St. Luke's Health System
Common Questions and Answers

Q: Is St. Luke’s not-for-profit?

Yes.  St. Luke’s Health System and related subsidiary corporations are organized as not-for-profit corporations which also meet the tax exemption requirements of section 501(c)(3) of the Internal Revenue Code.   As a not-for-profit organization St. Luke’s is exempt from some, but not all taxes.  To have this designation, St. Luke’s must meet several criteria, including reinvesting surplus funds in facilities and services to pursue the organization’s mission, vision and goals to improve the health of the people in the region.

Q:  What does St. Luke’s do with the income it generates?

If revenues exceed expenses resulting in a financial surplus, 100 percent is retained and reinvested back into the organization to support our mission in the form of physical assets, programs and services for the communities we serve.

Q: Why does St. Luke’s need philanthropic support?

Since the first philanthropic gift to the organization in 1902, St. Luke’s has relied on philanthropic support to become a leader in health care.  St. Luke’s continues to make significant investments in facilities, technology, and medical services, in order to serve patients, including those patients who require financial assistance.  

Facility replacement and enhancement projects are being implemented at St. Luke’s locations in carefully planned stages with the community’s long-term needs and well-being in mind.  Communities throughout St. Luke’s service region benefit from an exceptionally designed health care system dedicated to both medical excellence and personalized care. 

Providing a means for the members of the community to invest in an institution that will transform health care and support the needs of Idaho citizens for decades is essential to achieving St. Luke’s vision.  With ongoing philanthropic support, St. Luke’s will create a strong, community-based health care system for the future and preserve our tradition of health care excellence for Idaho.  Generous philanthropic support will ensure St. Luke’s Health System can advance its vision to transform health care within our region.

Q: How are physicians involved in making decisions regarding the health care services provided by St. Luke’s? 

Physicians are active participants in determining health care services to be provided.  Their participation occurs at many levels:  board of directors, board committees, clinical leadership councils, Medical Executive Committee, medical staff committees, department committees, and in specific initiatives pursued by administration or by physician champions.

Q:  What opportunities are there for physicians to assume greater responsibility in health care leadership?  Does St. Luke’s do anything to help prepare them?

Health care leadership opportunities for physicians include executive leadership, clinical leadership councils, medical staff leadership, department leadership, medical director positions, and committee leadership.  In addition, physicians lead the Heart and Vascular and Ortho/Neuro Management Services Organizations (MSO) and their operating committees. 

St. Luke’s is in the early stages of developing and supporting a Physician Leadership Development program for current and future physician leaders.

Q:  What opportunities are there for residents of the communities served by St. Luke's to participate with St. Luke's in determining how to best meet their communities' health care needs?

St. Luke’s is governed by community-based volunteer boards of directors.  Those who serve bring a perspective from their communities about what is needed to support and encourage quality health care. 

St. Luke’s also conducts an annual community health needs assessment that includes focus groups with community residents from the region St. Luke’s serves to help inform its wellness and disease/injury prevention priorities.

St. Luke’s also has several forums whose members represent a broad cross section of the communities we serve.  These include our Women’s Forum, our Meridian-Eagle Advisory Council, and our Strategic Initiatives Council.  Members of these forums receive information about St. Luke’s initiatives and provide St. Luke’s with a broader community perspective on the needs of the region.

Q:  Beyond the provision of health care services, how does St. Luke's help residents maintain their health?

St. Luke’s is firmly committed to supporting health improvement as well as disease and injury prevention efforts in the communities it serves.  To inform our efforts and prioritize our activities, St. Luke’s conducts an annual community health needs assessment. Examples of St. Luke’s community health improvement efforts include:

  • Annual financial contributions via St. Luke’s Community Health Improvement Fund to community organizations who support health improvement and disease and injury prevention activities.
  • Support for free health screenings such as skin cancer, prostate cancer, and cardiac health risk assessments.
  • Free or low cost community education classes.
  • Pediatric Injury Prevention partnership with Ada County Paramedics.
  • Support of Safe Kids programs in both the Treasure Valley and Magic Valley markets.
  • Community health fairs.

Q: Why don’t St. Luke’s and Saint Al’s collaborate more on services? 

St. Luke’s and Saint Alphonsus do collaborate on some services based on community needs and organizational efficiency.  Examples include the Idaho Cytogenetics Diagnostic Laboratory and a new state-of-the-art central laundry facility. We do not, and cannot, divide up services between competitor hospitals because the federal government considers that type of market division to be anticompetitive.

Q: Why does St. Luke’s advertise? 

Though St. Luke’s health care services are available 24/7/365 to everyone, they are not necessarily needed on a daily basis by the vast majority of the community.  Therefore, advertising is one way we can communicate about the many services St. Luke’s offers, and inform the public about the physicians who choose to practice at St. Luke’s facilities.  Additionally, as a growing region, newcomers need to know about the health care services available to their family from St. Luke’s and how to access them. 

St. Luke’s spends its advertising dollars responsibly, and we spend considerably less on marketing-related activities than the national average reported by the American Hospital Association.  That national average is 2% of total operating expenses, while St. Luke’s marketing budget is only 0.38% of total operating expenses.

Q: Why does St. Luke’s continue to build facilities and buy property throughout the region?

St. Luke’s has a responsibility to keep pace with our region’s population growth as well as advancements in how health care is delivered.  This commitment requires continued investment in facility expansions and new construction.  

The way health care is delivered continues to evolve.  New technology, a shift to more outpatient delivery options, medical advancements impacting patients’ length of stay and the importance of convenience for patients in choosing where they receive their care are all influencing the type, size, and configuration of St. Luke’s facilities.  To meet patient needs, St. Luke’s must continue to adjust and invest appropriate resources in its facilities. 

Every investment St. Luke’s makes in building renovations, expansions and new facilities is made following a thoughtful process and considerable analysis by its leadership team and the Health System’s community-based boards of directors.

Q:  How does St. Luke’s determine which other health care organizations it partners with?

St. Luke's wants to be available to provide care to those who wish to receive care from St. Luke’s and physicians associated with us. To that end, St. Luke’s has aligned with a number of health care organizations and providers in various communities throughout southwest Idaho. The most common of these relationships are with hospitals and physicians in smaller/rural markets. The criteria we consider include, but are not limited to:

  • Whether the entity provides care within St. Luke's service region, which extends as far east as Rupert, as far west as La Grande, Oregon, as far north as Grangeville and as far south as Elko, Nevada.
  • Whether the individual community has invited St. Luke’s to evaluate a partnership, in which case St. Luke’s considers a number of factors, including the size of the organization, the size of the community served, the mission of the health care organization, scope of community needs, and alignment with St. Luke's mission and vision.

St. Luke’s relationships with other organizations range from as basic as leveraging supply chain purchasing to more complex management and financial relationships with governmental and not-for-profit entities.  It is important to note that through the relationships it develops, St. Luke's does not require exclusivity from our owned or managed hospitals and will not interfere with any physician's judgment.

St. Luke's has a detailed due diligence process that aligns St. Luke's capabilities with the other organization’s requests and needs. In all of our efforts, we strive to honor and expand upon existing relationships with physicians based upon St. Luke’s values.

Q: What is St. Luke’s position on health care reform?

St. Luke’s supports meaningful reform to the health care system. Real and meaningful health care reform must include changes that:

  • Result in insurance coverage and access to health care providers for all.
  • Provide tangible incentives, education, and support to individuals to make healthy lifestyle choices.
  • Provide tangible incentives to health care providers to prescribe the best medically necessary care for each patient in an integrated fashion that is coordinated with other care givers.
  • Remove unnecessary, costly and burdensome administrative processes - policymakers must dig deep into areas beyond reimbursement rates, and all involved in the delivery of health care must be open to change, agree to cooperate and be willing to compromise.
  • Provide for meaningful tort (malpractice) reform.

Q: Does St. Luke’s support tort reform on malpractice lawsuits?

St. Luke’s supports meaningful tort reform.  In addition to the direct cost of malpractice insurance and defense, malpractice cases also contribute to the cost of health care due to the practice of “defensive medicine.” The threat of lawsuits causes health care providers to order more tests and procedures than are medically necessary. The need to assure that a serious diagnosis is not overlooked is a major contributor to the rapid growth in advanced imaging (CT and MRI) as well as laboratory testing. Doctors who choose not to order these additional tests to “rule out” unlikely but possible conditions open themselves to accusations of malpractice. It’s easier to order the test and avoid the worry.

Evaluating effective tort reform models – like the one passed by the Idaho Legislature in 2003, can provide guidance in how to implement real and meaningful change.  Reforming the way our society adjudicates injuries from medical malpractice will result in cost savings by reducing this practice of “defensive medicine.”

Q: As a not-for-profit, how does St. Luke’s determine its executives’ compensation?

Compensation for all St. Luke’s employees is determined following a comprehensive market assessment with peer organizations from across the country of similar size and scope of service.  For executives, this assessment is done by an independent, national firm to ensure the objectivity of the report.  The report is delivered to the Compensation Committee of the Board of Directors, which reviews the results and the performance assessment of each executive to determine a recommended compensation level.  The executives do not determine, nor even vote, on their own or their peers’ compensation.

The full Health System Board reviews and approves the final compensation package for St. Luke’s Health System executives.  The local boards of directors approve the final compensation package for site-specific executives within the local markets. 

Q: Doesn’t St. Luke’s receive a significant amount of money from the Idaho Medicaid Program?

The amount of money St. Luke’s receives from Medicaid is an indication that St. Luke’s provides care to a large number of Medicaid patients.  In fact, St. Luke’s provides more care to patients covered by Medicaid than any other health care provider in the state.  Medicaid pays hospitals well below the cost of providing care to Medicaid patients.    The costs that count for Medicaid purposes do not include all of the hospitals costs, so the reimbursement is even less on a percentage basis than it would appear.  Because Medicaid pays below cost, a higher volume of Medicaid funding results in lower net revenue for the hospital.  In other words, on balance, St. Luke’s pays to see Medicaid patients because we spend more on the care of the patient than we receive in payment for the care we provide.

Q:  Does St. Luke’s use collection agencies and/or charge interest on overdue patient accounts?

If a patient has difficulty paying their medical expenses, St. Luke’s Patient Financial Services works with them to determine what options are available for assistance, including a possible payment plan.  If it is determined that a patient can pay all, or a portion, of their medical bills but chooses not to do so, St. Luke’s refers those accounts to a collection agency to help collect payment from patients.  St. Luke’s may charge interest on outstanding accounts depending on the circumstances.

Q: How does St. Luke’s determine how much it pays employed and contracted physicians?

St. Luke’s pays employed physicians fair market value compensation for the services they provide.  Physicians performing services under contracts, but not employed by St. Luke’s, are also paid fair market value for the type of services provided.  For all physicians, fair market value is determined using third party resources, and not based on the physicians’ desired incomes.

Q: Is it appropriate for hospitals to employ physicians?

Given the changes in the health care industry, more physicians have sought employment with hospitals in the past several years.  Employment arrangements can improve access to care.  Physicians employed by St. Luke’s, unlike most private practice physicians, do not limit the number of Medicaid or Medicare patients that they will see.  In addition the employment arrangements relieve the physicians of many of the administrative duties that would otherwise take away time from patients.

St. Luke’s is committed to forming productive working relationships with physicians.  These relationships take many forms.  St. Luke’s considers a number of factors when evaluating an employment relationship with a physician: 

  • Does it improve access to care for patients? 
  • Does it enhance patient care and improve quality? 
  • Does it create a more secure, supportive and productive environment for the physician to practice medicine?
  • Does it comply with all necessary regulations and laws? 
  • Does it help to further St. Luke’s mission to improve the health of people in our region.

Q:  Will there still be choice if St. Luke's employs all of the region's physician groups?

St. Luke’s has never had an intention of employing all physicians. In fact in most areas there are a significant number of independent physicians. In Southwest Idaho for example, according to the Idaho Medical Association, St. Luke’s and other health systems only employ about half of all physicians.  

Deciding to affiliate with either St. Luke's or another health system remains the choice of each individual physician. St. Luke's has a long history of working with independent physicians and we will continue to work and collaborate with physicians in the region regardless of whether they are employed or not employed by St. Luke's.

Q:  What are the benefits of St. Luke’s regional relationships?  To St. Luke’s?  To the other organizations?  To patients?

Benefits of these relationships to St. Luke's include:

  • Enhancement of primary and specialty care throughout the region.
  • Understanding of care delivery in diverse regions and populations.
  • Improved health status of community due to improved access to health care.
  • Direct communication between regional and local providers.

Benefits of these relationships to regional facilities include:

  • Expanded scope of services arising from the broader clinical expertise.
  • Participation in comprehensive care delivery through relationships with specialty care providers who were not previously available in the local community.
  • Community perception of quality associated with St. Luke's services.
  • Access to specialty providers, services and equipment.
  • Participation in the planning and delivery of care across the region.
  • Access to administrative and other operational support and expertise.

Benefits of these relationships to patients include:

  • An appropriately expanded scope of service provided locally.
  • Better coordinated care throughout the region.
  • A smoother return to their primary care provider after being discharged from a tertiary-level facility.
  • Confidence that St. Luke's focus on quality is available in the local market.

 


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