Sunday, April 16, 2017

St. Francis Had $248 Million In Reserves, Able To Overcome Losses

By Michael Hooper

Rumors are circulating St. Francis Health Center in Topeka, Kan., may announce on Tuesday plans to close the hospital, The Topeka Capital-Journal reported.

SCL Health, of Broomfield, Colo., formerly known as the Sisters of Charity of Leavenworth, had previously announced plans to sell St. Francis Health Center.

The 2015 public tax return for St. Francis Health Center shows $278.5 million revenue and $291 million in expenses and an operating loss of $12.4 million. The organization received $14 million in investment income in 2015 compared to $20.7 million in the prior year.

Tax records show St. Francis Health Center is still strong financially -- able to withstand some losses. The organization has over $248 million in “inter-company” receivables, according to the 2015 Form 990 Tax Return Schedule D Part IX Other Assets.

Total assets of St. Francis were listed as $368 million at year end 2015, down 3.4% from $381.4 million in the prior year.

When Sister Loretto Marie Colwell was CEO of St. Francis, the organization was thriving. Much of the assets on the books today are the result of frugal savings efforts by Sister Colwell and staff during her 14 years there through 2006.

I wrote an article about St. Francis and Sister Colwell.

During Sister Colwell's leadership at St. Francis Health Center, the hospital healed the sick, gave to charity, invested in technology and improved the culture of the hospital -- all while improving its financial health.

Dr. Nason Lui, former president of the medical staff at St. Francis, said, "She didn't turn anybody down, and she was still able to keep the hospital financially stable, profitable and viable."

In the early 2000s, the hospital was doing great. St. Francis generated a total of $182 million in revenue from June 1, 2003, to May 31, 2004, and had $153 million in expenses -- with $29 million leftover for a margin of 16 percent. Its cash and investments grew 8.6 percent to $213.3 million by May 31, 2004, compared with $196.4 million on June 1, 2003.

Post Colwell

It seems St. Francis lost its way when SCL Health hired a new CEO and bought 132 acres of the former Menninger campus, with plans to build a new hospital there. But SCL Health shut down those plans, replaced the CEO and sold 13 acres to the the Sunflower Foundation.

Current leadership at St. Francis is 

 David Setchel – President
 Essence Montgomery - Vice President, Finance
 Erik Olson - Vice President, Medical Group
 Jenna Speckart - Vice President, Mission Integration
 Lisa Alexander, RN - Chief Nursing Officer
 Jacquelyn Hyland, MD - Chief Medical Officer
 Nikki Sloup - Director, Marketing and Communications

Tax returns in the past few years have shown some losses. St. Francis suffered a $12.4 million loss in 2015, a $6.1 million loss in 2014 and a $1.46 million loss in 2013.

Gov. Sam Brownback's recent veto of the expansion of Medicaid did not help the situation any. Hospitals suffer losses when treating people without insurance. Many of these patients cannot afford health insurance and cannot afford hospital stays, which costs thousands of dollars per day.

Who owns the $248 million in reserves?
If SCL Health closes the hospital, I believe the hospital's assets, including the $248 million in reserves, belong to Topeka, Kansas. Those monies were made here and invested under shrewd leadership and grew to a large amount of money. The Kansas Attorney General may be able to file a lawsuit to retain those assets in Kansas. SCL Health may want to take those investments and use them for other purposes, but I believe they belong with the hospital. The hospital and its staff were able to generate a modest profit over time and invest proceeds wisely and grow them into a quarter billion dollars.

SCL Health used to be located in Lenexa. Several years ago, SCL Health hired a new CEO, Michael Slubowski, who moved the headquarters from Lenexa to Denver and started expanding and spending money on Denver area locations including over $600 million on the main Denver hospital rebuilding it.

SCL Health sold two of its Kansas-based hospitals — Providence Medical Center in Kansas City and Saint John Hospital in Leavenworth — to for-profit operator Prime Healthcare Services.

Michael Slubowski recently announced plans to resign as president and chief executive of SCL Health to become president and chief operating officer of Trinity Health in Novi, Mich., a health system he worked for from 1997 to 2010.
Slubowski joined SCL Health in January 2011 and oversaw the relocation of its system services operations from Lenexa, Kan., to Denver and later to Broomfield, Colo.

A modest proposal
There should be a way to make St. Francis break-even. With $278 million in revenue, and $291 million in expenses, the leadership should be able to cut expenses somehow by $20 million and break even or make a slight profit. Don’t shut down a good hospital. If you close all the doors now, then it will be very hard to re-start, to re-open.

Let’s find a way to save St. Francis. Close down unprofitable ventures. Find core profit centers in your operation and build from there a sustainable health care concern. There is certainly enough capital within the hospital’s reserves to keep this organization going, especially if the hospital cuts $20 million in operating expenses.

SCL Health should consider giving St. Francis to the City of Topeka, along with the hospital's $248 million in reserves. This way the organization would have sufficient reserves to keep the organization going. Let St. Francis Health Center continue to heal the sick and bring people back to good health. The medical staff save people every day. Find a way to keep this mission alive.


  1. Does the 291 million include the millions of dollars SF sends to the SCL system office for their "management" and "accounting" services? This needs a lot more investigation and explanation.

    1. Unfortunately, it probably doesn't. Nor does it include the money that Denver has taken from us to build their 600 million dollar hospital

  2. There are multiple Town Hall meetings at St Francis today and tomorrow. The remaining times are 3:30pm today and 7:30am and Noon tomorrow. I would definitely recommend you attend because the numbers you are citing here are completely different than what we are being told in those meetings. We are being told that St Francis has been in the red for the past 9 years and that the reserve is $11.9 million. We were also told that over $100,000,000 in debt was paid off recently prior to seeking buyers. With so much information flying around it's hard to know what is the truth.

  3. SCL representatives stated today that the St. Francis Endowment money has been depleted due to 117 million dollars in losses over the last several years which the Tax Records show as you point out in your article as not even $20 million over the last 3 years. They state another 160 million was used to pay off operational incurred debt so that we would "appear" more desirable to a potential buyer. This article is a great representation of how poorly SCL has managed true St. Francis assets. I am hoping that the Attorney Generals investigation into financial handlings reveals the holes in the SCL explanation. Please continue to expose this story and bring light to the causes for our current situation.

  4. The author is way off base. All the unpaid bills for health care, he looks at getting blood out of a turnip as a solid asset like gold bars kept in a bank vault. Smell the coffee and stop day dreaming. The disincentive for going broke is that you are broke. No need for you there ought to be a law people to bother the Attorney General with your nonsense.