SOS: Public Hospitals

Philip Betbeze and Jim Molpus, for HealthLeaders Magazine , March 12, 2009
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The new Parkland will further help the system alleviate some money-losing activities, says Dragovits, by helping to diversify its payer mix.

"Our mission is to serve the underserved, but we do have some highly specialized services, like the burn unit and trauma that attract paying patients," he says. "We'd like to be able to provide the full range of services to ensure continuity of care and keep those patients here through their care." Semi-private rooms, for example, which the current facility has many of, don't offer that possibility.

A corollary: IT
Perhaps information technology itself doesn't drive productivity or quality transformation anywhere, much less in public hospitals. But in such complex institutions, it allows disparate parts of the system to communicate better.

"Information technology is not part of the puzzle," says Gabow. Denver Health has spent more than $300 million on IT since it separated from the city of Denver in 1997. It has grown dramatically since then, having doubled or tripled in size, depending on which parameter you look at, since it separated from the city—doubling its employees from 2,500 to more than 5,000. Gabow says an orderly and efficient growth would have been impossible without that investment. "IT enables us to hold the pieces together. Part of what it has done is enabled our quality and financial success."

"Right now, our space doesn't lend itself to efficient staffing and care. The new facility will do that and provide for a full EMR."

A hospital of choice
The new Parkland is what Anderson has been looking forward to for several years. His vice president of facilities planning and development, Walter Jones, who will direct the construction of the new hospital and ancillaries, lists the limitations of the current facility.

"As a mid-20th-century hospital, it's not adaptable to delivery of healthcare in modern form," Jones says. Spaces are small. The majority of Parkland's rooms are still semi-private, and 70% of them don't have inpatient showers and toilets. Meanwhile, all of the traffic that serves a unit comes down a single corridor, which makes it noisy and crowded.

"Many operations have developed workarounds because of those limitations that have been institutionalized," he says. "We want to plan a hospital for the best way to deliver care as opposed to the way it is now."

Anderson believes the new Parkland is a once-in-a-lifetime event that will allow the system to position itself for a time "when you can be a hospital of choice, not a hospital of last resort." He often recounts a story about former Parkland board chairman and Texas billionaire Paul Bass, who told Anderson that a hospital that is for the poor only will become a poor hospital over time.

"So you want people to choose you."

Philip Betbeze is finance editor and Jim Molpus is editor-in-chief of HealthLeaders magazine. They can be reached at or
On Leadership at Public Hospitals

Larry Gage, president of the National Association of Public Hospitals, has seen the good and the bad in governance among his membership of 71 public hospitals and health systems. In addition to luck, running a public hospital effectively requires at least these leadership attributes, he says:

  • You need as strong or stronger leadership instincts than you do in any other sector of the industry, because you're leading an organization that has a very public mission but has to function like a private hospital or healthcare system and has to deal with dozens and hundreds of governmental constraints.
  • You need a broader skill set. One of the things that's sometimes missing in the public sector is a substantial background in healthcare administration.
  • You need staying power (Anderson has been CEO of Parkland since 1982; Gabow has led Denver Health since 1992).
  • You need to be a bit of a financial magician because you're dealing primarily with government funding sources.

That Will Be $50 Million, Please

Grady Health System and new CEO Mike Young are playing a high-stakes game of healthcare politics in Atlanta, with the end game of finally fixing a massive and quickly deteriorating public hospital.

In December, after less than five months on the job, Young sent out a request to Atlanta's other nonprofit hospitals to pony up $50 million as their share of the uncompensated care burden shouldered by Grady, which could face a 2008 deficit of more than $40 million.

Not surprisingly, they declined.

Not soon after, the Fulton County Commission, one of the two counties that supports Grady directly, slashed its funding by $30 million. Young and Grady officials later responded by saying that Fulton County needed to increase its level of funding by $36 million.

And not to leave surrounding counties out, Young sent a $75 million bill to Atlanta's doughnut communities to repay Grady for care provided to their uninsured. A few said they will look into it.

Jim Molpus

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