Volume 16, No. 3, Summer 2008
CURTAIN UP ON ACT III
‘Stat’ Describes Style
Of New CCHC Chief
(In hospital and emergency room parlance, “stat” means “right now!” and that’s how one-time ER doc Dr. Richard F. Salluzzo is approaching his new position as head of Cape Cod Healthcare. Taking advantage of what one hospital insider described as a “three-month honeymoon period,” in his first days Dr. Salluzzo took what looms as the start of recruiting members of his own management team from Tennessee by installing Michael Lauf as Chief Operating Officer (replacing Margy Hanson, who recently resigned); acted to improve physician relations by bringing doctors into the decision-making loop; scheduled a major strategic planning retreat for September; and announced plans for major staff reductions.)
By Larry Fox
If the evolution of Cape Cod Healthcare was a play, last month’s debut of new leading man Dr. Richard F. Salluzzo as President/CEO could be said to signify “curtain up” on Act III of a 12-year narrative.
Act I, The Creation: Cape Cod Healthcare (CCHC) came into being in 1996 with the merger of Cape Cod and Falmouth Hospitals, plus three regional Visiting Nurse Associations and the old Medi-Center Five (now the Fontaine Medical Center) in Harwich. (C-Labs followed soon after.) James F. Lyons, visionary president of Cape Cod Hospital and moving force behind this epochal merger, was named CCHC president/CEO with Roy Hitchings, Falmouth Hospital president, installed as Chief Operating Officer of the combined organization.
Act II, Implementation: Mr. Lyons retired in 1999 and was replaced by Steve Abbott, under whose direction CCHC grew both in size and stature to gain recognition among the nation’s top regional health care systems.
But with this growth came new fiscal challenges, many from forces beyond the system’s control. This included the growth of so-called niche providers who siphoned off many of what had been the two hospitals’ more lucrative surgical procedures as well as the vagaries of compensation payments from public and private insurers.
Jim Lyons, Visionary
(…and we ‘helped’)
In charting the history of Cape Cod Healthcare, it’s not a major stretch to recognize the small role To Your Good Health, A Healthcare Newsletter, may have played in helping create an atmosphere that made its creation possible. But credit really belongs to the vision of James F. Lyons for recognizing the opportunity we might provide.
In 1993, my associates and I were mulling over the idea of creating a healthcare publication for the Cape. At the time, the healthcare delivery system here was totally fragmented. Cape Cod and Falmouth Hospitals were separate and competitive entities jealously guarding their turf. There were three Visiting Nurse Associations and a bevy of other stand-alone clinics and providers.
I had known Mr. Lyons, then president of Cape Cod Hospital, through my coverage of the business community for the old Cape Cod Business Journal and WQRC. I approached Jim to see if we could count on the hospital for support. His response was positive, but then he asked, “Have you thought about talking to Roy Hitchings? I think it would be a good idea.”
Mr. Hitching then was president of Falmouth Hospital, Mr. Lyons’s arch-competitor.
But I did contact Roy, he agreed to add his support and soon after our first issue appeared with joint recognition of the “cooperation” of the two hospitals. This gave us instant credibility and, to my knowledge, may have been the first time these rivals ever did anything public in concert.
Three years later, the merger of the two hospitals was announced to a stunned Cape community. I am certain that this was the goal Jim Lyons had in mind when he made the suggestion of “talking to Roy Hitchings.” And actually, he subsequently told me, the fact that he saw the Cape as ripe for a regional hospital system was one reason he accepted the job here in the first place several years earlier.
As I write this, Mr. Lyons, now 73, has just been released from Cape Cod Hospital following open heart surgery. That the procedure could be done here—benefiting countless Cape Codders—is another tribute to Mr. Lyons’s foresight in helping to recruit Dr. Robert Rizzo and his team to set up the cardiac surgery division in the first place.
--Larry Fox
This led to a major drop in revenues, which was made clear when the retirement of Mr. Abbott, 64, was announced in May. At that time Dr. Salluzzo was named from a field of more than 100 candidates to be his successor.
Act III, Consolidation: Staunch the financial bleeding while maintaining high standards of care. This clearly was Dr. Salluzzo’s dual mandate when he officially assumed the top job July 10. It was seen as not a coincidence that his resume included major success as a turnaround specialist in his two most recent venues. And that in addition to his clinical experience as board certified in both Emergency and Internal Medicine, there’s also an MBA (from Pitt) appended to his M.D. from Tufts, which his daughter now attends. (The Commonwealth connection also includes his undergraduate degree from UMass.)
As the 57-year-old native of upstate New York likes to say, “I’m as at-home in the Emergency Room as I am in the board room.”
Prior to accepting the CCHC position, Dr. Salluzzo had served since 2004 as President/CEO of Wellmont Health System, a 12-hospital system based in Kingsport, TN. During his tenure, Dr. Salluzzo led Wellmont to a significant financial turnaround, with net income rebounding from a cumulative loss of $13 million during the previous four years to a cumulative gain of $142 million.
In 2007, Wellmont was selected as the sole winner of the Excellence Award from the Tennessee Center for Performance Excellence. Last year, Dr. Salluzzo was selected one of the nation’s 100 Most Powerful People in Healthcare and the sixth Most Powerful Physician Executive by Modern Healthcare magazine.
Mr. Abbott summed up the situation at Dr. Salluzzo’s initial introduction in May. “Clearly we have financial challenges that underscore the need to do some serious rebalancing in our delivery system,” he said. “It seems every time we think we have the table set, somebody saws off a leg.”
On the plus side Dr. Salluzzo assessed the situation as “not dire” and he described CCHC as “a well-run organization.” However, he did agree “we do have challenges” and he cited the added cost pressures from serving an older patient census with all the extra ailments of aging.
And, actually, CCHC management began taking steps to trim its losses with staff reductions, hiring freezes, executive pay cuts and requests for early retirements even before Dr. Salluzzo’s official installation.