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Hospital leaders in Florida take on the competition

NCH’s Allen Weiss combines numbercrunching with a focus on prevention.

In 2000, NCH Healthcare System faced the end of its long run as the only hospital provider in Collier County. Cleveland Clinic, which already had operations in Broward County, was building a hospital in Naples. Realizing that competition for medical staff was about to heat up, William Crone, then CEO of NCH, asked if a local rheumatologist, Dr. Allen Weiss, would join NCH.

For 23 years, Weiss had owned a successful private practice in Naples. He also had been a volunteer leader of a local network of NCH-affiliated physicians. Crone believed that with Weiss in a top management position, NCH could boost its physician relations.

Weiss joined NCH as chief medical officer and soon became president, focused on demonstrating improvements in patient outcomes. An early advocate of electronic health records, he saw the ability to “slice and dice” data as crucial to providing better care. “It’s not just about being nice” to patients or physicians, he says. “You have to give patients a better chance of survival if they come to your hospital.”

Allen Weiss, 70
President/CEO, NCH Healthcare System

Education: B.A. from LaSalle University (1969), M.D. from College of Physicians and Surgeons of Columbia University (1973), MBA from Florida Gulf Coast University (2001)

Family: He and his wife, Marla Weiss, an educator and writer, have two daughters — one works as a biomedical illustrator; the other as an adolescent medicine doctor.

Background: In 1977, Weiss moved to Naples to establish a private practice in geriatrics, internal medicine and rheumatology. After running the practice for 23 years, he closed it and joined NCH as a top administrator. He has been NCH’s CEO since 2006.

NCH: The non-profit, 716-bed Naples Community Hospital Healthcare System has about 4,300 employees, including 730 physicians, and is one of the largest employers in Collier County. It operates hospitals in downtown Naples and north Naples and the Marco Healthcare Center on Marco Island. It also owns 50% of the Bonita Community Health Center in Bonita Springs. NCH is one of 45 hospital systems nationwide affiliated with Mayo Clinic.

In 2006, Weiss became CEO. That same year, the 83-bed Cleveland Clinic Naples, after failing to get state approval to offer heart surgery, became part of Health Management Associates, which has since become part of Franklin, Tenn.-based Community Health Systems.

Today, NCH competes in Collier against two Physicians Regional hospitals operated by Community Health Systems. Weiss estimates that NCH has a 75% market share in Collier.

“Prior to 2003, we didn’t win any quality awards,” he says. “In 2003, we got a quality award for cardiology and had a huge celebration. Now, we get something like that every month.”

Business interests

Weiss grew up in Philadelphia, the second of three sons. His dad was a high school vice principal who also owned a small marketing business; his mom helped run the business out of their home. Weiss studied biology and chemistry at LaSalle University in Philadelphia.

“I lived at home during college. I was socially not mature, which may have been an advantage,” he says. “I was much more studious than I might have been otherwise.”

Weiss attended medical school at Columbia University in New York City. He then completed his residency training at New York Presbyterian Hospital and did a rheumatology fellowship at Cornell University’s Hospital for Special Surgery.

After vacationing in southwest Florida, he thought Naples would be a good place to work and raise a family. In 1977, he opened a practice in downtown Naples, specializing in geriatrics, internal medicine and rheumatology. “At the time, New York was going through a financial crisis, and Florida was about to take off economically,” he says. “I got busy fast.”

During his 23 years in private practice, Weiss employed a small staff. He grew increasingly interested in the business side of health care, and in 1999 he enrolled in the executive MBA program at Florida Gulf Coast University. “I still love this book,” he says, pulling a worn paperback, “Understanding Financials,” off a shelf in his office.

When Weiss joined NCH in 2000, the nonprofit hospital system was financially insecure, he says. “We had two weeks of cash on hand.” Things were only a little better when he took over as CEO six years later.

“Revenues were good, but we had out-ofcontrol expenses,” he says. “I was certain that reimbursements from insurance companies were not sustainable long-term and that everyone was going to have to go on a diet. You’re better off going on a diet early. It doesn’t get any easier later.”

Weiss changed his management team and instituted a hiring “frost,” meaning slower job growth. Meanwhile, NCH nurses were considering forming a union. On the advice of a consultant, Weiss began writing an employee newsletter to recognize their work and make them feel valued, he says. Eventually, the nurses didn’t unionize.

Preventive approach

Weiss still publishes the “Straight Talk” newsletter, with an email version going to readers nationwide. “I haven’t missed a week in 11 years,” he says. Topics range from feelgood employee recognition stories to edgier commentary about health policy. Last July, Weiss spoke out in favor of an efficient, single-payer health insurance system built around preventive care.

Such a system would have “the dual positive effect of a healthier and more productive population,” he wrote, adding that health spending as a percentage of the nation’s gross domestic product (18%) would decline as a result, freeing up resources for education and other things.

“Rice bowls will be broken – profit margins of health insurance companies, tobacco producers and others benefiting from sickness will be slashed,” he argued. “But the overall good for society is undeniable.”

Weiss says he expected to be “pilloried” for his views but instead got positive feedback. “I’m apolitical in this role,” he says. “Having said that, the surrounding community is pretty Republican.”

About eight years go, three NCH nurses developed breast cancer around the same time. Each was in her 40s or 50s. None had been getting annual mammograms, despite being in a higher-risk age group. One died, and the others survived.

The experience impressed upon Weiss that there “was something we weren’t doing right,” he says.

NCH subsequently implemented a workplace wellness program, making it easier and cheaper for employees to exercise, eat healthy and seek preventive care. NCH, for example, picks up the full costs of colonoscopy screenings at age 50.

Employees now have lower blood pressure and cholesterol levels and reduced risk of disease, Weiss says. After an initial spike in costs, NCH has cut its spending on health coverage by half while keeping benefits affordable for employees, he says.

“In the last three years, we’ve saved $23 million. We haven’t raised our premiums in four years, and we’ve lowered them for single parents, who were already so stressed economically,” he says.

In 2015, NCH joined with Healthways, a Tennessee-based wellness program provider, to launch a community initiative to improve the health and well-being of local residents. The NCH-led Southwest Florida Blue Zones Project works with local employers, businesses, churches and schools to encourage people to adopt healthy diet and lifestyle practices.

Weiss says the effort could put NCH in a better position as the industry moves away from traditional fee-for-service payment models to value-based reimbursements.

In January, NCH will launch a Medicare accountable-care organization (ACO) with about 10,000 patients. If NCH can lower costs and produce good outcomes, it will receive a share of Medicare’s savings.

“I want to see fee-for-service go away,” Weiss says. “I think fee-forservice encourages me to make you sick.”

He acknowledges that a health insurance system based on prevention rather than treatment could leave some doctors feeling like the Maytag repairman — less necessary. “But it’s the right thing to do,” he says.

Recently, Weiss attended a community workshop designed to help people find their purpose in life — a key tenet of the Blue Zones project. Weiss says he had no trouble identifying what makes him go. “My purpose is to help people live longer, happier, healthier lives,” he says.

Hospital Diagnosis

Stand-alone non-profit hospitals must be nimble to compete.

In November 2016, after four years as CEO of Tampa General Hospital, Jim Burkhart was asked to resign by the hospital’s board of directors, who Burkhart says had grown dissatisfied. “They would like to see the finances be better because we’re in an environment where you are trying to build a health care system,” he told the Tampa Bay Times.

Indeed, increased consolidation in the health care market over the past decade has made it harder for stand- alone, non-profit hospitals such as Tampa General to compete.

Before joining Tampa General in 2012, Burkhart led UF-affiliated Shands Jacksonville Medical Center. He now works as a health care management consultant for CSuite Solutions in Tampa.

Burkhart spoke to FLORIDA TREND about the challenges and opportunities facing hospital leaders and the most important skills for being successful in today’s health care environment.

Jim Burkhart on ...

Financial Pressures

“Access to capital is going to be a huge issue, particularly if you’re not an extremely large health care system with almost unlimited resources. If you’re buying something like an MRI, you can be talking $3 million to $4 million. Those dollars are hard to come by, particularly when the ability to squeeze dollars out of Medicare, Medicaid and other government payers is limited. As profit margins in hospitals continue to shrink, CEOs will have to look for other ways to do things. It might be as simple as a landlease deal where somebody else builds and owns a new facility and the hospital just rents the space.”

Non-Acute Care Services

“CEOs are having to figure out how they’re going to take care of more and more people outside the acute-care environment, which is so expensive. At some point, the system is going to break if we don’t change things.”

Doctor/Nurse Shortage

“You have to worry about are we training doctors in the right specialties to fill the shortfalls we’re going to have as more doctors retire. There will be some holes in areas you wouldn’t think about, like radiology and general surgery. We need more nurse practitioners, more physician assistants and more pharmacists who can prescribe medication to try to keep patients away from hospitals and in the lowestcost settings. Also, we have way too severe a cap on the number of residents we can train in Florida. Florida is the third-most populous state, and yet we’re 47th in the number of residents we’re allowed to train per capita. You’ve got way too many residents being trained in northeastern states, where populations used to be, and not nearly enough in southern states. The industry needs to put pressure on Congress to make changes.”

Hospitals As Insurers

“Let’s say you’re a company with 100 employees, and we came directly to you and asked how much you were spending on insurance premiums. You say ‘$300,000 a year,’ and we offer to do a deal with you that’s going to cost you 25% less. First, we’re going to take the insurance company and its 15% to 20% profit margin completely out of the equation, and then we’re going to do the backroom, third-party kinds of things at a 10% lower cost. You’ll use our network, and we’ll buy reinsurance for catastrophic cases. We’re confident that for 25% less, we can provide you the same level of service. It’s a huge opportunity.”

Being a Successful Leader

“This is still a people business. You have to be able to listen effectively, take instructive criticism, put the best minds in a room and not worry about whether or not you’re always in charge. You have to be willing to start things quickly and quit things quickly. Hospitals sometimes are too slow to respond and very slow to quit.”

His Ouster at Tampa General

“My sense is the board just wanted to go in a different direction. I had a new board chair and four or five new board members. The board members who brought me in for the most part were not there anymore. The average tenure of a CEO is only 3½ years. I had a good run.”

Taking Over

John Couris, a former executive with the BayCare Health System in Pinellas and Pasco counties, recently took the reins at Tampa General Hospital. From 2010-17, Couris was president and CEO of Jupiter Health in Palm Beach County. There, he developed partnerships with Mount Sinai Hospital in New York and Nicklaus Children’s Hospital in Miami.

Construction Boom

Cleveland Clinic is growing throughout south Florida.

Two years ago, the Cleveland Clinic opened a $100-million building in Weston to treat complex cancer cases and neurological disorders. A year later, the clinic announced plans for $302 million worth of expansion projects throughout south Florida.

Construction is now under way on a new hospital tower at the Weston campus. The clinic also is building an outpatient surgery center in Coral Springs and medical offices in Wellington.

Dr. Wael Barsoum, president of Cleveland Clinic Florida, says two factors are driving the expansion: Population growth and demand.”Our hospital is full almost every single day, and sometimes it’s well beyond full.”

In addition to a 150-bed hospital complex in Weston, the clinic has outpatient clinics in Parkland, Palm Beach Gardens and West Palm Beach.

On the Front Lines

As president of Cleveland Clinic Florida since 2014, Barsoum oversees about 3,000 employees in Broward and Palm Beach counties. An orthopedic surgeon, he remains a practicing surgeon and holds about 40 patents related to orthopedic technology.

“Being a health care provider enables you to understand what’s happening from the patient’s perspective,” he says. “My patients will tell me very frankly, ‘I love your hospital, but here’s something you can improve.’ I don’t know if they’d have that opportunity as often if I wasn’t a doctor.”

Year to Year

Rather than sign long-term contracts, doctors at the Cleveland Clinic work year to year. During annual employment reviews, management evaluates each physician. “We have candid conversations about outcomes, quality and how their patients are doing,” says Barsoum. “We make sure we have the right people on our staff.”

Beyond the Turnaround

Jackson CEO Carlos Migoya has ambitious plans for the once-ailing public health system.

Between 2008 and 2011, Miami-based Jackson Health System lost $419 million, putting it on the verge of bankruptcy. At the end of that three-year period, the taxpayer-owned medical system hired Carlos Migoya, a retired banker and former Miami city manager, to turn things around as CEO.

Since then, Jackson has cut costs and boosted income by attracting more patients with private insurance to have surgery or give birth at one of its facilities, offsetting a decline in revenue from publicly funded patients. Last year, Jackson reported a surplus of $17 million, its fifth consecutive annual surplus.

With finances stable, Migoya is now leading the hospital network through a 10-year, $1.5-billion plan to help it compete against other large medical centers.

Jackson’s main campus in downtown Miami has undergone extensive renovations and has added new technology and equipment. It consolidated emergency services and has a new layout that’s easier for visitors to navigate, Migoya says. About $150 million in improvements also have been made to satellite hospitals in northern and southern Miami-Dade.

“Up until four or five years ago, Jackson really had not spent any money on itself because of the financial situation,” Migoya says. “We were way behind where we needed to be.”

In 2013, Miami-Dade voters approved $830 million in taxpayer financing to help pay for the upgrades, leaving Jackson to come up with the remaining $670 million. Jackson faces the challenge of having to “generate enough extra earnings” to cover the project costs amid Medicaid reimbursement cuts, Migoya says.

Migoya notes that Jackson has increased its revenue from paying patients, especially maternity patients, by 10% annually for the past three years. More patients are choosing Jackson not only for its quality care, he says, but also because they see it as a “comfortable place.”

Jackson Health System

  • With about 13,100 employees, Miami-Dade County’s taxpayer-owned Jackson Health System consists of six hospitals, a stand-alone trauma center, three urgent care centers, multiple primary care clinics and specialty centers and two long-term care centers. The system’s flagship is Jackson Memorial Hospital, a 1,493-bed teaching hospital in downtown Miami.
  • Jackson has expanded its geographic reach with new urgent care centers throughout Miami-Dade County. A proposed Jackson West campus in Doral will include a hospital, pediatric ambulatory pavilion and outpatient treatment center. Plans also call for a $173-million rehabilitation hospital at the downtown campus.
  • Last March, Nashville, Tenn.-based HCA won the latest round in its battle with Jackson Health System to build a new hospital in Doral. In a lengthy decision, a Florida administrative law judge recommended that the state Agency for Health Care Administration approve HCA’s certificate-of-need application over a competing bid by Jackson. HCA, a forprofit operator of health care facilities, is proposing an 80-bed hospital in Doral. Jackson, for its part, wants to build a 100- bed hospital at a new medical campus in Doral. The state health care agency, which gave Jackson’s plan preliminary approval in 2015, ultimately will decide which hospital will better meet the community’s needs.

New Solutions

Mayo’s expansion will double its research and patient space in Jacksonville.

Shortly after Dr. Gianrico Farrugia became CEO of Mayo Clinic’s Florida operations in 2015, the health system announced a partnership with a biotech company to bring a new lung restoration center to Jacksonville.

The announcement marked the beginning of a multi-year, multi-phase plan to position Mayo as a medical destination for the southeastern U.S. In all, Mayo plans to spend more than $300 million to expand its Jacksonville campus during the next five years. When completed, the projects will nearly double the space Mayo has for patient care and research in Florida.

“There’s an increasing population with an increasing number of serious and complex medical needs,” Farrugia says. “We need to come up with new ways of taking care of them.”

Three years ago, Farrugia came to Florida from Rochester, Minn., where he had been a gastroenterologist and professor of physiology and biomedical engineering with Mayo for more than two decades.

In addition to the campus expansion, Farrugia will steer Mayo through a transition to a new electronic medical record system in 2018. “We’ve been planning it for three years. We think we’re well-prepared,” he says.

Mayo’s Jacksonville Projects

  • In 2015, Mayo partnered with Maryland- based United Therapeutics, which has developed a technology to restore damaged donor lungs so that they’re acceptable for transplant. Mayo is now building a 75,000-sq.-ft. lung restoration center to significantly increase the number of lungs available to transplant patients nationwide. Construction is to be completed in 2019.
  • In 2016, Mayo unveiled plans for a four-story, 150,000-sq.-ft. medical building with the potential to rise 11 more stories. The building will specialize in complex cancer, neurologic and neurosurgical care. Another facility, also announced last year, will house a radiochemistry lab and cyclotron — a particle accelerator used to produce radiopharmaceuticals for medical imaging. Mayoproduced choline C-11 will be used to “light up” cancer cells to detect prostate cancer during PET scans. Both buildings are to open in 2018.
  • This year, Mayo began a $70.5-million expansion and renovation of two buildings. The project, to be completed in 2019, will provide space for cardiovascular, cardiology and cardio-thoracic surgery; a larger spine center and pain rehabilitation programs; more labs; and a molecular imaging center for radiology.
  • Mayo’s $300-million capital plan includes more work on existing buildings and a third research building.
  • Mayo’s Alzheimer’s Disease Research Center, jointly based at campuses in Jacksonville and Rochester, conducts research and education programs related to Alzheimer’s disease and dementia, and also provides services and care for patients.

The Legal Side

Attorney Maria Currier, a partner in the Miami office of Holland & Knight, says physician CEOs are becoming more common in hospitals. While financial expertise is critical, it’s not enough to succeed in today’s health care environment, says Currier, co-leader of the firm’s health care and life sciences practice group. Currier herself is a former nurse. “I think the ability to organize a team around the clinical aspects of health care delivery is more important than it has ever been,” she says.

Effective CEOs of the future must understand “how care is delivered, why it should be delivered in certain settings, who should be handling the care and how to measure performance. The more efficient and effective your clinical care is, the better your opportunity for financial reward will be,” she says.

“In order to remain financially viable, you’re going to have to be able to understand the clinical implications of every dollar you spend.”

 

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