New CEO of SIU group practice aims to reverse losses

Published April 10, 2011 @ 10 p.m.


Southern Illinois University School of Medicine's group medical practice is turning to an internist with extensive experience on the business side of health care as it tries to reverse four money-losing years.

"My understanding is the financial operational turnaround has already begun," Dr. Hyung Kim, the new chief executive officer of SIU HealthCare, said during an interview last week.

Kim, 45, the son of a surgeon, was born in Korea. Now a naturalized U.S. citizen, he grew up in St. Louis.

He also carries the title of associate dean for clinical affairs at the Springfield-based medical school.

Kim replaces David Tkach, an accountant who was removed by SIU HealthCare's board in September 2009. Tkach's departure from the helm of the 262-doctor group was prompted, at least in part, by financial losses, SIU HealthCare officials said.

Dr. John Bradley, a longtime member of SIU's faculty, served as acting CEO after Tkach was ousted. Bradley set in motion a series of improvements, many of them related to the way SIU HealthCare bills and collects money from insurance companies and patients.

The improvements stemmed from a consulting firm's report that identified opportunities to generate at least $1.6 million more in annual net revenues.

The improvements are still under way, according to Dr. J. Kevin Dorsey, the medical school's dean and provost. He said SIU HealthCare is expected to be in the black by the end of the current fiscal year June 30.

Treating, training

Although it's not-for-profit, the group practice needs to be financially healthy, Dorsey said, because many SIU doctors earn most of their income by treating patients through SIU HealthCare, one of the largest multi-specialty groups in downstate Illinois.

In addition to serving a higher percentage of Medicaid and uninsured patients than most medical practices in the Springfield area, SIU HealthCare doctors help train medical students and medical residents, many of whom end up practicing in central and southern Illinois.

Most of SIU HealthCare's doctors are based in Springfield, although a handful are in Quincy, Decatur and Carbondale. The practice takes in more than $85 million a year and pays salaries to doctors and 800 other staff members, most of them in Springfield.

SIU doctors will serve an estimated 119,000 patients in 2011, providing more than 533,000 patient visits in 55 downstate Illinois communities. Twenty-three percent of SIU's patients are covered by Medicaid, Dorsey said.

The practice was founded in the early 1970s, when the medical school was established. It began to lose money in fiscal 2007 and reported net losses of $5.5 million in 2009. The practice lost $1.5 million in the fiscal year that ended in June 2010, according to SIU.

The losses have been offset by the reserves of the medical group, not the university, Dorsey said.

To help stem the tide of red ink, SIU HealthCare began in summer 2009 to divert more revenue from doctors for overhead, potentially reducing doctors' take-home pay. That diversion of funds is continuing, Dorsey said.

Doctor as CEO

The medical school's former chairman of neurosurgery, Dr. H. Dennis Mollman, resigned in fall 2009 because of what he said were chronic billing and staffing problems that SIU HealthCare's management either was slow to address or ignored.

SIU ended up filing a lawsuit against Mollman, alleging contract violations connected with his departure. Mollman filed countercharges.

The lawsuit was settled out of court recently, but SIU officials wouldn't release details. Mollman, now on the faculty of the University of Missouri School of Medicine, couldn't be reached for comment.

Because the business side of medicine is becoming increasingly complex as health-care reform is implemented, Dorsey said, SIU HealthCare doctors wanted a CEO who was a doctor.

"We speak the language, and we get what the issues and the problems are," Dorsey said. "It's not like business people can't or don't or won't. It just seems to be easier and better."

Kim, who is paid by both SIU HealthCare and the medical school, will receive a total salary of $450,000 a year, SIU spokeswoman Nancy Zimmers said.

'Nice convergence'

Kim earned his medical degree at Johns Hopkins University and completed an internal medicine residency and master's in business administration at the University of Michigan in Ann Arbor.

He most recently was vice president of research and a managing partner for "transformational development" at St. Louis-based Ascension Health, the largest Catholic health system in the nation.

Kim also was a vice president at Thomson Medstat, a health-care information services company in Ann Arbor and held positions at a management consulting firm in Detroit. He treated patients for three years, from 1995 to 1998, while on the faculty of the University of Michigan.

A jogger who is married and has three children -- ages 10, 8 and 6 -- Kim said he was attracted to the SIU HealthCare job because "it's just a nice convergence of all these things that I have done in the past."

The medical group and medical school provide a platform for developing better ways of practicing medicine at a time when efficient, effective care is needed more than ever, he said.

"There's just an extraordinary opportunity that I think SIU has to do a lot of good, not just for central and southern Illinois, but to help with the health-care ills of the country in general," he said.

Dorsey said Kim was chosen because he is smart, articulate and has "real-world business experience."

"He is someone who could take us the next step - a physician leader for the future," Dorsey said.


SIU HealthCare revenues

Total revenues, Net revenues over (or under) expenses

Fiscal 2010 $85.5 million $1.5 million loss

Fiscal 2009 $81.7 million $5.5 million loss

Fiscal 2008 $80.4 million $4.4 million loss

Fiscal 2007 $77.1 million $1.9 million loss

Fiscal 2006 $72.4 million $2.6 million gain

Fiscal 2005 $69.7 million $8.6 million gain

Source: SIU HealthCare

Copyright 2011 The State Journal-Register. Some rights reserved

Photo: Dr. Hyung T. Kim has been named associate dean for clinical affairs for Southern Illinois University School of Medicine and chief executive officer of SIU HealthCare.

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