University Hospitals aims at cost-efficient growth in uncertain health care environment

CLEVELAND, Ohio — Expecting to be challenged in the next five years as never before, University Hospitals is streamlining its clinical and non-clinical operations, and bringing in some new faces to lead continued growth at the regional health system during uncertain times in its industry.

“The hospital has undergone significant expansion and financial growth over the past five years, and at the end of 2010, will open the new UH Ahuja Medical Center followed by the new UH Cancer hospital in spring 2011,”  University Hospitals CEO Thomas F.  Zenty III said in a written statement. “UH anticipates adding a net 500 additional positions in 2010, mostly new physicians.”

University Hospitals has undergone a financial turnaround since 2003 when Zenty became its chief executive. A year later, UH reported its first operating profit in 11 years, thanks in part to Zenty’s decisions to cut jobs, close a money-losing hospital, sell a psychiatric facility and exit the health insurance business.

Now, UH is growing. To accommodate the growth, Zenty separated clinical operations, system administrative services and system staff functions, hiring a new “chief” and promoting two more, while promoting one president and creating another president’s job yet to be filled. The moves are aimed at streamlining the health systems’ growing community hospital and physician networks, as well as giving its emerging clinical and research institutes room to grow.

Dr. Achilles Demetriou will lead daily clinical operations as chief operating officer. “My previous position was president of the system, which was a mix of clinical and non-clinical systems,” Demetriou said. But that mix “sometimes was a bit confusing.”

Dr. Fred Rothstein, president of University Hospitals Case Medical Center, which is UH’s academic medical center, among others, will report to Demetriou. Rothstein also will manage University Hospitals Ahuja Medical Center, being built in Beachwood, as well as the cancer hospital taking shape and neonatal intensive care unit opened this year at its main Cleveland campus. “He will have his hands full managing these larger operations,” Demetriou said.

The construction is part of the health system’s $1.2 billion strategic plan called Vision 2010. CEO Zenty and his trustee board have raised millions of dollars in gifts, largely to pay for Vision 2010 projects. Many of the anticipated 500 jobs will be created to get the two hospitals up and running, Demetriou said.

“We have taken everything clinical outside UH Case Medical Center and created a new position, president of community hospitals and ambulatory networks,” a position that has yet to be filled, Demetriou said. “That allows us to have renewed focus on another growing segment of our system, namely ambulatory centers.”

UH also has hired Dr. Eric Bieber as system chief medical officer. Bieber will join the health system on Jan. 1 from Geisinger Health System in Danville, Penn.  For the last year, that position has been held on an interim basis by Dr. Michael Anderson, who will return to his role as associate chief medical officer. And System Chief Nursing Officer Cathy Koppelman will continue to lead the nursing structure system-wide.

On the administrative side, Steve Standley will move into the new position of chief administrative officer. Standley had been senior vice president of System Services at University Hospitals. In his new role, he’ll work with leaders in marketing and communications, information technology, government affairs, facilities, nutritional and environmental services, and real estate.

UH also will centralize front- and back-office support functions at its two physician practices, University Hospitals Medical Group — the non-profit organization of about 850 academic faculty who are physicians and specialists at the medical center — and University Hospitals Medical Practices — the for-profit group of about 550 mostly family physicians who practice at UH’s community hospitals, he said.

Dr. Michael Nochomovitz, a 20-year UH veteran who had been president and chief medical officer of UH Medical Practices and UH Management Services Organization, has been appointed president of University Hospitals Physician Services, the new service umbrella for UH’s 1,400 physicians who practice at more than 200 locations. The clinical missions, governance and operations of each group will be maintained, Demetriou said.

The new organization also will oversee UH’s access services for centralized scheduling of patient appointments, seven urgent care centers, six hospitalist programs and UH Corporate Health Services. “We have learned a lot from both of our practices. We believe we will achieve significant efficiencies that our patients will see through improved scheduling, for example,” Demetriou said, “through seamless flow of patient data throughout the system from community physicians to specialists, and back and forth.”

Part of the efficiencies will be gained through an ongoing $100 million electronic medical record project, which now is being phased in at UH’s acute-care hospitals, he said. The health system hopes to have all its hospitals on the record system by the end of 2010 and to start planning by mid-year for roll outs at its out-patient care centers.

Some of the new 500 hires will staff emerging clinical and research institutes at University Hospitals. Two already are open — the UH Harrington-McLaughlin Heart and Vascular Institute and the UH Neurological Institute.

The heart and vascular institute “has been a phenomenal success for us,” Demetriou said. The institute has recruited more than 20 physicians and researchers “to essentially grow our market share and to establish our institute as a leader in the field and we believe we are on our way under Dr. Dan Simon’s leadership,” he said.

UH is getting ready to launch urological and digestive health institutes. One of the distinctions of the institutes is they are open to physicians who are not employed by or affiliated with University Hospitals, said Dr. Firouz Daneshgari, Lester Persky professor, chair of the urology department at University Hospitals Case Medical Center and leader of the urology institute.

Like the others, the urology institute will focus on providing the best medical care with the most advanced research while educating the highest-quality doctors, said Daneshgari, who signed on at UH three months ago from the Cleveland Clinic via SUNY Upstate Medical University in Syracuse, N.Y. Already, he has recruited six physicians and five researchers for his institute, which likely will launch early next year.

Business has been growing at University Hospitals partly because of its institutes. Patient volumes, including the volume of complex patient cases, have been growing at UH, Demetriou said. Revenue and operating income also have been growing.

Despite this growth, UH wants to become as efficient as possible now — before a new hospital franchise fee, Ohio budget shortfalls and health care reforms could combine to make growth tough.

“In view of that, we pay a lot of attention to our organizational chart … to become as low-cost as we can possibly be,” Demetriou said. “We as health care providers have never been challenged in the way we will be challenged in the next five years.”