market for Penrose-St. Francis outside Colorado Springs is an easier job for Sabin than it will be for Memorial’s executives.

That’s partly because Penrose is part of Centura Health, the largest hospital system in the state. Penrose has moved to leverage that relationship only recently, and it’s already seeing results.

“Penrose now gets 100 percent of referrals from both St. Mary Corwin (in Pueblo) and St. Thomas More (in Canon City),” Sabin said. “We don’t have any patients going outside the system. That’s allowed us to increase our patient levels.”

The hospital also created a partnership with the hospital in Alamosa in southern Colorado for cardiovascular services. That, too, will extend Penrose’s reach, Sabin said.

Centura also created a statewide Cardiac and Vascular Network that allows its telehealth program to reduce hospital admissions and manage patients with cardiac issues. Doing so creates a relationship with rural patients that simply didn’t exist before, Sabin said.

The plan, Sabin said, is to leverage the entire network to bring down costs, expand services and deliver high-quality care.

Penrose is doing well on that front, too, ranking among the top 50 hospitals by the Society of Thoracic Surgeons, an industry group that rates surgery levels nationwide.

The system is taking the same approach with its stroke and trauma care, with equally positive results, Sabin said.

Also, Penrose recently added a new partner to its list: the Rocky Mountain Cancer Center. Sabin hopes the expansion in service will draw more patients.

“Cancer is on the rise, mostly because people are living longer,” she said. “But ways to treat it are on the rise, too. It’s no longer a death sentence, that’s very hopeful.”

For its part, Memorial hopes to expand its reach to the Western Slope and as far east as the border with Kansas.

More efficient care

McEvoy said Memorial wants to deliver higher-quality care more efficiently by following the latest models of integrated care — providing what, in effect, becomes a “medical home” for patients that stresses preventive, or wellness, care combined with a greater reliance of information technology.

Penrose is already experimenting with preventive-care models, Sabin said. The hospital has recently completed these wellness pilot projects with the Old North End neighborhood in Colorado Springs, as well as employees of the Greater Colorado Springs Chamber of Commerce. Wellness programs involving Penrose employees are ongoing.

Its work with the Old North End yielded impressive results; its 203 participants lost more than 1,000 pounds. The percentage of people in the “healthy” category went from 61 percent to 84 percent, based on blood screenings for cholesterol and diabetes, as well as body mass index measures.

Eventually, Sabin said, the aim is to put these programs in place with every patient seen by the hospital and its partner doctors.

“We want tangible examples, where we say, ‘We can do a better job,’ and then do it,” Sabin said. “And we’re going to erase some of the barriers to care that exist out there. These programs show that it doesn’t require a lot of money, (or) a gym membership, just the will to change habits.”

The focus on wellness has been a cornerstone for Penrose since Sabin’s arrival two years ago. Kaiser Permanente, the giant insurance company, renewed a relationship with the hospital this year based on that commitment, opening the door for its members to seek medical attention at the hospital and its doctors.

The emphasis on wellness has also prompted Penrose to invest in the da Vinci Surgical System, the only minimally invasive surgical program in southern Colorado, and the Cyberknife, a non-surgical alternative to cancer treatment.

In other related areas, McEvoy’s plan focuses on more investment in electronic health records, creating a network between primary care doctors, hospitals and specialists.

Centura has already linked its system, Sabin said, not only with doctors and hospitals, but with its long-term care and home care services.

Memorial’s vision for the future requires more such investment, but the city council is hesitant to sign off on more money with taxpayers on the hook.

Penrose doesn’t have that problem. Systemwide, Centura has spent $700 million on information technology and state-of-the-art treatment systems.

The overall goal for Penrose?

“We’re not greedy,” Sabin said. “We’ll settle for 50 percent of the market. We’re getting there, too.”

No wonder McEvoy is so impatient.


  1. Although competition is healthy, it will strike those more interested in increasing the quality of patient care at a lower cost as curious that the author of this article states that “…in all matters in the free enterprise system, when all is said and done, whoever grabs the biggest share of the market wins.”

    Indeed, unlike battles between Microsoft and Apple, it’s not as clear that market hegemony in health care delivery systems or in the health insurance industry translates into improved patient care at a lower cost.

    Beyond that, it’s remarkable that the article failed to note that “Larry McEvoy, CEO” is, in fact, “Larry McEvoy, MD, CEO.” In the vanguard of effective Integrated Delivery Systems (IDS) you’ll find executive teams led by physicians, and Dr. McEvoy is the quintessential example.

    Moreover, Dr. McEvoy has a track record of creating an IDS in Billings Montana, which features a successful hospital-physician group system that has demonstrated superior patient care at significantly reduced costs. It’s a vision he intends to replicate at Memorial Health System and he’s working hard with a dedicated executive team to establish the infrastructure and physician participation to make that dream a reality.

    It would advance the cause of candor and balance in the media if reporters would bring the requisite perspective to critical issues such as health care by emphasizing the shared, community-wide goal of improved care in a free market system rather than cynically reducing such efforts to the trench warfare of market share dominance.

  2. RE: “And, as in all matters in the free enterprise system, when all is said and done, whoever grabs the biggest share of the market wins.”

    Wow. Ms. Gillentine, your analysis of local healthcare system competition reflects a real disconcerting and disheartening understanding of what “winning” in healthcare should be.

    You see, as Mr. Mella more eloquently states in his comments above, winning in healthcare is not like winning in business (ie., marketshare, ROI, profit margins, etc). Sure, you cannot have healthcare if you cannot make the business model to support it. But to say it is as easy as “whoever grabs the biggest market share” sadly represents simplistic insight into what is truly important in healthcare business competition in general, and more importantly, to us here in Colorado Springs.

    Winning–as defined from a patients perspective (which is, of course, what matters most)–occurs when a community possesses the proper resources (regardless of the name on the hospital sign) to deliver high quality healthcare to its citizens at sustainable costs. Our community wins when patients have two top-flight hospitals to from which to choose. The question CSBJ and its journalists should be addressing is “how does Colorado Springs win,” not “which hospital wins?” And when you study that question, you’ll soon discover its more complicated corollary: How can our two very different healthcare systems (Penrose and Memorial) compliment each other as they compete so that our citizens win? When you have two winning hospitals, all patients get better care, and that is what matters.

    Ask any doctor, nurse or hospital administrator…if they care about the patients they care for, I’m sure they’ll agree: HOW care is provided to patients (ie., access, quality, etc) is a much more important question than WHO captures more market-share. I hope CSBJ and other Colorado Springs media can help provide insight into this more complicated and germane question.

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