A decade ago, two non-profit hospitals in a small market got two new CEOs ... and reshaped healthcare in northwest Florida.
Employee turnover at Baptist Health Care dropped from 27% in 1997 to 13% last year. Fortune magazine has ranked the hospital among its "100 Best Places to Work" for the past five years.
By 2000, Baptist's trophy case was starting to be well-stocked with rewards: Successive highest satisfaction ratings by Press, Ganey for Baptist hospitals starting in 1998; in 2003, the Malcolm Baldrige National Quality award; and five consecutive listings, including a No. 18 in 2006, in Fortune magazine's "100 Best Places to Work.'' Employee turnover dropped from 27% in 1997 to 13% in 2005.
Stubblefield even began marketing Baptist's strategy to the hospital leaders around the country who kept calling to ask how Baptist sustained its satisfaction ratings. In 2000, a year after his promotion to CEO, he created the Baptist Leadership Institute, a for-profit venture that's brought 8,500 seminar attendees to Pensacola in the past five years and is keeping 10 full-time business consultants on the road, working with 300 clients across the country, in Canada and Ireland. Stubblefield expects BLI to post some $2 million in profit next year.
Mary Sand, director of a hospital-improvement initiative at Avera McKennan Hospital in Sioux Falls, S.D., is in the second year of a two-year BLI contract. "Our satisfaction scores are continuing to increase, a nice trend line,'' says Sand. "There's already a different feel to the place.''
Baptist, meanwhile, tried to grow within its means, in part by diversifying. While two small Alabama hospitals in its network decided to go independent, Baptist acquired Lakeview Center, a 2,200- employee Pensacola mental health organization with services across the region. In 2000, Baptist launched a $100-million expansion program, building a $20-million Baptist Medical Park on Pensacola's northern residential fringe, enlarging community hospitals in Jay and Gulf Breeze and acquiring a medical park at Navarre.
Stubblefield also moved Baptist into several niche markets. At the invitation of developers of the luxury-market Portofino Resort condominiums at Pensacola Beach, Baptist opened the Portofino Medical Spa in Gulf Breeze in 2004. And last year, Baptist partnered with renowned Birmingham, Ala., sports surgeon Dr. James Andrews to build the Andrews Institute for Orthopaedics and Sports Medicine at Gulf Breeze, a $30-million venture opening this month and expected to attract sports stars seeking Andrews' surgical skills. Baptist and clinic doctors will be majority owners. Next year, they plan to add a performance center for budding athletes and a non-profit research institute that's already garnered $5 million in state grants.
This summer, Stubblefield tried to make Pensacola a two-hospital market. He and Baptist colleagues approached HCA-owned West Florida Hospital about a possible acquisition, discussing what Stubblefield calls options for combining resources "to more efficiently and more cost-effectively address the healthcare needs of this region.''
Soon after, HCA executed an agreement for a leveraged buyout, and West Florida decided to continue operating as is. Dennis Taylor, president and CEO of West Florida, says the local market is competitive and remains competitive. "I'm certain Al would be more comfortable if there were only two hospitals, but that doesn't mean there should not be the three hospitals that are here. HCA would not be investing $100 million currently if they did not think there was a future for them in this particular market.''
West Florida, which hasn't been as expansion-minded as its two non-profit rivals, is currently spending $100 million on hospital upgrades and Hurricane Ivan repairs.
Still, says Stubblefield, "Maybe the opportunity will be there again.''