A Market in Transition

Hospital care isn’t a zero-sum game, but the Kansas City region has definitely seen some winners and losers since 1997.

Imagine you stepped into a time machine here in 1997 and jumped back out again today. If you knew the local market for hospitals and medical centers back then,
you’re in for a few surprises:

  • Baptist Medical Center, the third largest hospital in Kansas City? Gone.
  • Trinity Lutheran Hospital, the 11th-largest? Gone.
  • Independence Regional Health Center, at No. 13? Gone.

And for goodness sakes, that financial train wreck barely on the rails at 39th and Rainbow? The University of Kansas Hospital, No. 6 back then, has been unchained from state control and is now the kingpin of health-care facilities here, in terms of both revenues and patient admissions.

But much more has changed in the interim, as reflected in the charts on the facing page.

Saint Luke’s has added two satellite campuses, Saint Luke’s South Hospital in Overland Park, and Saint Luke’s East in Lee’s Summit, as health-care delivery followed the rooftops of housing developments deeper into the suburbs.

Centerpoint Medical Center’s arrival in 2007 spelled the end of the line for both Independence Regional Health Center and the Medical Center of Independence.

What might stand out most of all are the huge increases in hospital revenues, even after being adjusted for inflation.

The University of Kansas Health System has been the big winner there, with a 30-fold increase in revenues—and even in real-dollar terms, it’s still a beast 18 times larger than the current leadership was wrestling before being granted independent health authority status in 1998.

Even after COVID-19 inflicted deep drops in admissions—The University of Kansas Hospital was down more than 10 percent from 2019’s admission levels—the system was able to harvest an increase of nearly $419 million in annual revenues last year. That was at least 2 imes its closest institutional competitor.

Not reflected in those charts has been the economic impact of that health-care delivery. The population of the Kansas City Metropolitan Statistical Area has grown about 10 percent since 1997. The Top 15 hospitals in the market, however, went from combined employment of roughly 22,500 in 1997 to last year’s figure of nearly 50,000. Physicians? Up from 6,200 to nearly 7,900 with-in those 15 largest. And nurses? From fewer than 6,000 to nearly 13,800 at those same enterprises.

Perhaps the most interesting shift in the market has been with where care is delivered. The closures of those hospitals closer to Kansas City’s core were almost entirely offset by new construction, leaving the market with roughly the same 6,150 licensed beds today that it had back then among the 15 largest hospitals.

That has placed additional burdens on the former Truman Medical Center, now University Health, The University of Kansas Hospital and Research Medical Center as the three largest institutions that are physically closest to the greatest numbers of uninsured and under-insured patients.