Wayne Lerner has been asked to fill some big pairs of shoes in recent years.
He became president of Jewish Hospital in St. Louis in January 1991 when David Gee retired after 27 years at the hospital's helm.
Then in April, Lerner became the new president and chief executive officer of the Rehabilitation Institute of Chicago in the wake of the more than 30-year rule of Henry Betts, M.D., who is now focused on fund-raising and advocacy efforts as chairman of the institute's foundation.
"It's difficult to follow someone who has made more than a personal imprint on an institution and the industry as a whole," says Lerner, 47. "I'm not succeeding Henry. Henry had the problem of giving birth to the organization and developing it in its early years. Now we're laying the groundwork for its adulthood."
Lerner joined the institute in the middle of a $37.2 million renovation of its 23-year-old inpatient facility, a $10 million upgrading of its information systems, and a major reorganization of its administrative and clinical processes.
The institute is a private, not-for-profit academic affiliate of Northwestern University Medical School. It runs a 155-bed rehabilitation facility and provides outpatient and subacute services at various locations.
The changes illustrate the tension facing many of the nation's top not-for-profit, academic-affiliated rehabilitation hospitals. They want to protect their clinical and research reputations, but they also feel pressure to tighten their internal operations and secure their competitive positions in an industry increasingly dominated by for-profit companies and managed-care demands.
In an interview with MODERN HEALTHCARE, Lerner shared some of his goals as the new head of the institute and how he thinks his background as an acute-care hospital administrator has prepared him for the post.
In St. Louis, Lerner oversaw the 1993 formation of BJC Health System following the merger of Jewish, a 500-bed acute-care hospital, with 992-bed Barnes Hospital and Christian Health Services, which operated three metropolitan hospitals and had affiliations with several others. Missouri Baptist Hospital and St. Louis Children's Hospital also joined BJC. Lerner served as executive vice president of the new system from July 1993 to March 1996 when he became vice president of the Lash Group, a Bannockburn, Ill.-based healthcare consulting firm.
He also recently edited Anatomy of a Merger: BJC Health System, a comprehensive review of the system's formation.
As the St. Louis market was at the time, Lerner says, the Chicago market is just beginning to feel the effects of increased managed-care presence, changes in Medicaid and Medicare reimbursement, more interest on the part of employers in healthcare delivery and costs, and the emergence of physician groups.
And like Jewish, he says, the institute is a community-based teaching institution sitting in the shadow of some larger neighbors. It's on the campus of McGaw Medical Center, which includes a Department of Veterans Affairs hospital, Northwestern Memorial Hospital and the Northwestern University School of Medicine.
Jewish was part of the Washington University Medical Center campus, which also included Washington University School of Medicine, Barnes and the Central Institute for the Deaf. Barnes and Jewish were affiliates of the medical school, just as the institute and Northwestern Memorial are affiliates of Northwestern's medical school.
"Jewish had made a series of strategic thrusts but hadn't brought to reality an active strategic process," he says. "The institute has similarly formulated strategic partnerships but hasn't initiated full system delivery changes."
Lerner says the institute is in a healthy financial position with an endowment of $60 million. And next year the institute plans to kick off a three- to five-year capital campaign for an additional $60 million. In 1996 the institute reported net income of $3.7 million on revenues of $68.3 million, compared with a net loss of $3.4 million on revenues of $68.6 million in 1995.
But he says the institute now must start looking at its strategic options for the future. He says he hopes to reveal the institute's "full strategic thrust sooner rather than later."
He says the institute is looking at everything from developing an institute-centered rehabilitation system to merging with or being acquired by either a not-for-profit or for-profit healthcare system or company.
"We're looking at a full range of options to get an idea of what options are feasible," he says. "We need to take ourselves out of our current environment and think relatively unencumbered about the future."
Lerner says part of the institute's strategy could include further developing its corporate partnerships. The institute now provides a continuum of care through 50-50 partnerships with Chicago's Loyola University Health System, Alexian Brothers Medical Center, Swedish Covenant Hospital, Southern Illinois Healthcare and West Suburban Hospital. The partnerships cover a range of services, including inpatient, subacute, day treatment, outpatient and home-care rehabilitation.
In addition, Lerner says he wants to make sure the institute is part of discussions with Northwestern University's medical school and healthcare system about the development and use of existing and future facilities on the McGaw Medical Center campus. The institute already rents space from Northwestern University to house its Center for Health and Fitness, a free health club for the disabled.
Expanding the institute's outpatient rehabilitation therapy services is another option, he says. In September the institute's therapists began treating Loyola home-care patients under its partnership agreement. The institute now is negotiating a similar arrangement with Northwestern Memorial.
Lerner says he plans to announce a new organizational structure as early as next month that will aim to coordinate all the different relationships so the institute's expertise and information systems can be used systemwide.
Overall, Lerner says he envisions the institute as not just a regional player but as a national one. He says for some of the organization's highly specialized services, such as treatment of traumatic brain and spinal cord injuries, the institute wants to show its outcomes will end up reducing long-term healthcare costs.
"We need to prove that it makes sense for people to fly to Chicago and access our services if it helps them over the long term," Lerner says.