CAB: I was COO at the tail end of that, so I can’t own that turnaround. What they did was very effective cost cutting measures and good overall expense control. It included some standardization of hospital supplies and materials and new negotiations with suppliers. They closed some programs that were not profitable, such as home care and complementary care. They also tried to grow the top line, principally the business in the heart center, and were able to increase their inpatient numbers significantly over the previous year—about a five percent increase. They offered an early retirement program for a number of associates who were not replaced. Also, some elements of the Balanced Budget Act benefited Saint Vincent at that period of time.

CAB: I plan to play to our strengths. There are things that Saint Vincent does very well. I think we have a very good heart program, including open heart surgeries and particularly valve replacement. That whole product line I see as an area we want to continue to strengthen and grow through referrals. Where the community might not have a cardiologist, we might facilitate getting a cardiologist. The second area I would like to support and grow is neurosurgery. It’s hard to get neurosurgeons to come to Erie. We’re going to be adding another neurosurgeon to the staff. The third is joint programs. We’ve revamped the whole clinical program of how we deal with total hips, knee problems, anywhere that an orthopod is involved. The prosthesis is standardized—we only buy from one vendor. Except for those unique characteristics of the patient, the procedure is being standardized by the orthopods so that they’re not varying from the clinical pathway that we’re going to follow for joint replacements.

We’ve had a women’s center here for about 15 years. It’s been rather diffuse and I think we need to concentrate it and define its services. It’s not just Ob/Gyn, it’s the whole continuum of services for women. I’d like to focus on one of those areas, and we are in discussion with a group of physicians to define what that area will be.

I still want to strengthen the hospital, financially. When you have a year of losses like that, although you turn it around, it isn’t turned around. We’re continuing our expense control programs. We look at our pharmaceutical costs and at ways either to purchase better or control what drugs are used. I came from an area where we had a city-wide formulary, and I’d like to see that sometime in the future, but I can’t do it all here. That has to be something that’s thought about, but I think doctors are much more interested in looking at cost savings and looking at the cost of care. This is the time to strive to not have everything that comes out of R&D from a pharmaceutical company as something you put immediately in your hospital pharmacy. It should be looked at critically. Does it, in fact, do what it needs to do when used in a certain manner? You have to bring physicians into that mix. We are also looking at ways to make it easier for patients to access Saint Vincent. If a doctor calls from his office, can he just make one phone call and get everything scheduled for his patient? We are looking for a two percent to three percent increase overall each year for inpatient admissions.

CAB: There are some difficult recruitment goals we have for particular subspecialties. For instance, gastroenterologists are very hard to find, almost nonexistent. We have some gastroenterologists here, enough to tend to us, but they’re aging and we have to replace them. They have been recruiting and we’ve been helping them with their recruiting. Intensivists are very difficult to find. The big cities grab them all and then we have a hard time charging up the hill to get one. I also need another pulmonologist.

CAB: The competition has been there since the day when the two hospitals opened, so that’s not a new thing. Not all the joint ventures ended—only the trauma center. When Hamot notified Saint Vincent that they wanted to do trauma 24/7, Saint Vincent chose not to duplicate that because we really don’t need two trauma centers in the community. But the other joint ventures with Hamot continue. We have a regional cancer center which we both own, 50-50. We’re both participating in consolidated labs. We’re both in EmergiCare, which is the ambulance company, and LifeStar, which is the helicopter service. We’re in occupational health together, the blood bank and physical therapy. It’s kind of unique as a newcomer to the community to see two institutions that generally compete, also cooperate. I don’t want to speak for Hamot, but I think we both have the interest of the community first and foremost in our mind and we do some things that are very cost-efficient and economically better for the community that transcends the competition.

I view Hamot as one of many competitors in my landscape, so I don’t look at a failed merger and say, "Therefore we’ve got to compete." I think there’s much more competition coming into this community from Cleveland and Pittsburgh and elsewhere, and for us to waste all our energies on fighting each other doesn’t seem to make any sense to me. I think we compete where we need to compete. It keeps us sharp and on our toes, and I think that’s good for the community. But where we can be more cost-effective, we’ll continue to do so.

CAB: No there hasn’t, but I’m kind of new. The ball’s in my court. John Malone, the president down at Hamot, gave me an open-ended invitation to talk. We’ve had lunch together just to get acquainted. I don’t know him too well and he doesn’t know me. Right now, I’m too immersed trying to come up on a learning curve here. Saint Vincent had that year of losses and it’s been more introspectively focused than looking outside itself.

CAB: The major topic today is malpractice. We’ve been working very closely with the doctors and talking to our legislators in trying to get the message across why we need to do something about this in Pa. It hasn’t affected northwest Pa. as much as Philadelphia, but I think we need to get a wakeup call here because this is going to have a devastating effect on access to care if we don’t have physicians with us. We went through this crisis in New York, and it was a terrible thing when we had a slowdown of accessibility for the general community to hospitals and physician care. It’s not something you want to do. I think we need to prevent it.

The second issue is shortages, especially for nurses. That directly affects doctors and there is not a day that goes by here that I don’t have someone presenting that fact to me from among our medical staff. Our doctors here sometimes contribute to nursing education and have helped us to try to encourage people to go into nursing in the first place. We talked to educators. We do a lot of things to be sensitive to the stress and hard work on the units.

The third issue the doctors have is health insurance, in that sometimes a hospital and a physician might diverge on payment issues. Highmark is the biggest payer here, and they can lower the hospital provider payment to us and we might suffer through contractual negotiation for some of their products. Highmark’s CommunityBlue is a discounted, narrow access product that came out as a counter to a health plan in Pittsburgh. When they began to sell it in our market we were not on the provider list, so that affected our doctors. The only tertiary provider allowed in our area is Hamot. We’re in negotiations with Highmark to plead our case to be in the plan.

CAB: We employ about 60 primary care physicians

CAB: We’re among them. That’s under a microscope right now. I don’t think we want to grow it any bigger than it is. What we’re examining is whether they are in the right location and whether they are run as best as they can be. We might change some of the structural elements, like how we pay the physicians, how their bonuses are affected, what overhead we allocate, and try to make them more efficient. I view the practices as a value and I know it costs us something, but I also know that they are fully committed to Saint Vincent and we get a large number of referrals from them.

CAB: I think our relationship has over the years been built upon trust and respect. We bring them into our strategic planning process. I had a retreat with our board and we invited, not just the medical executive committee, but those who head up divisions—the next layer down, the up and coming leadership, to consider our strategic plans.