Keith Steffen is the administrator of OSF Saint Francis Medical Center. The hospital has 4,100 employees and is the second largest employer in Peoria. Its revenue budget is $778 million, with a medical staff of more than 700 physicians.

The medical center includes:

Tell us about your upbringing, family, schools, academic accomplishments, etc.

I was born at OSF Saint Francis Medical Center almost 53 years ago. My father was in the residential construction business at that time. When I was 4, he had an opportunity to move back to his hometown of Fairbury, Ill., to own and operate a lumber company and to continue in residential and commercial construction.

After graduating from high school, I attended Illinois State University. That was the era when everyone had lottery numbers with the military. My number was very low, and I was drafted out of college my sophomore year. I spent one year at Fort Sam Houston in San Antonio, Texas, and a year in Vietnam.

That was a very depressing time of my life in that just two months prior to getting orders for Vietnam, my older brother was killed in an airplane accident. His death was a very difficult time, compounded by the fear and unknowns of leaving my family and fiance to spend a year in the war zone of Vietnam.

Upon returning from Vietnam, I married and returned to Illinois State University to complete a bachelor of science degree in business administration. I accepted my first position at Saint Vincent Hospital and Healthcare Center in Indianapolis. My first position was serving as the assistant director of personnel.

It was a great first job and excellent exposure to the health care field. During my second year at Saint Vincent, I began working toward a master’s degree in hospital administration at the Indiana University School of Medicine. I was working full-time, going to school full-time (with two children), but completed the didactic portion of the program in two years.

I then served a 12-month administrative residency at Brokaw (now Bromen) in Normal. Seven months into that residency, the vice president of operations took a position in El Paso, Texas, and I was offered that position. Three years later, Ed McGrath, associate administrator at Saint Francis Medical Center at that time, contacted me regarding an assistant administrator position.

I accepted that position and began my employment at OSF Saint Francis Center August 16, 1980. Sixteen years later (to the day) I was promoted to associate administrator, when Jim Moore became the CEO for the OSF Healthcare System. In October 1998, Sister Canisia retired as administrator, and my job title was changed to administrator.

I’m an active member of the Apostolic Christian Church in Washington. My wife, Cathy, is from Indiana. We were married in Bluffton, Ind., June 6, 1971. We are very thankful to have four wonderful children, two boys and two girls.

Why were you attracted to health care and/or hospital administration? What prompted you to stay in the field for nearly 30 years?

When I served in Vietnam, I was assigned to what was initially called the 44th Medical Brigade, located in Long Ben, which was approximately 17 miles from Saigon.

When the 44th was sent back to the United States, we were all reassigned to the United States Army Medical Command, which provided medical oversight to all medical facilities and services throughout the country. My job was to handle top-secret security documents, to ensure proper distribution to the surgeon general (and his staff), and to ensure that they were in the confines of our safe at the end of the day.

I was challenged and intrigued as to how this team would provide health care planning in a war-torn country-specifically, making decisions as to where medical facilities would be established, when they should be closed, how and where physicians would be assigned based on subspecialty training, etc. It was then that I decided to pursue a career in health care.

My affiliation with OSF Saint Francis Medical Center has been a great fit. My Christian values are completely consistent with the Sisters’ Mission. It has become our Mission.

When you become part of the OSF Health care family, you see the importance of taking those words from the Mission statement plaques on the walls and placing them in your heart.

Last year the hospital provided $21.1 million of uncompensated care. That includes bad debts of approximately $10.7 million and charity care of $10.4 million. Those numbers are a strong witness of our commitment to our Mission statement.

As a leader in the local business community, what is the economic impact of OSF Saint Francis Medical Center to the local economy? How many employees fall under the OSF umbrella?

The boundaries of the OSF Healthcare Mission have grown significantly. OSF Saint Francis Medical Center has truly become a bona fide academic medical center with tertiary and quaternary (specialty and subspecialty) services available, not only to those patients we serve in Peoria and the tri-County area, but also to a region that covers more than 3.4 million people.

You cannot operate a children’s hospital and expect success clinically or financially in the tri-County area. You cannot establish and promote an organ transplant program (heart, kidney, and pancreas) and expect to recruit appropriate physicians and staff, in just the tri-County area.

You can’t acquire a gamma knife (the latest neuro-surgical, non-invasive procedure allowing physicians to treat what were formerly inoperable brain tumors) in the tri-County market.

For all of these highly sophisticated services, a large population base is a necessity. And we (our physicians and the College of Medicine working together) have been successful. Our regional laboratory was established in 1994 and now serves clients throughout the state-beyond just the region.

More than 30 percent of our business comes from outside the tri-County area. It’s taken years to build these high specialty services in terms of recruiting and collaboration with our physicians and the University of Illinois College ofMedicine.

We have developed a rural hospital network in the region, consisting of facilities that have legal/contractual/formal/exclusive relationships with the OSF Healthcare System. They include: Perry Memorial Hospital in Princeton, Illinois Valley Community Hospital in LaSalle-Peru; St. Margaret’s Hospital in Spring Valley; Mendota Hospital; Rochelle Community Hospital; Ottawa Hospital; Mercer County Hospital in Aledo; Memorial Hospital in Carthage; Pekin Hospital;Apostolic Christian Homes in Peoria; Morton, Roanoke, and Eureka; The Lutheran Home in Peoria; Easter Seals/UCP; and the Catholic Social Service Agency.

These relationships focus on the development of strategic plans that ultimately provide quid pro quo relationships and partnership initiatives where we all win. It’s been a collaborative effort with physicians, and-in the case of the Children’s Hospital of Illinois-the College of Medicine staff, who were very instrumental in building this referral base. These services are unique medical programs that allow us to compete very effectively with large medical centers in St. Louis, Chicago, Iowa City, and Indianapolis.

We have almost 4,100 employees that make it all happen. If you quantify the entire workforce of the OSF Healthcare System, there are more than 10,000 employees.

When we add our affiliates, there are another 7,200 employees, who directly or indirectly create this large, multi-hospital health care delivery system. From a managed care perspective, this creates “access” to care for many patients and a broad base of medical services.

Describe your responsibilities and leadership style as the administrator of OSF Saint Francis Medical Center. What does a typical day consist of? What is your favorite aspect of the job?

There is nothing routine about this position. Hospital administration requires us to look at health care from different perspectives-not only from the patient and physician point of view, but also from a strategic business vantage point. To address fundamental issues that confront all health care providers, you must look beyond the day-to-day trials or operational challenges and achieve a macro view of the industry as a whole.

I typically get to work around 6:30 a.m. and I leave around 6:30 p.m, unless there are evening meetings or dinners with physicians, community leaders, etc.

I believe health care is facing challenging times, but perhaps it would be better described as a turbulent period. This past year, 44 hospitals closed throughout the country. Three of those were in St. Louis and two in Chicago.

The most important component of my job is to ensure the development of a culture that is built around service and instill that mindset in the hearts of our employees and physicians.

The bottom line is simple: Happy employees create happy patients. Providing the very best care has become more than just a phrase or thought at OSF. Jim Moore, CEO for OSF Healthcare System, places the utmost importance on our commitment to becoming the employer of choice and our commitment to ensuring that service and quality standards are met at high levels.

In essence, everything we do is patient-focused. It’s obvious the Sisters have had almost 125 years of providing more innovative and advanced medicine than any other health care institution in the area.

Interacting with people is my favorite part of the job. Getting to know people and getting the most out of them by finding their strengths and competencies is a challenge, but it is extremely rewarding. In my mind, that is what organizational development and organizational effectiveness is all about.

I have a bent about the right person, in the right place, at the right time, doing the right thing. As the times and challenges change, realignment of strengths and competencies is sometimes required to meet new and greater challenges for the organization. I enjoy this aspect of my job because we see so many positive, measurable outcomes so quickly.

What are the challenges that exist in health care today and what are your perspectives on those challenges?

There have been many media headlines and articles published in major journals that refer to health care as being in “critical condition” and, for many, it is time for health care reform. We live in a land of “life, liberty and the pursuit of happiness.”

With respect to health care, that means people can behave as they wish-society will pay.

So, for things like drug abuse, alcohol, obesity, smoking, seat belts, helmets, diet, exercise, etc., the fact is this: Americans are left to individually make decisions for themselves and let others be responsible for the consequences. And so we ask-”who is paying for this?”

We are the only society that believes death is optional. We don’t ration medical care and we don’t decide who does or does not receive different levels of care. And, unfortunately, we are in an era that provides a system of medical miracles. So in a way, Americans are getting what they asked for-give me the best, give it to me now, at the cheapest rate, and at the most convenient location.

We are the only industrialized nation that has more than 47 million people uninsured and more than 18 million underinsured. So the U.S. health care system debate continues.

Many of the reasons health care costs have grown significantly and remain high are related to a host of social issues.

There have been rumors about OSF moving from its downtown location to the north end of Peoria. Please address these concerns.

The Sisters have made a commitment and have granted us approval to spend nearly $18 million dollars in renovation, modernization and technology upgrades in our downtown campus. In fact, those projects were established several years ago, and we have made significant progress toward their completion. We renovated several patient care units, established more private rooms and established a new nurse call system to improve patient response time and service levels.

The Sisters continue to make significant financial investments in state-of-the-art technology in our downtown campus. Our future includes:

OSF Saint Francis Medical Center is a Level 1 Trauma Center with its own air ambulance service. In fact, it happens to be the busiest in the State of Illinois. The requirement to be a Level 1 Trauma Center means that we have staff 24 hours a day, 365 days a year in the operating room, ready to meet the demands of trauma patients.

We have surgical staff, anesthesiologists and a flight team working around the clock to deal with medical emergencies. This service is unique to the area, as well as the region, and it is a very strong component to our downtown campus.

We were fortunate to find 216 acres north of Hoerr Nursery between Route 91 and Route 6, that is a perfect location for our new Center for Health.

The rationale for this facility was developed in our Strategic Plan of 1995. The focus was on access, convenience, competitive pricing and quality of care. As much as possible, we try to take the services as close as possible to the patient. We have had many contacts from other providers (specifically, physician groups) who are considering relocation to this campus.

We’ve also had calls from investors and developers who would like to purchase property on this campus for hotels, restaurants, etc. At this point, we have chosen to give first consideration to health care providers and make it a largemedical campus for a variety of health care services. We appreciate the efforts of Patrick Nichting and the city council in supporting this project that will contribute to the growth of the Cell 3 area of north Peoria. This facility will have a regional market.

What, if any efforts are underway to transform Peoria into a medical center such as the Mayo Clinic? What steps must be taken to see this vision to fruition? If realized, how will we ensure the nation recognizes this community as a treatment destination?

Our physicians have been actively developing strategic marketing plans that extend south to Paducah, Ky., east and west to the borders of Illinois, and as far north as the collar counties of Chicago.

Most recently, Dr. Don Rager, dean of the University of Illinois College of Medicine at Peoria, established a team that recruited an individual from M.D. Anderson who is internationally known for cancer research.

This is a big step for the medical school, the community, and all health care providers in Peoria. It will put Peoria on the map. And it will require all area health care providers to work cooperatively to see these research projects grow.

The keys are communication, marketing, physicians active with regional clinics, relationship-building, and the role of the medical school-all partnering with local health care entities in recruiting highly trained physicians who join us to anchor these health care service growth opportunities in Peoria.

Again, it will require cooperation on the part of all three Peoria hospitals, the physicians, as well as the College of Medicine. All three hospitals have already committed significant dollars for the development of this biotech research project.

Most recently, the hospital administrators, representatives of the University of Illinois College of Medicine, and many community leaders have been meeting for the sole purpose of developing and promoting biotech and research appropriate to health care services in Peoria. This should not be misunderstood to mean that we are collaborating to divide up clinical services; that has never been on the agenda of this consortium.

Needless to say, the dividing of health care services to decide who does what is frowned upon and considered illegal by the Federal Trade Commission, as well as the U.S. Justice Department.

We will continue to compete for services-and I believe that is healthy-because the winner in this model will be the patient.

Describe the various designations OSFMC holds that attract patients to Peoria. How important are these designations to the health of the organization, and why?

Services unique to Peoria available at OSF Saint Francis Medical Center include:

These are examples of unique, highly specialized services that have required us to build a referral base of more than 3.4 million people. It took between 15 and 18 years to accomplish this-and it took real commitment on the part of many physicians and the College of Medicine.

As more and more rural hospitals either close or downsize in providing basic health care services, we must grow and create capacity. And we must continue to work with our physicians and the medical school to advance the practice of medicine with cutting-edge technology and new and more effective ways in treating things like heart disease, neurological disorders, cancer, AIDS, trauma, etc.

What is your vision for the hospital? Has it changed during your years at OSF?

I must first point out that it isn’t my vision; it is our vision. We are not a “me” organization; rather, we are a “we” organization. We work as a team to develop strategic plans together, we make decisions together and we share successes and failures together. I know I speak for the entire administrative and management team when I say the greatest component of our strategic plan is to ensure the Mission the Sisters built and maintained for more than 124 years has the vitality and viability required to keep it alive for another 125 years. You can’t carry on that Mission without focusing on its greatest asset: the employees and medical staff.

We in the OSF Healthcare System are very fortunate that we can integrate medical services that could not be achieved in other health care systems. For example, at Saint Vincent Hospital in Indianapolis, we were part of the largest Catholic healthcare system in the country, known as the Daughters of Charity.

Unfortunately, their hospitals are located in Indianapolis, Michigan, Ohio, New York, etc. The fact that four hospitals within the OSF Healthcare System are located within a 50 to 60 mile radius of Peoria allows us to integrate and collaborate effectively in the provision of programs and service lines.

Because OSF is a Catholic organization, certain procedures/treatments are not offered to patients. Do you believe the hospital loses patients because of these restrictions? How do you explain the decision to limit these services?

In many respects, we are an extension of the Catholic Church. We are fortunate that we have ethical and religious directives (ERDs) that clearly articulate how we view certain issues that keep us on an unwavering course-especially when our identity is being threatened by such things as abortion, sterilization, physician-assisted suicide, and genetic restructuring. These ERDs provide guidance and direction in an environment marked by extraordinary change and challenge. Secondly, they serve as an expression of the church’s teaching on medical and moral matters. Furthermore, ERDs provide the church’s vision on health care issues.

Our challenge is maintaining Catholic identity in a pluralistic society. Some states are proposing legislation that could force Catholic health care facilities to struggle at finding a legal way to continue as a church-sponsored facility and provide health care services in a matter consistent with medical ethics.

There are approximately 595 Catholic health care facilities throughout the country-16 percent of all health care admissions. Catholic health care has traditionally been leading the way in terms of children’s wellness programs, teen outreach services, adult daycare, hospice services and programs for the indigent.

Describe the future of hospital administration. What do you hope to accomplish in the next five to 10 years at OSF? What do you see for yourself in your professional future?

The roles, duties, responsibilities and competencies will continue to change for hospital administrators largely due to a very volatile and changing health care environment.

Increasingly, hospital administrators need an understanding of information systems and information technologies to facilitate connection of the correct data with the correct parties. This ensures we have the correct tools to make the best decisions-with the ultimate goal of improving the quality of patient care and clinical outcomes. Being a strong strategic thinker is critical in developing plans for the future.

My philosophy has always been to poll the experts and put our best foot forward with people who have the appropriate skills and competencies. Lastly, to summarize my top priority; communicate, communicate, communicate . This means maintaining ongoing communication with our employees, medical staff, the business community, and the citizens of the population we serve. I enjoy communicating, sharing and educating people as to who we are, what we are about and how we impact the health of the community in general. From an internal perspective, it is communicating the strategic plan to all 4,100 employees.

With respect to accomplishments, there is no doubt in my mind our efforts and collaboration with the University of Illinois College of Medicine will continue to grow. We will continue to work together to recruit highly trained subspecialists and continue to develop growth strategies in a population base of 3 to 4 million people.

The network that already exists must grow to support such services as additional organ transplantation, gamma knife procedures and services available through the Children’s Hospital of Illinois. We’ve been doing this very successfully for more than 15 years.

Together, we will continue to identify tertiary and quaternary services that will be unique to the Peoria region, and specifically, the development of services that will compete with St. Louis, Chicago, Iowa City and Indianapolis. In essence, we will continue to expand the boundaries of our Mission in partnership with the College of Medicine.

By and large, these services are not available at Methodist or Proctor. These high-tech services are being executed as a result of a joint plan developed between OSF and the college.

But our greatest goal has to do with patient satisfaction. Our goal is to be in the 99th percentile of the Press Gainey Patient Satisfaction National Surveys. Based on the trend over the last four quarters, I am optimistic about achieving that goal. It’s all about creating a culture around service. It’s all about capturing the hearts of our employees and the medical staff that creates an overwhelming desire to walk and talk the Mission in everything we do and every decision we make.

We are a Mission-driven organization. The Children’s Hospital of Illinois is currently number two in the country, with a ranking in the 97th percentile for patient satisfaction.

As a learning organization, we have already gained much from the strategies and tactics implemented at the Children’s Hospital to achieve this amazing accomplishment throughout the medical center.

My personal/professional goals are few. First of all, and more than anything else, I want to mature in my Christian walk and my example. I find this to be an incredible asset in all facets of my life-at work, at home and in my interactions with the community.

From a professional perspective, I recognize there is much to learn that requires flexibility; a soft-heart; listening skills; honesty; credibility; and being, as much as possible, a friend to all. I have a lot to learn. We have a great leader in Jim Moore. He is a great coach, an excellent mentor, a fair and honest individual who truly personifies the Mission. He challenges us to keep all of our priorities in proper alignment. Jim and the Sisters are very patient and helpful in building leadership skills and competencies in those of us who have come up through the ranks and are still learning and growing daily.

What is your proudest professional accomplishment? What lessons can you share from your administrative career?

I’ve been at OSF Saint Francis Medical Center for more than 20 years. In the first eight to 10 years, I was very fortunate to be a part of several “firsts.” For example, I was administratively responsible for working with the surgeons in the establishment of both kidney and heart transplantation.

I was involved with the radiologists to establish the first CT scanner in Illinois. I worked with the urologists to bring the first lithotripter (kidney stone crusher) to the state-the 13th in the country. I’ve always been impressed with the risk the Sisters accepted with these kinds of technologies and investments, where clinical efficacy was documented but the economics were never certain.

I find there are many decisions you are forced to make that will please some and irritate others. That’s why I subscribe to the old adage: “Reasonable people with equal information seldom disagree.”

Through the years, I’ve learned to be a better listener and to spend more time communicating; sharing; soliciting opinions; and, in general, establishing credible relationships with people. It is all about building relationships.

I’ve learned to forgive-to be kind, honest, to keep building, be happy, do good and give my family and my organization the best I have to offer. Because in the final analysis, as Mother Teresa once said, “In the end, it’s between me and God-not me and them.”

The Children’s Hospital of Illinois has become an important resource for this community. What is the relationship between Saint Francis Medical Center and the Children’s Hospital?

Approximately 14 years ago, several representatives from OSF Saint Francis Medical Center-including administrators and physicians-visited the Children’s Hospital at Vanderbilt in Nashville, Tenn.

The purpose of that trip was to develop a similar model at OSF Saint Francis in that the Children’s Hospital would become an “entity within an entity.” Upon its return, the team established the same model at OSF Saint Francis Medical Center in Peoria.

Although it is a separately licensed facility (by the state of Illinois), the Children’s Hospital draws its strength from its affiliation with OSF Saint Francis Medical Center.

For example, the Children’s Hospital is able to share many clinical services, such as the Life Flight program, radiology services, the surgery department and the laboratory. Additionally, there are non-clinical services, such as the laundry, information systems and cafeteria-all of which are shared.

The fact that it is not a freestanding hospital means these services would otherwise be duplicated, which would increase the cost to the patient by 45 to 50 percent.

In fact, we know our charges for some of the major Children’s Hospital services are 33 percent less than two freestanding children’s hospitals in Chicago. That gives us a strategic and competitive advantage for children’s hospital services throughout Illinois.

In low, rural population areas such as central Illinois, a children’s hospital requires a strong working relationship with a major adult tertiary care center and a medical school.

The University of Illinois College of Medicine and OSF Saint Francis Medical Center have developed those strong partnerships for the Children’s Hospital. Collectively, both organizations have been diligent in recruiting more than 60 pediatric subspecialists, which are critical to the growth of a bona fide Children’s Hospital. And, collectively, we have developed clinics in a large regional network that covers a population base of more than 3.4 million people.

Discuss the merger of the Progressive Healthcare System and the OSF Healthcare System. Please address the positives and negatives for both parties as well as the impact on the health care consumer. Please address the hurdles, timetables, issues that could kill the merger, etc. In the end, what improvements might Pekin residents expect if this merger is finalized.

Pekin Hospital has been an independent affiliate of the OSF Healthcare System for more than five years. During that time, both organizations have gotten to know each other quite well in terms of operations, strategic planning and, most of all, the ability to integrate services that has resulted in a quid pro quo relationship.

Through the years, as this relationship has grown, and the credibility and trust was developed, it was concluded that a merger might be in the best interest of Pekin Hospital, in terms of maintaining its long-term viability and organizational vitality.

In that regard, representatives from the Progressive Health Systems board (the parent company for Pekin Hospital) and the OSF Healthcare System (the parent company for OSF Saint Francis Medical Center) initiated discussions as to how this merger might strengthen both health care systems.

In fact, I believe it is the success of this affiliation that brought both parties together to explore the opportunity to take this relationship to a new level-a full merger.

Both boards have signed a letter of intent, which is a non-binding agreement allowing both parties to work together to demonstrate to the various regulatory agencies that this merger will improve quality of care, promote greater operating cost efficiencies, offer greater efficiencies in the delivery of health care, and create a stronger organizational structure.

The Illinois Department of Public Health must approve the merger through a Certificate of Exemption, required by the state of Illinois. This type of merger also requires the review of the Federal Trade Commission and/or the U.S. Department of Justice. It is expected that this process could take as long as six to eight months.

So you ask: Could some services be merged and moved from Pekin to Peoria? You bet. Are there some services at OSF Saint Francis that could be merged and moved to Pekin? Possibly. No one has those answers now, so it would be premature to come to any specific conclusions.

That’s the purpose of this in-depth study, with highly sophisticated and well-trained people who have had significant experience dealing with hospital mergers. We are periodically asked what kinds of things could prevent this merger from happening. The fact that we’ve known each other for more than five years makes it much easier to mutually determine where the major opportunities exist in merging services in both organizations.

However, one hurdle that would be insurmountable would be a request on the part of the Pekin board demanding that all services that currently exist remain intact and in service forever.

I can’t imagine that occurring, but if it would occur, OSF would probably terminate the process. Likewise, if OSF, through all of these efficiency studies and analyses, concluded that certain services are required to be eliminated or merged, and the Pekin board does not agree, the Pekin board would probably terminate the process.

I honestly do not anticipate that either of those two scenarios will occur during this due diligence process. It’s simply too early to know how this single delivery system will look until the studies and analysis have been completed. Both communities should understand that we have had a long-term relationship. We developed a satellite dialysis center in the early 1990s.

It started with four dialysis stations and is now up to nine. We developed an outpatient radiation oncology program for cancer patients in need of radiation treatments. We have provided residency rotations for internal medicine and pediatrics to Pekin and Delavan. Pekin Hospital was a charter member of our Stroke Network. Additionally, we have provided many subspecialty programs, such as neonatology and neurology services. And from a delivery system and access to care standpoint, we have worked together in developing managed care contracts with organizations in the three counties served by Pekin Hospital. These patients have access to primary services at Pekin Hospital and tertiary (specialty) services at OSF Saint Francis in Peoria. It’s a win-win situation for all parties involved.

I find it interesting that the Pekin Hospital Board of Directors elected to proceed with this intent to merge when the hospital is in a profitable mode. Pekin Hospital, like many small rural hospitals throughout the country, has had good and bad years financially. As Pekin Hospital indicated in its news release, “Health care is changing and funding is becoming more and more difficult, particularly for small independent hospitals.” The release goes on to say, “The assistance of the OSF Healthcare System will allow for greater economies of scale, joint venture opportunities, access to capital, access to improved technologies and equipment, and unique programming.” We agree with this statement.

As always, any time mergers involving Catholic health care come to fruition, there will always be a small fraction of the population disturbed because of limited access to care for certain services. For example, any service that would be in conflict with Catholic Ethical and Religious Directives will be prohibited at Pekin Hospital post-merger. To my knowledge, Pekin Hospital has never performed abortions or sterilizations, but does a very small number of tubal ligations. Again, it is such a small portion of the hospital’s services, and individuals inconvenienced will have to drive only a few miles further to one of the other Peoria hospitals for those service choices. The bottom line is simple: through this merger, the financial viability of both organizations will be strengthened. IBI