New St. Edward CEO: Sector problems bigger than just one hospital

story by Michael Tilley

Editor’s note: The City Wire will post frequent reports on the regional medical community and strengths, weaknesses, opportunities and threats. Link here to the first report. Your thoughts, suggestions, information on future topics, issues, etc., would be most welcome.

Jeff Johnston will need his youth and vigor. Every ounce of it.

He stepped into the job of CEO of St. Edward Mercy Medical Center on Dec. 1 after the previous CEO was forced to leave after a serious violation of the hospital’s personnel policy.

Restoring confidence and stability at the top of the hospital’s management structure is the least of his challenges.

IT TAKES A COMMUNITY
Not unlike many other metro areas in the U.S., the Fort Smith regional health care industry is faced with doctor and nurse shortages. Hospitals and clinics already struggling with finances now face a national recession and federal reimbursement cutbacks. A generational shift that will likely increase demands on the system while reducing the supply of qualified doctors and nurses to meet said demand fast approaches

“This problem, it’s bigger than just St. Edward and Cooper Clinic,” Johnston said during a Feb. 17 interview with The City Wire. “Fort Smith isn’t the only place” faced with a lack of doctors and nurses.

Cooper Clinic, located next to St. Edward’s campus in east Fort Smith, is a physician-owned clinic with 94 doctors in 25 specialties. The St. Edward Mercy Clinic, formed in October 2007, has about 60 doctors.

And to the point of the problems being larger than one hospital, Johnston said he is pleased with the level of community support. He meets about twice a month with Cooper CEO Doug Babb, and has met with his primary competitor, Ted Woodrell, CEO of Sparks Regional Medical Center in Fort Smith. He’s also making connections with business and civic leaders in the area.

“The community, this region is what will recruit physicians … it’s what will help with that (nursing shortages),” Johnston explained. “And that’s why I think we have a lot to offer … because of what (the community) has to offer.”

Community offerings will need to be maximized. The physician shortage in the Fort Smith region ranges from 50 to 150, according to various sources and published reports. St. Edward has refused to release year-over-year net gains or losses in physician and nurse levels.

Johnston’s efforts to establish contacts with the community has resulted in conversations about past controversies, conflicts and other negative events in the regional medical community. That perturbs Johnston to some degree. Faced with pressure to respond to existing and future issues, Johnston apparently finds little value in focusing on stories of yesteryear.

“I really don’t care about what happened in 1982” or any other time, Johnston said.

One of those existing and future problems is the level of charity care — care for which the hospital is unable to obtain payment. It’s up $300,000 a month over previous levels and expected to grow, Johnston said.

“We think things could be worse,” he warned.

FIRST IMPRESSIONS
Johnston said initial meetings with hospital staff have him convinced “we have the people here with the sincere desire to see the organization succeed. They want to do well, and they want the organization to do well.”

But he acknowledges it is a daily challenge for the 1,500 hospital employees — between 400-450 of those being nurses — to stay ahead of the effort to provide care to an average patient census of 250.

He said the hospital is “making headway” in beefing up the nurse corps, with 15 nurses recently joining the hospital.

To support the doctors, nurses and patients, Johnston is excited about the addition of an electronic health record system from Epic, a Verona, Wisc.-based company that provides software to about 170 health care companies around the world, including the popular Cleveland Clinic. The system, now being installed, will go live in 2010, and is expected to better connect hospital employees, doctors and patients. In fact, Johnston said, patients will have access at home to “a limited level” of information and can directly e-mail questions to doctors and/or their assistants.

“That’s a major improvement, we believe, for the care and safety of the patient,” Johnston said of the Epic addition.

HOSPITAL vs. DOCTOR
One fight likely to gain more local coverage in the next year is the  economic credentialing of doctors. Around the country, traditional hospital systems are responding to competition from specialty clinics and hospitals by requiring doctors — and their physician spouses, in some cases — to affiliate only with the hospital. Physicians who hold a full or partial financial interest in or work full- or part-time in a specialty hospital are often barred from practicing in the nearby larger hospital network.

Dr. Anthony Capocelli, a neurosurgeon with River Valley Musculoskeletal Center, is in this boat. When the RVMC opens its $20-million surgery facility in late 2009, Capocelli faces being locked out of St. Edward.

Johnston defends the practice, saying that subspecialty hospitals like RVMC take good-paying patients and high-margin medical care and leave the hospital with low-margin services and lower-income patients. It’s a practice commonly referred to as “cherry picking.”

Capocelli disagrees with Johnston’s assessment.

“If they go through with it, this hospital (St. Edward) will not have neurosurgeons,” Capocelli said in an interview earlier this year. “Economic credentialing is problematic for all sides. I’m not sure they (St. Edward) have thought this out that far ahead.”

And it’s not cherry picking, Capocelli argues.

“We see it as creating a larger pie, a larger group of patients for the area. … The patients (RVMC) recruits are those who might have otherwise gone to Tulsa, or to Little Rock,” Capocelli explained.

JOHNSTON PROFILE
• 2004-2008: chief operating officer, Mercy Health Center, Oklahoma City
• 2001-2004: senior vice president-operations, Mercy Memorial Health Center, Ardmore, Okla.
• 1995-2001: several leadership positions at MetroHealthSystem, Cleveland, Ohio

• bachelor’s degree in business administration from Southern Nazarene University, Bethany, Okla.
• master’s in business administration and hospital/health administration, Xavier University, Cincinnati, Ohio

• wife, Lauri; three children, Alivia (10), Isaac (8), and Luke (4).