‘Craig Melin, who orchestrated a stunning turnaround at Cooley Dickinson Hospital more than a decade ago, and is currently leading the facility through a period of expansion and innovation, has been chosen as BusinessWest’s ‘Top Entrepreneur for 2004.’
Craig Melin says that if a hospital does what’s right, and not necessarily what’s expected, it can often get better outcomes — meaning both a healthier community and a healthier bottom line.
Take bill collection, for example.
The aggressive policies of some hospitals have become fodder for the network news magazine shows, and the exposure has created a public relations problem for some institutions, said Melin, president and CEO of Cooley Dickinson Hospital (CDH) in Northampton. But beyond the bad press, the stern tactics don’t often yield the best results.
"We do not put liens on people’s houses and we do not charge interest — with some of the work-out plans people get into with other hospitals, the interest on how much they owe is higher than the monthly payment they’re making," he told BusinessWest. "We work out plans with people based on what they can afford, and, interestingly, our collection rates are much better than anyone else’s.
"I think that comes from relating to all our of our community as patients, or people in need who wish to be taken care of; they go out of their way to work with us because we’re going out of our way to work with them," he continued. "Did we know it would be this way when we started? No, but we knew that supporting access for people regardless of their ability to pay was the right value for us."
There are many other examples of how doing what’s right has worked out for CDH and the community it serves, said Melin, who was chosen BusinessWest’s ’Top Entrepreneur for 2004’ by the magazine’s editorial board. It’s an honor that Melin understands — sort of — but one that he accepts grudgingly.
"It’s not one person," he said at least 10 times, referring to an entrepreneurial mind-set that pervades the hospital. "Here, ideas come from everywhere."
Perhaps, but Melin has created an environment in which ideas are allowed to flourish, said BusinessWest Publisher John Gormally, who noted that while a hospital administrator may seem an unusual pick for ’top entrepreneur,’ it is certainly warranted in this case.
"He has led the hospital back to sound fiscal health at a very difficult time for all health care providers," said Gormally, referring to CDH’s stunning turnaround — from a facility on the brink of fiscal collapse in the early ’90s to one of the few hospitals in the Commonwealth to record surpluses the past several years. "And while what he’s done is important, it’s how he’s done it that is most impressive; he has people thinking outside the box, and in the process, Cooley Dickinson is creating models for hospitals across the country."
Indeed, a few days after Tom Brokaw, in one of his final broadcasts, presented a piece on aggressive bill-collecting policies, CDH conducted a conference call, including more than 100 hospitals nationwide, to present details on its less-forceful, more successful tactics.
"When the American Hospital Assoc. saw that there were lawsuits across the nation stemming from these aggressive tactics, it wanted to help hospitals figure out what to do in response," said Melin. "It identified seven places, including Cooley Dickinson, as examples of how to do things differently — and effectively."
CDH is doing many things differently these days, in areas from nurse recruitment to food services; its bloodmobile to a unique program designed to keep people with congestive heart problems out of the hospital. The ideas have, indeed, come from everywhere, but Melin has set a distinctive entrepreneurial tone.
BusinessWest looks this month at how and why that philosophy has flourished, and what it means for the hospital and the community it serves.
When BusinessWest initiated its ’Top Entrepreneur’ award in 1996, it did so to recognize individuals who embody the many aspects of that term. Entrepreneurs are generally defined as risk-takers, and the picture that most often comes to mind is that of someone who takes an idea or a new product and creates from it a thriving enterprise.
But BusinessWest believes entrepreneurs come in many forms. In 1999, for example, the magazine gave its award to now former Springfield Technical Community College President Andrew Scibelli for his leadership in the creation of the school’s technology park and enterprise center — and also for his ability to inspire an entrepreneurial spirit that enabled STCC to gain regional and national acclaim for its work in education in economic development.
This year’s pick is in a similar vein.
During his 16-year tenure at the hospital, Melin has displayed leadership that has helped guide CDH through turbulent financial waters and put it in the national spotlight. CDH had six years of increasing losses before and just after Melin arrived — $1.4 million in 1988 and $1 million in just the first quarter of 1989 — before he structured a turnaround plan that included wage and salary freezes, a hiring freeze, construction freeze, and reduction in staff and other measures.
Melin also orchestrated an affiliation with Dartmouth Hitchcock Medical Center in 1993, a move that eventually led to formation of a multiple-hospital system known as the Dartmouth Hitchcock Alliance, an affiliation that has brought a number of benefits to the hospital.
In 1995, CDH was selected as a national Comeback Hospital of the Year by the American Hospital Association and Coopers & Lybrand, and in 2000, the facility was named one of the top 100 regional hospitals in the nation. And at a time when more than half of the state’s hospitals are recording annual operating losses, CDH has recorded surpluses during each of the past eight years.
Last summer, the hospital announced a $45 million expansion plan that will include new operating rooms, a new central sterile laboratory, more private patient rooms, and a parking garage.
Behind these accomplishments is a culture of innovation, said Melin, who told BusinessWest that departments, individual employees, and those handling the hospital’s marketing are encouraged to seek new, often non-traditional ways to achieve desired results and a healthier community.
There are many examples, including:
• An imaginative campaign to recruit new nurses and other health care professionals. The campaign goes well beyond traditional help-wanted ads, and invites prospective candidates to have dinner with hospital adminsitrators at a Northampton restaurant and talk about opportunities. ’We Need Med Surg Nurses — Let’s Talk about it Over Dinner,’ is the headline over one of the many print ads being used. The program also makes use of television to recruit nurses, partly in recognition of the fact that many nurses lead busy lives and don’t have time to ready the daily paper;
• Way Cooley Coffee. This is an ambitious program, in which CDH has teamed with Orange-based fair trade coffee roaster Deans Beans to create its own blend of coffee, which is served in patient rooms and in the coffee shop. Proceeds from the sale are used to support Hampshire Health Connect (HHC), a CDH-sponsored program that connects uninsured people in the community with health care and coverage. Through HHC, the hospital has seen a decrease in the amount of free care it administers, at a time when most facilities are experiencing increases.
• A Wood Chip Plant. CDH uses a wood-chip burning plant to heat and cool and its facilities. The plant not only saves the hospital about $1,000 a day (the difference between burning wood chips rather than oil or gas), it also helps the environment and enables the hospital to better connect with a more environmentally conscious region.
In some way, each of the entrepreneurial ventures relates to a hospital-wide effort to move from what Melin calls "good care to really great care," and they often involve looking beyond what might be accepted, or expected, in the health care community — and they involve a measure of calculated risk.
As one example, Melin pointed to a program launched in 2002 that concerns individuals with congestive heart problems. In essence, the hospital is "spending money to lose money," as Melin put it.
A community case manager hired by the hospital at a cost of $100,000 follows up on patients that fit certain clinical criteria upon discharge from the hospital, he said. This group includes those with congestive heart failure, who require steady monitoring of their weight and other factors if they are to stay out of the hospital, its emergency room, or a nursing home.
"As we looked it, the program reduces the cost to Medicare by about $150,000 to $200,000 a year; we’re saving the system money by keeping people healthier," Melin said. "But it costs us money to do that.
"There are no economic incentives in this at all for us — we’re keeping people out of our own hospital," he continued. "We do it to provide better care for people; our view is that this is the right thing to do and that it will eventually pay back for us. It’s by a doing a series of things like this that we’re making Northampton a healthier community and that will benefit us in the long run."
Another somewhat non-traditional approach is the hospital’s ongoing efforts to "staff up," as Melin calls it, while most hospitals are doing the opposite due to growing budget pressures.
In both the nursing and nursing-support areas, CDH has invested several million dollars in new hiring that has yielded benefits such as improved overall care, improved morale, and sharp reductions in the use of expensive temporary, or agency personnel.
"Some of the best things we did was add tray-passers and transporters, so that our nurses could be nurses," he explained, adding that by adding more permanent staff, the hospital has eliminated most of its $1.5 million annual bill for temporary help, while gaining happier employees and thus facilitating recruitment efforts in the process. "While there was a risk to putting the money upfront, it was a risk well worth taking."
Still another example of entrepreneurial thinking is the hospital’s bloodmobile, which was put on the road last year. The investment was made in the wake of the ever-increasing price of blood and difficulties maintaining adequate supplies year-round, said Melin, noting that facility has addressed both concerns. And projections show that the vehicle will be paid for in less than a year.
The bloodmobile project was conceived by the staff at the hospital’s blood bank, said Melin, noting that this just one example of how the hospital gives departments and individuals the incentive and support to run with new ideas.
"We’ve definitely been giving people room to test ideas and initiate them," he explained. "A lot of times, the tendency is try to design something absolutely perfectly — and it takes a lot of do that. Instead, we want to test things out in increments, and if you get some good early returns you can keep improving and get to the best place faster that way.
"As long as we’re not putting anyone at risk, we’re finding it easier to test things early on and get them going, rather than leaving things in study for too long," he continued. "It’s much better to identify key components, understand what you’re going to measure, move ahead with it, and see what differences you’re making rather than to study something to death."
And by moving forward with many of its initiatives, CDH is increasingly becoming a model for other hospitals. The facility’s bill-collection policies are one example of this phenomenon, said Melin, who added that the bloodmobile initiative has drawn some inquiries, as has another program designed to ease a patient’s transition from the hospital to a nursing home.
In Good Condition
When asked how CDH has managed to record surpluses at a time when many hospitals are losing money, Melin says it comes down to a simple philosophy about patients and how to care for them.
"Central to the concept is the belief that patients in our community are patients of Cooley Dickinson Hospital and our medical staff, and not patients of the managed care companies," he explained, adding that rates paid by insurers to CDH are slightly higher than the cost of the care provided — an unusual situation in today’s health care environment — and that the payers can afford such a scenario because of the work the hospital does to keep people healthy, and, ironically, out of the hospital.
This broad approach to health care has won Cooley Dickinson some time in the national spotlight, and its president some praise and a few unique awards — including designation as a Top Entrepreneur.
George O’Brien can be reached at [email protected]