Cape Cod hospital CEO maps turnaround
Dr. Richard Salluzzo, the new chief executive of Cape Cod Health Care in Hyannis, said he plans to rebuild his health system's relationship with doctors and create a "physician-led organization" as he seeks to turn around the cash-strapped organization.
Salluzzo joined the company, the parent of Cape Cod Hospital and Falmouth Hospital, last month. It lost $24 million in the eight months ended May 31. Typically, the system earns a surplus in May, when volume picks up because of visitors to the Cape.
"The medical staff leadership group is going to run the hospital with us," Salluzzo said. "They will be actively involved in all decisions. Now, there is suspicion and distrust between the doctors and hospital administration. We need to break down barriers of distrust."
Salluzzo acknowledged the hospital has lost volume in lucrative diagnostic procedures including high-tech imaging, the result of some doctors referring patients to hospitals outside of the system.
The health system plans to hold a news conference Monday at which Salluzzo is expected to detail his turnaround plan.
In an interview, he outlined some of his broad goals for Cape Cod Hospital, which has 238 beds and the state's busiest emergency room, and Falmouth Hospital, which has 95 beds.
Salluzzo said he would improve branding and marketing of the facilities. "In turning this place around, you start with the positive," he said. "We've got a great reputation for care, a good medical staff, and good medical outcomes."
But to improve finances, he said, some layoffs are inevitable.
"We need to right-size, and I'm not using that euphemistically," he said. "I work off of staffing benchmarks, and there are areas where we're overstaffed."
A spokesman said the organization is looking at reducing the number of "hospitalists," physicians who oversee patients' care as they receive treatment from different parts of the facility.
There are 33 hospitalists at the system's two hospitals.
Salluzzo said he would also work to improve the two hospitals' revenue. One way is to ensure the hospitals receive all the money they are owed, he said.
Salluzzo, a graduate of the University of Massachusetts and the Tufts University School of Medicine, joined Cape Cod from Wellmont Health System, a group of 12 hospitals in Tennessee, Virginia, and Kentucky.
At Cape Cod, he is facing problems that are affecting many of the state's community hospitals.
"The biggest problems for these hospitals are flat reimbursements from insurers and payers and rising costs," said Marc Bard, partner at the Bard Group, a Needham firm that provides management consulting to hospitals. "Everybody's getting the same amount but paying more."
One of Cape Cod's problems, Salluzzo said, is that 60 percent of the system's revenue comes from Medicare, the federal health plan for senior citizens.
Medicare reimbursements increase less than 3 percent a year, he said, while expenses are increasing at more than 5 percent.
In the fall, Salluzzo will renegotiate some contracts with insurers. He is also planning a trip to New York to meet with bond rating agencies.
"I'm going to go down there with a team and some board members and a plan," he said. "Hopefully, with my track record, they'll listen. I'd like to make sure they don't downgrade us any more."
When bond rating agencies downgrade a credit rating, the institution has to pay higher interest rates to borrow money.
Jeffrey Krasner can be reached at krasner@globe.com.
