Q&A: Catholic Health Initiatives' New Senior VP for Capital Finance
HealthLeaders: Where will CHI spend the bulk of its capital dollars in 2013?
Barto: In a significant departure from past years, when bricks and mortar tended to dominate decisions on capital investment, the majority of capital spending in FY13 is for information technology services. Spending in that key area represents about 37% of the budget, which is a significant increase from ITS spending in 2010 of just 6% of the total budget.
Spending on strategic capabilities and growth also has increased significantly over the last three years. This year, CHI will allot 24% to that area. In 2010, when our capital budget was about $825 million, it represented 10%.
To highlight the shift to these areas from more traditional bricks and mortar, the budget for routine replacement and facility repositioning and expansion represented 84% of the capital budget in 2010; this year, those two areas amount to 39%. So it's been a significant shift across the enterprise. The investment in ITS will improve our ability to gain some of the efficiencies we need in this new era of health reform, and generate the revenue to sustain the ministry.
HealthLeaders: Looking a little further out, what are CHI's strategic goals around capital investing for the next three to five years?
Barto: Our principal strategic goals include organic and new market growth in key areas, including statewide networks in Kentucky, Nebraska, and the Pacific Northwest; physician practice management—that is, the development and growth of employed physician networks across the enterprise, especially in terms of primary care—and investments in strategic initiatives, including care management and disease management and the development of clinically integrated networks.
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