Robinson JC and Dratler S.
Health Affairs - January/February 2006
This paper analyzes the evolution of capital investment strategy
at Catholic Healthcare West (CHW) between 1996 and 2005, as the
forty-hospital system reversed its financial losses and diversified
into ambulatory services and high-growth markets. The system
developed a formal process for allocating capital among profitable
facilities and those providing charitable services in communities
with high social needs. Capital priorities shifted from weak
facilities in low-growth markets (from 35 percent to 27 percent of
total investment) to strong facilities in high-growth markets (from
32 percent to 45 percent). Mission-related investments were made to
sustain, but not expand, the system’s presence in low-income
communities.