Mike Rowan contends on a daily basis with not one, not two, but six Columbia/HCA Healthcare Corp. hospitals surrounding his 571-bed Sarasota Memorial Hospital.
Talk about competition.
Not only does Rowan, executive vice president and chief operating officer at Sarasota, Fla.-based SMH Healthcare, have to stay ahead of the pack, but he also has to deal with older, affluent patients who pretty much can choose where they want to go for healthcare.
"We've always figured that people could afford going where they want for healthcare," says Rowan, 38.
So with that kind of competition, Rowan realized the hospital needed a game plan and niche to help keep its dominant market share.
When he started in 1993, Rowan organized a planning process; 250 staff members were broken into teams, based on their specialties, to analyze the future of each specialty. Rowan also worked with county officials to do a needs assessment in the six-county region.
After a year of studying, the hospital focused on being a technology and research leader. Rowan also started creating plans to keep costs down and attract top-notch physicians.
Today SMH has about 35 clinical research studies ongoing in areas such as prostate cancer, Parkinson's disease and other illnesses that mostly affect older people. It's also one of four hospitals in the country piloting new equipment for transmyocardial revascularization. SMH's Center for Advanced Surgery is known for several minimally invasive techniques, including cardiovascular and neurosurgerical procedures. It also boasts one of the larger open-heart surgery centers in the country.
"We can say to patients . . . there's no hospital out there that offers more than what we do," Rowan says.
Meanwhile, he has been looking for ways to save money and to position the hospital for the future. To get ready for managed care, he created a network of physicians who work for the hospital. Five years ago, the hospital had no physicians in its primary-care group, says Michael Covert, its chief executive officer. Today there are 43.
"It has made a big difference for us as we're beginning to deal with managed care," Covert says.
Rowan also initiated healthcare contracts with employers in the area; today SMH holds 25 contracts with employers within the region.
In addition, SMH was one of 12 hospitals that pulled 3,700 employees from the $68 billion Florida State Board of Administration to create a separate system for hospital employees last year. Rowan says hospital employees, who usually fall into the highly compensated category, were greatly subsidizing the system, composed of state teachers and other public employees. The move saved SMH an initial $5 million, Rowan says. He adds that in a few years, the savings should be $5 million annually.
In addition to a massive review of supply costs and subsequent renegotiations of contracts with vendors, Rowan crafted an affiliation with Lee Memorial Hospital in Fort Myers, Fla. Today SMH and Lee contract with the same food-service provider and together created a new group purchasing program, which saves SMH 4% on $100 million in supplies per year.
SMH and Lee also are exploring other ways to bring down costs, Rowan says. It's possible the two systems will standardize supplies and equipment.