Douglas Chamberlain took one tour of the then-named Kennedy Memorial Hospital and he was a changed person. "Nothing on earth can make you feel more empathetic than a sick child," says Chamberlain, who was immediately impressed by the staff's patience and compassion toward the special-needs patients at what's now called Franciscan Children's Hospital and Rehabilitation Center in the Allston-Brighton area of Boston.
Chamberlain, founder of a local investment management firm, made a donation to the hospital that day in 1986. In 1987, he joined the facility's board of trustees and remains a member today.
Since that time, Chamberlain, 56, has helped lead the 65-bed hospital through two turnarounds, a name change and a twelvefold increase in endowments. His work on the board has earned him the honor of Modern Healthcare's 2004 Trustee of the Year for facilities with fewer than 250 beds or less than $75 million in annual revenue. The competition is co-sponsored by Witt/Kieffer, a healthcare executive search firm based in Oak Brook, Ill.
Chamberlain became board chairman in October 1995, when the hospital was in financial distress.
In an effort to keep the doors open, the operating budget was cut by almost 40%, to about $20 million from $32 million over a roughly four-month period. The bulk of the savings came in staff reductions, a total of about 300 part-time and full-time employees.
The hospital's financial trouble arose because of changes in the 1990s to the state payment system that put a greater emphasis on reducing lengths of stay, says Franciscan President and Chief Executive Officer Paul DellaRocco.
"Reimbursement rates changed and the hospital didn't change," Chamberlain says.
When examining its financial situation, hospital executives and board members realized they were relying too heavily on inpatient services. About 90% of its revenue came from those services and about 80% of overall revenue came from Medicaid.
"You'd rather have that around 40% or 50%," DellaRocco says of the Medicaid funding. "It was twice as much as you might expect."
Reliance on Medicaid is the nature of the business when dealing with special-needs children, Chamberlain says. "When you have a special-needs child it puts a horrendous change on your financial situation," he adds. The number of costly bills often impoverishes families and about two out of every five special-needs children are born to Medicaid patients, Chamberlain says.
Still, the hospital was able to reduce its reliance on Medicaid to about 50%, a figure it was able to achieve by diversification.
Since Chamberlain took over as chairman, the hospital has added about 35 various services (it now offers nearly 50), and that helped boost the operating budget to $37.5 million in 2002 versus 1995's more austere total. Among the services added or expanded are the hospital's special-education day school-Franciscan now works with an average of 425 children per day-and additions to its home-care program.
The improvements helped the small hospital gain some national recognition. In 1997, it was named Turnaround Hospital of the Year by the American Hospital Association.
However, another turnaround was already in the hospital's future, but this time Franciscan was ready.
Although the facility had reduced its reliance on Medicaid, cuts in the program about two years ago meant an accompanying $2.5 million decrease in Medicaid revenue, DellaRocco says. Luckily for Franciscan, about a year earlier Chamberlain had put the hospital's leaders through a "What if?" exercise.
"He would say, 'What if we lose a million dollars? What are we going to do?' " DellaRocco says.
If that exercise hadn't been conducted, Franciscan would have had to reduce staff by another 40 part-time and full-time employees; instead, six were cut, and other operational efficiencies were achieved, DellaRocco says.
Another change Chamberlain made when he became chairman was putting more financial information into board members' hands.
Before he was chairman, the board received a three-page monthly financial statement that covered profit-and-loss performance, balance sheet information and cash flow. That document was converted into an eight-page form that also highlights payer mix, performance by program or service, and comparative budget data. This information provided "a lot more disclosure" and helped the board in its decision-making, Chamberlain says.
Chamberlain, president and CEO of Appleton Partners, says he made it a point to add board members who had financial backgrounds. Before he was chairman, he was the only member with such a background.
Appleton also provided the link for Chamberlain to Franciscan.
Chamberlain was introduced to the children's hospital by one of his Appleton clients who was the hospital's director of development. He was invited to go on a tour of the hospital, and by the end of it Chamberlain was ready to make his first donation, about a $1,000 "gift of appreciation," he says.
"Anyone who takes a tour at our hospital just comes away with the most heartfelt feeling," he says. That feeling stuck with him and he's continued to make donations over the years. To recognize Chamberlain's generosity, the board has started the Chamberlain Leadership Society, which honors donors who give $100,000 or more to the facility.
"It wasn't my idea," Chamberlain says about the society's name.
Chamberlain, who doesn't earn any compensation from the board position, says he was the first to pledge that amount and join the society. The hospital now brings in about $2.4 million in donations annually. Six years ago that total was about $200,000.
DellaRocco credits Chamberlain for that increase. Before Chamberlain became chairman, the hospital had one fund-raising event per year; now it has about a half-dozen.
DellaRocco says some of Chamberlain's leadership skills are hereditary. Chamberlain is a descendant of Joshua Lawrence Chamberlain, a Civil War general from Maine who was selected by Gen. Ulysses S. Grant to accept the formal surrender of Confederate forces at Appomattox Court House, Va. Douglas, who helps run a museum dedicated to Joshua in Maine, doesn't seem to enjoy comparisons to his ancestor, but he did say there were some parallels to their paths.
"As they did in the Civil War, we came together to do the right thing," Chamberlain says of the turnarounds at Franciscan.
? Nothing on earth can make you feel more empathetic than a sick child.'
--Douglas Chamberlain, board chairman, Franciscan Children's Hospital and Rehabilitation Center