INSIDE Keeping Employed Physicians Hospital Review Profitable: Is It Impossible? P

125 Hospital and Health System CFOs to Know p. 16

INSIDE Keeping Employed Physicians Hospital Review Profitable: Is It Impossible? p. 26 June 2013 • Vol. 2013 No. 6 5 Tips on Moving Away From RVUs ACOs: The Least What’s Behind for Physician Compensation p. 42 Agreed-Upon Concept in the Rash of Physician Healthcare? New Hospital Turnover at an By Molly Gamble Brands? All-Time High p. 27 Healthcare is one of the country’s most heavily regulated industries, one By Heather Punke Pittsburgh v. also driven by diagnoses, evidence and clinical expertise. Yet, despite this objectivity, one three-letter acronym has caused quite a divide among Hospitals and health systems across the UPMC: Legal healthcare policy experts, physicians, health systems and payors. country have been getting makeovers Arguments this year — several organizations have Behind the changed their name, brand and/or logo continued on page 12 in the beginning of 2013. The follow- Tax-Exempt ing 10 healthcare name changes and Challenge p. 43 new brands represent just a fraction of the organizations that have reinvented Should Healthcare Price Transparency: themselves this year. Abandon ICD-10? p. 37 Why It’s an Issue & • Oakland, Calif.-based Alameda Where Hospitals Fit in County Medical Center became INDEX Alameda Health System. By Bob Herman ACOs p. 12 • Baptist Healthcare System in Lou- isville, Ky., changed its name to Clinical Integration & Healthcare prices have been an enigma within the U.S. healthcare sys- Physician Issues p. 26 tem, especially in light of this year’s TIME exposé on why healthcare Baptist Health and is rebranding and hospital services cost so much. Simply put: More patients are its seven Kentucky hospitals. Executive Briefing: Community Hospital starting to question why their healthcare bills are so high — and why • Edward Health Services Corp. in Affiliation p. 31 they can’t find healthcare prices at all. Naperville, Ill., became Edward- Finance, Revenue Cycle In an effort to clarify the muddied waters of healthcare price trans- Elmhurst Healthcare. & ICD-10 Issues p. 35 parency, Catalyst for Payment Reform and the Health Care Incentives • Gaston Memorial Hospital in Gas- Executive Briefing: Improvement Institute released a report in March that quantified how tonia, N.C., was renamed Caro- Healthcare a majority of states have failed to enact comprehensive healthcare Transportation p. 38 Mont Regional Medical Center, to price transparency laws. The two groups graded each state on whether Compensation p. 42 reflect its relationship with Caro- healthcare pricing information is available, how accessible it is and the Mont Health. Legal & Regulatory Issues p. 43 continued on page 10 continued on page 11

Save the Date! Becker’s Hospital Review CEO Strategy Roundtable November 14, 2013 The Ritz-Carlton Chicago Co-chaired by Scott Becker, Publisher, Becker’s Hospital Review, and Chuck Lauer, Former Publisher, Modern Healthcare To learn more visit www.BeckersHospitalReview.com To register, visit www.BeckersHospitalReview.com/ novhospitalevent.html How do you want to move forward today? Explore new frontiers in clinical, operational and financial performance. To successfully improve hospital performance, you need help navigating the complex environment and managing an ever-increasing amount of data. VHA IMPERATIV™ is a unique performance management solution featuring highly skilled clinical and operational experts that work with you to interpret your data, counsel you through complex decisions and develop a performance improvement plan. You’ll also access our easy-to-use analytics dashboard, the industry’s only Leading Practice Blueprint® library, and collaborative networking.

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Editorial features Lindsey Dunn Editor in Chief 800-417-2035 / [email protected] 7 Publisher’s Letter Laura Miller Editor in Chief, Becker’s ASC Review & Becker’s Spine Review ACOs 800-417-2035 / [email protected] Molly Gamble 14 Survey: Majority of Physicians Unfamiliar With ACOs, PCMHs Editor 800-417-2035 / [email protected] 14 Medicare ACO Results Expected Soon Helen Gregg Writer/Reporter 800-417-2035 / [email protected] 16 125 Hospital and Health System CFOs to Know — 2013 Bob Herman Editor Clinical Integration & Physician Issues 800-417-2035 / [email protected] Heather Linder Assistant Editor 26 Keeping Employed Physicians Profitable 800-417-2035 / [email protected] Jim McLaughlin 27 Adding Employed Practices to Your Organization? 6 Ways to Getting Buy-in From the Writer/Reporter Practice 800-417-2035 / [email protected] Carrie Pallardy 27 Physician Turnover at All-Time High Writer/Reporter 800-417-2035 / [email protected] Heather Punke 28 Executing Population Health Strategy: Q&A With Dr. Mike Schatzlein, CEO of Saint Assistant Editor Thomas Health 800-417-2035 / [email protected] Sabrina Rodak 29 Creating Regional Health Networks: Q&A With LifePoint Hospitals CFO Jeff Sherman Associate Editor 800-417-2035 / [email protected] Executive Briefing: Community Hospital Affiliation Anuja Vaidya Writer/Reporter 800-417-2035 / [email protected] 31 Community Hospitals: Why Their Futures Are More Flexible Than You Think

sales & publishing Finance, Revenue Cycle & ICD-10 Issues Jessica Cole President & CEO 35 How Did Hospitals Post Positive Fiscal Years in 2012? 5 Hospital CFOs Respond 800-417-2035 / Cell: 312-505-9387 / [email protected] 37 Should Healthcare Abandon ICD-10? Lauren Groeper Assistant Account Manager 800-417-2035 / Cell: 630-639-7595 / Executive Briefing: Healthcare Transportation [email protected] Maggie Wrona 38 Healthcare Transportation as an Integration Agent Assistant Account Manager 800-417-2035 / Cell: 847-533-4118 / [email protected] Compensation Fola Dada Webmaster/Developer 42 5 Tips on Moving Away From RVUs for Physician Compensation 800-417-2035 [email protected] 5 Factors Used in Physician Production-Based Compensation Plans Cathy Brett 42 Conference Manager 800-417-2035 / Cell: 773-383-0618 / Legal & Regulatory Issues [email protected] Katie Atwood 43 Pittsburgh v. UPMC: Legal Arguments Behind the Tax-Exempt Challenge Director of Operations/Client Relations 800-417-2035 / Cell: 219-746-2149 / [email protected] 44 Chuck Lauer: First Things First: Treat Employees Well Scott Becker Publisher 45 Hospital & Health System Transactions 800-417-2035 / [email protected]

Becker’s Hospital Review is published by ASC Commu- 46 Hospital & Health System Executive Moves nications. All rights reserved. Reproduction in whole or in part of the contents without the express written permis- 47 Advertising Index sion is prohibited. For reprint or subscription requests, please contact (800) 417-2035 or e-mail sbecker@ beckershealthcare.com.

For information regarding Becker’s ASC Review, Becker’s Hospital Review or Becker’s Orthopedic & Spine Review, please call (800) 417-2035. @hospreviewmag Becker’s Hospital Review Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 7 Publisher’s Letter Dashboard Observations on 17 Niches and Specialties; 7 Reasons to Worry About the Healthcare Economy; Is a Large Combined System Better?

1. Prospects for markets within the ASC business remains in the greater context a systems in hospitals and health systems. healthcare industry. The dashboard below very good industry and business. It remains re- highlights where we see expansion or slow down markable how different the revenue equation can Urgent care in different niches with healthcare. Of course, be for ASCs from geographic market to market. Growth. Strong alignment with consumers and the success of a specific company or provider payors; slim margins. Dialysis facilities within an industry depends a great deal on its Stable to growth. Continued increasing pa- Dental practice management individual strengths, and the proficiency of its tient demand offsets some reimbursement risk; Stable to growth. Growth dependent on pay- management team and its available resources. continued consolidation; reduced number of or mix, with pressure on Medicaid-dependent companies; increased state regulatory pressure. Hospitals and health systems physician-owned facilities. Slow erosion to stable. Political power in part Physician practices Home health offsets substantial reimbursement risk; reduced in- Slow to moderate erosion. Reimbursement Stable. Little political power; fragmented inpatient cases; increased risk on patient receivables risk depending upon specialty (see below); pres- dustry undergoing consolidation; some reim- and increased deductibles; serious pricing pressure sure on referral base and payor access. bursement risk. if movement of patients to exchanges; continued Hospice consolidation across industry. Certain hospitals Medical device Stable. Some political power; reimbursement and health systems that have the best quality, that Slow erosion to stable. Political power in part risk; utilization risk constraints; consistent con- develop leadership in taking on risk, that have offsets some pricing pressure (e.g., industry re- sumer demand. market dominance, or that treat a specialized niche lationship with Sen. Orrin Hatch); better inter- and are very lean in their operations will thrive. national opportunities; patient demand contin- Nursing homes ues to increase; substantial mid- and long-term Slow erosion to stable. Reimbursement risks Ambulatory surgery centers pressure on domestic pricing. for Medicaid-dependent providers and timing Slow erosion. Reduced number of available of payment from states impacts cash flow. physicians, core specialties remaining fairly inde- Health information technology pendent, pressure on case numbers; reimburse- Stable to slow growth. Customer budget con- Behavioral health ment risk; some access to payor issues. Despite straints (increased risk to customer-available Growth. High patient demand for services; the slow erosion in the overall ASC industry, capital) offset by need to expand and improve alignment with payors and consumers.

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Anesthesia practice management around 30 to 50 percent of the payments health- • Mergers and acquisitions. Earlier this year, Stable to growth. Alignment with payors and care providers receive, and as a result, even small the New York Times reported that the first quar- hospital sector. reductions in federal spending could amount to a ter of 2013 saw the lowest M&A deal volume lot of money coming out of healthcare. since Q1 2010 (“Mergers Slowed to a Snail’s Pain management Pace in the First Quarter, the Fewest Since • Increased taxes. Increased taxes on high- Stable. Influx of physicians; increased reim- 2003,” April 2, 2013). We are still seeing a earning individuals will only further compound bursement and utilization controls. steady flow of deals in the healthcare sector. the impact of sequestration by taking more Orthopedics money out of the economy that would be oth- 4. Specialty physician practices. We are Slow erosion to stable. Reimbursement risk; Ma- erwise spent on goods and services, including still seeing many specialty physician practices ture orthopedic practices seem to be very resilient healthcare. These increased taxes being paid looking to remain independent. The decision in terms of their referral base and remain critical to by the largest tax payor blocs will take serious to stay independent is largely driven by concern the overall delivery of healthcare (i.e., as to the per- dollars out of the economy that won’t cleanly regarding future income. This concern largely centage of total dollars spent in orthopedics and recycle back in and may just go to service gov- stems from a lack of control over referral pat- the reliance of all facilities on orthopedics). ernment debt. Where a larger and larger por- terns and decreasing professional and ancillary tion of the healthcare bill is paid by consumers, reimbursement. Small changes in income lead to Spine care whether via deductibles or other means, this an explosion in physician/hospital transactions. Slow erosion to stable. Reimbursement risk; has a significant impact on the economy. For example, we saw a massive migration from increased payor controls on surgery. private practice to hospital employment when • Tepid economic growth. Even before account- the average cardiologist’s reimbursement fell by Gastroenterology ing for the sequester and increased taxes on in- about 15 percent. With most other specialties, Stable. While there is some pressure on pricing come and the payroll, the economic growth rate once reimbursement falls by more than 10 per- at all levels, gastroenterologists in many areas re- was at 1 to 2 percent. When you then take an- cent, the interest of joining a hospital or health main in very high demand and remain very busy. other 3 to 5 percent out of the economy through system tends to become significantly more acute. taxes and costs reductions, it is hard to see where 2. Hospital and health system mergers. Until that point, practices seem more eager to the country will have any economic growth. In This remains a fascinating time in healthcare. We remain autonomous, particularly if it’s a group March, the unemployment rate was steady at 7.6 are continuing to see small to midsize facilities en- that has enjoyed long-term independence. We are percent. Real job creation was below zero when ter into affiliations and sales transactions. In con- also seeing more independent practices evaluate job growth (an 88,000 increase in non-farm pay- trast, we are also seeing some large systems (e.g., strategies for affiliating with other practices, either roll employment) is balanced with those exiting systems with $3 billion dollars or more in revenue) through ownership or collaborations designed to the workforce. Overall, the civilian labor force looking at merging with each other. Here, many achieve increased bargaining power with payors. declined by 496,000 during the month. questions arise with respect to whether the merger I just completed reading really makes sense from a cost savings or strategy • Shifts to health exchanges. As insurance com- 5. Playing to Win. a fascinating book, “Playing to Win: How Strategy perspective. Specifically, will the combined sys- panies raise rates to meet the requirements of Really Works” authored by A.G. Lafley, the for- tem achieve a truly dominant position where pay- healthcare reform, it is increasingly projected mer long-term CEO of Proctor and Gamble. ors and employers must have the system in their that more of the population will move to health- He is mostly a disciple of the Michael E. Porter health plans, or will the merger leave the system care exchanges. This shift to exchange-based School of strategy. Lafley outlines a process for so burdened with costs and employees that it will health plans is concerning for healthcare provid- strategy assessment based on five concepts. ultimately need to engage in layoffs or other efforts ers, because the payment rates for these plans to drastically cut costs? Will it allow for more stra- are uncertain. Small movements of well-paying • What are the winning aspirations/goals? tegic management or simply lead to a large system commercial insurance patients to lower paying • What field or market will you play in? without clear priorities? Will the merger allow the exchanges bodes very poorly for providers. health system to better serve managed care payors, • What is the best approach to win? • Tightened spending on healthcare. Eco- deliver quality care and manage costs? Will the nomic problems will provide more pressure on • What capabilities must be in place to win? depth in revenues allow for better investments in employers and employees to cut costs, includ- management, outpatient services, information sys- • What management systems are required to ing what is paid for healthcare. Employees se- tems and other capital projects? support the effort? lecting health plans — either offered through For more discussion on this issue of whether hos- their employer or exchanges — may lean to- In exploring various businesses and opportuni- pital and health system mergers perform, please see ward lower-premium or high deductible health ties with clients, I found the tools and concepts “Is Bigger Always Better? Exploring the Risks of plans with less comprehensive coverage. These very useful and enjoyed it immensely. Health System Mega-Mergers” (Becker’s Hospital plans shift more healthcare cost responsibility Should you have questions, or we can be of assis- Review, March 18, 2013) and “Point-Counterpoint: on patients, which can create collections diffi- tance in any way, please contact me at sbecker@ Is the Rush to Hospital Consolidation Rash?” culties for providers. Similarly, employers look- beckershealthcare.com. (Becker’s Hospital Review, March 26, 2013). ing to cut costs will reevaluate healthcare spend and may elect to cost-shift to employees. 3. Healthcare spending. Here are seven observations on the current climate surrounding • Provider profitability under pressure. Very truly yours, healthcare providers. Health systems are starting to report much lower profits in 2012 than in 2011, and the • Government debt and the need to reduce decrease in reimbursement and inpatient cases spending. No matter how you slice it — and the coupled with the percentage of out-of-pocket sequester seems to be the most simple and obvi- healthcare costs patients are responsible for ous example of it — there is an increased rec- will exacerbate these changes. The loss in some ognition that the federal government must rein Scott Becker, Publisher types of cases by systems leads to increased in its spending. Even those on the tax and spend competition for other types of cases by these side seem to view it as such. Through Medicare systems, and more pressure on the providers and Medicaid, the government is responsible for who survive based on such cases and patients. Save the Date! Becker’s Hospital Review CEO Strategy Roundtable November 14, 2013 The Ritz-Carlton Chicago Co-chaired by Scott Becker, Publisher, Becker’s Hospital Review, and Chuck Lauer, Former Publisher, Modern Healthcare Keynote CEO Strategy Come hear from leading hospital and health system experts as they present Roundtable on the following topics: This keynote roundtable discussion • How to Assess Strategy in a Changing World, Thinking 5 will include: Months and 5 Years Into the Future • Joseph Fifer, President and CEO, Healthcare • Assessing and Defending the Fair Market Value of High Financial Management Association Earning Physician Compensation • Peter S. Fine, FACHE, President and CEO, • Driving Perioperative Performance to Improve Bottom Line Banner Health • Larry Goldberg, CEO, Loyola University • Talent Rules! Creating a Talent Management Process Health System Within Healthcare • Diana Hendel, CEO, Long Beach Memorial, Mill- • The Best Ideas for Community Hospitals Now er's Children's Hospital and Community Hospital • ACOs: Current Trends and Issues • Catherine Jacobson, President and CEO, • Creating an ACO for Your Own Employees Froedtert Health • The State of the Healthcare Future • Larry Kaiser, MD, CEO, Temple University • Compensation for Health System Leadership Health System • Phillip M. Kambic, President and CEO, Riverside • Hospital Leadership - What Are the Biggest Opportunities Health Care for and Threats to Hospitals? • Lynn Nicholas, FACHE, President and CEO, • The Road to Population Health: Key Enablers in Massachusetts Hospital Association Implementing Value-Based Approaches • Michael Sachs, Chairman, Sg2 • You’ve Now Implemented Your EMR - Welcome to the • Louis Shapiro, President and CEO, Hospital for Starting Line Special Surgery • Physician Alignment Strategies, Co-Management Joint • Quint Studer, Founder, Studer Group Ventures, Employment and More • Paul Summerside, MD, FAAEM, MMM, CMO • What is the Impact of Healthcare Reform on ASCs and and Chief Compliance Officer, BayCare Clinic Group Practices?

To learn more visit www.BeckersHospitalReview.com To register, visit www.BeckersHospitalReview.com/novhospitalevent.html 10 Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035

Price Transparency: Why It’s an Issue & healthcare, though few patients actually pay full transparent and reliable healthcare price infor- Where Hospitals Fit in chargemaster rates. Hospitals in California have mation started many years ago. Ms. Gelburd is (continued from page 1) already experienced “open book” measures president of FAIR Health, a New York City- scope of information available. Overall, 29 states when it comes to these all-encompassing lists based organization that maintains a database received an “F” grade, and seven states received of charges. Since 2006, the California Office of healthcare charges across the country. She “D” grades, meaning an overwhelming majority of Statewide Health Planning & Development says healthcare price transparency is vital today of states do not offer consumers adequate infor- has required hospitals to submit a copy of their because the previous system of “no questions mation on healthcare prices. chargemasters to post online, as well as average asked” is no longer viewed as effective. charges for 25 common outpatient procedures. While the report is an indictment of the lack of “For so long, the healthcare system, in a sense, healthcare price transparency legislation on the John Bishop has served as CFO of Long Beach worked in the shadows. Consumers had no skin books today, Suzanne Delbanco, PhD, executive (Calif.) Memorial Medical Center, Miller Children’s in the game, and almost behind a curtain, the director of Catalyst for Payment Reform, says the Hospital Long Beach and Community Hospital transaction was somehow settled upon,” Ms. groups did not conduct the research because they Long Beach — all part of Fountain Valley, Calif.- Gelburd says. “Cost was not a critical issue, and thought laws were the only solution to the prob- based MemorialCare Health System — for the there was a lot of dust on chargemasters because lem. Instead, she views price laws as a last resort, past three years. He explains that chargemasters are no one was really looking at those with a bright and hospitals could be taking two steps on their important, but when it comes to the transparency light. Consumers are much more engaged in own to ensure their patients have requisite knowl- movement, hospitals and health plans both play a healthcare now due to the economic climate and edge to make informed healthcare decisions. role with them. Chargemasters are the result of [mechanisms] such as high-deductible health years of negotiations with health plans that have plans, and they have to manage care in a more “Number one, hospitals can stop requesting requested discounts from hospitals’ prices, Mr. proactive way.” health insurance companies to hide their pricing Bishop says, and prices that appear to be high or information from patient members,” Dr. Del- inflated are “an unfortunate byproduct” of the While hospitals and other healthcare players work banco says. “It’s a minority that does this, but bartering system that has endured for decades. on becoming more transparent in their prices, gag clauses leave gaping holes. Two, hospitals one hurdle will still remain: Communicating to can make it as easy as possible for prospective “Price transparency — and chargemaster price patients that prices and quality healthcare are two patients to find out what hospital services will reduction — is a goal of ours, but it must be completely separate things. cost. It’s one thing to post the chargemaster, and done in cooperation with the health plans in “We could have complete price transparency, it’s another thing to work with patients and their order for it to be successful,” Mr. Bishop says. without the help of any laws, if hospitals, doc- health benefits to figure out what they will pay “There needs to be an industrywide recalibra- tors and health insurance companies worked to- out of pocket. That could help foster transpar- tion of charges as the impact on health plan gether to provide it,” Dr. Delbanco says. “The ency when it’s needed most.” reimbursement, Medicare and [Medicaid] cost reporting and charity care will all be affected.” other challenge is we have to continue to educate Hospitals and American consumers about cost and quality re- Price transparency — for lationship — and the fact there really is none. chargemasters People assume more expensive care is better. The chargemaster, as mentioned by Dr. Del- the good of hospitals and We have to pair cost information with quality banco, has been a lightning rod symbol for price patients information. Otherwise, consumers may assume transparency in the new era of consumer-driven For Robin Gelburd, JD, the movement toward more expensive care is better.” n

Correction In the May issue of Becker’s Hospital Review, the annual list of “100 Great Places to Work” was missing two organizations. Penn State Milton S. Hershey (Pa.) Medical Center and University of Chicago Medical Center were inadvertently left off the print version of the list due to a technical error. Full- length profiles of the organizations are below. Becker’s Hospital Review regrets the error.

Penn State Milton S. Hershey (Pa.) Medical Center Type of facility: Hospital/health system What makes it a Great Place to Work: Penn State Milton S. Hershey Medical Center is committed to keeping its employees well, beyond offering basic health, dental and vision coverage. The medical center has an employee wellness program, called Blueprints for Wellness, that aims to enhance quality of life through education on healthy behaviors and empowering participants to encourage each other in healthful practices. In addition to promoting physical health, Penn State Hershey Medical Center helps employees stay mentally fit through educational assistance. Employees — and their spouse and any dependent children, after one year of employment — can receive a 75 percent discount on tuition at Penn State University. Job- related degree programs offered at other accredited colleges are also eligible for tuition reimbursement.

University of Chicago Medical Center Type of facility: Hospital/health system What makes it a Great Place to Work: Along with packages for medical, dental, vision and disability benefits, University of Chicago Medical Center offers employees access to its on-site corporate quality academy that offers a range of education and training courses, including BSN completion programs offered in partnership with two local colleges. Full-time hospital employees are entitled to 50-percent remission for courses taken at the University of Chicago or the lab school, and nurses receive 100 percent tuition reimbursement at the nursing school of their choice. The hospital also offers a generous paid-time off package: New full-time employees receive up to three weeks paid vacation per year, plus five paid personal holidays and 10 sick days. Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 11

What’s Behind the Rash of New Hospital Brands? they’re redefining themselves, they recognize the need to rebrand who they (continued from page 1) are in order to better reflect what they really do now.” • Greenville (S.C.) Hospital System University Medical Center was re- For instance, Greenville Health System, formerly Greenville Hospital Sys- named Greenville Health System and adopted a new logo. tem University Medical Center, decided to rebrand in part because it had added multiple employed physician practices and became more integrated • Huguley Memorial Medical Center in Burleson, Texas, became Texas as a system. “From an operational standpoint, we’re becoming more inte- Health Huguley Hospital Fort Worth South. grated and physician-led,” explains Sally Foister, the system’s director of • High Point (N.C.) Regional Health System changed its logo and marketing services. “We were moving forward with the goal of becoming a brand. highly integrated delivery system, and if we were going to be operating as an integrated system, we wanted to look like one as well.” • Des Moines-based Iowa Health became UnityPoint Health. Bill Leaver, CEO of UnityPoint, formerly Iowa Health System, says his • Jefferson Regional Medical Center in Chesterfield, Mo., became Mer- system rebranded for similar reasons. “For four years, we’ve been working cy Hospital Jefferson. on creating a different delivery model. With that in mind, we started thinking about our brand and realized we need to be known as the manager of • Vancouver, Wash.-based PeaceHealth renamed its four Oregon hos- disease and the care coordinator.” pitals, which now include PeaceHealth in their names. As part of its rebranding effort, Greenville Health System is bringing all of Why now? its employed physician practices under the new brand umbrella to present Hospitals and health systems have always had reasons to rebrand, like to a unified system, says Ms. Foister. According to Ms. Chachra, that practice promote a new affiliation or an expansion of services. However, this recent is becoming more popular with organizations that are reinventing them- rash of healthcare rebranding seems to come from widespread industry selves. “It allows [the organization] to increase its footprint in the commu- trends, such as increased physician integration and coordination of care nity,” she says. “Having practices rolled up underneath the larger brand… across the continuum, that have picked up steam in the last year. broadens the number of entry points that a patient can access a hospital “It’s no secret that healthcare systems and hospitals are redefining them- or system.” selves…with healthcare reform prompting population health initiatives, So, as hospitals and health systems continue to integrate and redefine there is a move toward a physician-driven, patient-centered system mod- themselves to patients and their communities, additional new names and el,” says Marissa Chachra, a senior advisor with Brentwood, Tenn.-based brands are likely to pop up across the country. n Jarrard Phillips Cate & Hancock, a healthcare communications firm. “As

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ACOs: The Least Agreed-Upon Concept in Healthcare? denied the Pioneer ACOs’ requests to delay the pay-for-performance peri- (continued from page 1) od and said performance benchmarks will apply to Pioneer ACOs in 2013. The discord between the ACOs and CMS could be considered a significant The ACO, or accountable care organization, may very well be the least hiccup in terms of confidence around the Pioneer ACO program. agreed-upon concept in healthcare today. Here, various experts weigh in on why the healthcare industry has been The term ACO was coined in 2006 by Elliott Fisher, MD, director of Dart- slow to accept ACOs, the five most common arguments against the model mouth Institute for Health Policy and Clinical Practice in Hanover, N.H. and what it will ultimately take for ACOs to become a proven strategy for The concept resembles that of health maintenance organizations, with a population health. focus on cost savings and accountability. One of the largest differences between the two models is ACOs’ size, with ACOs being smaller than HMOs. “There is no magic bullet” The concept was embraced by lawmakers and built into the 2010 Patient Stuart Lockman, Esq., is president of Michigan Pioneer ACO, which is De- Protection and Affordable Care Act. In the first few months — even years troit Medical Center’s ACO. The ACO is managed by the DMC Physician — after the passage of PPACA and after the publication of CMS’ long- Hospital Organization, which includes approximately 1,100 providers, and awaited final ACO rule, it wasn’t uncommon for healthcare experts to call it is one of CMS’ Pioneer ACOs. ACOs the “unicorns of healthcare.” Critics said the healthcare law encour- “ACOs have really proliferated in the past three years or so, considering aged a model everyone had heard of, but nobody had seen. that this was a concept that was only written about in academic journals The unicorn moniker has since fallen to the wayside. As of January 2013, around five or six years ago,” says Mr. Lockman. “To have 300 of them up there were 428 ACOs — sponsored by commercial payors and Medicare and running already is sort of a remarkable achievement.” — across 49 states. That’s a significant increase from March 2010, when Michigan Pioneer ACO was one of the 32 Pioneers to sign the letter there were just 10 ACOs across the entire country. to CMS requesting a change to the quality reporting requirements. The From late 2011 to early 2013, Medicare has contracted with more than ACOs’ letter said CMS does not yet have mature data for empirical 250 ACOs nationally with 4 million total Medicare beneficiaries. Another benchmarks, a considerable roadblock, and that CMS’ proposed bench- 100 to 200 ACOs are expected to be added in the next two years. The marks are loftier than those in commercial contracts and difficult to meet. model has spread just as quickly on the commercial side. For instance, last But the problem may stretch beyond the Pioneers. Mr. Lockman says year, commercial insurer Cigna announced its plans to have one million problems around data and measurements are likely to present themselves patients enrolled in its ACOs by 2014 — a tenfold increase at the time of in any ACO arrangement. the payor’s announcement. “ACOs are driven by data,” says Mr. Lockman. “The question is the avail- Although the model has grown by leaps and bounds in the past three years, ability and extensiveness of the data with which you have to work. We proliferation does not necessarily thwart criticism. ACOs have stirred de- have our own issues with CMS in terms of the data we receive, and [other bate since day one, and they’ve been subject to a few louder critiques as ACOs] have data issues as it relates to each commercial payor or insurer. of late. In terms of how to proceed, it almost becomes an individual approach.” In February, two professors from Harvard University and a senior research As far as expenses go, cost expenditures on Michigan Pioneer ACO’s fellow from Innosight Institute, an education and healthcare think tank, pub- 12,900 patients have remained flat compared with the baseline data pro- lished an op-ed in The Wall Street Journal, highlighting what they called “flawed vided by Medicare. That means the ACO is spending no more or less on its assumptions” that will ultimately lead ACOs to fail. “The ACO concept is patients than it has historically spent. based on assumptions about personal and economic behavior — by doctors, Mr. Lockman says he’s hestitant to jump on the bandwagon when it comes patients and others — that aren’t realistic,” the authors wrote. to broad criticism of the ACO model. “There is no one magic bullet,” A month later, Deloitte released its “2013 Survey of U.S Physicians,” based he says. “My feeling is that it took us years to get us to the point we’re at. on 613 responses from primary care physicians, surgical specialists, non- You can’t expect everything to be changed overnight. ACOs put emphasis surgical specialists and other physicians. In a somewhat unpromising find- where it should be, which is on cost and quality.” ing, only one in three physicians reported familiarity with ACOs, episode- Marc Bard, MD, co-director and physician leader of Tufts Health Care In- based payments and patient-centered medical homes. That meager rate of stitute in Boston and author of “Accountable Care Organizations: Your Guide to familiarity was noteworthy, given that ACOs have been part of the health- Strategy, Design and Implementation,” says the concept of ACOs is so complex, care reform law for more than three years now. there are bound to be contentions. To punctuate the dampening events, the 32 Pioneer ACOs sent a letter to “Anybody looking at the ACO and saying that it will or won’t be the end- CMS, asking the agency to reconsider the quality metrics they are required game for healthcare is missing the point,” says Dr. Bard. “It’s an evolution- to report on in 2013. The Pioneer program was designed to be a high-risk, ary stepping stone in building a system of care,” says Dr. Bard. high-reward model with an accelerated track to ACO formation. For the past year, Pioneer ACOs received payment for reporting data on metrics. Five frequent arguments against ACOs In 2013, the ACOs are slated to move from pay-for-reporting to pay-for- Criticism of ACOs in the past few years has varied in extremity and logic, performance. In year three, Pioneer ACOs that have shown a specified but there have been a few recurring arguments made against the pay-for- level of savings over the first two years will be eligible to move a substantial performance model. portion of their payments to a population-based model. In their letter, the Pioneer ACOs urged CMS to hold them to reporting 1. In the grand scheme of healthcare status only in 2013, just as they were this previous year. The Pioneer ACOs spending, ACOs’ savings will be slight. also asked CMS to delay 2014 payments tied to performance benchmarks. Will juice from ACOs be worth the squeeze? Will incentives be enough to Those benchmarks are being applied this year for the Pioneers, and the 32 change physicians’ behavior? How many administrative costs will ACOs organizations claimed that 19 of the proposed “flat percentage” bench- accrue? These continue to be some of the most pressing questions about marks were higher than other quality performance targets. In April, CMS the model. ACOs 13

Some skeptics have said ACOs involve more work than reward. For exam- 3. ACOs won’t work when healthcare still ple, in November 2011, former Federal Trade Commission Commissioner J. operates in a fee-for-service system. Thomas Rosch said that in even the most optimistic scenario, “the savings Even though ACOs are built on a pay-for-performance reimbursement to Medicare from the ACO program are no more than a rounding error.” model, Medicare continues to reimburse hospitals on a fee-for-service Unfortunately for ACOs’ defense, it’s still too soon for CMS to point to model. Medicare also reimburses individual providers and suppliers for how much money ACOs will save Medicare — if any. Richard Gilfillan, specific services just as it did under fee-for-service payment system. Many MD, director of the Center for Medicare and Medicaid Innovation, said hospitals continue to use fee-for-service as a way to keep score or deter- more “telling evidence” about CMMI models, including accountable care mine which physicians have earned what portion of payments and savings. organizations, would be available this summer. But commercial models This is still the go-to method for “score-keeping” in some ACOs, accord- have reported some promising results, like Oak Brook, Ill.-based Advocate ing to a 2012 report from the New England Journal of Medicine. Health Care’s ACO. Mr. Lockman of the Michigan Pioneer ACO says he’s observed this inher- Advocate launched its ACO, called AdvocateCare, in late 2010 with Blue ent tension at DMC, and among ACOs in general. When hospitals and Cross Blue Shield of Illinois. The ACO includes 10 hospitals and covers physicians are reimbursed on a fee-for-service model, it can be difficult roughly 380,000 patients. Based on data from the ACO’s first six months, to incentivize them to reduce utilization rates and spend more time with hospital admissions per member decreased by about 10 percent and emer- patients. “Part of the issue is that we are trying to have a pay-for-quality- gency department visits fell by 5 percent. Year-one data from the ACO driven system when we’re still in a pay-for-volume system,” says Mr. Lock- showed a 26 percent decrease in readmission rates for AdvocateCare pa- man. “It’s very difficult to live in both worlds.” tients with chronic illnesses, due in part to patients’ access to transition A 2012 Commonwealth Fund report recommended that ACOs’ compen- coaches. And the 13.6 percent readmission rate for AdvocateCare patients sation models should be locally determined, based on the unique makeup who were sent to nursing facilities was still lower than the national average, of the physician population, the relationship that exists between providers 20 percent. and payors, and other factors respective to the ACO. 2. ACOs were designed on a premise that Potential payment models for ACOs include straight salaries, a model overestimated the level of integration in Cleveland Clinic has used for years; equal shares, in which income is based healthcare. on revenue after expenses with expenses divided equally among provid- CMS offered the Pioneer ACO program in recognition that a handful of ers; productivity-based compensation, in which income is based on the integrated health systems were further along in their clinical integration, percentage of either billings, collections or resource-based relative value coordinated care and shared savings arrangements than others. scale units; incentive-based compensation, with a portion tied to providers’ performance around core ACO goals; and capitation, in which income is Healthcare experts often point to those health systems and other highly based on distribution of money from payors either equally or based on a integrated organizations, like Oakland, Calif.-based Kaiser Permanente or predetermined formula. Danville, Pa.-based Geisinger Health System, as what ACOs should ultimately resemble down the line, but these comparisons may be overstated. For ACOs to be successful on a nationwide scale, various approaches to payment need to be tested for effectiveness. Hospitals and health systems Dr. Bard of Tufts says ACOs were founded under the idea that there is will also have to use fee-for-service payments in a more limited fashion. a high degree of cohesion between physicians and their community hos- “Bringing Medicare and private-sector payment models into sync, to the pitals, something he refers to as “systemness.” The only problem is this extent possible, will facilitate this,” the Commonwealth Fund reported. assumed level of systemness or integration is not found in many communities in America. 4. ACOs will move patients out of hospi- “At the end of the day, if the only successful ACOs are those from [Part- tals and hurt hospitals’ revenue. Do ACOs represent hits to hospitals’ revenue? It’s certainly a possibility, ners HealthCare], Vanguard Health Systems and Kaiser Permanente, what but as healthcare strives to incorporate the tenets of the triple aim, declin- has society gained?” says Dr. Bard. “These organizations were already op- ing inpatient admissions may be an unavoidable reality for hospitals. erating at the highest levels of confidence in respect to the triple aim.” The triple aim was the concept coined by former CMS Acting Administrator The potential change to hospitals’ bottom lines comes on top of ACOs’ Donald M. Berwick, MD: to improve the health of populations, improve inherent financial burden, as well. Hospitals have the organizational struc- the patient experience and reduce per capita healthcare costs. ture, facilities and capital necessary for ACOs, whereas physicians drive the intellectual capital behind the model, making the most decisions about Instead of integrated systems operating successful ACOs, Dr. Bard says where healthcare dollars go. So while hospitals and health systems may pro- ACOs’ worth will be proven if they can transform care delivery in organi- vide the capital investments and infrastructure necessary for ACO success, zations and regions that are not prolific healthcare hubs, such as Syracuse, it will also be their business model that takes the largest hit from the model N.Y., or Wichita, Kan. as ACOs shift healthcare away from “heads in beds.” Gary Thomas, COO of Accountable Care Solutions at Aetna, says he’s “To achieve the triple aim, care is going to continue its migration out of seen nuances in how organizations pursue accountable care programs, hospitals and into the ambulatory environment,” says Dr. Bard. “The capi- driven by the level of integration they’ve attained. “Interest in a specific tal partners that need to make investments in the ACO are precisely those approach seems to be heavily dependent on how prepared an organization organizations that are likely to experience the greatest negative impact is to make this transition — both structurally and culturally. Those [health from the ACO — mainly a reduction in hospital volumes.” systems] that are far along in clinically integrating their networks are looking at a range of accountable care models to leverage public and private Mr. Lockman says the hospital industry faces a challenge today — to build payor programs.” accountable care mechanisms while ensuring hospitals can survive and thrive. “What we want to evolve to is a situation in which we reserve hos- He says those health systems that are less advanced are looking for consult- pitalization for those who really need it,” he says. “That may mean over a ing, capabilities and other gain-share programs to push clinical integration period of time, hospitals might get smaller or become more specialized — and build a foundation for value-based care. not any hospital in and of itself but the system as whole.” 14 ACOs

Speaking from the payor side, Mr. Thomas says Aetna’s ACOs involve op- What will prove ACOs? portunities for hospitals and health systems to tap into new sources of The healthcare industry is still in a waiting game as far as ACOs’ results. revenue. “For example, many of the ones Aetna is involved with include Although a few mature ACOs like AdvocateCare (and it’s important to jointly marketed health plan products, giving health systems and provider keep in mind that the term “mature” means that ACO is only about three organizations an additional way to improve the health of their communi- years old) have reported hopeful results from their first years; other newly ties while at the same time grow their patient base,” he says. launched ACOs are not yet able to disclose results. For Medicare savings, the industry has its eye on the Pioneer ACOs, and results from those 32 5. ACOs take healthcare back to the 1990s. organizations are expected this summer. Healthcare leaders have a hard time forgetting the 1990s and emergence of integrated delivery networks. These memories leave many in the in- Either way, whether in regards to commercial or Medicare results, Dr. Bard dustry pointing to ACOs and calling the model déjà vu. Physician-hos- says people shouldn’t expect dramatic results or a sudden wave of ACO pital organizations and management service organizations were designed acceptance and implementation. to coordinate care through capitated risk contracts, but overall, they were regarded as ineffective in improving care quality or lowering costs. Those “What I look for is evidence that as we invest in and improve systemness, disappointments still linger for some cynics. with everyone working as a team, playing as far north in their licenses as possible and delivering patient-centered care, outcomes improve. I think it There has have also been consistent comparisons between ACOs and will be a slow, steady momentum.” HMOs. For instance, some critics say ACOs should allow patients to par- take in cost savings. This participation could take different forms, such as Dr. Bard and Mr. Lockman both noted that ACOs have already made patients paying smaller copayments if they choose a physician who is in an changes to the healthcare industry, particularly for providers. Dr. Bard says ACO. If ACOs make it more expensive for patients to receive care else- ACOs have restored a level of professionalism across the industry that has where — as a strategy to keep patients in the ACO — then it may resemble been well-received and healthy, as ACOs have enabled the broader range an unfavorable, network HMO. of healthcare providers — nurses, physicians, dieticians, pharmacologists, social workers and more — to feel needed in the care continuum. “That’s Oddly, even HMOs received less flak when they were rolled out. Dr. Bard what was lost in the 1990s: dignity and care and all those things that matter says the emergence of HMOs in the 1990s did not stir as much controversy so much to those people,” he says. as ACOs, largely because HMOs were not as mainstream. “The HMO was an alternative movement. It was voluntary and always a bit of the fringe, Mr. Lockman says although it will take time for ACOs to gain broader whereas managed care was more mainstream,” he says. acceptance, he’s observed a change in the provider-patient relationships within Michigan Pioneer ACO. As more providers begin to notice ACOs’ One of the most significant differences between ACOs and delivery net- positive effects and promotion of patient-centered care, Mr. Lockman says works in the 1990s is today’s role of health information technology, data the model is likely to catch on. analytics and clinical decision support. But these tools alone will not make ACOs infallible, according to a 2012 study published in Health Affairs, “One of the things that gives us gratitude is some of the individual experi- which suggested that information technology is necessary but insufficient ences patients have in terms of working with care managers and providing to improve outcomes in an ACO. Rather, the study found ACOs will fare the kinds of care transitions that the fee-for-service, episodic care system best if they are not oversold as silver bullets and if structured to target in a fragmented environment does not provide. When we see patients be- specific populations. ing grateful for having care manager and providing care transitions — every one of those voices adds to support of program,” he says. n

Survey: Majority Medicare ACO of Physicians Results Expected Unfamiliar With Soon By Molly Gamble

ACOs, PCMHs ichard Gilfillan, MD, director of the Center for Medicare and By Heather Punke Medicaid Innovation, said more “telling evidence” about CMMI models, including accountable care organizations, would be avail- ust one in three of the nation’s physicians reported they were R able this summer. familiar with accountable care organizations, episode-based pay- Jments and patient-centered medical homes, according to the De- Dr. Gilfillan offered some early evidence that other pilot programs like loitte 2013 Survey of U.S. Physicians. bundled payments and patient-centered medical homes may be helping to lower healthcare costs. In the final quarter of last year, hospital readmis- Last year, more than 50 percent of physicians were familiar with those sions for Medicare beneficiaries decreased to slightly below the threshold programs, according to the survey. of 18.5 percent to 19.5 percent, which is where the readmission rate had The survey’s findings are based off of 613 responses from primary care sat for the past five years, according to the report. physicians, surgical specialists, non-surgical specialists and other physi- Dr. Gilfillan also said there is data suggesting CMMI’s medical home pro- n cians. gram in Vermont is slowing the growth of healthcare costs, according to the report. n Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 15 Save the Date! Becker’s Hospital Review CEO Strategy Roundtable November 14, 2013 The Ritz-Carlton Chicago Co-chaired by Scott Becker, Publisher, Becker’s Hospital Review, and Chuck Lauer, Former Publisher, Modern Healthcare To learn more visit www.BeckersHospitalReview.com. To register, visit www.BeckersHospitalReview.com/novhospitalevent.html Principle Becker Ad 7x5 April Final_Layout 1 3/8/13 8:20 AM Page 1 It is a matter for Principle.

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230 West Monroe • Suite 2540 • Chicago, IL 60606 312.422.1010 • [email protected] www.principlevaluation.com 16 Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 125 Hospital and Health System CFOs to Know — 2013 By Bob Herman Becker’s Hospital Review has named the following CFOs Talana Bell. CFO of Flowers Hospital (Dothan, to its list, “125 Hospital and Health System CFOs to Ala.). Ms. Bell started her healthcare career at Flow- Know.” These men and women help lead renowned ers Hospital in 1999 as a financial analyst. She served tertiary centers, academic medical centers, commu- in that role for six months before being promoted nity hospitals and health systems in all financial mat- to CFO. This past September, Franklin, Tenn.-based ters while balancing quality patient care and innovative Community Health Systems, the parent company of healthcare reform strategies. The Becker’s Hospital Review Flowers Hospital, awarded Ms. Bell with an Excellence editorial team used several resources to develop this in Leadership Award, which recognizes hospital leaders list, including nominations, prior Becker’s Hospital Review who have demonstrated commitment to quality health- lists and input from industry experts. care and operational excellence. Note: Individuals cannot pay for inclusion on the list. Chris Bergman. Vice President and CFO of The Names are presented in alphabetical order. Christ Hospital (Cincinnati). Mr. Bergman, who has more than 30 years of healthcare financial experience, Clint Adams. CFO of Ardent Health Services joined The Christ Hospital in December 2008. Previ- (Nashville, Tenn.). Since 2003, Mr. Adams has led the ously, he was CFO of the Sparrow Health System in financial operations of Ardent Health Services, which Lansing, Mich., and vice president of finance at Cen- owns and operates three different health systems — tura Health in Englewood, Colo. He was a senior audit Lovelace Health System in Albuquerque, N.M., Hillcrest manager at Ernst & Young before entering the hospital HealthCare System in Tulsa, Okla., and Baptist St. An- sector. In 2011, the Cincinnati Business Courier named Mr. thony’s Health System in Amarillo, Texas. Prior to his Bergman as its “CFO of the Year.” time with Ardent, Mr. Adams was a senior audit manager for Ernst & Young and staff accountant for Deloitte. Michael Blaszyk. Senior Executive Vice Presi- dent, Chief Corporate Officer and CFO of Dig- Katherine Arbuckle. Senior Vice President and nity Health (San Francisco). As senior executive vice CFO of Ascension Health (St. Louis). Ms. Arbuckle president, chief corporate officer and CFO of Dignity became senior vice president and CFO of Ascension Health, one of the largest health systems in California, Health, the largest non-profit and Catholic health sys- Mr. Blaszyk oversees the financial affairs and corporate tem in the United States, in April 2012. She had a prior operations for the $13.1 billion integrated health system. stint at Ascension from 2002 to 2006 as vice president He has more than 30 years of experience in managing of finance. Ms. Arbuckle also was CFO of Bon Sec- finances and operations in the healthcare sector, and he ours Health System, based in Marriottsville, Md., for previously served as CFO of University Hospitals in more than five years and assistant vice president of fi- Cleveland. Mr. Blaszyk also serves as a member of the finance at St. Vincent Health in Indianapolis. nance committees for St. Louis-based Ascension Health, Charles Ayscue. Senior Vice President of Finance Englewood, Colo.-based Catholic Health Initiatives and and CFO of Mission Health (Asheville, N.C.). Mr. Cincinnati-based Catholic Health Partners. Ayscue has served as senior vice president of finance Sally Boemer. Senior Vice President and CFO of and CFO of Mission Health since March 2007, and his North Shore Medical Center (Salem, Mass.). Ms. healthcare finance career has mostly been based in the Boemer never intended to pursue a career in healthcare Tar Heel State. Prior to Mission Health, Mr. Ayscue finance, but that changed after she took an administra- was CFO of UNC Health Care in Chapel Hill, N.C., tive fellowship at Massachusetts General Hospital in for 20 years, where he helped develop a combined op- Boston in 1993. The fellowship allowed her to rotate erating expense budget of more than $1.4 billion for through all of the hospital’s operations and finance de- the 1,096-bed system. He also served as comptroller partments. Ms. Boemer assumed the position of senior and associate director of financial services at The Mo- vice president for finance at Massachusetts General in ses H. Cone Memorial Hospital in Greensboro, N.C. 1999. She is currently senior vice president and CFO Jenny Barnett. Executive Vice President and CFO of North Shore Medical Center, a two-hospital system of Catholic Health East (Newtown Square, Pa.). that is part of Boston-based Partners HealthCare, the Ms. Barnett is responsible for the financial oversight parent of Massachusetts General. and stewardship of Catholic Health East, which re- Mark Bogen. Senior Vice President of Finance cently announced a pending merger with Livonia, and CFO of South Nassau Communities Hospital Mich.-based Trinity Health this past October. She has (Oceanside, N.Y.). Mr. Bogen has more than 35 years been at CHE since 2006, and before becoming execu- of healthcare financial experience, and before being tive vice president and CFO, Ms. Barnett was CHE’s named CFO of South Nassau Communities Hospital vice president of finance and chief accounting officer. in April 2012, he was the hospital’s vice president of fi- Prior to CHE, she served as system director of finance nance for four years. Prior to joining South Nassau, Mr. and corporate controller of Christus Health, based in Bogen was CFO of New York City’s Preferred Health Irving, Texas, and director of accounting at Memorial Network before it merged with NewYork-Presbyteri- Hospital and Health System — 2013 CFOs to Know Hermann Healthcare System in Houston.

125 an Healthcare System. In 1997, he founded his own Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 17 consulting firm, The Bogen Consulting Group, of finance departments for both the hospital and in 1997, and as executive vice president and which merged with Besler Consulting in 2004. medical school. In March, Moody’s Investors Ser- CFO, he oversees the system-wide finances of vice confirmed the “A3” credit rating on the hos- the second-largest for-profit hospital chain in Jeff Bolton. CFO of Mayo Clinic (Roches- pital’s bonds, and Mr. Burke helped the academic the country. From 1973 to 1996, Mr. Cash held ter, Minn.). Mr. Bolton has been CFO of Mayo medical center post a 9.9 percent operating mar- executive finance positions at Columbia/HCA Clinic since 2003. Previously, Mr. Bolton was gin in fiscal year 2012. Prior to his time with NYU Healthcare, now Nashville, Tenn.-based Hospi- CFO at Carnegie Mellon University in Pitts- Langone, he was senior vice president and CFO tal Corporation of America, and health insurer burgh and worked in planning and financial of Tufts Medical Center in Boston for roughly Humana. Global finance publisher Institutional analysis at the University of Pittsburgh. His first five years. He also served as CFO of Duke Uni- Investor named Mr. Cash as one of America’s best professional financial position was as a contract versity Hospital in Durham, N.C., for four years. healthcare CFOs for seven consecutive years, administrator for the city of Pittsburgh in 1979. from 2005 to 2011. He has helped Mayo achieve an “Aa2” rating Daniel Cancelmi. CFO of Tenet Healthcare from Moody’s Investors Service, one of the (Dallas). Tenet named Mr. Cancelmi CFO of Paul Castillo. CFO of University of Michi- highest long-term credit ratings. its 49-hospital network in September 2012. Pre- gan Health System (Ann Arbor). Since Sep- viously, he served as Tenet’s senior vice presi- tember 2011, Mr. Castillo has led the finances Kevin Brennan. Executive Vice President dent, controller and principal accounting officer, of U-M Health System, one of the largest ac- of Finance and CFO of Geisinger Health and he has been a headquarters-level executive ademic-based healthcare organizations in the System (Danville, Pa.). For roughly two de- at Tenet since 1999. Mr. Cancelmi also was CFO country. Before joining the University of Michi- cades, Mr. Brennan has been a top financial of Hahnemann University Hospital, a Tenet- gan, he was CFO and vice president of finance leader within Geisinger Health System. From owned, 496-bed academic medical center in at UPMC Shadyside in Pittsburgh, a 520-bed 1997 through 2000, Mr. Brennan served as CFO Philadelphia. His healthcare career began with hospital within University of Pittsburgh Medical of the formerly merged Penn State Geisinger PwC in Pittsburgh and New York City. Center. Mr. Castillo was also the vice president Health System, and since 2000, he has held his of finance at Saint Vincent Health System in role as executive vice president of finance and Benjamin Carter. Senior Vice President and Erie, Pa., in the early 1990s. CFO of Geisinger. Before Geisinger, he was CFO of Trinity Health (Livonia, Mich.). the regional vice president of finance and vice Mr. Carter’s healthcare finance career has taken Randy Combs. Senior Vice President and president of managed care with Sylvania (Ohio) him all across Michigan. His hospital experience CFO of Mercy (Chesterfield, Mo.). Mr. Franciscan Health, and he was also the vice pres- started at Oakwood Healthcare in Dearborn, Combs became senior vice president and CFO of ident of finance for The Germantown Hospital Mich., where he spent 20 years and eventually Mercy in March 2009, and he has more than 26 and Medical Center in Philadelphia and Saint became CFO of the four-hospital system. Mr. years of service with the 32-hospital system. This Michael’s Medical Center in Newark, N.J. Carter then moved to Detroit Medical Cen- past year, in addition to his regular CFO duties, ter, where he was COO, before joining Trin- Mr. Combs received the added responsibilities of Bill Brosius. Vice President and CFO of St. ity Health as senior vice president and CFO strategic growth. Prior to his time with Mercy, Mr. Luke’s Episcopal Hospital (Houston). At in 2010. Trinity Health is currently exploring a Combs was vice president of finance for Barnes- St. Luke’s Episcopal Hospital, Mr. Brosius has mega-merger with Newtown Square, Pa.-based Jewish Hospital in St. Louis, and he also was a described his leadership style as that of some- Catholic Health East. senior accountant with KPMG in St. Louis. one who evaluates all requirements, builds support among stakeholders and creates consensus Larry Cash. Executive Vice President James Connelly. Senior Vice President and around the shared vision. Before he became CFO and CFO of Community Health Systems CFO of Henry Ford Health System (Detroit). of St. Luke’s, he served as the chief financial (Franklin, Tenn.). CHS recruited Mr. Cash As senior vice president and CFO of Henry Ford consultant for hospital operations at The Lane Group, a boutique healthcare consulting firm in CARE413_ICD10_4.875:Layout 1 4/24/13 10:20 AM Page 1 Atlanta. He also was a consultant and CFO for Triumph HealthCare, a $300 million long-term acute-care hospital company based in Houston. Jump Start Your ICD-10 Readiness: Michael Buhl. Senior Vice President and CFO of University of Wisconsin Hospital Prepare with CARE! and Clinics (Madison). In November 2008, Care Communications’ experienced ICD-10 team can quickly get you on the road to readiness with our comprehensive Mr. Buhl joined UW Hospital and Clinics as services, including: senior vice president and CFO. He previously • Staff Inventory and Knowledge Gap Analysis served as interim CFO of Stanford Hospital • Clinical Documentation and DRG Revenue Risk Assessment & Clinics in Palo Alto, Calif. Mr. Buhl also was • Comprehensive Staff Education (remote or on-site) CFO for the Mayo Clinic in Scottsdale, Ariz., • ICD-10 Project Manager or Coach and Mayo Franciscan Skemp Healthcare in La • ICD-9/ICD-10 Production Coding Support Crosse, Wis., and for 16 years, he was vice presi- • Systems-based Leadership and Change ManagementSM dent of finance at Minneapolis-based Fairview For more information, contact Roberta Peters at 800-458-3544, Health Services. His professional career started ext. 153 or [email protected]. in Minnesota as a staff accountant for PwC and Download your complimentary copy of a senior Medicare auditor for Blue Cross and “Six Building Blocks for a Successful ICD-10 Implementation” at carecommunications.com/ICD-10-Success. Blue Shield of Minnesota. Michael Burke. Senior Vice President, Vice Dean and CFO of NYU Langone Medical Center (New York City). Mr. Burke, part of 800.458.3544 NYU Langone since 2008, oversees operations www.carecommunications.com/icd10 18 Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035

Health System, Mr. Connelly oversees all fiscal affairs such as capital devel- tive finance roles at General Electric — including manager of finance and opment and mergers and acquisitions — including the system’s pending deal global business development for GE Energy and CFO of GE Transporta- to merge with Royal Oak, Mich.-based Beaumont Health System. Before tion Systems — and worked for PwC in Pittsburgh for 10 years. joining Henry Ford, Mr. Connelly served as senior vice president and CFO of TriHealth in Cincinnati. He also was senior vice president and COO of Chris Denton. CFO of Henrico Doctors’ Hospital (Richmond, Va.). Cincinnati-based Bethesda North Hospital. Mr. Connelly’s executive career Mr. Denton has served as CFO of 767-bed Henrico Doctors’ Hospital, began at Arthur Andersen in Detroit as an audit partner. one of the largest hospitals within HCA Virginia, since October 2007. Be- fore Henrico Doctors’ Hospital, Mr. Denton held various other executive Mike Connors. Senior Vice President of Finance and CFO of Cape positions at HCA hospitals, including CFO and COO of Parkland Medical Cod Healthcare (Hyannis, Mass.). Mr. Connors has served as senior vice Center in Derry, N.H. He also held executive accounting positions at HCA president of finance and CFO of Cape Cod Healthcare since March 2009, hospitals in Florida and Virginia, and he has 15 years of experience in the and executives at the two-hospital system have said Mr. Connors’ knowledge healthcare industry. and understanding of expense and revenue cycle management has helped make Cape Cod Healthcare a financially sound institution. Prior to Cape Cod Roger Deshaies. Senior Vice President and CFO of Fletcher Allen Healthcare, he served as senior vice president and CFO of Signature Health- Health Care (Burlington, Vt.). Mr. Deshaies has served as senior vice care, a long-term care system based in Brockton, Mass. Mr. Connors also was president and CFO of Fletcher Allen, the only academic medical center CFO of Lahey Hospital & Medical Center in Burlington, Mass., and vice in Vermont, since 2008. His healthcare financial experience spans almost president of finance at South Shore Hospital in Weymouth, Mass. 35 years. Before joining Fletcher Allen, Mr. Deshaies served as CFO of Brigham and Women’s Hospital in Boston for 10 years. Diane Corrigan. CFO of Hospital of the University of Pennsylvania (Philadelphia). Since 2000, Ms. Corrigan has been with the 772-bed Hos- Stephanie Doughty. CFO of Poudre Valley Health System (Fort Col- pital of the University of Pennsylvania — the largest hospital in Philadel- lins, Colo.). Ms. Doughty’s healthcare finance career dates back to 1982 phia and flagship facility of the University of Pennsylvania Health System. after she graduated college with a bachelor’s in business administration. Before she joined HUP, it had recorded three straight years of losses, but Prior to joining Poudre Valley Health in 1998, Ms. Doughty was CFO of she and others helped the hospital post operating margins above 10 percent St. Anthony’s Hospital in St. Petersburg, Fla. She previously worked with from 2007 to 2011. In 2011, the Philadelphia Business Journal named Ms. Bayfront Medical Center, also in St. Petersburg, for 10 years as the control- Corrigan as the city’s “2011 CFO of the Year” for an extra-large company. ler and vice president of finance, and with Englewood (Fla.) Community Hospital as the controller. Thomas Corrigan. Senior Vice President of Finance and CFO of Christiana Care Health System (Wilmington, Del.). Since 2006, Mr. John Doyle. CFO of IASIS Healthcare (Franklin, Tenn.). Since April Corrigan has served as senior vice president and CFO of Christiana Care, 2010, Mr. Doyle has served as CFO of IASIS Healthcare. He has also the largest health system in Delaware with more than $2.1 billion in total held other positions within the for-profit hospital company, including vice patient revenue in fiscal year 2011. Before joining the health system, he was president, chief accounting officer and treasurer. Previously, Mr. Doyle was CFO for the ADP Brokerage Services Group in Jersey City, N.J., and was a senior manager at Ernst & Young from February 1997 until March 2002, also president of the ADP Investment Center in Wilmington, Del. He also and he was at KPMG from August 1994 to January 1997. Between 1991 served in various financial roles at Anheuser-Busch. and 1994, Mr. Doyle also served as CFO for two community hospitals, one in Tennessee and one in North Carolina. David Cox. CFO of Marin General Hospital (Greenbrae, Calif.). Mr. Cox was a consultant to the Marin Healthcare District before joining as Ben Dunford. CFO of Texas Regional Medical Center at Sunnyvale. full-time CFO in 2009. Previously, he held various finance and manage- At 36 years old, Mr. Dunford is one of the younger CFOs in the hospi- ment positions at Sutter Health in Sacramento, Calif., Fletcher Allen Health tal sector. He joined the 70-bed, physician-owned Texas Regional Medical Care in Burlington, Vt., and St. Mary’s Health System in Waterbury, Conn. Center in August 2011, where he has improved profitability by roughly 30 Healthcare has been Mr. Cox’s primary professional field since he left the percent while lowering accounts receivable days and supply costs. Previ- U.S. Air Force as a captain in 1982. ously, Mr. Dunford was a senior leader at Bain & Company and an associate at Goldman Sachs in Dallas. Kelly Curry. Executive Vice President and CFO of Health Manage- ment Associates (Naples, Fla.). Mr. Curry has been an executive vice Gordon Edwards. CFO of Gundersen Lutheran Health System (La president at Health Management since July 2007 and officially became CFO Crosse, Wis.). Mr. Edwards joined Gundersen Lutheran in February in January 2010. He also served as Health Management’s COO and chief 2011 as CFO and has helped the system garner an “A1” credit rating from administrative officer, and held various other management positions with Moody’s Investors Service. Before his time with Gundersen Lutheran, Mr. the for-profit chain during its infancy from 1982 to 1994. Along with his Edwards worked at Legacy Health in Portland, Ore., for eight years. He professional financial endeavors, Mr. Curry and his wife founded Founda- held a variety of roles, including vice president and controller, acting CIO, tion in Christ Ministries, a religious organization based in Ireland, in 1995. vice president of finance, director of finance operations and director of government reimbursement and payor contracting. Mr. Edwards also spent Dennis Dahlen. Senior Vice President and CFO of Banner Health eight years in public accounting firms Arthur Andersen and KPMG. (Phoenix). Mr. Dahlen oversees all financial operations of Banner Health, which operates 23 hospitals across seven states and has nearly $5 billion in Marvin Eichorn. Senior Vice President and CFO of Mountain States annual revenue. He started his career at Banner Health in 1983 as an inter- Health Alliance (Johnson City, Tenn.). Since 1998, Mr. Eichorn has been nal auditor and worked his way up the ranks to become vice president of part of Mountain States Health Alliance, a regional healthcare system with 13 finance in 2000 and senior vice president of finance in 2006 before taking hospitals throughout Tennessee, Virginia, Kentucky and North Carolina. Mr. on the CFO role in 2009. Prior to Banner Health, Mr. Dahlen was an audi- Eichorn was influential in MSHA’s acquisition of five community hospitals tor for accounting firm McGladrey. in southwest Virginia throughout the past several years. Mr. Eichorn previously was with Covenant Health, based in Knoxville, Tenn. Robert DeMichiei. Senior Vice President and CFO of University of Pittsburgh Medical Center. As senior vice president and CFO, Mr. Chris Ellington. Executive Vice President and CFO of UNC Health DeMichiei leads the financial initiatives of one of the top-grossing systems Care (Chapel Hill, N.C.). Mr. Ellington has served as executive vice in the country. Before joining UPMC, Mr. DeMichiei held various execu- president and CFO of UNC Health Care since July 2010, monitoring all Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 19 financial decisions of 824-bed, $1-billion UNC England HealthAlliance in Leominster, Mass., officer of MedStar Health in Columbia, Md. He Hospitals. Before joining UNC, he served as vice Saratoga Hospital in Saratoga Springs, N.Y., also was an executive and community hospital president for fiscal affairs and CFO of Appala- and HealthAmerica, a Pittsburgh-based HMO CFO at MedStar when Helix Health and Med- chian Regional Healthcare, a 10-hospital system owned by Coventry. lantic Health merged in June 1997 to form the with locations across Kentucky and West Virgin- modern-day MedStar. ia. Mr. Ellington also held senior finance roles at John Gantner. Executive Vice President Norton Healthcare in Louisville, Ky., and three of Finance and CFO of Meridian Health Mike Gleason. Vice President and CFO of different major for-profit hospital operators. In (Neptune, N.J.). Mr. Gantner has been CFO Shands Jacksonville (Fla.) Medical Center. 2010, the Triangle Business Journal named Mr. El- of Meridian Health, one of the largest non-prof- Mr. Gleason was the controller at the 695-bed lington a “CFO of the Year.” it health systems in New Jersey, since February Shands Jacksonville before assuming his current 2008. He has more than 35 years of healthcare title in 2009. Last year, the Jacksonville Business John Faulstich. CFO of UAB Health Sys- financial and operational experience, having Journal named Mr. Gleason as a finalist for its tem (Birmingham, Ala.). Before joining UAB served as executive vice president of Robert “CFO of the Year” title for large non-profit Health System in April 2009, Mr. Faulstich had Wood Johnson University Hospital and Health organizations, saying his leadership helped the a longstanding tenure as senior vice president of System in New Brunswick, N.J., prior to his cur- academic medical center garner a credit upgrade finance and CFO of Cleveland-based Sisters of rent position. Mr. Gantner also was a healthcare and allowed it to exceed patient cash collection Charity of St. Augustine Health System. From consulting partner at Ernst & Young. targets. Prior to Shands Jacksonville, Mr. Glea- 1984 to 2008, he led that system — which in- son was a senior financial strategist, manager cluded five wholly-owned and joint-ventured John Geppi. Executive Vice President and and CFO of Adexa, an integrated supply chain hospitals in Ohio and South Carolina — in fi- CFO of Covenant Health System (Knoxville, solutions company. nancial governance, strategy, contracting, trea- Tenn.). During his tenure at Covenant Health, sury and merger and acquisition activities. While Mr. Geppi has kick-started multiple projects. For Robert Glenning. Executive Vice President at Sisters of Charity, he oversaw a 50-50 joint example, he currently serves as CEO of Cen- and CFO of Hackensack (N.J.) University operating venture with Cleveland-based Univer- tral Atlantic Health Network, a group purchas- Medical Center. Since 2007, Mr. Glenning sity Hospitals in 1999. ing organization that is part of VHA that has has led the financial operations of Hackensac- saved Covenant Health an estimated $1 million kUMC as executive vice president and CFO. Steve Filton. Senior Vice President and over two years. Before joining Covenant Health, Under his tenure, the 775-bed hospital gener- CFO of Universal Health Services (King Mr. Geppi served as CFO of several different ated almost $1.2 billion of net patient service of Prussia, Pa.). Mr. Filton has been with hospitals and health systems, including Memo- revenue in 2011 with a 2.4 percent operat- UHS, which has roughly two dozen acute-care rial Health System in Chattanooga, Tenn., and ing margin. Also in 2011, HackensackUMC hospitals and more than 170 behavioral health Northside Hospital in Atlanta. Mr. Geppi’s pro- received an “A-” credit rating from S&P, the facilities, for more than 20 years, starting with fessional financial career started in Baltimore first time it received a rating from S&P. Before his role as director of corporate accounting in with Arthur Andersen. HackensackUMC, Mr. Glenning was CFO of 1985 and working his way up to vice president Kaleida Health in Buffalo, N.Y. and controller in 1991. Since 2003, Mr. Filton Steven Glass. CFO of Cleveland Clinic. Mr. has been senior vice president and CFO of Glass has been CFO of Cleveland Clinic and Paul Goldstein. Vice President and CFO of UHS, which recorded roughly $6.96 billion in the Cleveland Clinic Health System since 2005, Orlando (Fla.) Health. Mr. Goldstein has held 2012 revenues. and he joined the organization in 2002 as the his position of vice president and CFO of Or- Cleveland Clinic’s controller and chief account- lando Health since June 2005. He has been CFO Kenneth Fisher. CFO of University of Iowa ing officer. Prior to Cleveland Clinic, Mr. Glass of Orlando Health, one of the largest health Hospitals and Clinics (Iowa City). Few served as vice president and chief accounting systems in Florida, since 1996. Mr. Goldstein hospital CFOs have longer current healthcare careers than Mr. Fisher. He has been CFO of University of Iowa Hospitals and Clinics since June 2007, but he has more than 40 total years One case of Legionnaires’ disease is one too many. of healthcare financial experience. Prior to joining UIHC, Mr. Fisher was a director for Navigant Consulting, where he worked with PROTECT YOUR PATIENTS. hospital and health system clients. He has also held executive financial positions at DMC Sinai PARTNER WITH ® Grace Hospital in Detroit, Baptist Hospital of THE LEGIONELLA EXPERTS . East Tennessee in Knoxville and three Char- lotte, N.C.-based organizations: Presbyterian • Legionella and waterborne pathogens testing Hospital, Charlotte Memorial Hospital and • Water safety plans Carolinas HealthCare System. • Legionella risk assessments Michael Freed. Executive Vice President • Outbreak response and CFO of Spectrum Health (Grand Rap- ids, Mich.). For the past 17-plus years, Mr. • Research and education Freed has been an integral part of the Spectrum Health leadership team. In addition to serving as executive vice president and CFO of the nine-hospital system, Mr. Freed is president and CEO of Spectrum’s Priority Health, one of the largest health plans in Michigan. Previous experience included positions with Central New 877-775-7284 | WWW.SPECIALPATHOGENSLAB.COM 20 Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 joined Orlando Health in 1981 and eventually became director of finance Paul Ishizuka. Medical Centers Finance Officer at University of in 1985. Prior to Orlando Health, Mr. Goldstein was the controller and Washington Medicine (Seattle). Mr. Ishizuka has been the medical cen- director of finance at the former Brookwood Community Hospital in Or- ters CFO at UW Medicine and UW Medical Center, as well as associate vice lando for three years. president for medical affairs, since 1999. He has also served as CFO and controller throughout other hospitals in Washington and California, and he Greg Gombar. Executive Vice President and CFO of Carolinas serves on the finance committees of various UW Medicine affiliates. HealthCare System (Charlotte, N.C.). Mr. Gombar joined Carolinas HealthCare System, one of the largest systems in the Carolinas with rough- R. Milton Johnson. President and CFO of Hospital Corporation of ly three dozen hospitals under its management, in 1984. Before then, he America (Nashville, Tenn.). Mr. Johnson has served as president and served as an audit manager and healthcare consultant with Arthur Ander- CFO of HCA, the largest for-profit hospital company in the country, since sen for seven years. Mr. Gombar is actively involved in the North Carolina February 2011. He also was executive vice president and CFO of HCA Hospital Association and is a member of the North Carolina Association from July 2004 to February 2011, and he has been one of HCA’s direc- of Certified Public Accountants. tors since 2009. Mr. Johnson joined HCA in 1982 as a tax manager in the research and planning area and eventually became director of tax for Michael Gough. Senior Vice President and CFO of Norton Health- HealthTrust, which spun off from HCA in 1987. care (Louisville, Ky.). Mr. Gough’s career in healthcare finance stretches back to 1983, when he first worked at several hospitals within Nashville, Evan Jones. Senior Vice President and CFO of Lakeland (Fla.) Re- Tenn.-based Columbia/HCA Healthcare, now known as Hospital Corpo- gional Health Systems. Lakeland Regional brought Mr. Jones in as senior ration of America. He was CFO of Audubon Regional Medical Center vice president and CFO in September 2011. Since then, he has improved in Louisville, Ky., Medical Center Hospital in Huntsville, Ala., and several the operational income of the 851-bed health system from $8.8 million in other hospitals. Mr. Gough joined Norton Healthcare in 2000 as the vice FY 2011 to $41.8 million in FY 2012, which has raised the operating mar- president of finance and has been system CFO since September 2003. gin from 1.4 percent to 6.2 percent. Prior to joining Lakeland, Mr. Evans held several executive positions within Main Line Health, including CFO Misty Hansen. CFO of University of Arizona Health Network (Tuc- of Lankenau Medical Center in Wynnewood, Pa., and Riddle Hospital in son). Ms. Hansen has been with the University of Arizona Health Network Media, Pa. From 1980 to 2006, Mr. Evans also was CFO of St. Luke’s Uni- since 2001, where she started out as the academic medical center’s chief versity Hospital and Health Network in Bethlehem, Pa. accounting officer. She was promoted to system CFO in 2010. Before the University of Arizona, Ms. Hansen was an accounting manager at Arthur John Kasberger. Vice President of Finance and CFO of Mercy Medi- Andersen. She is a past president and board member of Pima Community cal Center (Roseburg, Ore.). For the past eight years, Mr. Kasberger has Access Program, which operates as a bridge to healthcare for the uninsured. served as vice president of finance and CFO of 169-bed Mercy Medical Cen- ter. During this time, he has helped improve Mercy Medical Center’s operat- Gail Hanson. Senior Vice President and CFO of Aurora Health Care ing margin from 1.4 percent to 7.2 percent and increased days cash on hand (Milwaukee). Ms. Hanson joined Aurora in 2011 and has been on Au- more than fivefold. Previously, he was assistant vice president of revenue at rora’s board of directors since 2009. Previously, she served as deputy ex- Palos Community Hospital in Palos Heights, Ill., and interim CFO/director ecutive director for the State of Wisconsin Investment Board for six years, of revenue services at Centegra Health System in Woodstock, Ill. where she managed more than $83 billion in assets for the Wisconsin Re- tirement System, the State Investment Fund and several other trust funds. Jack Kaup. Compliance Officer and CFO of Black Hills Surgical Ms. Hanson also worked at Blue Cross Blue Shield United of Wisconsin Hospital (Rapid City, S.D.). Mr. Kaup has been CFO of Black Hills for 20 years and spent time with Cobalt Corp., the publicly traded arm of Surgical Hospital since 1999, a couple years after the 26-bed hospital first BCBSUW, as treasurer and CFO. opened. He has more than 20 years of experience in finance, accounting and business operations. Prior to joining Black Hills, Mr. Kaup was Fred Hargett. Executive Vice President of Finance and CFO of involved in financial management for a diverse group of industries and Novant Health (Winston-Salem, N.C.). Since 2003, Mr. Hargett has served as a certified public accountant at a national firm. worked his way through Novant’s executive ranks, going from senior vice president of financial planning to executive vice president of finance and Robin Kilfeather-Mackey. CFO of Dartmouth-Hitchcock (Leba- CFO. Prior to joining Novant, Mr. Hargett worked as a manager of health- non, N.H.). Ms. Kilfeather-Mackey has led the financial strategy of Dart- care consulting with Ernst & Young in Charlotte, N.C., leading several ini- mouth-Hitchcock since January 2010, and she has held several other posi- tiatives in strategic planning and financial forecasting. tions within the organization since joining it in 1996. In October 2007, Ms. Kilfeather-Mackey served as vice president of corporate finance, where Mark Hepler. CFO of Munson Healthcare (Traverse City, Mich.). she controlled audit, tax, accounting, treasury and reimbursement func- Before becoming CFO of Munson Healthcare in April 2009, Mr. Hep- tions. She has also held other executive finance positions at various other ler served as vice president of finance for the eight-hospital system and healthcare organizations throughout New Hampshire and Vermont, and Munson Medical Center, the 391-bed flagship and regional referral center. her career started in public accounting. In addition to his current responsibilities, which include accounting and finance functions, Mr. Hepler serves as treasurer of Munson Home Health, Ryan Kitchell. CFO of Indiana University Health (Indianapolis). IU North Flight, which is Munson’s emergency medical services, and the Con- Health promoted Mr. Kitchell to system CFO in February 2012. He joined servation Resource Alliance, a private non-profit committed to sustaining IU Health in September 2010 as senior vice president and treasurer, and northwest Michigan’s natural habitat. in November 2011, he became president of IU Health Plans, which is a health plan that offers four Medicare Advantage options for beneficiaries Todd Hofheins. Vice President and CFO of Providence Health & living in IU Health’s 32-county service area. Before IU Health, Mr. Kitchell Services (Renton, Wash.). In December 2011, the 27-hospital Providence spent time at the Indiana Statehouse as the Indiana public finance director, Health & Services named Todd Hofheins vice president and CFO. Mr. Hof- and he eventually became director of Indiana’s Office of Management and heins oversees all financial operations of the system, which recorded $8.7 Budget for former Gov. Mitch Daniels. billion in net operating revenue and $5.4 billion in total net assets in 2012. His healthcare career spans more than 20 years. He previously managed a Greg Klugherz. Vice President of Finance and CFO of CentraCare new $500 million medical tower at Providence Regional Medical Center in Health System (St. Cloud, Minn.). Mr. Klugherz joined CentraCare in Everett, Wash., and was CFO of Providence’s Northwest service area. 2008 as its CFO. Previously, he was a vice president for HealthPartners, Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 21 an integrated health system in Minneapolis, and CFO of Regions Hospi- since 1989. He has overseen the system’s acquisitions of South Miami Hos- tal in St. Paul, Minn. Additionally, Mr. Klugherz was the senior financial pital, Homestead (Fla.) Hospital, Mariners Hospital in Tavernier, Fla., and executive for HealthPartners Medical Group, controller/treasury director Doctors Hospital in Coral Gables, Fla., as well as Baptist Health’s $2 billion for St. Louis Park, Minn.-based Park Nicolette Health Services, which investment portfolio. Mr. Lawson has more than 30 years of healthcare is now part of HealthPartners, and a finance executive with GE Capital financial experience. Prior to joining Baptist Health, he spent 17 years at Fleet Services. Deloitte. Mr. Lawson is the current national chair of the Healthcare Finan- cial Management Association. Anne Krebs. Vice President of Finance and CFO of Butler (Pa.) Health System. Ms. Krebs has served as vice president of finance and Mike Louge. Executive Vice President and CFO of OhioHealth CFO of Butler Health System since January 2011. Her prior experience (Columbus). Mr. Louge has been executive vice president and CFO of includes roles as vice president of finance at Mercy St. Louis, vice president OhioHealth since 2000 and is responsible for the health system’s financ- of finance at St. Joseph Hospital (now SSM St. Clare Health Center) in es, treasury, managed care, internal audits, information systems, materials Kirkwood, Mo., assistant vice president of finance at Lurie Children’s Hos- management and real estate/construction. Prior to joining eight-hospital pital of Chicago and senior auditor in KPMG’s Chicago office. Over the OhioHealth, Mr. Louge was CFO of Seton Healthcare in Austin, Texas, past four fiscal years, Ms. Krebs has helped boost Butler Health System’s and vice president of financial operations at Presbyterian Healthcare Sys- days cash on hand to 177.4. tem, now known as Texas Health Resources, in Dallas. JoAnn Kunkel. Corporate CFO of Sanford Health (Sioux Falls, S.D., Robert Lux. Vice President and CFO of Temple University Health and Fargo, N.D.). Ms. Kunkel joined Sanford Medical Center in 1995 System (Philadelphia). As vice president and CFO of Temple University and became CFO of Sanford in 2012. Her responsibilities are to provide Health System, a $1.4 billion academic health system, Mr. Lux is respon- system-wide leadership and direction of financial strategies for Sanford, sible for financial reporting, cash and debt management, payroll, managed which has 35 hospitals, 140 clinics and roughly 26,000 employees, making care contracting and other financial tasks. He has served in this position it one of the largest non-profit, rural health systems in the country. since July 1996. Previously, Mr. Lux served as assistant controller, controller, associate vice president and CFO of Temple University Hospital, the Kathy Lancaster. Executive Vice President of Strategy and CFO of system’s flagship facility. Mr. Lux’s career started as a supervisor in the as- Kaiser Foundation Hospitals (Oakland, Calif.). Ms. Lancaster has been surance practice for KPMG Peat Marwick. with Kaiser Foundation Hospitals and Kaiser Foundation Health Plan since 1998 and has been CFO since 2005. She provides financial leader- Richard Magenheimer. CFO of Inova Health System (Falls Church, ship for each of Kaiser Permanente’s eight geographic regions and also Va.). Mr. Magenheimer joined Inova in 1987 as vice president of financial holds the title of executive vice president of strategy. Before Kaiser, Ms. operations and was named CFO of the six-hospital system in 1994. Prior Lancaster held senior leadership positions at insurance company Pruden- to joining Inova, Mr. Magenheimer worked for American Medical Interna- tial, where she focused on underwriting and network management for the tional — an investor-owned international hospital management company company’s western region. — for seven years, where he served as vice president of financial controls as well as director of finance and budgeting for its western region. Phyllis Lantos. Executive Vice President, Treasurer and CFO of NewYork-Presbyterian Hospital (New York City). Since 2000, Ms. Stacey Malakoff. Executive Vice President, Treasurer and CFO of Lantos has served as treasurer and CFO of NewYork-Presbyterian Hospi- Hospital for Special Surgery (New York City). Ms. Malakoff has served tal and its parent company, NewYork-Presbyterian Healthcare System. She as executive vice president and CFO of Hospital for Special Surgery — the added executive vice president to her title in 2007. Ms. Lantos previously oldest orthopedics and specialty hospital in the United States — since Au- served as deputy COO of Yale University School of Medicine in New gust 1998. She also serves as the hospital’s treasurer. Ms. Malakoff joined Haven, Conn., and as vice president of financial management services at Hospital for Special Surgery in November 1990 as director of reimburse- Montefiore Medical Center in the Bronx, N.Y. She also held advisory roles ment, and she also held the roles of controller and vice president of fi- in the Greater New York Hospital Association and Association of Ameri- nance. Previously, she served as an audit manager at Ernst & Young. can Medical Colleges, among other organizations. Peter Markell. Executive Vice President, Treasurer and CFO of Part- Todd LaPorte. Senior Vice President and CFO of Scottsdale (Ariz.) ners HealthCare (Boston). As executive vice president, CFO and treasurer Healthcare. Mr. LaPorte joined Scottsdale Healthcare in 2001 as direc- of Partners HealthCare, an organization with $8 billion in revenue and assets tor of finance. He served as associate vice president of finance and vice valued at approximately $10 billion, Mr. Markell oversees payor contracting, president of finance before he was promoted to his current position. Mr. materials management, research management and all other financial opera- LaPorte has helped the system raise its credit profile, which prompted the tions. Before joining Partners in 1999, Mr. Markell was a partner at Ernst & system to absorb Phoenix-based John C. Lincoln Health Network. Before Young in Boston, where he helped clients obtain financing and interacted with Scottsdale Healthcare, Mr. LaPorte served as CFO of Dental-Net, the par- the U.S. Securities and Exchange Commission. From 1983 through 1995, Mr. ent company of Arizona’s second-largest dental plan, in Tucson for nine Markell was Ernst & Young’s director of human resources and administration. years. He also worked at Ernst & Young for eight years. Tim Maurice. CFO of University of California Davis Health System Dennis Laraway. CFO of Memorial Hermann Healthcare System (Sacramento). UC Davis Health System appointed Mr. Maurice CFO in (Houston). In September 2011, Mr. Laraway was named CFO of Memo- March 2011. Prior to joining the multibillion operations of UC Davis, he rial Hermann Healthcare System. Previously, he served as CFO of Scott & was vice president and CFO of St. John’s Regional Medical Center and St. White Healthcare in Temple, Texas, CFO of Dignity Health in San Fran- John’s Pleasant Valley Hospital, both in Oxnard, Calif., and member hospi- cisco and CFO of Dignity Health’s primary academic medical center, St. tals of San Francisco-based Dignity Health. Mr. Maurice has also served as Joseph’s Hospital and Medical Center in Phoenix. Mr. Laraway’s healthcare CFO of Good Samaritan Community Healthcare in Puyallup, Wash., and career began in the Empire State, where he was CFO of Seton Health and Saint Joseph Mercy Oakland in Pontiac, Mich. His professional experience St. Mary’s Hospital in Troy, N.Y. at academic medical centers also extends to Virginia Mason Medical Center and University of Washington Medical Center, both in Seattle. Ralph Lawson. Executive Vice President and CFO of Baptist Health South Florida (Coral Gables). Mr. Lawson has been CFO of Baptist Peter McCanna. Executive Vice President of Administration and Health South Florida, the largest private employer in Miami-Dade County, CFO of Northwestern Memorial HealthCare (Chicago). Mr. McCan- 22 Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 na is executive vice president of administration and CFO of Northwestern Daniel Morissette. CFO of Stanford Hospital & Clinics (Palo Alto, Memorial HealthCare and its principal subsidiary, Northwestern Memorial Calif.). Mr. Morissette has served as Stanford Hospital & Clinics’ CFO Hospital, which recorded $1.3 billion in revenue in 2011 — the most of since August 2007 and has helped fortify the medical center’s solid financial any Chicago hospital. Before joining Northwestern Memorial in August profile. Before joining Stanford, Mr. Morissette served for four years as 2002, he was senior vice president and CFO of Presbyterian Healthcare senior vice president of finance and strategy at the University of Toledo Services in Albuquerque, N.M. Prior to that, Mr. McCanna was senior vice (Ohio) Medical Center during the health system’s merger with the Univer- president and CFO of the University of Colorado Hospital in Aurora. sity of Toledo. Prior to that tenure, he served in various executive roles at the Herman M. Finch University of Health Sciences at Chicago Medical Patrick McGuire. CFO of St. John Providence Health System (War- School for 11 years, including senior vice president and CFO. ren, Mich.). For the past 27 years, Mr. McGuire has served in various capacities at St. John Providence Health System and has led all financial Kenneth Morris. Senior Vice President, Treasurer and CFO of Duke operations of the $2 billion, seven-hospital system as CFO since 2004. University Health System (Durham, N.C.). Mr. Morris serves as senior As CFO, Mr. McGuire has accomplished many feats for the system, the vice president, treasurer and CFO of Duke University Health System. Be- largest within St. Louis-based Ascension Health. He helped all Ascension fore he joined Duke, Mr. Morris served as senior vice president of finance Health facilities in Michigan negotiate a three-year deal with Blue Cross at Mission Health System in Asheville, N.C. He also was vice president for Blue Shield of Michigan, and he also centralized many reimbursement and finance and treasurer at Loyola University Health System in Maywood, Ill., revenue cycle functions. and served in the U.S. Army as a commissioned officer. Mary Meitz. Senior Vice President and CFO of Bronson Healthcare Dominic Nakis. Senior Vice President, Treasurer and CFO of Ad- (Kalamazoo, Mich.). Ms. Meitz assumed her current position as senior vocate Health Care (Oak Brook, Ill.). Mr. Nakis has been with Advo- vice president and CFO of Bronson Healthcare in 2004. She handles all cate Health Care since its inception in 1995. After beginning his career accounting, budgeting, investment managing, payroll, managed care con- in healthcare at Ernst & Young, Mr. Nakis went to Evangelical Health tracting and billing compliance for the three-hospital system, as well as Systems Corp. in 1995, the same year it merged with Lutheran General for Bronson Medical Group. She has more than 22 years of experience in HealthSystem to create the system known as Advocate Health Care to- the hospital and healthcare field. Ms. Meitz currently serves as treasurer day. As CFO, Mr. Nakis oversees all financial operations of Advocate’s 10 of West Michigan Cancer Center, a Bronson collaborative in Kalamazoo. acute-care hospitals, two integrated children’s hospitals and more than 200 other sites of care. In fiscal year 2011, Advocate posted total operating Wentz Miller. Managing Director of Finance and CFO of Integris revenue of more than $4.4 billion. Health (Oklahoma City). Since October 1998, Mr. Miller has served as managing director of finance and CFO of Integris Health. Prior to join- Joel Perlman. Executive Vice President of Finance and CFO of ing Integris, he held several positions with Columbia/HCA Healthcare, Montefiore Medical Center (Bronx, N.Y.). For the past 25 years, Mr. now known as Hospital Corporation of America. He was CFO of HCA’s Perlman has worked at the four-hospital Montefiore Medical Center. As Nashville market for one year and CFO of Tulane University Hospital and CFO, he manages the financial strategy behind the academic medical cen- Clinic, now Tulane Medical Center, in New Orleans for more than two ter, which recorded $2.98 billion in consolidated operating revenue in fiscal years. Mr. Miller also served as CFO of St. Mary’s Medical Center in West year 2011. Prior to Montefiore, he was CFO of St. Francis Medical Center Palm Beach, Fla., for eight years. in Trenton, N.J., from 1980 until 1988. Mr. Perlman was also a supervisor at Ernst & Young for four years and an associate director of financial aid Jennifer Mitzner. Senior Vice President and CFO of Hoag Memorial at The College of New Jersey in Trenton for three years. Hospital Presbyterian (Newport Beach, Calif.). Ms. Mitzner serves as senior vice president and CFO of Hoag Memorial Hospital Presbyterian, Scott Posecai. Executive Vice President and CFO of Ochsner Health and her Hoag tenure spans more than 18 years. Ms. Mitzner joined the System (New Orleans). Mr. Posecai joined Ochsner Clinic in 1987 and Hoag ranks in 1994 working mostly with various internal committees, in- was named CFO in 1995, continuing in that role until the merger of Och- cluding the finance and audit committee of Hoag’s board of directors and sner Clinic and Alton Ochsner Medical Foundation in 2001. Upon the the investment management committee. Before joining Hoag, Ms. Mitzner merger, he was named CFO of the Ochsner Clinic Foundation, and in worked as a certified public accountant for KPMG Peat Marwick, where 2006, of the Ochsner Health System. Prior to joining Ochsner, Mr. Posecai she worked mostly with healthcare and health insurance clients on audit held various financial positions with oil and gas firms, mainly in account- and consulting issues. ing, treasury and international tax. Dan Moncher. Executive Vice President and CFO of Firelands Re- Edward Prunchunas. Senior Vice President of Finance and CFO of gional Medical Center (Sandusky, Ohio). Mr. Moncher, executive vice Cedars-Sinai Medical Center (Los Angeles). Mr. Prunchunas has held president and CFO of Firelands Regional Medical Center, has been with his positions as senior vice president of finance and CFO of Cedars-Sinai, the 400-bed teaching hospital since 1997, and he has been instrumental in a $2.5 billion academic medical center, since 1998. He has held other roles helping Firelands achieve financial stability. Before he joined Firelands, Mr. within Cedars-Sinai, including associate director of finance, director of -fi Moncher served as regional vice president and CFO of Mercy Hospital in nance and vice president of finance. Outside of Cedars-Sinai, Mr. Prunc- Tiffin, Ohio, and Mercy Hospital in Willard, Ohio. He has more than 25 hunas was CFO of Northridge (Calif.) Hospital Medical Center in the late years of healthcare financial experience. 1980s, and he also worked on the consulting staff of accounting firm Ernst & Ernst, which is now known as Capgemini. John Mordach. Senior Vice President and CFO of Rush University Medical Center (Chicago). Mr. Mordach became senior vice president Ann Pumpian. Senior Vice President of Finance and CFO of Sharp and CFO of Rush University Medical Center in February 2011. Previous- HealthCare (San Diego). Ms. Pumpian has served as senior vice presi- ly, he served as CFO of Loyola University Health System in Maywood, dent of finance and CFO of Sharp HealthCare, a 2007 Malcolm Baldrige Ill., and vice president of finance at University of Chicago Hospitals and National Quality Award Recipient, since 1993. She has been at Sharp her Health System, both top academic medical centers in the Chicagoland area. whole career, which started in 1984, and has helped maintain Sharp as a Mr. Mordach also was CFO of Edward Hospital & Health Services in competitive provider in the San Diego area. Naperville, Ill., and vice president of finance for Tufts Medical Center in Boston, formerly known as New England Medical Center. He has more Michael Reney. CFO of Brigham and Women’s Hospital (Boston). than 25 years of healthcare executive experience. Mr. Reney was an 18-year veteran of Boston-based Partners HealthCare Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 23 when he was named CFO of Brigham and Women’s Hospital and B&W Randy Safady. Executive Vice President and CFO of Christus Faulkner Hospital, both in Boston, in May 2008. Mr. Reney began at Health (Irving, Texas). Mr. Safady joined Christus in June 2011 with Brigham and Women’s Hospital as an accounting supervisor in 1990. He more than 30 years of experience in finance, accounting and healthcare op- rose through the ranks as a senior manager and director within Partners erations. Prior to his current position, he served as executive vice president over a 10-year stretch before coming back to Brigham and Women’s as and CFO of Centura Health, Colorado’s largest health system and a joint executive director/controller for the hospital’s finances in 2000. venture between Englewood, Colo.-based Catholic Health Initiatives and Altamonte Springs, Fla.-based Adventist Health System. Mr. Safady also Chuck Robb. COO and CFO of Saint Luke’s Health System (Kan- previously served as senior vice president and CFO of Adventist Midwest sas City, Mo.). Since 1991, Chuck Robb has been with Saint Luke’s Health, a region of Adventist Health System. Health System, based in Kansas City, Mo., and he has been CFO of the organization — one of the largest health systems in the Kansas City Fred Savelsbergh. CFO of Baylor Health Care System (Dallas). Since area — since 1999. When Mr. Robb joined Saint Luke’s, he started out as he graduated from North Texas State University in 1982 with a double CFO of Saint Luke’s Hospital, the 382-bed flagship facility of the health major in accounting and economics, Mr. Savelsbergh has worked at Baylor system. Before joining Saint Luke’s, Mr. Robb worked at Ernst & Young Health Care System. He worked his way up from staff accountant to CFO, for roughly 13 years. a position he has held since 2009. Mr. Savelsbergh oversees all financial functions of the health system, which recorded $5.2 billion in total assets Kevin Roberts. Senior Vice President and CFO of BJC Healthcare in fiscal year 2011. Other positions he has held at Baylor include CFO and (St. Louis). In June 2008, Mr. Roberts become senior vice president and later interim president of Baylor Regional Medical Center at Grapevine CFO of 13-hospital BJC Healthcare from University Hospitals in Cleve- (Texas) and CFO of Baylor University Medical Center in Dallas, Baylor’s land, where he was senior vice president and CFO. During his tenure at flagship facility. University Hospitals, the system accomplished a multiyear financial turnaround that improved profitability by $250 million. Prior to joining Univer- Robert Shapiro. Senior Vice President and CFO of North Shore- sity Hospitals in 2001, Mr. Roberts served as treasurer of The Cleveland Long Island Jewish Health System (Great Neck, N.Y.). Mr. Shapiro Clinic Foundation. His financial career started with accounting firm Peat, has been CFO of North Shore-LIJ Health System in Great Neck, N.Y., Marwick, Mitchell & Co., now known as KPMG. since August 2000. Previously, he was vice president of financial operations and director of finance/assistant administrator for the system, previously Phillip Roe. Executive Vice President, Treasurer and CFO of Van- known as North Shore Health System, in 1984. He was also the assistant guard Health Systems (Nashville, Tenn.). Mr. Roe began serving as ex- director of finance at Maimonides Medical Center in Brooklyn, N.Y. ecutive vice president, CFO and treasurer for Vanguard in November 2007. Before then, he served as Vanguard’s controller and chief accounting of- Terry Shaw. Executive Vice President, CFO and COO of Adventist ficer since the company’s founding in July 1997. Prior to joining Vanguard, Health System (Altamonte Springs, Fla.). With more than $7.3 billion Mr. Roe served as senior vice president, controller and chief accounting in revenue across 41 hospitals in 10 states, Mr. Shaw oversees the finances officer of OrNda HealthCorp, which would eventually merge with Tenet of one of the largest faith-based health systems in the South and in the Healthcare. country. Prior to his current positions, Mr. Shaw served as senior vice president and CFO of Adventist’s Florida Division. He also was the vice presi- Steven Rose. CFO of Conway (Ark.) Regional Health System. For dent, assistant vice president and director of DRG management at Florida the past 23 years, Mr. Rose has worked at Conway Regional, which includes Hospital Orlando. 154-bed Conway Regional Medical Center. Mr. Rose started as Conway Re- gional’s director of business and fiscal services in 1990, eventually working Craig Sheagren. Vice President of Finance and CFO of Sarah Bush up to his current position in December 1997. Before joining Conway Re- Lincoln Health System (Mattoon, Ill.). For the past six-plus years, gional, he served as assistant administrator of finance for Decatur (Texas) Mr. Sheagren has steered the financial operations of Sarah Bush Lincoln Community Hospital, now known as Wise Regional Health System. Mr. Health System, which has roughly $200 million in net annual revenue and Conway also currently serves as secretary, treasurer and national chair-elect includes 128-bed Sarah Bush Lincoln Health Center. Mr. Sheagren, the of the Healthcare Financial Management Association. lead of Sarah Bush Lincoln’s audit, finance and investment committee, has helped the system secure an “A+” bond rating from S&P, one of the few Richard Rothberger. Corporate Executive Vice President and CFO health systems of its size to garner an “A+” rating. of Scripps Health (San Diego). Mr. Rothberger has served as corporate executive vice president and CFO of Scripps Health since August 2001. He Jeff Sherman. Executive Vice President and CFO of LifePoint has 30-plus years of experience in the healthcare industry and has helped Hospitals (Brentwood, Tenn.). Since 2009, Mr. Sherman has led the Scripps improve its financial operations through better contracting efforts financial strategy of LifePoint Hospitals, one of the five largest for-profit and reducing days in accounts receivable by 30 percent. Before Scripps, Mr. hospital companies in the country. Prior to his current position, Mr. Sher- Rothberger served as senior vice president and CFO of Mercy Healthcare man served as vice president and treasurer of Dallas-based Tenet Health- Sacramento, a former division of Dignity Health, from 1997 to 2001. He care. He has worked in various capacities for Tenet and its predecessor also was Mercy Healthcare’s director of finance and decision support and company since 1990. Mr. Sherman has also served as CFO of several director of management engineering. different acute-care hospitals in Philadelphia and throughout the Texas Gulf Coast region. C. Michael Rutherford. Senior Associate Vice President for Health Sciences and CFO of The Ohio State University Wexner Medical Eddie Soler. Executive Vice President and CFO of Florida Hospi- Center (Columbus). Mr. Rutherford became senior associate vice presi- tal (Orlando). Mr. Soler is executive vice president and CFO of Florida dent and CFO for health sciences at OSU Wexner Medical Center in Janu- Hospital, which has more than 2,100 beds across its seven hospitals and ary 2011. Before taking the reins as CFO of OSU Wexner Medical Center, admits more patients annually than any other health system in the country. Mr. Rutherford served as CFO of Summa Health System in Akron, Ohio, Prior to his current post, Mr. Soler was CIO of Florida Hospital, and he for 10 years. He also worked in financial and executive roles at Cleveland- also served as senior vice president and CFO of Adventist Midwest Health based Sisters of Charity Health System for nine years, with some of those in Hinsdale, Ill. positions including CFO and CEO of the Cleveland market and CFO of 476-bed Mercy Medical Center in Canton, Ohio. Bernadette Spong. Senior Vice President of Finance and CFO of Rex Healthcare (Raleigh, N.C.). Ms. Spong has served as senior vice 24 Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 president of finance and CFO of Rex Healthcare, an affiliate ofUNC Lannie Tonnu. Senior Vice President of Finance and CFO of Chil- Health Care, since 2005, acting as a driving force behind the 660-bed health dren’s Hospital Los Angeles. Ms. Tonnu joined Children’s Hospital Los system’s strong portfolio and operations. Ms. Spong, who also served as Angeles in 1991 and has served as senior vice president of finance and controller at Rex and has more than 20 years of healthcare finance experi- CFO of the 347-bed pediatric medical center since 1993. In fiscal year ence, serves on the boards of many local organizations, including the Elon 2011, Ms. Tonnu helped the hospital record $812.8 million in total revenue University Love School of Business, where she earned her MBA. and $122.5 million in profit. Before Children’s Hospital Los Angeles, she was an audit senior manager in Ernst & Young’s Los Angeles healthcare James Staten. Senior Vice President for Finance and CFO of Yale- practice for roughly 12 years. New Haven (Conn.) Health System. Mr. Staten, CFO of both Yale- New Haven Health System and its 1,541-bed flagship Yale-New Haven Mike Tretina. Vice President and CFO of Mary Greeley Medical Cen- Hospital, joined the system in 2000. Previously, Mr. Staten was a senior vice ter (Ames, Iowa). Mike Tretina has served as vice president and CFO of president of finance for NewYork-Presbyterian Hospital in New York City Mary Greeley Medical Center, a 220-bed, city-owned hospital, since February and New York’s largest health system, NewYork-Presbyterian Healthcare 2009, and it has become one of the more vibrant community hospitals in the System. Mr. Staten’s healthcare career started at Ernst & Young in New Midwest. Before coming to MGMC, Mr. Tretina was senior vice president York, where he was a senior manager and director of the firm’s New York of finance at St. Vincent’s HealthCare in Jacksonville, Fla. He also has held State Reimbursement Consulting Services. various finance roles at Albert Einstein Medical Center and Heffler, a certified public accounting firm, both based in Philadelphia. Mr. Tretina has more Paul Staton. CFO of UCLA Health System. Mr. Staton has worked at than 25 total years of experience in healthcare finance. University of California, Los Angeles since 1996 and has been the per- manent CFO of UCLA Health System since 2005. He previously served Doug Vanderslice. CFO of Boston Children’s Hospital. Mr. Vander- as the hospital system’s controller. Mr. Staton has more than 30 years of slice began his tenure as CFO of Boston Children’s Hospital in January, experience in healthcare finance and has worked for various other hospital coming from 258-bed St. Louis Children’s Hospital. While at St. Louis organizations in southern California. The year Mr. Staton was named CFO Children’s, he also served as the financial liaison to the hospital’s parent, of UCLA Health System, the organization recorded a net loss of $15 mil- St. Louis-based BJC HealthCare. Before joining St. Louis Children’s, Mr. lion, but by fiscal year 2011, the system recorded roughly $300 million in Vanderslice was the director of patient financial services and controller for net income on $1.7 billion in revenue. Children’s Medical Center of Dallas, and his professional finance career started at Deloitte in Dallas. Alan Strauss. Executive Vice President and CFO of Carondelet Health Network (Tucson, Ariz.). Before beginning his work at Caronde- Kevin Vermeer. Executive Vice President, Chief Strategy Officer and let Health Network last May, Mr. Strauss served as CFO of Saint Thomas CFO of UnityPoint Health (West Des Moines, Iowa). Mr. Vermeer was Health for six years. Mr. Strauss also worked as interim CFO of Mountain- appointed executive vice president and CFO of UnityPoint Health, formerly side Hospital in Montclair, N.J., in 2005 and CFO and operations leader of Iowa Health System, in 2009. Before then, he served as CFO for Trinity Re- Saint John’s Hospital and Health Center in Santa Monica, Calif., from 1990 gional Health System in Rock Island, Ill., and interim CEO of UnityPoint’s to 2004. Outside of the hospital sector, he has worked for Tatum Partners, hospital in Muscatine, Iowa. He has also held positions with Allen Hospital a Los Angeles-based firm that provides financial leadership services to vari- in Waterloo, Iowa, and Sisters of Charity hospitals in Colorado. ous companies across the country. Kerry Vermillion. Senior Vice President and CFO of Baptist Health J. Dean Swindle. Executive Vice President and CFO of Catholic Care (Pensacola, Fla.). As senior vice president and CFO of Baptist Health Initiatives (Englewood, Colo.). Since May 2010, Mr. Swindle has Health Care, Mr. Vermillion monitors all financial and accounting matters served as executive vice president and CFO of CHI, the second-largest, of the system, which includes four hospitals across northwest Florida and faith-based health system in the country with 78 acute-care hospitals and south Alabama. He has more than 20 years of healthcare finance experi- $10.7 billion in annual revenue. Prior to joining CHI, he served as senior ence. Prior to Baptist Health Care, Mr. Vermillion worked at Mountain vice president of finance, executive vice president and CFO of Novant States Health Alliance in Johnson City, Tenn., and Baptist Health System Health, based in Winston-Salem, N.C. Mr. Swindle also was CEO of the in Birmingham, Ala. former Concord Medical Center in Baton Rouge, La., and vice president of financial services at Baton Rouge (La.) General Health System. Nick Vitale. Executive Vice President and CFO of Beaumont Health System (Royal Oak, Mich.). Mr. Vitale was named executive vice presi- Michael Szubski. CFO of University Hospitals (Cleveland). In Oc- dent and CFO in June 2011. Before assuming his current position, he had tober 2008, Mr. Szubski was named CFO of University Hospitals, which served as Beaumont’s senior vice president of financial operations since includes the 1,032-bed UH Case Medical Center. He joined the system 2007. Mr. Vitale joined Beaumont in 2005 as vice president and CFO of in 2003 as CFO of UH Case Medical Center and later became COO of Beaumont Hospital, Troy. He also served various financial executive posts UH’s acute-care hospitals. Prior to UH, Mr. Szubski served as executive at Detroit Medical Center, the Rehabilitation Institute of Michigan in De- vice president and CFO of EMH Healthcare, a 387-bed hospital system troit and Bon Secours Cottage Health Services in Grosse Pointe, Mich. based in Elyria, Ohio. He also served as vice president of operations at health insurer UnitedHealthcare of Ohio. Monte Ward. Senior Vice President and CFO of Cabell Huntington (W.Va.) Hospital. Monte Ward is senior vice president and CFO of Ca- Jeff Taylor. Vice President and CFO of St. Luke’s Health System bell Huntington Hospital, a 313-bed, acute-care facility affiliated with the (Boise, Idaho). St. Luke’s Health System is the largest health system in Marshall University School of Medicine. He began at Cabell in 1978 as the Idaho, and Mr. Taylor has helped transform St. Luke’s financial operations hospital’s controller, rising to the CFO post in 1982. During his career at from a single-hospital initiative to a five-hospital endeavor with annual op- Cabell, he has been responsible for every department, except nursing, and he erating revenue of more than $1 billion. Mr. Taylor has been at St. Luke’s also served as interim CEO. Mr. Ward previously worked in the healthcare since 1994, when he was hired as the director of finance. In 2006, he was division of accounting firm Hayflich and Steinberg as a senior auditor. named vice president of finance and CFO of St. Luke’s Treasure Valley, and in 2008, Mr. Taylor took on his current role of system vice president Denise Warren. Senior Vice President, Treasurer and CFO of Ca- and CFO. Before St. Luke’s, he was a senior manager in the Boise office pella Healthcare (Franklin, Tenn.). Since October 2005, Ms. Warren has of Deloitte. been Capella’s senior vice president, treasurer and CFO. She has more than 25 years of financial experience, including time spent as a senior equity ana- Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 25 lyst and research director at Avondale Partners Marvin White. Vice President and CFO from “BBB” in the 1990s to “A+” in 2012. He and CFO of Gaylord Entertainment Company. of St. Vincent Health (Indianapolis). Mr. also serves on the boards of many community In 2011, Nashville Medical News named Ms. War- White has overseen the materials management, organizations, such as the United Way and the ren a “Woman to Watch,” and the Nashville Busi- accounting, managed care and other financial Allied Arts Council. ness Journal named her a “Woman of Influence services of St. Vincent Health since 2008. Mr. in Tennessee.” White’s tenure at the 19-hospital St. Vincent Kris Zimmer. Senior Vice President of Fi- Health, part of St. Louis-based Ascension nance and CFO of SSM Health Care (St. David Watson. CFO of National Surgical Health, is his only hospital executive experience. Louis). Since 2003, Mr. Zimmer has led the Hospitals (Chicago). Mr. Watson became Previously, he was executive director and CFO at financial planning, capital management, bond CFO of National Surgical Hospitals in August Eli Lilly & Company’s Lilly USA. Mr. White also financing and investment activities of SSM 2011 after serving as senior vice president and served various financial roles at General Motors Health Care, one of the largest Catholic health CFO of Community Education Centers, a pro- in Illinois and Hewlett Packard in Atlanta. systems in the country. Previously, he served as vider of treatment and education services for CFO of Norton Healthcare in Louisville, Ky., adult correctional populations based in West Jeanné Wickens. Senior Vice President of CFO of Mount Carmel Health System in Co- Caldwell, N.J. He also was executive vice presi- Finance and CFO of Allegiance Health lumbus, Ohio, and CFO of Southeastern Ohio dent and CFO of Radiation Therapy Services, (Jackson, Mich.). Ms. Wickens has served as Regional Medical Center in Cambridge, Ohio. a developer and operator of radiation therapy senior vice president of finance and CFO of In February, CMS appointed Mr. Zimmer as a centers and ancillary medical practices, and Allegiance Health, a 480-bed system, since July four-year panel member of the Advisory Panel vice president of finance for The GEO Group, 2004. She joined Allegiance Health in 2000 as on Hospital Outpatient Payment, where he will which outsources government services. corporate controller. Before Allegiance Health, advise HHS and CMS on ambulatory payment Ms. Wickens served as controller and direc- classifications for Medicare hospital outpatient Charles Weis. Executive Vice President and tor of finance and registration at Battle Creek services. CFO of Sinai Health System (Chicago). Mr. (Mich.) Health System, which is now part of Ka- Weis has been at Sinai Health System, a 421- lamazoo, Mich.-based Bronson Healthcare. She Bert Zimmerli. Executive Vice President bed safety-net provider on the southwest side serves on the boards and finance committees of and CFO of Intermountain Healthcare (Salt of Chicago, since 1982. Roughly 60 percent of several local organizations, including the United Lake City). Mr. Zimmerli oversees the direction Sinai’s patients are on Medicaid, and Mr. Weis Way and Center for Family Health. and oversight of all Intermountain Healthcare helped secure a system within Sinai in which the financial operations, including its health plan, hospital would receive Medicaid add-on pay- John Wilson. CFO of Heartland Health (St. SelectHealth. Mr. Zimmerli has been with In- ments from Illinois to support services such as Joseph’s, Mo.). Mr. Wilson’s career at Heart- termountain since 2003, and previously, he was obstetrics, trauma care and pediatrics. He also is land Health, an integrated delivery system with CFO of The Methodist Hospital System in one of the major forces behind The Sinai To- Heartland Regional Medical Center at its foun- Houston. He also was senior vice president and morrow Project, which will bring an outpatient dation, began in 1986. He started as senior inter- CFO of Houston-based Memorial Hermann pavilion and refurbished inpatient facilities to nal auditor and worked his way up to controller. Healthcare System. Before serving as a hospital the community. In 1990, Mr. Wilson was promoted to CFO of executive, Mr. Zimmerli was a partner at Ernst & the system. Under Mr. Wilson’s tenure, Heart- Young’s Houston office for 16 years, specializing Gary Weiss. Executive Vice President, Trea- land Health has improved its Fitch bond ratings in healthcare finance. n surer and CFO of NorthShore University Health System (Evanston, Ill.). Before Mr. Weiss joined NorthShore in 2001, he spent several years within the banking and financial services sector. He officially became CFO of NorthShore in October 2007, and he also serves Save the Date! as executive vice president and treasurer. Mr. Weiss spent 26 years at The First National Bank of Chicago and its affiliate organizations, and held the roles of CFO and chief accounting of- Becker’s Hospital Review ficer of the commercial banking business line. Ron Werthman. Vice President of Finance, CEO Strategy Roundtable Treasurer and CFO of The Johns Hopkins Health System (Baltimore). Mr. Werthman, November 14, 2013 who has more than 35 years of healthcare and higher education financial experience, became The Ritz-Carlton Chicago vice president, treasurer and CFO of The Johns Hopkins Health System and The Johns Hopkins Hospital in 1993. Mr. Werthman has Co-chaired by Scott Becker, helped Johns Hopkins reach its highest operat- Publisher, Becker’s Hospital Review, ing margins in its history during his tenure. Prior to Johns Hopkins, Mr. Werthman was CFO of and Chuck Lauer, Hahnemann University in Philadelphia. He also Former Publisher, Modern Healthcare served as CFO of St. Francis Regional Medical Center in Wichita, Kan., Mary Imogene Bassett To learn more visit www.BeckersHospitalReview.com Hospital in Cooperstown, N.Y., and Allegheny General Hospital in Pittsburgh. To register, visit www.BeckersHospitalReview.com/novhospitalevent.html 26 Clinical Integration & Physician Issues

FEature Keeping Employed Physicians Profitable

Is It Impossible? By Jim McLaughlin ealth systems have been on a physician group-acquiring frenzy in to be thrown out the window when they are acquired by a hospital, says recent years, anticipating more hospital referrals and ancillary ser- Gary Ermers, DDAF associate director of healthcare consulting services Hvice as well as better positioning for population health initiatives, and co-author of the report with Mr. Bundy. “Employing doctors doesn’t but for many, that comes at a steep price. mean you have an integrated system.” Consulting firm Dean Dorton Allen Ford in March released a report titled “We believe, particularly if it’s a competitive market, hospitals really aren’t “In-te-gra-tion: The Challenge of Integrating Physician Group Operations,” which thinking about the longer term sustainablity and are trying to scoop up found many hospitals lost $100,000 or more per physician annually, creat- practices and gain that competitive advantage,” says Jennifer Snider, vice ing a strong incentive for hospitals to learn how to keep their physician president of operations for the Halley Consulting Group. She and her col- groups profitable before an acquisition is finalized. leagues “favor an wRVU-based model, largely because it is payor-blind and lets [physicians] focus on productivity and patient care, and lets manage- To be clear, many industry experts agree that employed physicians don’t need ment focus on the payor mix and collections.” to operate in the black in order to contribute to the health system’s bottom line. “In no way do we feel like every [physician group acquisition] needs to Mr. Ermers favors physician compensation models that tie directly into the have a positive bottom line to be beneficial to hospitals,” says David Bundy, revenue physicians generate. “The model needs to incentivize volumes of president and CEO of DDAF and co-author of the report. “Our point is patient delivery,” he said, but added, “it needs to also incentivize the payor not to say you need to make money on them.” Rather, he says, “we’re not mix.” Simple wRVU-based compensation pays physicians equally, even for sure hospitals are managing these practices as effectively as they can.” treating less profitable government-insured or self-pay patients. If a physician treats high volumes of those populations, he or she brings less revenue The breakdown often occurs during the due diligence process, in which into the practice and therefore receive less in output-based compensation. health systems inadequately negotiate patient volume and wRVU mini- However, he says that can be offset with supplementary metrics to boost mums into contracts or agree to compensation levels for physicians that pay for high quality or patient satisfaction ratings. He also recommends emphasize stability over productivity, says Justin Chamblee, vice president that contracts with physician groups include an annual review clause to en- of the Coker Group. Too often, hospitals establish compensation variables sure wRVU levels meet or beat levels from one year prior to the acquisition. within their employment models solely based on market survey data, rather than considering the actual economics of the physician practice. Allowing physicians to focus exclusively on clinical elements wrongly spares physicians from the financial side of the practice, Mr. Bundy says. Keeping an independent mindset “Hospitals try to cushion doctors from too many market forces. Hospitals Before a hospital buys it, an independent physician practice is completely shouldn’t feel they need to keep compensation stable.” n dependent on productivity and collections to stay afloat. That doesn’t have Clinical Integration & Physician Issues 27 Adding Employed Practices to Your Organization? 6 Ways to Getting Buy-in From the Practice By Ann Maloley, MBA, Lead Consultant, Barlow/McCarthy

trong relationships between the hospital and employed physicians the practice. Encourage them to share their positive patient experiences, start when organizational leaders define their expectations of fi- for example, and then find ways to share it with internal stakeholders — Snancial performance and measures of practice success. This sets from the board of directors, to clinical directors to hospital staff — and the stage for others in the organization to launch into practice development through the hospital’s practice marketing efforts. efforts. With this understanding on the hospital side, gaining support from the providers and practice staff is a good place to start building confidence Show progress to drive ongoing involvement. As the practice in the relationship. Buy-in from the employed practice can make all the dif- development plan gets rolling, share the numbers. Physicians will expect ference in the eventual success of a practice development strategy. conversations with leadership about the pro forma metrics, but keep them in the loop on a more regular basis about the results of active practice Getting the practice team comfortable with any practice development plan marketing strategies. Strong numbers reinforce the value of the plan, and begins with an understanding and agreement of the goals. This should less-than-desirable numbers will hopefully motivate the team to get better. start before the contract is signed and reinforced in the early stages of Establish ways to incentivize the practice to reach satisfaction and qual- integration. Then, like any team project with a mutual goal, other building ity/outcome metrics and to help create differentiators that then can be blocks include a consensus on the action plan and a clear path for who is marketed. responsible for what. At the start of the hospital-employed physician relationship, there’s a good Once everyone agrees that working together is a good idea and the di- chance there will be some anxiety about this new partnership — at least alogue begins, hospital business development leaders will likely need to until both parties have time to prove their value as a good partner. Keep continue to earn credibility from the practice. Here are a few ideas to help the practice engaged and involved, even after the initial phase. Buy-in and cultivate this support: support is an ongoing effort. n

Invite, listen and acknowledge. One of the best things you can do Ann Maloley, MBA, is a lead consultant with Barlow/McCarthy, a recognized indus- to earn trust with your new practice partner is ask for the physicians’ input. try authority in hospital-physician relations programs. Having worked in a variety of They know their practice dynamics and culture best. Staying true to the healthcare settings allows Ms. Maloley to provide her clients with broad industry insight practice personality will be important, especially if the practice was suc- and results-oriented strategies. During her 20-year career in healthcare she has had the cessful in the market before it joined the hospital organization. Knowing opportunity to lead teams through the successful launch of practice marketing initiatives, that hospital leaders genuinely want to understand their perspective and physician relations programs and service line and brand image campaigns. In addition, will factor their input into the overall strategy is a great step for getting Ms. Maloley serves as an adjunct faculty member for a premier Midwest university buy-in to the recommendations later. teaching healthcare marketing.

Ease into it. Don’t risk alienating a newly employed practice by pushing them to change their brand and practice character all in one day. Start with understanding the brand elements that are working for them and commit to keeping them true. Then make the brand shift a process by taking small steps and getting agreement at each step. It will make acceptance and ac- Physician Turnover tion easier. Strategy vs. tactic. Leaders know physician practices are process- at All-Time High oriented operations. The practice’s objective each day is to provide great By Heather Punke patient care, on time and as efficiently and seamlessly as possible. This is an operational and tactical system, and you’ve signed them on because you hysician turnover has hit its highest rate since 2005, the first year know they can do this well, or have the potential. So, when it comes time to the data was collected, according to the 8th annual Physician engage this team in the practice growth plan, think about how they think. Retention Survey from Cejka Search and the American Medical Give them a strategic framework, but they will be most interested in the ac- P Group Association. tion plan — the tactics, the to-do’s, accountabilities, timelines and expected results. Engage them in the action. Define their roles in their terms. In 2012, the average rate of medical group physician turnover was 6.8 percent, up slightly from 6.5 percent in 2011, but much higher than the 2009 Regular rounds from executive team. Few things build confidence rate of 5.9 percent, according to the survey. in a practice-hospital relationship more than an engaged and participative executive team. The executive team will want to have a role in the process Also, medical groups do not expect a reprieve from losing physicians this and find reasons to have regular interactions with the physicians and prac- year: 36 percent of the groups expect the physician retirement rate to in- tice staff. Attaching the executive team to the practice development efforts crease in 2013. can eventually lead to deeper relationships with the physicians. The survey reflects responses from 80 physician groups that collectively Talk about “wins.” Look for opportunities to discuss any hospital-relat- employ 19,596 physicians. n ed news that will add value to the operational, strategic or clinical functions of the practice. Make the connection. And invite ‘good news’ stories from 28 Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 Executing Population Health Strategy: Q&A With Dr. Mike Schatzlein, CEO of Saint Thomas Health By Heather Punke

ike Schatzlein, MD, president and CEO they are. Taking care of patients across space and Point, and it will be fully of Saint Thomas Health in Nashville time in a loving way is what Saint Thomas Health deployed this year. We’ll Dr. Mike Mand ministry market leader for St. Lou- has done for 100-plus years. Now, the country actu- keep adding functional- Schatzlein is-based Ascension Health, knows healthcare’s sta- ally really needs that, and it feels like it’s our time. ity. It may initially be for tus quo isn’t sustainable. lab test results, scheduling and bill paying, and we can In addition to all of the things we continue to do to continue to add on to that and we will. Our stated That’s why the former cardiothoracic and vascu- make acute-care hospitals and outpatient centers ac- goal is to be the Amazon of healthcare. lar surgeon with 40 years of healthcare experience cessible and patient-centered, we also established an is making changes at Saint Thomas to improve the accountable care organization, MissionPoint Health Q: How will having a system clinically in- quality and efficiency of care provided in his system’s Partners. MissionPoint has a board with many phy- tegrated through EMR promote population hospitals and other facilities. A big part of that strat- sicians, some hospital administrators and even a health? egy is managing the health of populations. Medicare beneficiary. Beneath the board are a num- MS: You can’t manage the health of a population ber of committees with physician involvement that Here, Dr. Schatzlein discusses why and how Saint without it. If we’re going to provide optimum care are working on the best evidence-based care path- Thomas Health is working toward population at optimum cost, we need to know all about the pa- ways to help patients get well and stay well. health management and the leadership skills he tient before we do anything to him or her. Also, if uses to make that change happen. If you were a MissionPoint member, one of the you back up and look at population, you have to first things you’d get to do is go to an online mar- have longitudinal data on its health as well. Question: You’ve made some major changes at ketplace and pick your medical home. In the on- Saint Thomas Health. What fuels your drive to Q: Saint Thomas is a large system — how do you line marketplace, patients can see which physicians change your system and healthcare as a whole? lead change that affects staff and physicians at have what hours and what their special interests hospitals and numerous other facilities? Dr. Mike Schatzlein: Our people deserve better. are, things like that. Members also have access to We have [as a nation] evolved into a system that a cadre of health partners — like nurses, social MS: I only have one leadership skill and that is is episodic in nature and we do a great job taking workers, pharmacy technicians or dieticians, for that I hire, retain and motivate great people. When care of folks who need a major intervention, but example. The health partners provide a kind of I was a transplant surgeon I could do it all my- then we throw them back into the pond and wait concierge medicine to members while also looking self, and I can’t do that anymore. So it’s mentor- for them to get into trouble again. When we survey out for potential health pitfalls. ing, coaching and sponsoring — it comes down to people, we find them frustrated with their ability to trusting your team. Underlying MissionPoint is an investment in health navigate the system, know what things are going to information technology to bring inpatient and outpa- I’ve gotten better at it. Certainly, heart surgery is cost and know whose advice to believe. We’re not tient records together and do predictive analytics to a solo enterprise — there are teams involved but serving our neighbors in helping them stay well help us make sure we’re achieving the results we want the primary responsibility is certainly assumed by and understand the importance of maintaining and that we are following best practices. surgeons. Running a health system takes an entirely health throughout their lives. different skill set, so there had to be some evolu- Q: On that note, what is the goal of imple- Q: Population health is touted by many as tion there. menting electronic medical record systems in being the solution to fixing healthcare. What Saint Thomas facilities, and how has it been Q: Healthcare as an industry is continually steps has Saint Thomas taken to better man- accepted by physicians? developing and growing. How do you continu- age population health? ally develop your leadership skills to keep up? MS: There is no endpoint in EMR development, MS: Population health is a holistic concept. When but we just achieved HIMSS Stage 5 and have the MS: Being a ministry market leader for Ascension I think of population health, I think, for example, goal of reaching Stage 7. Health is a big boon for that. There are eight of us, of the patient-centered medical home. For 40 years and we meet with executive leadership in St. Louis in I’ve been saying everyone needs a personal physi- There’s a range of physician and caregiver accep- person or via telepresence. Those people all have vast cian. We’ve gotten away from that as people shop tance of EMRs, but the only way you can have inte- experience in hospital administration, and all have re- from emergency room to emergency room or spe- grated records is for it to be electronic. I would be sponsibilities in diverse markets in which Ascension cialist to specialist, but medicine is just too com- lying if I told you all of the 2,000 physicians on the operates all over the country. They would be my first plicated today to navigate it without help. With the medical staff and at MissionPoint are eager to see source of ongoing knowledge. fee-for-service payment model, there is no good a new software program pop up. But we exert re- way for providers of any type to be reimbursed to sources for implementation, optimization and pro- A second source, which is kind of a surprise to me take the time to do care navigation. The patient- vider training. Some caregivers are frustrated, and actually, is that I’m sitting here at “ground zero” for centered medical home addresses those issues and we work really hard to help with the learning curve. healthcare in Nashville. There are so many smart it’s the best way I know to help control the bur- healthcare people here; you can’t go out to dinner The investment is clearly well worth it. There is no geoning cost of healthcare. We cannot continue to without running into some at the next table. I’m also other way to maintain a medical record but digitally. spend 18 percent of our [gross domestic product] involved in the Nashville Healthcare Council. It’s Medicine is too complicated for us to have handwrit- on healthcare in this country — that’s twice what a function of the Chamber of Commerce, and it’s ten paper spread all over the country with no ability other developed countries spend, and we get out- unique. There’s not one member of that board that I for the data to interact. There’s also a need for more comes that certainly are not demonstrably better. couldn’t learn a lot from. than one person to access the same record at the This feels really, really right for Saint Thomas Health. same time, and you can’t do that with a paper chart. You can’t help but learn about healthcare just wan- We’re a faith-based organization that pursues ho- dering the streets of Nashville. It’s the Silicon Val- Right now, a patient portal is being tested for patients listic care, which involves taking care of a person ley of healthcare. n presenting at one of the nine hospitals in Mission- across the continuum and being with them where Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 29 Creating Regional Health Networks: Q&A With LifePoint Hospitals CFO Jeff Sherman By Bob Herman

or the past four years, Jeff Sherman has as we think about developing regional networks, Jeff Sherman led the financial operations of Brent- Marquette represents the foundation of that Fwood, Tenn.-based LifePoint Hospitals, network. The two additional acquisitions that one of the five largest acute-care, for-profit hos- have been announced up there lead to the full pital networks in the country. continuum of care, from the community level up to the tertiary level, and this represents a very Last year, LifePoint recorded more than $3.39 exciting opportunity for us. billion in total revenue, and this year, the company expects revenues to top $3.65 billion. A Fauquier is another great opportunity. We major reason behind the optimistic projections currently own five hospitals in Virginia, and is an increase in its hospital base. Fauquier is another outstanding hospital with the potential for growth. This is a state where Like many other for-profit hospital operators we have a significant presence, and it makes throughout the country, LifePoint has been sense to add to that. It will increase our mar- ramping up its acquisitions of independent ket leverage. community hospitals, many of which are finding it harder to operate in today’s healthcare envi- We are seeking hospitals in faster-growing com- ronment without a parent company for support. munities with a more diversified employer base Mr. Sherman says mergers and acquisitions in to complement our existing portfolio of hos- the hospital sector today are a lot more nuanced pitals. Our acquisitions over the last four years than before. The financial aspect is omnipres- have been consistent with this approach, while ent, but companies like LifePoint are factoring offering clinical, financial and operational resources to stay on top of these daily demands in several other demographic and reform-based sources to help newly acquired hospitals grow and changes. All of those factors and changes reasons as well, such as population growth and and thrive in the future. are continuing to exert pressure on unaffiliated high-quality care delivery. Q: What are your general impressions of hospitals. the hospital M&A market right now, even Here, Mr. Sherman sheds some light on Life- We think we’re well-positioned to benefit from outside of LifePoint’s moves? It’s been at a Point’s recent spate of hospital transactions, that. With the right emphasis on quality, and cer- feverish pace for the past three years — do why the hospital M&A market will most likely tainly with our partnership with Duke, we can you see this continuing? And what are the continue to proliferate and how hospital CFOs help invest in the future. Communities and com- biggest factors behind it? today can make the right decisions. munity hospitals are equally concerned about Question: LifePoint is one of the big- JS: As we view it, there will continue to be a the acquiring company’s ability to invest in the gest players in the hospital market, and lot of activity going forward, especially for small future. So, with our relatively low leverage and your organization has announced a flurry community hospitals that aren’t affiliated with a financial strength, we have the resources to com- of acquisitions so far this year: Fauquier bigger system. As we think about hospitals and pete and expand in those communities. Health in Warrenton, Va., Bell Hospital in what are their reasons for looking to partner, Q: So does this mean that LifePoint has Ishpeming, Mich., and Portage Health in there are a couple that stand out: accessing capi- more acquisitions in mind this fiscal year? Hancock, Mich. Can you talk about these tal for growth and expansion and the ability to transactions and how they fit in LifePoint’s recruit physicians. LifePoint is recruiting more JS: We don’t put out specific numerical targets, strategy right now? than 200 physicians per year, and the centraliza- but over time, LifePoint will continue to acquire tion of our resources for physician recruiting hospitals. It is difficult to predict the timing of Jeff Sherman: As a starting point, LifePoint makes it easier for us. We have built the infra- when an acquisition will take place with local operates 57 hospitals in 20 states. These com- structure to help do that, too. non-profit boards, county officials and, many munities are similar to the communities you just times, state’s attorney general involved. mentioned, and these acquisitions have been an- It’s increasingly difficult for freestanding hos- nounced but not completed. pitals to navigate the regulatory environment, We’re looking to grow both organically in our including the Affordable Care Act, meeting existing hospitals but also through acquisitions. In Michigan, the two announced acquisitions meaningful use, the ICD-10 conversion — even With more and more hospitals looking for stra- are very consistent with our strategy to form a just daily Medicare and Medicaid changes that tegic partnerships and alliances, we believe we regional network to provide the full continuum are coming out. We believe many hospitals can’t have a flexible approach that can be tailor-made of care. We acquired Marquette General Hospi- afford the increasingly complex technology de- for an individual hospital. tal in September 2012 through Duke LifePoint mands — HITECH, meaningful use, comput- Healthcare, our joint venture with Duke Univer- erized physician order entry, clinical interfaces. Q: LifePoint’s revenue topped $3.39 billion sity Health System. Marquette is the only tertiary At LifePoint, we have a quality department, an in FY 2012, an increase of 12 percent from care hospital in the region, serving 300,000 resi- IT department, a compliance department, a FY 2011, while profit slipped 6.8 percent to dents in the Upper Peninsula of Michigan, and revenue cycle department and others with re- $151.9 million. What do you see as the major 30 Sign up for the COMPLIMENTARY Becker’s Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 catalysts behind the revenue gains? Conversely, what were some of still have to meet our short-term financial objectives while continuing to the major reasons behind last year’s drop in profit? improve the quality of care and service that we provide. JS: Acquisitions represented a big piece of the revenue growth in FY 2012 We operate in many diverse markets with large and small hospitals, so it’s as well as continued growth in outpatient services. We completed a couple difficult to encapsulate the entire company. Hospitals are driven by local acquisitions earlier in the year, and then the Marquette transaction was fi- issues, local macroeconomic issues, physician relationships. At times, it is nalized in September. That was a large acquisition. challenging to summarize broad trends because of local dynamics, but it’s critical for the CFO to be a key strategic partner to the CEO and to drive The single biggest reason for the decline in operating income was related to future performance and help hold the organization accountable to perfor- a significant increase in depreciation expenses, which were up $27 million. mance standards. We made significant upfront investments in IT, which are preparing Life- Point to qualify for HITECH funding available by meeting meaningful use Q: What is the most difficult aspect of being a CFO of a large hospi- requirements. These capital investments typically have shorter lives, mean- tal chain? What are some of the toughest decisions you have to make ing they depreciate over a shorter period. In 2012, we made more than daily, weekly and monthly? $100 million in IT investments, so those upfront investments drove bigger depreciation expenses. We ramped up physician employment, so that also JS: Whether it is systemwide or for an individual hospital, some of the put pressure on our margins in 2012. We also view this as a long-term in- toughest decisions are ones that impact employees. Recently, we decided vestment by expanding physician presence in our markets and adding new to adopt a shared services approach and outsource our back office func- services, like cardiology and oncology. tions to Parallon Business Solutions. This change will allow us to become more efficient and improve our performance in those areas. Some of our Q: What advice would you give to other hospital and health system employees were hired by Parallon, but it was still a difficult decision be- CFOs right now? What are the biggest differences between being an cause it impacted people across our company. However, we knew it was the individual hospital CFO and a system CFO? right decision for the company. We always weight these types of decisions against the “High Five Guiding Principles” of the company. JS: I’ve been both — I grew up on the hospital side as an individual hospital CFO, both at smaller and larger hospitals. Whether big or small, CFOs Also, with limited capital to deploy, it’s been my experience over 25 years must encourage leaders to act as owners of the business, and the right that there is an insatiable appetite for hospitals to spend capital. It’s critical decisions will evolve over time. The key challenge is you have to be invest- to balance capital investments. How and where to deploy capital are always ing for future growth while maintaining current performance. It can be difficult decisions to make, and you must balance priorities. n conflicting at times. We’re managing LifePoint for the long term, but we Save the Date! Becker’s Hospital Review CEO Strategy Roundtable November 14, 2013 The Ritz-Carlton Chicago Co-chaired by Scott Becker, Publisher, Becker’s Hospital Review, and Chuck Lauer, Former Publisher, Modern Healthcare To learn more visit www.BeckersHospitalReview.com. To register, visit www.BeckersHospitalReview.com/novhospitalevent.html Executive Briefing: Community Hospital Affiliation 31