Jennie Stuart board chair responds to organization opposing Deaconess acquisition

Leslie Carroll says in a letter to Save Jennie Stuart that remaining independent "could require a reduction in services or other difficult decisions in the future" at the Hopkinsville hospital.

(Editor’s note: Leslie Carroll addressed this letter to four key members of the organization Save Jennie Stuart — Theresa Nichol, Darrell Gustafson, Dan Kemp and Craig Richardson — regarding their assertions about Jennie Stuart’s financial situation as reported by news media outlets. Along with this letter, Jennie Stuart Health provided a Fact Sheet that includes what is described as “key commitments” from Deaconess.)

As we’ve shared previously, Jennie Stuart operates in a challenging financial environment and these financial pressures have only accelerated in recent years. Jennie Stuart has generated negative operating margins in eight of the last thirteen fiscal years and a more sustainable run rate for our organization could require a reduction in services or other difficult decisions in the future if we were to remain independent.

It’s important to note that non-profit health systems have different capital and debt requirements than typical corporations. Like most of the healthcare industry, Jennie Stuart generates very limited operating profit and is therefore reliant upon investment returns from its cash to service debt and meet debt covenant requirements. This limits our ability to fund additional expenditures with cash or debt and therefore we’ve explored alternative strategic paths that would ensure a strong financial future and the long-term success of our health system.

The overall cost of a best-in-class EHR [electronic health records] platform, which ranges from $40 million to $60 million for an organization of JSH’s size, along with associated staff and support needs, requires a significant investment that is beyond our financial capacity on a stand-alone basis.

For more than a year, we have thoughtfully considered a broad range of opportunities, with outreach to 18 organizations — including the prominent regional care providers and academic health care systems — to explore a range of partnerships, including those specific to technology support as well as a more fulsome integration.

Following a year-long process, we determined that Deaconess is an ideal partner for Jennie Stuart, given their closely aligned mission of providing high-quality, community-focused care and ability to provide the resources needed to make essential investments in JSH’s technology, facilities and the employee experience.

Upon completion of the affiliation, Deaconess intends to make $95 million in financial commitments to our community including $90 million in capital to JSH and a $5 million donation to JSH Foundation. In addition, Deaconess will fully support the cost of JSH’s IT enhancements including integration to the Epic electronic health record platform.

As stewards of Jennie Stuart, our Board’s top priority is ensuring this health system remains positioned to deliver high-quality care, while remaining an anchor of this community for many years to come. I know you all share this same belief.

We look forward to discussing our potential affiliation with Deaconess in more detail and welcome you to attend an additional community meeting to be scheduled in the coming weeks.

Leslie Carroll, Chair of Jennie Stuart Health

Guest writer

Leslie Carroll is the chair of the Jennie Stuart Health Board of Trustees.