Now that the merger of three New York City healthcare systems is complete, the first thing the new system's chief executive has to do is make it profitable.
The new eight-hospital Saint Vincents Catholic Medical Centers of New York officially came into being late last month when 580-bed Saint Vincents Hospital and Medical Center and its Westchester County, N.Y., psychiatric hospital merged with four-hospital Catholic Medical Centers and two-hospital Sisters of Charity Healthcare System (Aug. 28, p. 4).
Combined, the three Roman Catholic systems lost $20 million in 1999 on total revenue of about $1.5 billion, said David Campbell, president and chief executive officer of the new Saint Vincents system. "We need to fix our bottom line," he said. "That's a Day 1 priority."
Campbell said that he expects it will take between 24 and 36 months for the new system to become profitable.
Achieving profitability depends in part on federal reimbursement relief, Campbell said, as well as meeting the goals of the new system, which include erasing duplication and gaining leverage in managed-care and supplier contracts.
Campbell is former president and CEO of eight-hospital Detroit Medical Center. He resigned in 1999 after nine years at the helm.
No decisions have been made about closing facilities or services or layoffs. However, some senior management positions have already been eliminated.
"Everything's on the table," Campbell said.
The full-asset merger, which created New York City's largest Catholic healthcare system, required extensive state and federal regulatory clearances. The deal didn't close for more than a year after the three had signed a final merger agreement (July 17, p. 22).
"It's a really courageous move to come together to try to preserve Catholic healthcare for the future," said the Rev. Michael Place, president and CEO of the St. Louis-based Catholic Health Association, which represents more than 2,000 Catholic healthcare providers.
At a time when other systems are coming apart, Campbell said Saint Vincents has taken steps he hopes will ensure its success. For example, he said the entire system is governed by a board of only five people, including himself, for the purpose of more efficient decisionmaking.
Ultimately, the board's numbers will be expanded but only into the low teens, Campbell said. The three original systems had four governing boards and several advisory boards, which all have been dissolved.
The new system also has a single management structure, in which five operating divisions will be reporting directly to Campbell.
"There are a lot of lessons out there," said Campbell, referring to failed hospital mergers.