Renown Health holds a dominant place in Northern Nevada’s health care landscape.

The nonprofit health system owns and operates two of the six major hospitals in the broader Carson-Reno-Tahoe region and has a 100,000-square-mile service area that’s one of the largest territorial reaches in the state.

Along with its expansive footprint, Renown is one of the largest employers in Washoe County, while offering the region’s only Level II trauma center and the area’s only Level III Neonatal Intensive Care Unit (NICU), which serves Northern Nevada and nearby parts of rural California. 

However, the health system’s specialized services and influence in the region have led to accusations, including in lawsuits, that the hospital holds an unhealthy monopoly. 

The Nevada Independent spoke with Renown’s CEO, Brian Erling, one year after he stepped into the role in December, along with a bevy of other health experts about the region’s most extensive hospital system.

Here is information to know about the nonprofit and the singular position it has in the state, as well as reflections from policy experts and leaders within the industry about Renown’s place in the Northern Nevada health care market:

Is Renown more than just a hospital? What other entities are under its umbrella?

Erling describes Renown Health as an integrated health care delivery network affiliated with the University of Nevada, Reno School of Medicine.

Though the nonprofit, community-academic health system is best known for its two hospitals, Renown Regional Medical Center and Renown South Meadows Medical Center, it also offers advanced medicine and specialty care, primary and pediatric care, mental health services and diagnostic services, and it has an insurance arm. 

Where is Renown Health based, and what does it mean that it’s a nonprofit health system?

Renown is one of two nonprofit health systems based in Northern Nevada. The other is Carson-Tahoe Health, which owns the Carson Tahoe Regional Hospital. The Reno VA (Veterans Affairs) Hospital is federally owned.

For-profit health systems own the other hospitals in Northern Nevada. Northern Nevada Medical Center and Northern Nevada Sierra Medical Center are part of the Valley Health System of Hospitals owned by Universal Health Services, Inc., a Pennsylvania-based company. Prime Healthcare, a California-based company, owns the St. Mary’s Regional Medical Center. 

How many people does Renown employ, where does money go and what are the system’s annual revenue and operating expenses?

Renown employs 1,996 registered nurses (88 of whom are travel nurses on temporary contracts), 299 physicians and 5,191 other employees, according to data it provided to The Nevada Independent. 

For fiscal year 2022, Renown Health reported just over $120 million in revenue on its December 990 tax form, a form that most nonprofit organizations claiming federal tax-exempt status must file yearly with the Internal Revenue Service. The organization reported about $119.6 million in expenses, a net income of just over $398,000 and net assets of more than $329 million.

Though the full salary for its recently hired CEO is not on the 990 form because of his start date, the organization’s June 990 tax form indicates that Anthony Slonim, the previous CEO, was compensated with more than $2.5 million and more than $195,500 in other forms of compensation.

Renown Health says it incurred more than $244 million in uncompensated care services for 2022, which are the health care or services provided by a health care system that an insurer or patient did not pay for.

What is Renown's market share compared to others in the region? 

The credit agency Fitch indicates that Renown Health had an inpatient market share of 66.5 percent as of 2022. Fitch’s report added that though regional competition exists, St. Mary’s Regional Medical Center is Renown’s only significant competitor with an estimated 25 percent market share.

A 2021 report from the Health Care Cost Institute’s Healthy Marketplace Index assessed and assigned urban health care markets a Herfindahl-Hirschman Index (HHI) score ranging from 0 to 1,000, where 0 indicates perfect competition, and 10,000 signifies a monopoly.

Reno’s HHI score is 4,096 — delineating the market as “highly concentrated,” meaning a few hospital systems account for a large share of hospital admissions. More than 75.5 percent of the markets assessed by the report were categorized as highly concentrated, and out of the 183 studied, Reno ranked 46 for the highest concentration level. 

Researchers intend for the HHI analysis to help contextualize health care markets, not serve as a judgment about whether a company is a monopoly or violates antitrust law.

Renown Health recently faced lawsuits surrounding an alleged cardiology monopoly and an alleged breach of contract with an organ procurement organization. As of mid-January, both lawsuits ended in temporary agreements. 

How does Renown respond to monopoly characterizations?

Erling said that those allegations come with the territory of being a hospital system that serves a disproportionate share of Medicaid and uninsured patients.

“I think Renown looks the way it does, has the market share it does, simply because it's trying to fulfill its mission as the safety net hospital and the tertiary receiving center (providing specialized care) for what is a 100,000-square-mile area,” Erling told The Nevada Independent. “You have to have something that looks like Renown Regional if you're going to serve all of Northern Nevada.”

What is a safety net hospital, and what percentage of Medicaid and uninsured populations do Renown Health’s hospitals serve relative to the other hospitals in the region?

Safety net hospitals provide care for Medicaid beneficiaries and the uninsured. Data from the state of Nevada’s health care quarterly reporting indicates that in 2022, Renown Health had Northern Nevada’s highest rate of Medicaid patient admissions, with about 26.5 percent of hospital admissions at Renown Regional Medical Center and 11.6 percent at Renown South Meadows Medical Center being Medicaid patients.

Comparatively, about 20 percent of St. Mary’s admissions were Medicaid patients, 14.2 percent of Northern Nevada Medical Center’s admissions were Medicaid patients, and 17 percent of Carson Tahoe Regional Medical Center admissions were Medicaid patients.

Renown Regional Medical Center and the Carson Tahoe Regional Medical Center are the only two hospitals in the Carson-Tahoe-Reno area that receive supplemental payments through Medicaid’s Disproportionate Share (DSH) Program. The government program offers funding to hospitals that provide a disproportionate share of services to indigent people and the uninsured.

In 2022, Renown Regional Medical Center received more than $6 million in DSH funding, while Carson-Tahoe received $1.6 million.

Is Renown’s market share and growth problematic?

Retired state government official Mike Willden said that although Renown is a leading competitor in Northern Nevada’s health care market, it’s wrong for people to say the health system is a monopoly. Willden served as former Republican Gov. Brian Sandoval’s chief of staff after spending 40 years working in Nevada’s Health and Human Services department, including 14 years as its director. He now works as a lobbyist and represents various health care groups, but has never had a contract with Renown Health. 

Willden said the Las Vegas area has more competition, and it’s natural for health care systems anywhere to try to differentiate themselves. He pointed to Renown’s efforts to place billboards around town, add services and keep itself competitive.

“If you were a monopoly, you wouldn't be out there doing all the effort, for branding, for bringing additional attention to your facility,” Willden said.

He added that during his time in state government, Renown consistently stepped up to meet the needs of the community, including partnering with Centene in 2017 to expand health insurance options on the state’s insurance marketplace after several insurers stopped offering coverage in rural counties. The health system also has been working with the state to open up a crisis stabilization center to help address behavioral and mental health needs.

“I think they're trying to figure out ways to diversify and their goal is to provide health care and to do it in a manner that meets their costs,” Willden said.

Chris Cochran, professor and chair of UNLV’s School of Public Health Department of Healthcare Administration and Policy, did not directly answer whether Renown Health’s market share is a problem, but told The Nevada Independent that for-profit health care systems can leverage more resources than smaller entities or nonprofits. 

Cochran added that it’s expensive to serve a more significant percentage of the uninsured population and run the region’s only Level II NICU, and that it makes sense that Renown would try to expand and incorporate more profitable service centers.

Many health care industry mergers and acquisitions took place in the 1990s, Cochrans said, because combining resources helped hospitals better achieve economies of scale, or cost advantages produced by more efficiencies.

UNR declined a request for an interview with a professor to discuss Renown’s role in Northern Nevada’s health care market because of the university’s affiliation agreement with Renown.

How do independent groups experience Renown Health?

Chris King, CEO of the Reno-based Pinnacle Medical Group and CORE Healthcare Alliance, said Renown provides vital services to the community, but is a “force” and can intimidate other independent providers in the community. He added that in the past, Renown Health has made acquisitions that limited options for consumers.

“Obviously, [Renown Health has] a lot of power in this marketplace. They do some great things in terms of some of the services that they provide, but I also think that they're a significant force,” said King, who worked at Renown from 2003 to 2012 as a physician recruiter and eventually director of physician recruitment at the health system. “I don't necessarily think that's always good, because I think competition is always good in any business place, including health care.”

He added that Renown recently tried to absorb GI Consultants, a gastroenterology advisory group, and was “incredibly aggressive” in that attempt. He helped ensure GI remained independent.

Though King said he has not seen a recent employment contract, he said Renown has had physicians sign non-compete agreements in the past. Many of the non-competes that doctors signed, he said, didn’t allow them to work within 15 to 30 miles of any facility in the region. Because Renown has locations in Reno and Carson City, doctors would need to be even further out if they wanted to practice independently.

A Renown spokeswoman said in an email that the health care system does not require non-compete agreements when recruiting primary care physicians, and that “while we do use non-compete agreements when recruiting specialists, they do not prohibit the provider from staying in the community and opening their own practice should they no longer wish to be employed.” 

Is consolidation always a bad thing?

Zachary Levinson, a project director at KFF, formerly the Kaiser Family Foundation, who is leading a new initiative analyzing the business practice of hospitals and other providers, said mergers and consolidations involve some levels of tradeoff. The practice can allow hospitals and health systems to operate more efficiently, he said, but consolidations can lead to less competitive pressure on providers to lower their prices or offer higher-quality care.

“When you actually turn to literature, there's now been a pretty substantial body of evidence that mergers and consolidation lead to increases in health care prices, without kind of clear evidence that there are necessarily quality improvements,” Levinson said. “And that, of course, could vary depending on the specific type of merger that you're looking at.”

However, he said there hasn’t been evidence that shows consolidations lead to improvements or worsening of health-care quality. In areas with less health care access, such as a rural hospital that’s trying to stay afloat, Levinson said that consolidation can potentially increase access to care.

This story was corrected on 3/18/2024 at 2:27 p.m. to note that Nevada Medical Center and Northern Nevada Sierra Medical Center are part of the Valley Health System of Hospitals owned by Universal Health Services, Inc.