Col. Russel L. Bryant faced one of his toughest missions in September 1986.
St. Joseph Hospital in Port Charlotte, Fla., was teetering on the brink of financial ruin, the medical staff was sending its patients to other hospitals, and the board of trustees and top management seemed unable to cope with the growing crisis.
With employee and medical staff morale at all-time lows, Col. Bryant, a retired Air Force hospital administrator who joined St. Joseph's board in 1980, took over as chairman to lead the turnaround.
But when the 212-bed hospital's chief executive officer abruptly resigned in January 1987, Col. Bryant found himself agreeing to an urgent request from the hospital's Roman Catholic sponsors to take over the CEO position "for a few weeks" until a replacement could be found.
Although he hadn't run a hospital in nearly 20 years, Col. Bryant knew he had to act quickly to regain the loyalty of physicians and reverse the losses. At stake were the hospital's 550 full-time-equivalent employees and the medical needs of hundreds of poor people who sought care at St. Joseph.
But how to achieve the turnaround?
First, he sought advice from a consultant in the Miami office of Ernst & Young. Meanwhile, he started personally meeting with physicians and employee groups to assure them that communications would improve at the hospital.
For example, he began a continuing practice of convening special board meetings at 7 a.m. to give physicians opportunities to attend, something they didn't have in the prior administration.
Col. Bryant's "short" stint as CEO lasted five months. During that period, 20% of the hospital's employees were laid off to cut expenses, and the hospital's sponsor, the Felician Sisters of Corapolis, Pa., began collaborative discussions with three congregations about acquiring St. Joseph's assets.
By May 1987, the hospital began showing signs of a turnaround, and Col. Bryant welcomed his replacement, Michael Cronin. The worst was over for St. Joseph, but the rebuilding program had just begun.
For leading St. Joseph's in its time of need and serving on its board for the past 13 years, Col. Bryant, 77, has been selected as MODERN HEALTHCARE's Trustee of the Year for hospitals and healthcare systems with revenues of more than $15 million.
"This hospital is as fine a hospital as you'll find anywhere," Col. Bryant said. "I've always been impressed with the level of compassion and quality of the physicians and staff."
Col. Bryant knows this from firsthand experience. "I've been a patient here. So has my wife (Mary, to whom he's been married 44 years). She had a little stroke and had her carotid
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Continued from p. 29artery rebuilt. I've had clots removed and a pacemaker put in."
Board member Joseph Goggin, M.D., a general surgeon, said it was Col. Bryant who singlehandedly won back the support of the medical staff.
"As a hospital administrator, he stopped the (financial) sliding," Dr. Goggin said. "He approached every physician with a logical pitch on why they should bring their patients back. As chairman, he was active and here all the time, but he didn't micromanage."
In his letter nominating Col. Bryant, current hospital administrator Kevin Potter said that, "St. Joseph's would not have survived had it not been for Col. Bryant's interest, management expertise and ability to pull a team together to meet financial and legislative challenges."
Mr. Potter became St. Joseph's CEO in September, replacing Mr. Cronin, who retired because of health problems.
Said Mr. Cronin in his letter supporting Col. Bryant's nomination: "He has been very instrumental in assisting the hospital in its managed-care policy and has kept a close eye on the operations of the hospital with the purpose in mind of protecting the rights of the patients the hospital serves."
Born in Tallula, Ill., Col. Bryant joined the Air Force on Dec. 27, 1939. Holding every rank except master sergeant and warrant officer in the Medical Services Corps, Col. Bryant was promoted to colonel in March 1959.
There is only one general in the Corps, and Col. Bryant jokingly said, "I didn't want that job."
During his military career, Col. Bryant served as hospital administrator from 1946 to 1956 at four Army and Air Force hospitals in the United States and abroad. He then oversaw administration of multiple groups of hospitals until 1966, when he retired from active duty.
For the next 11 years, Col. Bryant worked for the Illinois Department of Public Health, overseeing nursing home licensure, and at the Illinois Department of Aging.
In 1977, he and his wife moved to Port Charlotte to begin what he thought was his real retirement. But it didn't last long.
He began joining clubs, causes and serving on boards. In 1980, a friend with the local retired officers' association recommended Col. Bryant's appointment to St. Joseph's citizens' advisory council. In 1980, Col. Bryant became one of 20 members on the hospital's board of directors.
"I had mixed emotions about what the hospital needed," he said about his initial assessment of St. Joseph. From an operations standpoint, the hospital was small, he said. "We needed better ancillary services and larger operating, lab and emergency rooms."
For the next six years, Col. Bryant served on the hospital board and volunteered for other area activities. He has been a board member on the Area Agency on Aging for Southwest Florida and is on the board of the Cultural Center in Port Charlotte. At the state level, Col. Bryant is on several Florida Hospital Association committees and sponsored groups, including the newly formed Hospital Trustee Forum.
During his first six years on St. Joseph's board, Col. Bryant said he became concerned that physicians weren't involved in the governance of the hospital and that information about the hospital wasn't equally shared among trustees.
Although he felt powerless to act, he made sure patients were treated well. "I walk the halls and talk with patients," he said. "They say the coffee's horrible but are pleased with the nursing care they are getting."
It wasn't until he became chairman in the fall of 1986 that he became aware the hospital had been losing money for two years. "We saved the hospital because I developed a good relationship and rapport with the doctors," Col. Bryant said.
Another difficult decision Col. Bryant made was to close the hospital's money-losing freestanding surgery center in 1987. The year-old facility was located only one block from the hospital.
"It never should have been built. The surgeons didn't like it. It wasn't convenient for them," he said. Since late 1988, the former surgery center has been used as a fitness facility with cardiac rehabilitation and as a breast center for women's health services and mammograms, he said.
On Sept. 1, 1987, the Felician Sisters finalized their collaborative arrangement with seven-hospital Bon Secours Health System, Marriottsville, Md., in which the hospital's assets were transferred. The Felician Sisters are represented on St. Joseph's 15-member board with one sister. In addition, six Felician sisters are employed by the hospital.
Since 1987, St. Joseph's has shown improvement in financial and service indicators. Its discharges rose 16% to 8,465 in 1993 from 7,283 in 1991. Net income for fiscal 1993 ended Aug. 31 was $2.3 million on total net revenues of $55.4 million. For the last three years, the hospital has earned $5.9 million on total net revenues of $149.2 million, or a 3.9% total margin, according to the hospital's audited financial statements.
In 1987, the hospital opened 104-bed St. Joseph Nursing Care Center. The next year, the hospital began its Continuing Improvement Program, which Col. Bryant said has been a major reason for the hospital's recent success.
In 1989, it began a joint venture with Charlotte County and the Florida Department of Public Health to staff a clinic for the poor in a local mall. And in 1992, St. Joseph's started a home healthcare agency.
It's also in the process of forming a physician-hospital organization to match existing PHOs at two of its chief competitors, Fawcett Memorial Hospital in Port Charlotte, which is owned by Columbia Healthcare Corp., and Medical Center of Punta Gorda (Fla.), which is owned by Adventist Health Systems-Sunbelt, Orlando. The Adventist facility currently is for sale.
Col. Bryant has strong opinions about for-profit hospitals.
"For-profits are looking only at the bottom line. They don't have the compassion and caring you should have in a hospital. That's why I very much support Bon Secours," he said.
He also has harsh words concerning not-for-profit boards that agree to sell their facilities to investor-owned chains.
"I could never vote for something like that," Col. Bryant said. "There's a breadth of services a not-for-profit hospital brings a community."
Sticking with your mission is something Col. Bryant learned a long time ago in the military.
"Not-for-profit boards need to remember that they serve the community. Despite the changing times with healthcare reform, they ought to find ways to survive and flourish."
t was 1985 and southern Iowa's economy was sagging.
Main Street businesses were closing, population was dwindling, and some hospitals were near bankruptcy.
Facing an uncertain future for healthcare in Mahaska County, James Blomgren, an astute lawyer, became a savior for the area's public hospital by taking a good look around him.
For Mr. Blomgren, the newly elected president of the Mahaska County Hospital board of trustees, it could have been a particularly unnerving time. The hospital's 15-year veteran administrator was approaching retirement, and the hospital was barely breaking even.
"He (Mr. Blomgren) saw businesses closing in the area and knew that could happen to us," said nursing administrator Barbara Howar, who has worked at Mahaska County since 1958.
But the 46-year-old Mr. Blomgren's bold efforts to develop a strategic plan, hire valuable management and try new ventures has put Mahaska County on solid financial footing. In recognition of his achievements, he was named MODERN HEALTHCARE's Trustee of the Year for hospitals and healthcare systems with revenues of less than $15 million.
"He saw the bottom line, and he and the other trustees weren't afraid to stick their necks out," Ms. Howar said.
Mahaska County flirted with red ink when its revenues over expenses hovered near $26,000 in 1985 before dipping to $10,000 the next year and finally to $4,000 in 1987.
Meanwhile, six Iowa hospitals have closed since 1980. Many of the survivors are still struggling, according to the
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Some 42 healthcare organizations nominated candidates for this year's Trustee of the Year award.
In addition to the two winners, the judges selected runners-up. Second place in the division for hospitals and healthcare systems with revenues of more than $15 million was Robert M. Harrell of Orlando (Fla.) Regional Medical Center. Runner-up for organizations with revenues of less than $15 million was Myrtle Geisser of Townsend (Mont.) Health Systems.
This year's judges were:
|Thomas Chapman, chief executive officer of George Washington University Hospital, Washington.
|Charles Ewell, president of The Governance Institute, La Jolla, Calif.
|Tom Kennedy, administrator of Rolling Plains Memorial Hospital, Sweetwater, Texas.
|John Morrissey, editor of MODERN HEALTHCARE's Trustee Briefing newsletter.
|James Orlikoff, president of Orlikoff & Associates, Chicago.
|S. Harvey Price, a healthcare strategist based in Boca Raton, Fla.
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Iowa Hospital Association.
"The reality is that one-third of Iowa hospitals lose money on all forms of revenue-from taxes to patients to the gift shop," said Greg Boatenhamer, vice president of communications for the association.
Faced with similar challenges, Mr. Blomgren and his fellow trustees decided to look outside for help and hired the Kansas City, Mo., consulting firm of Arthur Clark Associates to help provide the hospital direction.
"We had to do something," Mr. Blomgren said. "And here you don't change people overnight."
With the support of trustees and their proud community, Mr. Blomgren accepted the consulting firm's recommendations to affiliate with a larger hospital and work more closely with physicians in Oskaloosa, the home of the hospital and the county seat with a population of 10,600.
To facilitate an affiliation, trustees began seeking proposals from larger hospitals in Iowa City, Ottumwa and Des Moines. They settled on 710-bed Iowa Methodist Medical Center in Des Moines for a "loose affiliation" agreement. They knew the competitive nature of hospitals in those larger cities, all within 100 miles of Oskaloosa.
The board then set out to hire a healthcare leader with a small rural hospital resume as well as a background in big-city hospital affairs.
Mahaska County's outgoing administrator, Earl Boland, was well-versed in accounting and had been able to keep the public hospital in the black, but Mr. Blomgren realized changing economic conditions would require a healthcare mind for the future, especially as Medicare implemented the prospective payment system in the mid-1980s.
David Rutter was a natural fit. Mr. Rutter, who was hired in January 1987, already had affiliated the 53-bed Dallas County Hospital in Perry, Iowa, with Iowa Methodist and knew the larger hospital's top executives.
Once on board, Mr. Rutter helped close the deal with Iowa Methodist.
The two hospitals formed Mahaska County Hospital Inc., directed by a board of three local trustees and three members of the Iowa Methodist management staff. Mr. Blomgren was elected president of the new corporation, and the trustees signed what in Iowa is known as a "28-E agreement," which allows a public institution to work financially with a private institution.
The agreement could have led to both hospitals' sharing equally in Mahaska County's bottom line. But the affiliation didn't stretch that far.
"They didn't come in and dominate the hospital but did provide us with some direction," said Mr. Blomgren, who today continues to lead the corporation.
That guidance by Iowa Methodist, which costs Mahaska County $600 a month, and the recommendations from the Kansas City consulting firm began to help Mahaska turn the financial corner.
In 1987, with the trustees still under Mr. Blomgren's leadership, Oskaloosa landed an orthopedic surgeon by promising to buy improved medical equipment.
The board's $800,000 purchase included orthopedic surgery equipment,
33and mammography and X-ray equipment.
From 1987 through last year, equipment investments helped Oskaloosa grow from a medical staff limited to family practice and general surgery to one with a psychiatrist, seven other physicians and the orthopedic surgeon.
"Doctors aren't people we sell to-they're our partners," Mr. Blomgren said.
"Local physicians are doing more here at the hospital, and that's done wonders to our bottom line," added Mr. Rutter.
By the end of 1992, the hospital had reported net income of $1 million on net revenues of $7.8 million, according to HCIA, a Baltimore-based healthcare research company. The previous year the hospital had reported net income of $631,000 on net revenues of $6.7 million.
The profit margin went from near zero in 1987 to 12.83% in 1992.
A new accounting system instituted in 1989 reduced accounts receivable by 22% to an average of 67 days.
Iowa Methodist also provided advice on promoting the hospital. "We still wanted to be the hospital for this area, and they helped us in developing a logo," Ms. Howar said. "We had never had a public relations person."
It turned out that Mahaska County was able to survive without the "big city" hospital's money. Meanwhile, Iowa Methodist benefited from the relationship by getting referrals.
"We never have gone any further with the affiliation," Mr. Rutter said. "I think the trustees were afraid they'd eventually need Iowa Methodist money to keep going."
With the hospital then well into the black, it was time to take steps to secure the future.
Mr. Rutter said he called on Mr. Blomgren's experience as a board member many times as the hospital continued to enjoy successes.
"It's tough to take schoolteachers, bankers, farmers, housewives and lawyers and turn them into healthcare experts," Mr. Rutter said. "But Jim and our trustees have made efforts to learn, and that's a great asset to a hospital."
Mr. Blomgren first joined the board of trustees in 1980; he was elected to his third six-year term in 1992.
A 1969 graduate of the University of Iowa and 1972 graduate of the University of Virginia Law School, he is a partner in his Oskaloosa law practice and serves on the board of governors of the Iowa Bar Association. The father of four, he also is active in the Oskaloosa Area Chamber of Commerce, where his wife, Pam, works as director of communications.
His political clout as a former Oskaloosa City Council member and a respected lawyer helped win public support for the hospital's ambitious expansion projects. Last year, the trustees won approval from the Mahaska County Board of Supervisors to finance a $6 million construction project. The board of supervisors, the top governmental body in the county, is allowed to incur indebtedness without voter approval. The project will be financed through general obligation notes, Mr. Rutter said.
It was a wise move in conservative Mahaska County, where voters have been unfriendly to special bond-issue elections to fund public construction projects or renovations. Seven school bond issues and two bond issues to build a new jail have sunk in the last decade.
"You have to find out the right time to do something," Mr. Rutter said. "Jim has been very wise and understands that environment."
The renovation began last year. The hospital will make annual payments of nearly $500,000 for 15 years.
The hospital's design for the future should keep it competitive and further improve its financial picture, Mr. Blomgren and Mr. Rutter said.
The expansion will include an enlarged emergency department, ambulance garage, occupational and physical therapy areas, and outpatient clinic space for physicians and specialists from nearby Iowa towns.
While the facility will bring Oskaloosa's healthcare into the 21st century, the original hospital, built in 1928 and expanded in 1965, will remain. By doing so, Oskaloosa will preserve its past while assuring a stable future.
"The board wanted to save the original hospital," Mr. Blomgren said. "Structurally, it's sound. This is a Dutch community rich in heritage, so we opted to renovate it."