Lehigh Valley Health NetworkLVHN Scholarly Works

LVHN Annual & Statistical Reports

1986

Annual Report (1986): New HorizonsLehigh Valley Health Network

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NEW HORIZONS

snntuu Rth Co mu

Bortz< I Health \ t m, t.

I

Table of ContentsMission StatementLetter to the CommunitySystem OverviewStrategic OverviewOperations OverviewNew HorizonsFinancial ReviewOfficers and Directors

34-7

8-1112-1516-1718-19

Inside Back Cover

I y

Communilj

William P. Koughan

.,,' •• I"

• 1

'I II 'I

Tbefirst year of the HorizonHealth System has been one ofenormous challenge andachievement.

Ibe System is founded onone primary objective: toidentify and serve the healthcare needs of the community.Ibis has, of course, demandedmuch attention to laying thegroundwork for a centraladministrative system that iseffective, efficient, andresponsive to the changingneeds of the community andour member hospitals:St. Luke's Hospital andMuhlenberg Hospital Center.

The results have surpassedour expectations. Strategic

plans for communications,resource advancement, con-solidation, and diversificationhave been developed and arebeing implemented.

Ibe System has been gainingsignificant economies fromcentralized administration anda national affiliation. It hasfocused on eliminatingunnecessary duplication ofresources, without compromiseto the full service health carecapabilities of each hospital. Ithas helped advance selectedspecialties toward becomingthe leading medical resourcesin the region. It has preservedthe traditions of high qualitycare, the reputations forexceptional personal attention,and the individual charactersof our member hospitals.

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Cooperation has been out-standing. Long, hard hourshave produced landmarkresults in one short year.Ibe System works!

Ibis report outlines manyof these achievements, andour Plans for the near future.In doing so, it reflects theselfless efforts of the com-munity leaders, medical staffs,and hospital personnel whoare leading us to these "NewHorizons" in health care.

I extend my thanks andcongratulations to all.

~~~{f1~William P. Kougha

President, Horizon Health System

3

SYSTEM OVERV

'The,~ystftll

L~()ttr

c::JI;[etJ lberI [oJpitclis

John W. Woltjen

••

"The Boards of Trustees atboth hospitals have given

increasing attention tooperating efficiencies in today's

changing health careenvironment. Our mutual goalwas quickly established: make

the Horizon Health Systemwork as a combined endeavor ,

while preserving the strongidentity of each institution."

4

E W

Muhlenberg medical leadership:Dr. Steven Diamond, president ofmedical staff and Dr. Gavin G Barr,vice president and medical director.

The Horizon Health System,founded Dec. 1, 1985, is theorganizational umbrella ofSt. Luke's Hospital, MuhlenbergHospital Center, and relatedsubsidiaries. With over 2,000employees, it is one of thelargest health care deliverysystems and the eighth largestemployer in the Lehigh Valleyarea. It oversees an $80 millionoperating budget, maintains567 hospital beds, and hastreated, during 1986, well over150,000 patients.

The System is its memberhospitals. It is a joint, strategiceffort; the common goal is tomeet the service area's ever-

changing health care needs bysharing valuable medical talentsand resources.

As a System, the Horizonhospitals can now enjoysuperior operating efficienciesand capitalize on both regionaland national economies ofscale. The new administrative

structure has engendered addedstrength and responsiveness inmedicine, surgery, nursing, andall other areas of health care.

ST. LUKE'SHOSPITAL

Fountain Hill, Bethlehem ,PennsylvaniaFounded 187240-acre campusEmployees: 1500+-Full service, acute careTeaching hospital, includingpost-graduate training ininternal medicine, obstetrics,and gynecology. JCAHaccredited.

Chartered in 1872 ,St. Luke's was the first hospitalin the Lehigh Valley. In 1884,it organized one of the nation'sfirst hospital-based Schools of

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"Ibe System Is its member hospitals.It is a joint, strategic effort; thecommon goal is to meet the servicearea's ever-changing health careneeds by sharing valuable medicaltalents and resources."

Nursing which continues to be

a valuable resource in the area.Today St. Luke's continues

to pioneer health careinnovations in the LehighValley. For example, itintroduced laser eye surgeryto the area in 1984, and hassince expanded laser facilitiesinto urology, gynecology, andneurology.

The institution is highlyregarded as a full servicehospital responsive to the full

Bethlehem, PennsylvaniaFounded 196187·acre campusEmployees: 500+-

Full service, acute careJCAH accredited

spectrum of inpatient andoutpatient needs. It is alsorecognized as a regional leaderin cardiac care, obstetrics andgynecology, and cancerdetection, treatment, andtherapy.

MUHLENBERGHOSPITALCENTER

Muhlenberg Hospital Centeris at the heart of the LehighValley in two respects. It islocated at the geographic centerof the Valley, accessible to all.More importantly, it has earneda reputation for exceptionalpersonal commitment to itspatients.

One of Horizon's goals hasbeen to extend Muhlenberg'simportance as a leadingresource for orthopedics andambulatory care, while main-taining its vital full service rolein diagnostic, surgical, andsupport services.

The System is also devotedto the Hospital's continuedenhancement of emergencyservices and community pro-

. grams which include a mentalhealth/mental retardation unitand a dental clinic.

SYSTEM OVERV E

Computerized operations at SI. Luke's

A Structure for Effident

ement

community's ever-changinghealth care needs:-Doctor's Office CampusCorporation-Realty Corporation-Lehigh InvestmentCorporation

These subsidiaries manageproperties ranging fromundeveloped acreage todoctors' office buildings andthe land on which the well-known Miller Memorial BloodCenter is located.

••

Horizon ManagementServices, Inc. is the administra-tive keystone of the HorizonHealth System. Its experiencedmanagement team develops andimplements strategic plans andcoordinates the managementservices for all corporations inthe System.

Four other subsidiaries-today forming HHS RealtyCorporation-were establishedto manage the real estatenecessary for the System torespond most efficiently to the

-NorthamptonHORIZON The Power of National

Investment HEAlTIlSYSTEM PresenceCorporation

I Our new economies of scaleI extend well

MANAGEMENT beyond the LehighCOMPANY

I I I I I IMUHLENBERG DOCTORS

LEHIGH NORTIIAMPTONST. LUKE'SHOSPITAL OFFICE REAlTY

INVESTMENT INVESTMENTHOSPITALCENTER CAMPUS CORPORATION

CORPORATION CORPORATIONCORPORATION

Horizon management (I to r).M. Alyce Dula, vice president, planningand marketing; William P. Koughan,president; Joseph W. Fitzgerald,senior vice president; Dan R. Kraft,vice president, development andcommunity relations; Francis). St.Onge,vice president, finance

Valley, although it is here thatthese benefits are ultimatelyrealized.

Last year, after defining ourgoals and scrutinizing ourstrategic options for obtainingthem, the Horizon HealthSystem joined the PremierHospitals Alliance, one of thenation's leading medical

"(Premier)provides a vital nationalnetwork throughwhichmembers cancollectively exchange managementexpertise and improve operatingeffectiveness. Moreover,Horizon cancapitalize on a national presence inaccessing a wide variety of benefitsand programs ... "

cooperative systems.Essentially, Horizon is one of38 member hospital systemsthat together own the Illinois-based Alliance.

This partnership provides avital national network through

which members can collectivelyexchange management exper-tise and improve operatingeffectiveness. Moreover,Horizon can capitalize on anational presence in accessinga wide variety of benefits and

programs:-Premier's Group PurchasingProgram provides more cost-effective ways to purchasemedical/surgical supplies andcapital equipment.-Premier's finandal andother management systems willallow the Horizon hospitals tomaintain their competitive

edge.-Premier allocates millionsof dollars annually to marketresearch studies that will help

Horizon anticipate local needsand administer programs tomeet them.-Premier's InformationSystems allows access to

leading hardware and softwarevendors and consultants forsubstantial discounts andimproved data processingcapabilities.

St. Luke's medical leadership:Dr. Thomas L. Gaydos, president ofmedical staff, and Dr. Edward). Benz,vice president, medical affairs

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\

S T RAT E G C

Joseph W. fitzgerald

••

senior vice presidentHorizon Health System

"As a System, both hospitalscan more competitively

respond to-and anticipate-emerging trends in health care.

The dynamics of the industrydemand that we continue tomove forward and establishnew affiliations and linkages

necessary to meet ourmutual goals."

8

o V E R V E W

•

Medical leadership on the Horizon boardof governors: Dr. Ross M. Orr, St. Luke's(I) and Dr. Arthur A. Altman, Muhlenberg

1986 was a time of visionfor the Horizon Health System.Dedicated community leaders,senior administrative personnel,and the medical communityshared ideas, talents, andresources to find new ways toimprove health care delivery inthe Lehigh Valley. Spearheadedvoluntarily by physicians andmembers of both hospital'sBoards of Trustees, thisdynamic process began witha strategic plan whichidentified existing strengthsand pinpointed a varietyof objectives:

planning and implementationwere established for the Boardof Governors of the HorizonHealth System and theBoards, medical staffs, andmanagements of the twohospitals.

Horizon's first year ofaccomplishments has proventhe System to be efficient andresponsive to the changingneeds of the community andthe member hospitals.

Experienced key personnel,including a Chief Financial

Officer, Vice President ofDevelopment & CommunityRelations, and Vice Presidentof Planning & Marketing, wererecruited. Operatingprocedures for strategic

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tab sh ha oruourelation b

The outstanding cooperationand commitment of peoplethroughout the System openeda free flow of communicationsand resources. Mutual goals,strategies to address radicalchanges in health care, and

••Christine Donchez performs hematrakstudy at St. Luke's

t~ unified effort replacescompetitionbetween our hosPitals. Unnecessaryduplication of services is beingeliminated A strategic combinationof centralized and decentralizedprograms is being implemented.Alternative deliveryPlans are beingstudied. In all areas, we are finetuning the System to the rhythm ojthe community. "

operating and capital budgetswere planned together for thefirst time by St. Luke's Hospitaland Muhlenberg HospitalCenter.

A major, perpetual goalof the System is to becost competitive in today'shealth care market withoutcompromise to the quality ofservices.

Our membership in thePremier Hospitals Allianceoffers a wide range ofpurchasing and administrativebenefits. (See precedingsection)

A unified effort replacescompetition between ourhospitals. Unnecessaryduplication of services isbeing eliminated. A strategiccombination of centralized anddecentralized programs isbeing implemented. Alternative

Physical therapy.Muhlenberg Hospital Center

delivery plans are beingstudied. In all areas, we arefine tuning the System to therhythm of the community.

Furthermore, the structureof the System encourages thesmooth exchange of ideas andtechnology. Services are

9

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S T RAT E G C o V E R V E W

coordinated, the newestequipment is obtained andallocated most effidently-allto the community's benefit.

'I: Expand communityservices

'II

HorizonCare® is an

excellent example of how thenew System can respond tocommunity needs. It is aprogram for Medicaresubscribers that guaranteesenrollees that they will not bebilled for Medicare deductiblesor coinsurance if they do nothave other insurance to payfor these items.

The program was institutedat St. Luke's Hospital in 1985,and was soon joined byMuhlenberg Hospital Centerand Quakertown CommunityHospital. The community

reception was enthusiastic;to date, more than 21,000people have enrolled in theprogram.

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Laboratory studies at St. Luke's

S: Accelerate newmedical researchmnortunirl»

The System has alreadyhelped bridge new medicalresearch opportunities. Twonew clinical and sdencepartnerships between St. Luke'sHospital and Lehigh Universityhave been established in whathas become known as the'Lehigh Connection'. Each ofthese projects is supported bya $75,000 research grantprovided through the NETBenFranklin Partnership.

One brings the Lehigh Valleyits first hospital-based In Vitro

Fertilization Program.It also involves

~

Dr. Chong S. Lee, specialist in In VitroFertilization, working with medical team

an embryo

transferprogram and advanced studiesinto male infertility.

The second, which alsoinvolves Centocor, Inc., aMalvern-based biotechnology

firm, is researching monoclonal

antibodies to detect, diagnose,and eventually treat breast andovarian cancers. This vital,cutting-edge project is beingfurther supported by an

'The System has already helped bridgenew medical research opportunities... in what has become known as theZehigh Connection'."

additional $425,000 contributedby the three organizations.

development programs forphysicians, residents, nurses,and student nurses. Educationprograms help patientsunderstand and adjust to theimpact of medical conditionsand procedures. Communityprograms stress preventivemeasures, teaching people howto stay healthy.

On the horizon are plansfor new physican residencyaffiliations, new meetingfacilities, and a variety of newcommunity-based programs.

enuca nalr'{)mMn,I;;

The System is supportingeducational programs in allareas of health care and relatedcommunity service. Affiliationswith Temple University Schoolof Medicine and PennsylvaniaHospital, both based inPhiladelphia, sustain specialized

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E WOPE RAT o N S o V E R V~---------------------

Richard A. Anderson

president,St. Luke's

"Patients don't go to 'Horizon'for health care. They go to

'St. Luke's' or 'Muhlenberg',and they will always perceive

us that way, But the System isvital to efficiently bringing out

the best qualities in bothinstitutions, building a spirit of

cooperation in the medicalcommunity and foremost,

maintaining efficiencies for thehospitals' reputations for

excellent care."

12

Always a special delivery

While the Horizon hospitalsstress excellence of care in allmedical and surgical areas, theHorizon Health System hasplaced strategic emphasis onestablishing and advancingseveral specific major healthcare specialties,

The System's pioneer HeartProgram, based at St. Luke's

Hospital, offers outstandingfacilities and personnel fortesting, diagnosis, therapy,surgery, and rehabilitation inthe fight against the nation'snumber one killer,A cardiac catheterization lab

produces images of the heart'schamber, tracking blood flowto help physicians locateobstructions or deposits, Drugtherapy procedures help tocontrol heart disease;transluminal angioplastyremoves life-threateningdeposits from the arteries.

Cardiac catheterization, St. Luke's

Two specialized operatingrooms are devoted exclusivelyto open heart surgery.

Programs in cardiacrehabilitation, exercise diet, ,counseling, and follow-up carefurther help patients regainrewarding lifestyles,

Muhlenberg Hospital Center'svast expertise in orthopedicsurgery and rehabilitationrange from multidisciplinary

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neurological, musculoskeletal,and orthopedic disorders tototal joint replacement.

Recent expansions to thehand rehabilitation programoffer extensive treatment fortraumatic, systemic, andcongenital disorders of thehand and upper extremities.

The Hospital's therapeutictechniques for successful

••rehabilitation today includehypotherapy, ultrasound,electrical stimulation, andmassage.

Orthopedic operation in progress,Muhlenberg

"Behindthe warm, home-like atmos-phere of the new Maternal and ChildHealth Care Center at St. Luke'sHospital are some of the area's bestObGyn facilities, technology, andpersonnel

Behind the warm, home-like atmosphere of the newMaternal and Child Health CareCenter at St. Luke's Hospital

are some of the area's finestfacilities, technology, andmedical personnel.

The unit contains newprenatal testing areas, birthing

rooms, labor rooms, anddelivery rooms. Delivery to thefamily's wishes and needs ismade possible by a full rangeof laboring and birthingfacilities. Birthing classes areconducted for parents andtheir children over the ageof four.

The unit is geared forthe unexpected as well.Concentrated neonatal careembraces babies bornprematurely or having other

Dr. Andrew Unger, St. Luke'sneonatologist, with infant

special needs. The newbornnursery includes a separateroom to treat babies withjaundice.

With its new multi-disciplinary Cancer Care Unit,

. St. Luke's Hospital continuesits 14-year status as one of themost comprehensive cancertreatment resources in theservice region.

Early detection isemphasized through thelatest diagnostic techniques in

OPE RAT o N S

CT Scanning, mammography,and laboratory services.Specialized surgery,chemotherapy, and radiation

- therapy-enhanced by a new

linear accelerator-are devoted

William R. Mason

••

president,Muhlenberg

"Hospitals in close geographicquarters inevitably find

themselves competing. As aSystem, both member

hospitals can better providesuperior services. Cooperation

unquestionably has been in thebest interests of the hospitals

and the community."

o V E R V E W

Emergency care entrance, Muhlenberg

to fighting the disease.Outpatient services have beencentralized, and the 33inpatient beds in the unitreceive the personal attentionof specially-trained nurses andsupport staffs.

A range of excellentcapabilities and a centrallocation have madeMuhlenberg Hospital Centerthe area's leading resource forambulatory care.

Cancer radiation therapy, SI. Luke's

Complete pre-admissiontesting, pre-operativeeducation, procedures, andfollow-up care are providedfor the removal of cysts,

biopsies, diagnosticlaparoscopies, cataract and eyemuscle surgery, certain plasticsurgery operations, and a wide

variety of other procedures.

Muhlenberg performsalmost half of all surgery onan outpatient basis. TheSystem has been responding tothe growing trend of short-stayand same day surgery. In manycases, the patient can beadmitted in the morning andbe home by the evening.

Continued commitment tothe evolving challenge ofoutpatient services is one ofHorizon's highest priorities.

(:4 range of excellent capabilitiesand a central location have madeMuhlenbergHospitalCenterthearea'sleading resource for ambulatorycare."

Ambulatory cataract surgical team, led byDr. David Hyman

15

H 0 RNEW Z 0 N S

Dr. George P. Gillen, chief of radiologyMuhlenberg

The Horizon Health Systemis looking forward to a varietyof new health care challengesand opportunities to betterserve the region. Strategicobjectives for 1987 include:1. Strengthen the Systemthrough the mutual cooperationof providers sharing similar

goals.2. Preserve the spirit andindividuality of our memberhospitals.3. Assess the viability ofAlternative Delivery Systemopportunities for employersand individuals within the

region.4. Evaluate the financial andservice benefits of consolidatinghospital laboratories.

16

5. Achieve maximum utilizationof the System's service andprogram mix.6. Attract new medical andadministrative personnel where

st. Luke's open heart surgical teamled by Dr. Terrill E. Theman andDr. William S. Hoffman

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necessary to advance healthcare programs and services.7. Take full advantage of theSystem's national leadershipliaison with the PremierHospitals Alliance.

8. Continue to instituteexemplary programs and

"Ibecommunity's ever-changingneedswiD always dictate our actions asHorizon shapes the most effectivehealth care delivery system in theregion."

practices that have provensuccessful for multi-hospitalsystems throughout the nation.

Emphasis for any expansionof the Horizon Health Systemis on planned growth for thecommunity's sake. Like all

efforts completed this firstyear, the unerring focus ofHorizon's progress will be onthe community's best interests.The community's ever-changingneeds will always dictate our

actions as Horizon shapes themost effective health caredelivery system in the region.

Hydrotherapy, Muhlenberg Hospital

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F

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NAN C S TAT E MEN T SA L

HorizonHealth System, Inc.and Subsidiaries

ConsolidatedStatementsof FinancialPositionfor the year endedJune 30, 1986

GENERAL FUNDS

ASSETS:

••

Current assets:Cash and investmentsAccounts receivable - net of allowancesInventories and prepaid expensesDue from donor restricted funds

Total current assets

Funds held by trustee and board designatesProperty, plant, and equipment - netOther assets

Total assets - general funds

LIABILITIESAND FUNDBALANCES:Current liabilities:

Current portion of long-term debt and capital lease obligationsAccounts payableAccrued salaries, wages, and taxesDue to donor restricted fundsOther current liabilities

Total current liabilities

Long-term debt and capital lease obligations, net of current portionOther liabilitiesFund balance

Total liabilities and fund balance - general funds

DONOR RESTRICTED FUNDS:

ASSETS:

Cash and investmentsPledges receivable - netDue from general funds

Total assets - donor restricted fundsLIABILITIESAND FUNDBALANCES:Due to general fundsFund balances

Total liabilities and fund balances - donor restricted funds

$ 24,2265,816,493

$ 5,840,719

$ 9,885,86013,522,3561,922,891

2422625,355,33320,670,60050,774,898";~870

$99,617,701

$ 265,6822,931,8813,444,666

85,7971,762,9138,490,939

39,123,6341,959,701

50,043,427$99,617,701

$ 5,073,066681,85685,797

$ 5,840,719

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HorizonHealth System, Inc.and Subsidiaries

ConsolidatedStatementsof Revenueand Expensesfor the year endedJune 30, 1986

REVENUE:

Net patient service revenueInvestment incomeUnrestricted gifts and bequestsIncome from assets whose use is limitedOther

Total Revenue

EXPENSES:

Salaries and employee benefitsSupplies and otherDepreciation and amortizationInterest

Total Expenses

Excess of Revenue over Expenses

$79,776,031590,726791,521

1,538,8011,609,471

84,306,550

45,069,03025,465,4494,317,0633,222,694

78,074,236$ 6,232,314

StatisticalHighlightsfor the year endedJune 30, 1986

Inpatient admissions

Patient days

Emergency room patients

Outpatient visits

MHC

5,107

39,054

25,057

19,087

SLH

13,924

94,082

31,434

99,716

TOTAL

19,031

133,136

56,491

118,803

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1987Horizon Health SystemBoard of Governors

John W. WoltjenChairman

D. Patrick RobinsonVice Chairman

Arthur A. Altman, M. D.Jacob S. Kolb, Esq.Ross M. Orr, M. D.Richard M. SmithRichard L. StrainAnn A. Taylor

1987Muhlenberg HospitalOfficers, Board of Trustees

Leon L. NonemakerChairman

William R. MasonPresident

Timothy]. McDonaldTreasurer

Ronald]. MacaulayAssistant Treasurer

James]. Heller, Ph. D.Secretary

]. Jeffrey BeichAssistant Secretary

H. Scott AshtonMrs. Margaret E. BergerWalter J. DealtreyRev. Dr. Frank FlisserBarry L. GaalGeorge P. Gillen, M. D.Allen]. GoldenbergAlbert M. LerchPaul M. MardncinRev. Glenn G. NeubauerDr. Clarence A. ReichardThomas S. Sauer, M. D.Mrs. Mary E. Stever

1987St. Luke's HospitalOfficers, Board of Trustees

Alan C. DillmanChairman

Paul]. FranzFirst Vice Chairman

Richard A. AndersonPresident

Donna L. FieldsSecretary

Jay B. Berger, M. D.Jerry BiscopinkLeonard BlochWalter W. Buckley, Jr.Rev. Douglas CaldwellFrank]. Danyi, jr., Esq.Alex P. DyerMrs. Andrew]. GuffMrs. George HurdMrs. Edward P. LeachPeter Likins, Ph. D.Robert M. McGovernFrederick J. Munson, M. D.Joseph A. RossettiCharles D. Saunders, M. D.Thomas H. SemmelRobert L. Snyder, M. D.

(I to r) William P. Koughan withAlan C. Dillman, John W. Woltjen andLeon L. Nonemaker

Trustees EmeritiSamuel BlackDr. W. Deming LewisEdmund F. MartinWalter L. Peters, Esq.H. M. ScheldenR. S. Taylor

<II

Horizon Health System, Inc.Suite 201

60 w. Broad Street

Bethlehem, Pennsylvania 18018(215) 865-9988

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