You might remember Saint Anthony Hospital from a story I wrote in 2010, when the hospital was executing an exit from its then-corporate parent, the nonprofit hospital giant Ascension Health. Even at the time, the hospital and its leadership were swimming against the tide of consolidation, which as many of you know, has only picked up speed since.
If the future is decidedly murky for standalone community hospitals, it is murkier still for standalone community hospitals in economically depressed areas such as Saint Anthony, a 151-bed safety net hospital in Chicago's South Side.
But instead of looking to ingrain itself even more deeply in the safety of Ascension's size, Saint Anthony was looking to strike out on its own.
By the CEO's admission, it wasn't being forced out. Guy Medaglia had to do a sales job on both Ascension and his own local board that going it alone would work after 6 years as a unit of Ascension.
So far, so good.
Saint Anthony reported a roughly $3 million net margin on total revenue of about $103.5 million in 2010, the latest period for which information is available.
But Saint Anthony needs a replacement hospital. There's money and vision to do that by 2016, says Medaglia, but the new facility will contain a lot more than a hospital, thanks to his enterprising vision and the cooperation of city officials.
In fact, it will contain one million square feet, retail tenants, a hospitality center available for community groups to rent, a day care center, an outpatient and specialty clinic, an education center, a recreation center, a variety of wellness programs aimed at the community, and a charter school.
And, oh yes, that new hospital.
"We really don't want to make this strictly a hospital project. It truly is a community campus initiative," says Medaglia, whose entrepreneurial vision was developed earlier in his career as an executive at Sara Lee, and later as a consultant at FTI Consulting.
It all sounds great for a new hospital campus in, say, Beverly Hills, or maybe Scottsdale. But maybe not the South Side of Chicago.
On one side of the new 11-acre site, home for a now-closed trade school that the city of Chicago was happy to sell, is what Medaglia calls a "food desert," and the other side is plagued by what Medaglia calls national gangs: the Latin Kings and Satan's Disciples. Hmmm.
Medaglia insists the new "community campus" will be financially self-sustaining, and that any profits received from tenant rents (Saint Anthony will also pay rent to the corporate parent, Saint Anthony Ministries) will be plowed back into community programs that at least tangentially will help improve the area's health.
"The challenge was going back and figuring out what would need to happen to create a viable entity and expand our current services, some of which are not healthcare-related, and make it sustainable," says Medaglia.
The idea of a vertically integrated private/nonprivate partnership came into being as Medaglia held conversations with local aldermen and the city's mayor.
"By creating this campus and providing services and using lease money from these services, we can pay for programs that aren't funded in the current healthcare environment," he says.
As part of its due diligence, Saint Anthony Ministries, a holding company that owns the hospital and which will operate the campus, worked with community leaders to find out what they needed that wasn't currently being offered in the area, and also worked with Jones Lang LaSalle, a company that manages retail malls, to vet and design the concept.
Additionally, it solicited philanthropic interests who said they would donate to a concept like the community campus where donating money for a replacement hospital would be a tougher sell, Medaglia says.
The model attracted interest from academia. It was recently the subject of a research study conducted by University of Nebraska Medical Center College of Public Health, the University of Nebraska-Lincoln College of Architecture, and HDR Architecture to help Saint Anthony Ministries better understand the needs of the Southwest and West Chicago area community.
Researchers employed several tactics to ensure a complete representation of the population, including key informant interviews, a community cross-sectional survey, focus groups and a spatial analysis with the Geographic Information Systems analytical tool.
An April whitepaper details the study and affirms that the campus "represents new social, economic, education and wellness opportunities that can significantly improve the health and quality of life of local residents."
Of course that is far from guaranteeing financial viability. But Medaglia says he had little choice, because the economics of building a new safety net hospital in a declining reimbursement environment most certainly make that proposition financially unviable.
"It's just not viable to build a safety net hospital today," he says. "I would have been irresponsible to say, 'I'll put up a safety net hospital.'"
Still, many are skeptical about the prospects of such a project, which is expected to open at the end of 2016.
"There have been many disbelievers," says Medaglia. "I could fill up my office with those people. But I really believe this concept can be replicated in New York, Boston, Pittsburgh, Philadelphia or LA. It's something that can be duplicated, so I want it up and running right so other cities can use it and copy it."
He could also probably fill up his office, and more, with the people who will be rooting for him.
Philip Betbeze is the senior leadership editor at HealthLeaders.