State of recovery

MU Health Care returns to profitability
with help from aggressive changes
in personnel and services
Sunday, January 23, 2005 | 12:00 a.m. CST; updated 2:44 a.m. CDT, Saturday, July 19, 2008

As end-of-year parties go, this was no gala. Orange punch and Tiger Stripes ice cream were the only freebies available, and the line for scoops stretched almost the length of the University Hospital lobby.

But after several consecutive years of financial losses, leaders of the MU Health Care system had reason to celebrate in November when it announced a record-high profit of $26.4 million for the 2004 fiscal year. By comparison, the system lost $30 million over the previous five fiscal years.

The economic climb follows an administrative overhaul, two consulting firms’ aggressive intervention and a sinking morale among hospital staff members.

James Ross, who joined MU Health Care as its chief executive officer in April, says the system is on the upswing. The Hunter Group, a consulting firm hired in September 2002 to pull the system back from the precipice of impending devastation, recruited Ross.

Ross came to town after 14 years as a health care administrator in Greenville, N.C., most recently as chief operating officer at the University Health Systems of Eastern Carolina. During his tenure, the organization enjoyed a financial climb and expanded from one hospital to six. Ross is similarly optimistic for success at MU Health Care.

“(The recent economic success is) a good news story about a lot of people who’ve been very dedicated to our healthcare system,” Ross said. Even though Ross has presided over University Hospital and the system’s other entities for less than a year, his appointment is regarded by many system employees as a major stabilizing force.

“We’ve been in transition ever since I got here,” said Bill Crist, dean of the School of Medicine.

Now, said Crist, the university’s medical system is ready to rebuild with good leadership.

Crist, who took his post in 2000, arrived in the midst of the Johnson and Johnson consulting group’s system-wide audit. The conclusions of that firm were later mirrored by recommendations from the Hunter Group and came as no surprise to many hospital employees.

In a 2003 report to the UM System curators, Hunter Group chief executive officer David Coats outlined a number of problems ranging from high faculty turnover and aging buildings to outdated medical equipment and a lack of accountability by employees.

“We were at a crisis point and the turnaround came just in time,” Crist said.

The most tangible change, from a personnel standpoint, has been the influx of new blood at the hospital and medical school. Sixteen department chairs were recruited, with new chief officers assigned to operations, information and networking posts.

Charles Caldwell, director of the Ellis Fischel Cancer Center, said the new department leaders are nationally renowned professionals who have helped MU recruit quality physicians and researchers.

“This is a trickle-down effect,” Caldwell said.

The addition of providers has broadened the scope of medical services available at the university’s hospitals and increased the number of patients coming in, according to Caldwell.

Ross hopes to grow the patient base up to 5 percent each year and says the organization is on target to accomplish that goal.

Caldwell said he has also witnessed a revival in spirit and motivation among remaining employees.

"When there are financial issues there is low morale,” he said.

He added that many faculty and staff members resigned during the money-losing years, putting a serious strain on remaining employees.

More than 35 physicians have been recruited, and several more will be hired in coming months, he said. Two departments have also been added: a Department of Dermatology, previously a division in the Department of Medicine; and the Department of Ortolarengology, a former ear, nose and throat division in general surgery.

Caldwell also emphasized a renewed focus on research.

“We have a three-legged stool here: teaching, patient care and research,” he said.

Ellis Fischel has nearly quadrupled its outside revenue over the past three years, increasing its grant awards to $40 million this year. That money pays for administration of clinical trials, some staff salaries and new equipment, Caldwell said.

Caldwell said expansion of the hospital system will create jobs for Missourians and boost investments in local real estate and businesses from faculty arrivals.

An MU Health Care employee for the past 20 years, Caldwell is looking forward to a new building for cancer care and research. He said the 65-year-old Ellis Fischel center is growing increasingly unaccommodating to industry innovations and cannot house an expanding patient load.

Still, the recent financial turnaround won’t solve the remaining problems overnight, said Crist, the medical school dean.

“Just because we’re making some money this year doesn’t mean we’ve paid all our bills,” he said.

Crist said recent years’ losses have halted expansion efforts and significantly stalled equipment upgrades and repairs.

“Now there is a huge need to buy and the hospital has been able to step up,” he said. “But it will take a few years to catch up with all the pent-up demand.”

The capital projects budget is $40 million over the next two years, said Ross.

Steven Scott and Roger de la Torre lead one of the new programs, bariatric services. They were partners at a private practice in St. Louis for 14 years before their move to Columbia in September.

According to Scott, both were happy in their arrangement until Steven Eubanks, the new chief of surgery, shared with them his vision.

“He wants the University of Missouri to be a leader in surgery,” Scott said. “And, I think it will be.”

Scott said he and his partner were among the first groups in the country to perform bariatric surgery with a laparoscope, a thin tube that allows doctors to view and operate on internal organs less invasively than with open surgery. Over the course of their careers, Scott and de la Torre have performed more than 2,000 such surgeries, he said, including 12 cases at MU.

With a staff of seven, the bariatric doctors are adjusting to the bureaucracy of a hospital system, but are enjoying great cooperation between departments, Scott said. They hope to have an adolescent weight reduction program within the next year and are looking at preventive initiatives with the hospital’s diabetes program and Rusk Rehabilitation Center.

“I want to be part of a team that will influence the way medicine is practiced in the rest of the country,” Scott said.

Dennis Stanbaugh’s mission is slightly more localized. As chief network officer, he is in charge of relations with the hospital’s 17 affiliated health centers sprawled throughout Missouri. Another novice in the

MU Health Care system, Stanbaugh visits each site at last once every three months and routinely dispatches teams of management consultants for quality assessments. Most important, he says, is letting these small health centers know they are supported.

“There’s a need in rural areas for screening and prevention,” Stanbaugh said.

He said the Ellis Fischel mammography van, on the road for the past eight years, is a great example of successful outreach services. The cancer center plans to use profits to buy a new van soon, he said.

Prevention efforts are central to Stanbaugh’s vision. He is chairman of a newly formed steering committee on wellness aimed at bringing stress management, exercise and other preventive programs to MU employees and the greater mid-Missouri area.

Having just completed a major health assessment survey of nearly 1,000 MU Health Care employees, Stanbaugh and other wellness advocates are putting together a comprehensive program that will include discounted membership at the remodeled Student Recreation Center, smoking-cessation classes and a weight-loss program, among other initiatives.

“So many of the services are already in place, we just need to coordinate and connect them,” Stanbaugh said.

Correcting the disjointed nature of the University Hospital system was one of the Hunter Group’s recommendations, and a problem that Barb Brucks experienced firsthand.

A 27-year veteran of the newborn intensive care unit, Brucks remembers how three years ago her department merged management with obstetrics and women’s services, creating an arbitrary connection between separate programs.

“The job was almost impossible, and our staff felt a little distanced from the manager,” said Brucks, who was recently appointed manager of the newborn ICU.

The union of the departments was a cost-saving measure that was reversed in September. Brucks said both departments are seeing a growth in business and planning to update some medical equipment with new income

But Brucks’ unit and the rest of the hospital system is getting deeper and deeper into a serious nursing shortage, she said. The hospital is increasingly relying on traveling nurses and nursing agencies to staff a field with an aging population and one that’s dropping out of favor with younger medical professionals.

“People don’t want to work weekends and night shifts, and patients in hospitals are much more ill now than before because of the shift towards outpatient care,” she said.

Although Brucks acknowledges that the MU Health Care system has increased incentives for nurses, including signing bonuses for longer contracts and a pay increase for entry-level nurses, she said that she thinks compensation is probably not enough for the amount and intensity of the work.

Despite such difficulties, Brucks is excited about the hospital system’s growth and its possibilities.

James Ross’s vision for the future involves feeding the three branches of a teaching hospital with support and innovation.

“We get patients referred to our hospital from every county in the state,” Ross said. “That says a lot about the high regard for our university.”

Ross doesn’t want to take that patronage for granted. He wants everyone in the community to know that the university hospital is on the cutting edge of medicine and says he is prepared to invest in the system to substantiate the claim.

Missourian editor Alan Scher Zagier contributed to this report

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