For healing the financial bruises of New England Deaconess Hospital, William Robinson, 43, is the winner of this year's Cain Brothers award.
When Mr. Robinson joined Deaconess in April 1988, the 428-bed tertiary-care hospital in Boston had posted a $28 million loss in the prior year on revenues of $170 million. The hospital hadn't adapted to changes in reimbursement and failed to put the kinds of systems in place that would have warned of impending losses, he said.
Having amassed a track record for turnarounds, Mr. Robinson welcomed the challenge. Each of the past three hospitals for which he had worked-Memorial Hospital in Worcester (now part of the Medical Center of Central Massachusetts); Leonard Morse Hospital in Framingham, Mass. (now part of MetroWest Medical Center); and Valley Regional Health Systems in Methuen, Mass. (now part of Holy Family Hospital and Medical Center)-had some financial difficulties that required fixing, he said.
Mr. Robinson implemented changes at Deaconess on several fronts.
"In sum and substance, New England Deaconess is one of the great turnaround stories in the healthcare industry," said Daniel Cain, a principal at Cain Brothers and one of the contest judges. "Bill clearly left an indelible mark on the institution" as its financial architect and in his approach to hospital networking, he said.
As the seventh annual winner of the Cain Brothers award, which recognizes outstanding financial executives in healthcare, Mr. Robinson will attend a two-week corporate financial management course at Harvard Business School this summer. Cain Brothers, a New York-based investment firm, pays for tuition, room and board.
At Deaconess, one of Mr. Robinson's first priorities was getting money owed by third parties. Through rate appeals, the hospital increased net revenues by $41.5 million in the first three years of the turnaround.
He also saw a need to help educate board members on financial issues. So he developed a reference guide dubbed FORUM, for Financial Operating Reports-Users Manual, containing useful background, from a guide to reading the hospital's financial statements to an analysis of its financial ratios. The manual is something that board members could refer to at any time, giving the documents "a life beyond the (board) meeting," he said.
One of the biggest challenges Mr. Robinson faced was turning around the hospital's receivables problem. When he arrived, outstanding receivables exceeded 120 days. An outside billing firm was handling about 40% of the collections, and several experienced managers had left the department as part of an early retirement program offered by Deaconess to reduce its staff.
Within 90 days of his arrival, Mr. Robinson made a deal to terminate the outside billing firm's services. As part of the amicable breakup, the company left behind its software package, which had been modified to fit the hospital's needs. Bringing the billing and collection functions back in house saved $1.8 million in the first year, Mr. Robinson said.
And, in anticipation of future capital needs, Mr. Robinson led an effort to streamline the organization. He sold the hospital's share in a stand-alone surgery center because, as a tertiary-care center, "we saw that as not being important or critical to our mission," he said.
He also sold a home healthcare company because of the money that could be made on the deal. And he sold and leased back a research facility in hopes of eventually building a new facility in several years. These transactions resulted in a net profit of $30 million.
All of the efforts have helped restore Deaconess' financial health. Last year, the hospital generated $149,000 in income from operations and recorded a profit of $4 million on total revenues of $235 million, he said.
Now Mr. Robinson is focusing on network development. Deaconess is part of the NEHD Corp., which also includes a 200-member physician group practice, 60-bed Deaconess-Nashoba Hospital in Ayer, Mass., and a real estate corporation. By the summer, Deaconess plans to add three community hospitals to the network, for a total of 1,000 beds.
The hospital also is close to completing a $130 million building project that will result in the replacement of a major portion of its "clinical core." Plans are just beginning to be made for a 200,000-square-foot research building, which will cost $60 million. Construction will begin in 1998 or 1999.
Mr. Robinson is a fellow and past president of the Massachusetts chapter of the Healthcare Financial Management Association.