Fed Up with CHI Health, Doctors in Grand Island to Build New Hospital

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August 17th, 2015

A group of 60 Grand Island doctors say they are unsatisfied with the way decisions are made at CHI Health St. Francis, and want to build their own hospital. (Image courtesy CHI Health)

A group of 60 Grand Island doctors say they are unsatisfied with the way decisions are made at CHI Health St. Francis, and want to build their own hospital. (Image courtesy CHI Health)

In the central Nebraska town of Grand Island, a group of 60 doctors say the medical community there is sick. Their remedy? Build a new hospital.


Catholic Health Initiatives is a large system of healthcare providers. CHI has more than 100 facilities in 9 states.The non-profit had almost $22 billion in assets and generated nearly $14 billion in revenue last year.

The 17 CHI facilities operating in Nebraska are known as CHI Health. Officials there said as in many industries, the size of their network helps keep costs down for customers–in this case, patients.

But some Nebraskans had to pay more than they’d bargained for during a dispute over the past year between CHI Health and Blue Cross Blue Shield, Nebraska’s largest insurance company. What started as an argument over prices at Alegent Creighton Health System in Omaha led to Blue Cross dropping CHI  Health from its list of in-network providers in May of last year.

The dispute is now settled, but for 10 months, many Nebraskans with Blue Cross insurance were forced to pay more money to see their same doctor, or find a new health care provider.

“Blue Cross was our predominant private insurer in Grand Island, and St. Francis, which is under the CHI banner, was the only hospital facility in town and the two did not get along,” Tom Werner said. He’s a family practice doctor in Grand Island who worked in the medical clinics at Case IH & JBS Swift, two of the area’s largest employers.

dr tom werner NTV

Dr. Tom Werner is the spokesperson for the group of Grand Island doctors who want to build their own hospital. He said building a new hospital isn’t about competing with CHI Health St. Francis. He said he wants to re-establish local control of the medical community in Grand Island. (Photo courtesy of NTV News)

“At both of the plants,” Werner explained, “all of the employees are insured with Blue Cross insurance, but we had nowhere to send them for hospitalization that would be covered in network. So a large number of people from the local community were leaving town to get their healthcare.”

Werner said the feud between CHI Health and Blue Cross was the final straw for him and 59 other Grand Island doctors who now want to build their own hospital. Werner said it’s about re-establishing what he calls “local control of the medical community”, instead of waiting on decisions out of Colorado, where CHI is headquartered.

“We’ve gone to (the administration of) St. Francis and have tried to have several discussions with them in this regard, and we don’t feel as if we’ve particularly been heard,” Werner said.

Werner said one doctor even sent a letter to the head of CHI Health in Nebraska, Cliff Robertson, asking if CHI Health St. Francis in Grand Island would be for sale. Werner said that doctor, “received a letter back that no, it would not” be for sale.

Werner said he and the other 59 physicians have had quite a few discussions prior to the decision to build their own hospital. Werner said “We just feel like it’s time for actions, rather than words.”

Dan McElligott is the president of CHI Health St. Francis. He said he doesn’t understand why Werner and other doctors in Grand Island feel there’s no local control.

“We had an opportunity to have a Grand Island physician participate on the UniNet board, which is the organization that makes decisions for whether we are in network with different payers,” McElligott said, “I’ve offered up to my local medical staff that we’d like to have a representative from Grand Island to sit on that board and make specific decisions related to contracting, specifically Blue Cross Blue Shield. And I was unable to find anyone who was willing to take the time to do so.”

The situation in Grand Island is not the first time doctors in central Nebraska wanted to break away from CHI Health and build their own hospital.

Kearney Regional Medical Center opened its doors in June of 2014. The hospital has plans to expand this year its ICU, trauma bay, and build a helipad. (Image courtesy of Kearney Regional Medical Center)

Kearney Regional Medical Center opened its doors in June of 2014. The hospital has plans to expand this year its ICU, trauma bay, and build a helipad. (Image courtesy of Kearney Regional Medical Center)

Sean Denney is a cardiologist in Kearney, where CHI Health owns Good Samaritan Hospital. Several years ago, Denney and about 80 other physicians began building Kearney Regional Medical Center. It opened last year, and Denney said they already have plans to expand.

“We’d grown kind of increasingly less satisfied with the current healthcare system that we had here locally and were seeking a situation where we had more local control,” Denney said, “in particular of where resources were allocated both from a manpower standpoint as well as from a facilities standpoint.”

Denney said Kearney Regional’s day-to-day administrative tasks are handled by a management company in Kansas, but all medical decisions are brought to a board of local physicians.

“So as a result, if we need for instance new anesthesia equipment, we simply say we need new anesthesia equipment. We vote on the perceived needs, the equipment that’s necessary, what’s the best available for the best price, and then we make a move towards making that happen,” Denney said.

McElligott said decisions about purchases are made in similar fashion at CHI Health St. Francis.

“We get a long list of what I call a ‘wish list’ of all the things we’d like to have. We go through the large dollar items and identify what are those things (we need). Then we develop a business plan around it and decide how does this make sense, and then we go out there and prioritize where we need to spend our monies,” McElligott said, “Now is there an additional group besides locally that has input on that process? Yes. But it doesn’t diminish the effectiveness and appropriateness of going through a very rational process to make sure we make good purchasing decisions.”

McElligott said while he has purchasing power for smaller items, anything over $2 million goes to CHI Headquarters in Colorado for approval.

Tom Werner and the other Grand Island doctors won’t need CHI Health’s approval however on their next big purchase, the land they’ll need to build a hospital. Werner said the new facility will have between 50-60 beds when it opens, which should be in about 2 years. Total price tag on the project is estimated to be between $50 and $60 million.

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