While many hospitals and health systems have been forced to consolidate services and locations over the last few years, Morgantown, W.Va.-based WVU Medicine has been on a growth spree.
The academic health system, which is close to $7 billion in revenue currently, has acquired 12 hospitals over the last three to four years, and hopes to finalize its purchase of Weirton (W.Va.) Medical Center Jan. 1, bringing its portfolio to 25 hospitals.
"We've grown very dramatically," Nick Barcellona, CFO of WVU Medicine, told Becker's. "I think we're now at a point where we have critical mass, so it's shifting from integration to optimization."
Once WVU Medicine acquires a hospital, it integrates Epic's electronic health record system and Workday into the facility. When asked if the health system has further plans for growth and acquisitions, Mr. Barcellona said WVU Medicine is not looking to grow just for the sake of growth.
"We're looking for growth where it fits our strategic vision, where it helps us achieve our mission of improving the health trajectory of the folks in West Virginia and those that we serve beyond," he said.
Mr. Barcellona said that many West Virginia hospitals have already been scooped up by either WVU Medicine or other state systems, which is why WVU Medicine has expanded its portfolio into other states. The health system currently has two hospitals in Ohio, one in southwest Pennsylvania and one in Maryland.
"Our geography is a little different from other health systems," Mr. Barcellona said. "Because of the rurality that we have across our state and the states that we also have hospitals in that are sort of next door to us, the traditional hub-and-spoke model where everything feeds the mothership is not really how we are designed. Yes, we have a flagship 881-bed hospital … but because of our geography, we are really building breadth and depth in regions across the state so we can provide care closer to home. We have eight critical access hospitals, some with 25 beds or less in very rural, very beautiful campuses."
The health system is also focused on initiatives like Peak Health, a health insurance service company that WVU Medicine launched in partnership with Huntington, W.Va.-based Marshall Health Network and Winchester, Va.-based Valley Health in January 2023. Peak Health also kicked off a Medicare Advantage product this year.
"We want to look towards capitation and understanding how we can truly take risk," Mr. Barcellona said. "The way you do that successfully is you understand your costs and you provide not just sick care, but you keep folks out of the hospitals whenever possible and closer to home."
Running at around a 2% margin, WVU Medicine is slightly down from its peak 4% margin during the pandemic. However, Mr. Barcellona said with all of the health system's recent growth and acquisitions, the sweet spot for its fiscal year 2025 margin is around 3%.
"We're in growth mode, and when you think about measures like days cash and looking at the balance sheet, you have to balance some of the significant capital investments we're making to deliver the breadth and depth and sometimes the acquisitions to fund that," he said.
"Significant capital investments" include the nearly $400 million that the system's board of directors approved April 17 to help fast-track growth and development for new healthcare facilities across West Virginia.
Of the funding: $234 million will go to a multicenter outpatient facility with surgical suites for the Morgantown-based WVU Eye institute; $44 million toward the development and renovation of new operating rooms at WVU Medicine Fairmont (W.Va.) Medical Center; $64.5 million toward building a comprehensive cancer center on the WVU Medicine Princeton (W.Va.) Community Hospital campus, and relocating the hospital's Bluefield (W.Va.) emergency department and lab services to the Bluefield Pavilion campus; and $37 million for a multispecialty ambulatory facility in Bridgeport, W.Va.
"We're proud of all of the big investments," Mr. Barcellona said. "We want to keep doing that, every year we want to be doing that."