September 15, 2014

Healthcare

Healthy Competition

A decade ago, two non-profit hospitals in a small market got two new CEOs ... and reshaped healthcare in northwest Florida.

Charlotte Crane | 12/1/2006
Patrick Madden, CEO
Sacred Heart Health System

Age: 62.
Degrees: Undergraduate, City College of New York; master's in business administration, Fordham University.
Family: Wife, Philomena; married 39 years; three daughters and one son.
Career: Mobil Oil Co. planning systems; American Stock Exchange finance department; has worked in healthcare since 1972.
Roots: Madden came to America from Ireland at age 17. "My parents blessed the move. The economy was depressed; there were no jobs.'' In New York City, "I washed dishes, shined shoes, worked in factories and went to school at night.'' And for a time, he worked on Wall Street.
Observer: "Patrick can seem to be focused at 50,000 feet, seeing a visionary thought for the region, and then, suddenly, he's talking to housekeepers about what's important to them,'' says Sacred Heart Executive Vice President Peter Heckathorn. "He can turn on a dime like that.''
Recent Reads: "1776'' by David McCullough, "Hope Dies Last'' by Studs Terkel.
Passion: "I find healthcare an absolutely fascinating industry. You can make a difference. You can change communities, and you can make people's lives better."
On Stubblefield: "I admire Al for his commitment to the community and for the innovations and leadership he has brought to Baptist Health Care"


An important part of Sacred Heart's strategy involves establishing partnerships. Six years ago, it opened a building to house the Nemours Children's Clinic.

tax and applause
As Stubblefield picked his spots, Madden developed Sacred Heart along different lines, crafting a strategy for a broad regionalization that has created a service range encompassing 25,000 square miles, from Mobile, Ala., to Port St. Joe.

His most important decision, Madden says, was "to expand the hospital beyond a community hospital to a regional tertiary-care hospital. We had to create a larger critical mass that was reflective of the growth of the entire region and large enough to support the millions of dollars of new investment that we expected to make in new facilities, new technology and skilled people."

Geographic outreach would bring new patients into the network and help the bottom line, but to accommodate those referrals, Madden knew that the Pensacola campus would need to grow. A half-billion dollars has gone into doubling the size of the hospital's main campus -- now covering 91 acres. Sacred Heart opened a new Children's and Women's Hospital and a Heart & Vascular Institute and enlarged the hospital's emergency center.

In 2000, Sacred Heart opened a sixstory building to house Nemours Children's Clinic -- which has been bringing some $8 million a year in children's care to Pensacola. In 2001, Sacred Heart launched its Air- Heart ambulance service, with bases near Destin and at Marianna. In the past two years, it's built medical centers in Pensacola and Pace and acquired a clinic at Crestview. It opened a Pensacola nursing home in 2001 and an assisted living facility there in 2005, partnering on both with Methodist Homes for the Aging.

Even with its AA bond rating and the bulk-borrowing clout provided by membership in Ascension Health, spending on the scale needed wasn't always assured, notes construction company executive Bill Greenhut, a board member since 1977. "To get capital from our parent company, you have to provide a business plan that's sound and will provide return.''

An important part of Sacred Heart's expansion strategy has been to establish partnerships with communities, doctors and religious and business groups. One corporate partner is St. Joe Co. As it develops its extensive land holdings throughout northwest Florida, St. Joe believes it can leverage the presence of a first-rate healthcare facility in a region where many of the few rural hospitals are aging and financially ailing. The company donated land in south Walton County where Sacred Heart built Sacred Heart Hospital on the Emerald Coast in 2003. "If healthcare is better, more people will be secure in a decision to live in and explore west Florida,'' says St. Joe's chief strategy officer, Chris Corr.

Residents of the region have responded. In Destin, population 12,000, residents raised $25 million to help fund the south Walton hospital. Says hospital board chairman, retired insurance professional Gerald Christie: "People put money as well as time into it, like being a stockholder.''

Next year, on another St. Joe-donated site at Port St. Joe, Sacred Heart will begin building a 25-bed, $39-million hospital. Gulf County health administrator Doug Kent recalls last year's meeting at which county commissioners approved passage of a half-cent sales tax to help support indigent care at the proposed hospital. "We had a packed house. The commission vote was unanimous. The audience got up and clapped. In 33 years as a health administrator, I've never before seen an audience stand and clap because they'd just had a tax put on them.''

Madden expects to spend another $500 million on local and regional expansion within the next five years. Planned projects include a children's medical research hospital and a cancer research center.

Tags: Healthcare, Northwest

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