Health Care: Hospitals
From the April 25, 2003 print edition
Philadelphia Business Journal
New CEOs prescribe changes
Temple's Marshall realigns hospitals and management
John George Staff Writer http://www.bizjournals.com/industrie...ia_story3.html
About 20 minutes into his third "town meeting" of the day at Jeanes Hospital, Joseph W. "Chip" Marshall III used the first of what he calls "Chip-isms" to describe his management style.
"My job isn't to do your job," the Temple University Health System chief told the three dozen employees gathered in the Philadelphia medical center's cafeteria. "My job is to help you do your job better."
Since taking over as chairman and CEO of the Temple health system 18 months ago, Marshall has systematically put his signature on the North Philadelphia-based health-care provider by "not being afraid to make hard decisions."
During his tenure, the health system has negotiated new multiple-year contracts with Independence Blue Cross and Aetna, gotten out of the nursing home business, launched a new ambulance service and instituted a incentive pay program for all its 8,000 full-time and part-time employees.
The health system also severed its management ties with Lower Bucks Hospital to focus on its North Philadelphia medical centers.
Earlier this month, Temple restructured the management at its hospitals (Temple University, Northeastern, Episcopal, and Jeanes hospitals and Temple University Children's Medical Center) to give their leaders more autonomy.
Next month, Temple expects to break ground on a new $70 million ambulatory services building that will provide space for Temple University Hospital to expand its growing radiation oncology department and anchor all of its cancer programs in one building.
Although CEO for only the last year-and-a-half, Marshall will soon have seniority among the chief executives of the region's three major nonprofit health systems based in the city.
Joseph Sebastianelli took over as the head of the Jefferson Health System last February. Last week, the University of Pennsylvania Health System said Chicago health-care executive Ralph W. Muller will be its new CEO effective July 1.
In fiscal 2002, the Temple health system generated revenue of $850 million and posted a $20 million profit.
Marshall, however, noted the profit was largely the result of state and federal government subsidies and investment income.
When looking purely at patient revenue and patient-care expense, the system had a $43 million operating deficit.
His goal is to turn that number into a $25 million operating profit by 2006.
Marshall said some steps toward that goal have already been completed, such as the realignment of services within the health system to avoid program duplications. Those actions included taking general inpatient-care programs out of Neumann and Episcopal and shifting Episcopal's focus to behavioral health. Most of the Neumann facility is in the process of being converted to senior housing.
Also in December, Temple formed a new affiliation with Friends Hospital in Philadelphia to strengthen its psychiatric health programs.
The management restructuring that occurred this month created seven-member executive teams, led by an executive director/CEO at each hospital. The leadership team at each facility previously was set up independently with no consistent titles or responsibilities.
"This move will create a consistent, streamlined template across the health system that will provide efficiencies and reduce redundancies," said Robert Pezzoli, president and COO of the health system. "It also helps move us from a group of freestanding institutions to a unified health system."
Other actions taken to improve the system's fiscal performance have included getting out of the nursing home business and launching the patient transportation service.
Last year, the Pennsylvania Department of Health twice temporarily banned admissions at two Temple nursing homes because of deficiencies in the care being provided.
In January, Temple -- which closed two of its nursing homes last year -- shut down its remaining nursing home: the Continuing Care Center in the Olney section of Philadelphia.
Henry Sciortino, a financial adviser to the center, said at that time, "Temple Continuing Care Center is home to a very vulnerable population, and because of that, a team of professionals worked for months to avoid closing the facility. But the center cannot continue to sustain financial losses that it has suffered for the last several months reaching into the million of dollars."
Back in December, at a time when some hospitals were cutting back on ambulance services because of escalating malpractice expenses, Temple created a transport team to provide ground transportation for critically ill patients throughout the region.
Marshall said Temple began the service after studying the area and finding that while there was a glut of helicopter services, a need existed for critical-care ground transport.
The system has established an access center to serve as a "one-stop shopping" site for Temple's referring physicians to interact with the system. It also recently embarked on a multimillion-dollar project, led by new vice president and chief information officer Arthur Papacostas, to upgrade its technology and information services.
Marshall said he believes one of the key ingredients to meeting his financial goals is a systemwide commitment to providing better service to patients than other providers in all aspects of delivery.
"That means from the time a patient calls for an appointment until the time he gets his car back from the valet attendant and everything in between," he said. "All it takes is one bad experience any step along the way" to create a negative impression.
"In this region people can vote with their feet, there are a lot of good doctors at Jefferson and a lot of good doctors at Penn and Hahnemann. Service will be the one area we can differentiate ourselves."
To motivate the system's 8,000 full- and part-time employees, Marshall created a "results sharing program."
Workers will split a $2.5 million pool created for the program if the system meets two goals by the end of its fiscal year on June 30: a $4.6 million improvement in the hospital's financial performance and an increase in patient-satisfaction survey scores.