KEVIN LEININGER: IU Health’s ‘heart transplant’ says competition will help patients, if not rivals

IU Health will open a primary care medical facility in this mostly vacant building at Engle Road and West Jefferson Boulevard in the first quarter of next year. (Photo by Kevin Leininger of News-Sentinel.com)
Geoff Randolph

After Geoff Randolph was fired as Lutheran Health Network’s chief medical officer in June, an irate co-worker described him as the heart of the operation — the absence of which would inevitably render Lutheran “less effective.”

Now that heart has been transplanted into the soon-to-arrive IU Health Network, where Randolph will serve in a similar capacity for what could become a formidable presence in Fort Wayne. And that, he insists, would make the local medical marketplace more effective.

“Competition is good for consumers and could improve access, timeliness and, hopefully, quality,” Randolph said of the imminent arrival of a third health-care system that was in the works for months before the long-rumored announcement was made official last week. The first tangible IU Health presence could be operational within months in the form of a primary care office at Engle Road and West Jefferson Boulevard to be staffed by about 20 physicians and advanced practitioners. He wouldn’t comment on what might happen down the road, but IU Health says it sees “a long-term presence in the Fort Wayne market,” and, as I reported last week, two new outpatient clinics are planned and even a full-fledged hospital is possible.

For now, though, Randolph is focusing on recruiting doctors, potential corporate customers and establishing a culture of service and success. Many Lutheran Health doctors were fired or resigned after Tennessee-based owner Community Health Systems rejected a locally led group’s $2.4 billion buy-out bid in May, and Randolph said he’s open to reuniting with some of them. IU Health is also talking to graduating residents and is attending physician meetings throughout the Midwest in search of talent.

“Everything’s been very positive; there have been no negative comments. A lot of people have approached us,” said Randolph, who believes improved access to primary-care services could reduce the number of unnecessary visits to emergency rooms.

Randolph admits IU Health’s plans for Fort Wayne might have been considerably different had the group led by local doctors succeeded in its effort to acquire Lutheran Health Network. Even in May, there were rumors IU Health eventually would have been involved with the new owners, and Randolph acknowledged this week’s “there was a good possibility IU would have been in the mix.”

As things stand now, however, Indiana’s largest health network will begin locally as barely a blip compared to Lutheran and Parkview Health. But you can bet IU doesn’t plan to stay small for long. Last month, it announced Riley Children’s Health will open a pediatric specialty care office in Fort Wayne early next year, and the network plans to work closely with the Indiana University School of Medicine’s Fort Wayne operation.

Might IU Health even still be interested in some sort of a Lutheran buyout? Randolph wouldn’t speculate, nor could he say for sure whether Fort Wayne will prove capable of supporting three major health-care systems.

“Build it and we’ll see what comes,” he said. “If all three are doing well, that’s good.”

Just this week, however, CHS reported a net loss from operations in the third quarter of $108 million compared to a $77 million loss a year ago, along with a 14.8 percent decrease in total admissions attributed in part to recent hurricanes. The value of CHS stock dropped by more than 13 percent, and some analysts have suggested CHS may have trouble paying off debt that comes due in 2019. Cash-rich Parkview, meanwhile, continues to expand, and IU Health has more than $6 billion in annual revenues, 15 hospitals, 2,000 employed doctors, 117,000 admissions and 2.6 million outpatient visits every year.

On one hand, CHS seems unconcerned. CEO Wayne Smith told analysts this week that, “There’s a lot of distraction in the market, but we fully intend to protect our assets, our reputation and joint venture partners.” Lutheran Health Network, he added, is hiring more doctors and is “doing all the right things” in Fort Wayne, such as a previously announced $500 million upgrade of Lutheran Health facilities that is part of a plan to strategically invest in our strongest markets.”

But on the other hand, the lawsuit CHS filed against former Lutheran Health CEO Brian Bauer and five others indicates it is very concerned.

Fort Wayne is one those “strongest markets,” at least for now. But Randolph and IU Health clearly intend to shake up the status quo, and it should be fascinating to watch.

This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel. Email Kevin Leininger at kleininger@news-sentinel.com or call him at 461-8355.

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