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November 2001
Hospital Heartsaver
By Nan Bauroth

     When Ed Case arrived a year ago as CEO and president of Presbyterian Healthcare www.presbyterian.org, he got letters – lots of letters from patients telling him exactly what they thought about the healthcare provider.

      Today, Case still receives a lot of letters, but that dreaded “Dear Jack” stack has become a pile of love letters. “I get ten letters of praise for every letter of complaint, and that says we’re heading in the right direction,” Case beams.

      The wonder drug Case administered is that age-old business prescription “Put the customer first.” it has been the driving force behind Presbyterian Healthcare’s dramatic recovery from what some once feared was a life-threatening disease.

      Since Case has been on the case, this seasoned healthcare executive has performed CPR on patient care and patient choice, giving the institution he runs a whole new life. Try these vital statistics (YTD August 2001 vs. same period 2000): net revenue up 3.7%, income from operations up 30.5%, patient days up 5.8% and surgeries up 8.6%.

      “When I came on board I said, ‘We’re going to get the managed care contracts, and we’re going to get the cardiologists and others to recognize what we have to offer, and there is a very bright future here at Presbyterian,’” Case recalls. “I told everyone that we’ve been in business for 98 years, and not to believe we will not be in business for another 100 years.”

      Dr. Fred Pfeiffer, chief of staff at Presbyterian, believes Case’s confidence, coupled with his reassuring approach, have been critical to Presbyterian’s rapid turnaround. “He’s the best hospital CEO I have worked with,” maintains Pfeiffer, who has been at Presbyterian since 1985.

      Presbyterian, which merged with Novant Health, now falls under the aegis of Paul Wiles, Novant’s President and CEO. “Ed possesses the intellect and experience,” he observes. “His demeanor is calm, steady and predictable, which is important to folks there.”

      James L. Moore, CEO of Coca-Cola Bottling Company Consolidated and chairman of Presbyterian Healthcare’s board of trustees, concurs: “Ed has brought a rare combination of leadership and managerial competence.” In his opinion, Case understands the complexities of the healthcare business and has created a sense of teamwork. “He’s got various constituents pulling together so we provide the best possible care for the people of this region.”

      In taking on the CEO role, Case accepted a mission impossible: winning back major managed care contracts so patients would have a choice. He also had to win back the confidence of Presbyterian’s revered cardiologists, who were threatening to defect to Carolinas Medical Center and develop a freestanding heart hospital.

      Twelve months later, Case is batting 1000. Presbyterian now has access to every major managed care contract but Aetna. He also saved the heart and soul of its cardiology unit. On only his second day on the job, Case went head to head with cardiologists to determine why they felt they needed to go elsewhere and what he could provide to service their needs. The upshot: “They decided to stay, and are fully committed to Presbyterian.”

      Dr. Daniel E. Wise, medical director of Presbyterian’s innovative new Center for Preventive Cardiology, says Case’s resolve got his practice’s heart pumping again. As he explains, when Case came to town, things were going from bad to worse. The heart hospital was almost a fait accompli, which could have siphoned all cardiology from Presbyterian.

      “Ed was very definitive from the moment he arrived that that wasn’t the right thing for Presbyterian or this community,” says Wise. “He immediately put things in place that allowed us to rebuild the cardiovascular program and stature of Presbyterian to gain the confidence of hospital employees and physicians. They saw someone in charge with the vision and ability to make things happen again.”

 

Mastering a Different Business Model

     Case’s ability to revitalize Presbyterian so quickly is rooted in his extensive healthcare experience and management credo. Prior to coming here, Case spent his entire career in St. Louis, most recently as acting CEO and COO of top ten-ranked BHJ Health System, which includes Barnes-Jewish Hospital.

      “Through directly contributing and seeing what others can do, I understand how you can be great,” he asserts. “My financial background is a benefit because it brings a level of analytical thought to the process, but being able to take what I’ve learned and through the people I’ve had an opportunity to work with and demonstrate how we commit to excellence is truly the difference.”

      John H. Belk, president of finance, systems and operations at Belk, Inc. and a member of Presbyterian’s board, thinks Case’s background with BHJ in St. Louis has been very beneficial.

      “He’s seen a large scale system work well and dealt with similar issues as COO. I think that’s been helpful to him, coming into this market.”

      By market, he’s referring to the intensely competitive healthcare industry here, which was the source of Presbyterian’s problems. As Wise assesses it, “The playing field changed so dramatically. Leadership was used to a situation where you basically did things on a handshake. When Dr. Harry Nurkin came to town, the landscape changed. It became a very competitive medical business and has taken time for the Presbyterian system to adjust.”

      Combine this fierce rivalry with a volatile industry unlike any other in the private sector, and you have the makings of a formidable managerial task. “Board members who are very strong businessmen all scratch their head about healthcare and how different it is in terms of the business model,” Case readily professes.

      For instance, a manufacturer knows how much material is in their product, the selling price and to whom they can sell it. “When someone comes to our doors and needs help, we don’t know how much we’ll get paid, we can’t decide whether we will take the patient based on how much we’ll get paid and we work with a series of other people to determine what we need to do,” explains Case. “We don’t have the same controls over expenses that most companies do.”

      That is one reason Belk is impressed by Case’s performance to date. “He has been successful with a very difficult challenge of expense management. Just about all healthcare systems have been under tremendous expense pressure.”

      Moore echoes this sentiment. “Healthcare is probably the most complex business I’ve ever been associated with. You’re dealing with human life and all that entails, but in addition, in a managed care environment where people are not necessarily free to chose their health care providers. Add to that a tremendous amount of government involvement, and care provided by employees such as nursing staff as well as independent contractors like doctors.”

      In Wise’s view, Case is undaunted by this complexity. “One of Ed’s leadership abilities is his understanding of medical economics and what it takes to make a system run.”

      Certainly, Case’s willingness to tackle the cardiology crisis his second day out made a superb first impression. But in his management book, “My philosophy is that if you have a question for someone, you’re better off asking that person. And if you have to deal with controversy, deal with it. I find people truly respect an individual who will put all the cards on table and explain what they’re thinking and where they want to go, versus playing a chess game where no one knows where anyone is.”

             

Presbyterian’s Persona: TLC

      If Case has a mantra, it’s patient care. Although Presbyterian’s problems seemed insurmountable to some, he quickly acknowledged it wasn’t anything he hadn’t seen before. “I told everyone we shouldn’t be troubled because what we really needed to do was spend our time and focus our attention on providing credible patient care, and over time that would bring us to the point we need to be.”

     Judging by the letters he gets, Case’s strategy has become a self-fulfilling prophecy. “I think there are several factors that have contributed to growth. One was access to managed care contracts. Secondly, though, we’ve spent an incredible amount of time face-to-face with physicians asking them what we need to improve and what we can do for their patients to make the experience better.”

      The key indicator is patient volume, because that serves as a measure of market preference. In Case’s experience, it’s all about repeat customers. “People gain a relationship with an institution and when things go well and their physicians are happy, you get a lot of return business. That is our primary emphasis and focus.”

      On the expense side, he says they’ve been able to reduce expenses per patient seen. “The beauty of having more patients is you can become more productive by using the same people to see more patients. We haven’t had to reduce our staffing level to improve our expense position.”

      Like any other business, though, patient satisfaction is an ephemeral thing, and given the life-or-death nature of healthcare, has a strong emotional component. Call it the “Presby persona”: the venerable Charlotte institution is best known and loved for its nursing professionalism and TLC.

      “We have incredibly thoughtful and caring people in nursing, and that interaction with patients is a critical one,” Case insists. “It comes through the people we hire, supported by our nursing school, which will soon celebrate its 100th anniversary. Presbyterian is known for nursing, which goes a long way toward giving people the strong feeling and perception this is a place that really cares about them.”

 

A Shift in Charlotte’s Medical Center of Gravity

     Presbyterian board members and physicians agree: thanks to Case, the prognosis for their beloved organization is excellent. 

     From Belk’s perspective, the primary factor has been the support of Novant in opening up some of the insurance contracts. Add to that, “Ed’s leadership in driving patient satisfaction and innovative projects like the Cardiovascular Institute definitely bodes well for Presbyterian.”

     Pfeiffer’s optimism is palpable. “Presbyterian was the place to go for a long time. But they got used to resting on their laurels, which is never a good idea in the business or medical world, so we fell upon some pretty depressing times. Now people are enthusiastic that the center of medical gravity in Charlotte is shifting again from CMC to Presbyterian. You will find more innovation, a better approach and everyone working together better here. And Ed gets a lot of the credit for that.”

      Case says this is just the beginning. “The greatest challenge is always the challenge of momentum. We have a phrase we use, ‘We’re pleased but not satisfied,’ because too often as you start to rise above the water level, you can get complacent. We’re pleased with what we’re doing, but we’re nowhere near where we ultimately need to be. We need to keep all the forces motivated and focus on continued improvement.”

     His ultimate goal is to convince the Charlotte region of Presbyterian’s value by continuing to strive to exceed patient expectations. “That is something we must do every day. You don’t simply reach a point and say you’ve done that, you can go on to something else.”

Nan Bauroth is a Charlotte-based freelance writer.
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