Berman helps N.Y. facility find stability
Trustees of the Year 2008 - Honorable Mention: Large Healthcare Organizations
In his nearly three years as board chairman for Westchester Medical Center in Valhalla, N.Y., Richard Berman possessed the ideal background—politics and healthcare administration—to rehabilitate a financially ailing organization.
Berman—who has been president of Manhattanville College, Purchase, N.Y., since 1995—also has held these positions: U.S. House candidate in a Democratic primary, member of then-New York Gov. Hugh Carey’s Cabinet, assistant dean at New York Hospital/Cornell Medical Center, executive vice president at New York University Medical Center and consultant at McKinsey & Co.
“His perspective and background couldn’t have been better,” says Michael Israel, who became interim president and chief executive officer of Westchester Medical Center in 2005, taking over permanently in 2007.
Berman joined the board of trustees of Westchester Medical in 1998—soon after Westchester County officials converted the hospital from a county government department to a separate political organization. He was chairman from February 2005 through December 2007, and remains on the board this year.
The 871-bed hospital—which serves as a regional referral center for the seven-county Hudson Valley region—was suffering financially because it never transitioned from a county department to a stand-alone organization, Berman says. For example, processes and information systems—such as in payroll, billing and accounting—were antiquated. As a result of systems issues and other problems, the hospital lost about $200 million between 2002 and 2005, according to media reports.
As board chairman, Berman led efforts to turn the hospital around. The board hired Pitts Management Associates of Baton Rouge, La., in 2004 to create a stabilization plan and furnish top executives, including Israel and his predecessor, Mary Brown, to run the hospital.
In June 2004, Pitts Management identified $75 million in cost cuts and new revenue, which included eliminating 144 positions in addition to negotiating more-favorable contracts with insurers, suppliers and labor unions. In 2006, for example, the hospital netted $20 million in additional revenue through renegotiated managed-care contracts.
Berman, 63, who was also serving as chairman of the trust that handles tobacco lawsuit settlement money, worked tirelessly behind the scenes in 2005 and 2006 to drum up political support for multiyear financial aid packages from local and state governments. The result of his efforts included $40 million from Westchester County in the form of tobacco-lawsuit settlement funds as well $75 million from the state in additional Medicaid money.
“We needed some time and some money to turn it around,” Berman says.
They’ve done just that. Israel says the hospital had a combined surplus in 2006 and 2007 of about $150 million, including governmental support.
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