In just less than two years, Rulon Stacey took Poudre Valley Hospital in Fort Collins, Colo., from a single facility to a five-hospital system with a surgery center, a home health agency and three ambulatory-care centers.
None of that would have been possible, his colleagues say, if Stacey hadn't first built trusting relationships with hospital employees and physicians.
Stacey, now chief executive officer of Poudre Valley Health System, is the 30th recipient of the American College of Healthcare Executives' Robert S. Hudgens Memorial Award, making him the 1999 Young Healthcare Executive of the Year. The award is presented annually to a CEO or chief operating officer of a health services organization who is younger than 40.
Stacey, 38, became president of 225-bed Poudre Valley Hospital in 1996 and its CEO the following year. As the fifth CEO in three years, Stacey's first order of business was to let everyone know he had a vision for the hospital and would stay to see it become reality.
"He was able to crack the communication logjam that management had with the medical staff and the community," says Jim Davidson, M.D., who was chief of staff when Stacey came on board. "He restored trust."
An open-door policy. Stacey began by making himself more accessible to hospital staff, inviting them to come by his office and handing out his home phone number. Communication is so important to him that he regularly loses sleep over it.
Once a month, Stacey spends the night at the hospital, making the rounds and talking with the staff. During one such night he was approached by a nurse in the neurosurgery department. She was a part-time employee, she said, but she worked full-time hours. So, she asked, why wasn't she paid as a full-time employee?
On the basis of that middle-of-the-night conversation, Stacey says, the hospital re-evaluated all its workers' schedules and shifted those who worked full-time hours to full-time status.
"It had a financial impact, but we were well enough off financially that we could do that," he says. "We want to be cost-effective, but we will never cheat our employees in an effort to keep costs down."
At another point early in his tenure, Stacey stood up at a general medical staff luncheon and announced that physicians would not be his top priority. Instead, he said, employees would come first. If employees' needs were met, they'd be in a better position to meet the needs of doctors and patients, he said.
Each month, employees fill out forms to give feedback to management. A new bonus system, designed by the employees, rewards cost-savings and quality of care. Employees also suggest, and often win, changes in day-to-day operations.
"He helped restore the morale of the employees at the hospital," Davidson says.
Stacey hasn't exactly neglected physicians, however. Soon after he arrived, he heard that the local orthopedic group was considering selling its surgery center to a national company. Stacey didn't want to deal with that sort of competition.
It took only a few months to persuade the orthopedists to let the hospital buy into their surgery center on an equal-equity basis.
The move toward partnership was a huge change from past hospital leadership, according to Jim Horstman, a surgeon at the jointly owned Orthopedic Center of the Rockies. "The thrust back then was to control, not to partner," he says. "(Stacey) bent over backward to talk with doctors."
The doctors retain management control over the center, and the partners share the profits.
"My philosophy is, I am willing to make incrementally less money by finding ways to partner with physicians if it means we'll lengthen the revenue stream," Stacey says.
Other joint ventures followed, including a management services organization with local physicians. He also signed the system's first capitated contracts with the two independent practice associations in town.
Poudre Valley, which competes with 262-bed North Colorado Medical Center in Greeley and 109-bed McKee Medical Center in nearby Loveland, Colo., must work aggressively to capture market share.
Last year, Stacey crafted a deal with the school district in Fort Collins to provide medical care for its employees. Two physician groups also participate in the deal, whereby the district contracts directly for discounted services from Poudre Valley providers for 2,700 district employees and their dependents. The district, which is self-insured, had previously contracted with health insurance companies for access to their physician networks and claims-processing services, but claims costs had ballooned.
Building a career. Stacey traces his accomplishments at Poudre Valley to earlier career experiences.
After earning his master's degree in health administration in 1986 from the school of management at Utah's Brigham Young University, Stacey worked in three very different hospital settings before coming to Fort Collins.
He began his career in the military in 1986, serving as assistant administrator of Ninth Strategic Hospital, a 50-bed, acute-care hospital at Beale Air Force Base near Marysville, Calif.
There he learned valuable leadership skills, he says. But he knew that without a medical degree he wasn't eligible to head a military hospital, and heading a hospital was what he had been trained to do.
So in 1989, after three years in California, he took a job as CEO of a 31-bed rural hospital in Leadville, Colo.
Adjusting to life in a civilian hospital-with its Medicare cost reports, accounts receivable and tight budgets-would have been a difficult task in itself. But St. Vincent General Hospital was also on the brink of financial ruin.
"There was no money in reserves, they had just borrowed to meet payroll, they were nearly a year behind on accounts payable. I thought that my challenge would be to gracefully take the hospital through bankruptcy," Stacey recalls.
The hospital had lost money since 1980, Stacey says, but by 1994 he had taken operating margins to 15%.
"The big key in Leadville-it stuck with me the rest of my life-was making sure that Leadville people stayed in Leadville for their care, to sell to them that the care provided in Leadville was good quality care."
In 1994, after five years at Leadville, Stacey became COO at Saint Francis Hospital and Health Center, Blue Island, Ill., where he spent two and a half years. As second in command at a 254-bed urban hospital, he learned "how to keep a good performing hospital performing well."
That, he says, was even more difficult than turning around a poorly performing hospital. The job gave him the chance to work with a large medical staff in a competitive environment. But Stacey hankered to go back to Colorado, so when a job in Fort Collins opened up, he took it.
The future. Stacey now is putting the finishing touches on a dissertation on workers' compensation policy and plans to defend it this spring. He figures that having a doctorate from the school of public affairs at the University of Colorado at Denver will give him more credibility as he deals with lawmakers.
He also finds time to be active in the Church of Jesus Christ of Latter-day Saints, where he serves on the governing body for the church's 4,000 members in Fort Collins. And he helps his wife rear their four daughters, who range in age from 7 to 16.
This month, Stacey plans to break ground on the hospital system's newest project: a medical campus south of Fort Collins, which will house a medical office building and an ambulatory surgery center with an urgent-care center, cardiac catheterization lab and cancer center. Each of the centers will be a joint venture with physicians. The $55 million expansion will allow Poudre Valley to continue to grow by drawing more patients from underserved rural areas, Stacey says.
A planned $46 million addition to the system's flagship hospital is also under way, he says.
With these projects, Stacey intends to turn Poudre Valley into the major tertiary-care referral center for southern Wyoming and Nebraska as well as northern Colorado.
And the doctors who work with the hospital are counting on it.
"He is laid-back and sincerely honest. When he says something, he will do it, and in this day and age that is unusual," Horstman says.
