McGuire: A keen eye toward the future

Healthcare Financial Management, June, 1994

On June 1, 1994, Jonn P. McGuire, FHFMA, CPA, will become the 44th chief elected officer of the Healthcare Financial Management Association as he assumes the office of chairman of the Board of Directors. McGuire is senior vice president of Jewish Hospital of St. Louis, St. Louis, Missouri. A member of HFMA since 1974, his involvement with the Association has included service as chairman of the Quality Standards Task Force (1991-92), chairman of the Uncompensated Care Task Force (1985-86), membership on the Executive Committee (1987-89 and 1991-94), membership on the Board of Directors (1986-89 and 1991-94), and membership on the National Matrix (1984-85). He also has served as the secretary, vice president, and president of HFMA's Greater St. Louis Chapter. He attained Fellowship in HFMA in 1985.

McGuire is a Certified Public Accountant and holds a master's degree in health administration from Washington University, St. Louis, Missouri, a master's degree in accounting from Memphis State University, Memphis, Tennessee, and a bachelor's degree in business administration from Christian Brothers College in Memphis.

"Actually, I first worked in a hospital when I was an undergraduate attending Christian Brothers College in Memphis," says McGuire, relating how he first became involved in health care. "I worked part-time in the finance office of a local hospital. But after I graduated in 1970, I went to work for the Memphis office of the accounting firm of Ernst & Young--although it was Ernst & Ernst at that time. The firm was making a strong push for clients in the healthcare field. I already knew the language and the terminology, so I gravitated into health care with the firm. I was with Ernst & Ernst nine years, and by the time I left, about 80 percent of my work was health care related.

"I left Ernst in 1979 to work at the Jewish Hospital of St. Louis. I was hired as director of internal audit and eventually became associate director of finance. During that period of time, I also attended Washington University and got my master's in health administration. That allowed me to move to the operations side of the organizational chart. I became a vice president of operations, then executive vice president and chief operating officer, and now that Jewish Hospital has established an affiliation with Barnes Hospital, my title is senior vice president for surgical sciences and services and I have responsibilities at both Barnes Hospital and Jewish Hospital."

The changing climate of health care

McGuire has experienced the effects of the changing climate of health care firsthand. "There are 42 hospitals in the metropolitan St. Louis area," he explains, "and until Barnes Hospital and Jewish Hospital established our affiliation in November 1992, there were no 'systems' as such. We were all independent hospitals practicing a friendly, gentlemanly competition. But the escalating costs of health care are changing all that. Just since Barnes Hospital has affiliated with Jewish Hospital, two other groups have announced affiliations. What is happening in St. Louis is a microcosmic example of what is happening around the country. Hospitals are forming networks to gain efficiencies.

"One of the primary forces behind the Barnes Hospital-Jewish Hospital affiliation was the business community. Members of our board of directors who were in businesses outside of health care said the two hospitals needed to work together to reduce unnecessary duplication. They did not want to see us competing in a 'technology race.'

"It is my opinion that health care is one of the few areas where competition increases cost rather than reduces cost, because to remain competitive in all areas of technology and match all the amenities of other facilities requires a continual, substantial investment of capital. What the business community was saying to us, was. There is excess capacity in St. Louis. We do not need all these beds. We do not need all this brick and mortar. Is there some way that the hospitals can work together?'

"So, Jewish Hospital began a dialogue with Barnes Hospital and that dialogue resulted in the affiliation we have today. Then we added Christian Health Services to form the BJC Health System. As an example of its effectiveness, in 1993, the first year of our affiliation, we were able to realize $7.5 million in savings. These savings were achieved in a variety of ways. For example, we had a particular surgical microscope that was underutilized at Jewish Hospital. Barnes Hospital was planning to purchase a new microscope like the one we had, so we transferred ours to them, and we saved $250,000 of capital. The system hospitals also have been able to go to vendors as a purchasing group and receive better pricing. And we have found opportunities for savings in operational activities. Barnes Hospital and Jewish Hospital were each running separate laundry facilities, and we were able to consolidate them into a single laundry facility, which, obviously, reduced our operational costs. Both hospitals were considering the purchase of stand-alone computer systems. We bought one computer system and now have one mainframe serving both hospitals.