Will Cook, the new CEO of Vail Health, said that he’s learning about the hospital. One of the reasons he said that costs are so high is that the specialists don’t see as many patients in a small market such as Eagle County as they would in Denver, but the hospital has to pay their salaries. The Eagle County Airport (EGE) isn’t served by any specialty airlines such as Southwest, Frontier or Spirit, only the legacy carriers of American, United and Delta. Why? The market at EGE is economically too small for specialty carriers. If there were any sort of economic efficiencies in the health care market, going to Denver to see specialists for which there are limited numbers of patients in Eagle county might make more sense.
Even taking into account the higher costs of having specialists at Vail Health, it doesn’t explain VH’s sky-high profit margin and net annual profits. A Denver Post article from Oct 4, 2018, states that “Vail Health last year (2017) generated a 36 percent profit margin ($100 million), among the highest for a hospital in the state and the nation.” Cash flow margins for nonprofit hospitals for 2018 were expected to be 8.1 percent, according to Moody’s Investor Service in a Becker’s Hospital Review article from August 29, 2018. Vail Health’s 36 percent margin is more than four times as high, which is great if it were a for-profit corporation, but not so great when local consumers of healthcare are footing the bill.
The easiest way to find out what consumers of healthcare want in Eagle County is to ask them. The market is small enough that Cook doesn’t need to commission a firm to do a study. Get out and ask locals at the grocery store, in restaurants or stores, on chairlifts or at events, what they want from Vail Health. More than likely, the answer is going to be access to affordable healthcare.
Hopefully, Cook, a former administrator at the University of Pittsburgh Medical Center and University of Colorado Hospital in Aurora, facilities that are operating in competitive markets, can bring some of that knowledge of how to provide reasonably-priced medical services to the Vail market. Is Vail Health, a nonprofit entity, going to take the lead in providing affordable healthcare to the population that it serves in Eagle County or is it going to continue with the pricing model of “someone else is paying” and continue to charge some of the highest prices for healthcare in the nation?
Mike Beltracchi
Edwards
