Selecting a new president and chief executive officer for South Nassau Communities Hospital in 1998 after years of status quo must have been a no-brainer.
JOSEPH QUAGLIATA had held senior management positions at the facility for nearly 30 years, most of them as the steward of the hospital's strong balance sheet. But since taking the top posts nearly four years ago, the mild-mannered accountant has charged forward.
The 340-bed hospital in Oceanside, N.Y., a convenient 20-minute train ride from Manhattan, may have passed the greater part of the past 25 years living in a cocoon, but it burst out under Quagliata's leadership, pollinating the area with an ambitious smattering of outpatient facilities. In just the past 14 months, the hospital has opened a family medicine center, a center for surgical weight control, a sports medicine and physical rehabilitation center, and an 18-unit dialysis center designed to pamper patients with convenient hours and all the amenities of home.
The hospital used its own financial resources to pay for the new facilities and it is managing all of them itself. In April 2002, five miles away in Valley Stream, South Nassau is slated to open a 12,000-square-foot cancer center with its second state-of-the-art linear accelerator.
South Nassau, a modest, red-brick, Y-shaped building, had expanded during the past quarter century, nearly doubling its space to 400,000 square feet, but it never went in for any flashy renovations.
Public relations director Christine Hendriks saw the dramatic change firsthand. When she arrived at South Nassau six years ago, she searched for unique services that distinguished the hospital from a half-dozen others on Long Island's South Shore. She found a four-star chef running the dietary services department who created his own soup stocks and tended an 800-square-foot herb garden on the hospital's grounds.
"I promoted the chef because there wasn't anything else," says Hendriks, who these days hosts a weekly radio show featuring hospital doctors as guests. "Now I can't keep up. This is nirvana for a PR person."
Over the years, the fiercely independent mom-and-pop hospital has resisted the "Wal-Mart-ization" of hospital care, struggling to maintain its identity as a small, community-responsive hospital and withstanding fierce competition from New York's high-profile medical centers with prominent brand names.
Quagliata, 55, has watched the changes both nationally and locally from a front-row seat at South Nassau. Locally grown, as are many of the senior managers, he came on board at the hospital as assistant controller in 1973, several years after New York instituted its first cost-containment legislation. Previously he had been a public accountant specializing as a healthcare consultant for Touche, Ross and Co., educating beleaguered hospital executives on the confusing ways of Medicare reimbursement. He made the jump to the other side, he says, because "I was personally tired of fixing other people's problems, and I thought I could do it better."
Eight months later in the spring of 1974, Quagliata replaced the man who hired him, becoming the hospital's chief financial officer. He stayed in that job for 24 years until 1998, when he replaced Michael Rodenzenko, who retired after more than 20 years as president and CEO. But if anyone was expecting the status quo from Rodenzenko's right-hand man, they were mistaken. Quagliata rolled up his sleeves and played a quick game of catch-up-all in the interest of preparing the hospital for the big changes needed for 21st century healthcare.
What South Nassau had going for it for most of those years of quiet fortitude was an independent-minded senior management team headed up by a tight-fisted CEO who kept a taut rein on the budget. The hospital maintained a "reasonably strong" balance sheet, always in the black, although margins have worn thin in recent years, Qaugliata says. In the fiscal year ended Dec. 31, 2000, the hospital earned $609,000 on $136 million in operating revenue.
In 1993, a time when hospitals nationwide were frantically looking for partners to meet the changing financial climate that was being driven by managed care, South Nassau considered mergers, meeting "with everybody," including some of the biggest players in New York, Quagliata says. In the end, however "this hospital did not believe it was in the interest of these communities to be swallowed up in mega-mergers," he says.
Instead, in 1995 the hospital signed an agreement with 518-bed Winthrop-University Hospital, seven miles away in Mineola, N.Y., which brought the two hospitals together under a common parent but allowed each hospital to maintain an autonomous board. The arrangement is allowing the partners to obtain $100 million in financing. South Nassau will use its half to refinance its debt and pay for all the new construction projects under way, Quagliata says.
When he moved to the No. 1 spot after years of pondering how "this organization would need to reinvent itself," Quagliata says he recruited an architect, opened a design-and-development department and concentrated on developing a strategic plan "based on what we thought was going on in the community."
The effort brought new technologies to the hospital, and it also sent many services into the community with a focus on outpatients.
Although South Nassau didn't jump on board with every fad that came by, the hospital always was intent on staying current with medical technology. In the 1980s, Quagliata led a fight to prevent New York state health officials from locking out hospitals such as South Nassau from the then-new computed tomography scanners.
"We're not going to be all things to all people, but we want to do 95% and we want to do it really, really well," Quagliata says.