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Barnes-Jewish Hospital is one 13 facilities owned or leased by BJC, which has about a third of the St. Louis acute-care market.
Barnes-Jewish Hospital is one 13 facilities owned or leased by BJC, which has about a third of the St. Louis acute-care market.

Healthcare Market Profile: St. Louis

‘The big gorilla': BJC HealthCare has foothold in St. Louis area

By Vince Galloro
Posted: July 25, 2011 - 12:01 am ET

All discussions of the St. Louis-area hospital market begin with BJC HealthCare.

Formed by mergers in 1992 (Barnes Hospital and Jewish Hospital) and 1993 (Barnes-Jewish and Christian Health Services), BJC leads the St. Louis area with about a third of the acute-care market, says Susan Feigenbaum, a professor of economics and healthcare researcher at University of Missouri-St. Louis. The tax-exempt system owns or leases 13 hospitals, 11 in Missouri and two in Illinois.

“BJC is the big gorilla in the hospital sector,” Feigenbaum says.

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BJC expanded its reach beyond the St. Louis area in the 1990s when it agreed to lease Boone Hospital Center in Columbia, Mo., and gained a foothold in the Columbia-Jefferson City market in the center of Missouri, Feigenbaum says.

BJC's size is merely one factor that makes it the regional gorilla, Feigenbaum adds. Just as important is its long-standing affiliation with the Washington University School of Medicine and its Washington University Physicians group faculty practice, Feigenbaum says. The practice includes more than 1,200 physicians in 76 specialties and subspecialties practicing at 46 offices throughout the region, according to the practice's website. It claims to be the third-largest academic clinical practice in the U.S.

While BJC is the biggest hospital player, it is by no means the only big player in the St. Louis area. As befits the city that the largest Roman Catholic hospital system in the country (Ascension Health) calls home, St. Louis has three Catholic providers: SSM Health Care, with six of its 14 hospitals in the St. Louis area; Sisters of Mercy Health System, with three of its 22 owned or leased hospitals in the region, operating under the name St. John's; and 568-bed St. Anthony's Medical Center on the south side of the city.

Tenet Healthcare Corp., Dallas, owns two hospitals in the city, including 332-bed St. Louis University Hospital, which is affiliated with the St. Louis University School of Medicine. Two hospitals that Tenet sold because of poor financial performance have been consolidated into one hospital by investor-owned Success Healthcare, Boca Raton, Fla.

The region's major medical centers draw patients from southern Illinois, central Missouri and even beyond those adjacent regions, says Timothy McBride, professor and associate dean for public health in Washington University's Brown School of social work and public health. Yet that ability to draw in patients for complex cases has a flip side for residents of the area, McBride says.

“I think one of the strong aspects of St. Louis is that it's a great place to get specialty care, but one of the things we're struggling with is getting enough primary care in some areas,” McBride says. Most of the areas experiencing the shortages are in the city of St. Louis, usually in low-income areas, as in many other urban centers, McBride adds.

SLU Hospital draws a lot of the indigent patients who lack primary-care physicians, McBride says. Feigenbaum says the hospital has “an unparalleled commitment to the indigent population.” SLU Hospital has not joined the other major players in bringing more tertiary services to the suburbs to compete for patients there, Feigenbaum says.

“By and large, SLU Hospital has been very, very slow to move away from their primary service areas, which are in the heart of downtown St. Louis,” Feigenbaum says. “They've been behind the ball in pursuing patients in other areas of the region.”

Hospitals in the market, such as those around the country, also are competing for physicians. McBride says it's mostly about locking up physicians that are already affiliated with a particular hospital or system: “There's pretty strong loyalties among the physicians. They have their system, and they stick with it.” Feigenbaum says hospitals are managing these acquired physician practices much more aggressively than they did in the previous wave of practice acquisitions in the 1990s.

Another hot area for competition has been ambulatory surgery centers over the past decade or so, after the state of Missouri dropped certificate of need for these facilities, Feigenbaum says.

So even though the St. Louis hospital market has a big gorilla in BJC and some other large players, Feigenbaum says, there's fierce competition in some parts of the broader medical services market.

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