‘A Community Jewel’ Noble Hospital’s New CEO Has High Hopes

BY JOSEPH BEDNAR

Robert Perry has been in hospital administration long enough — almost 30 years, at seven hospitals in three states — to understand the challenges facing community hospitals.

“Standalone community hospitals have capital challenges; however, I think the worm is turning,” said Perry, the new CEO of Noble Hospital in Westfield, who replaced longtime CEO George Koller last year.

“Community hospitals, over the years, have not always fared well,” he said, noting that Massachusetts once boasted as many as 126 acute-care hospitals and now has just 82, while the population has remained essentially stable.

“Some of that is because people aren’t hospitalized as often, and they don’t stay as long in the hospital,” he explained. “However, there has been a gravitation to tertiary, large teaching hospitals, and that’s a two-edged sword from a taxpayer’s point of view.

“They have the broadest breadth of services,” he continued — and they’re preferable (and often the only local option) for services such as open-heart surgery and trauma treatment — “but that’s also the most expensive model to deliver care because of the superstructure they have in place, whether it’s Mass General or Brigham or Baystate. You’re going to this big, complicated, multifaceted organization which you probably only need for 5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} to 7{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of what ails you. It’s like using a cannon to kill a fly. For everything else, you’ll not only do as well here, you’ll do better, because we can pay better personal attention to you, because it isn’t as big and complicated.”

He also noted that patients at Noble are always seen by staff physicians and board-certified internists, rather than residents.

“That’s a huge advantage, but there are really many advantages in coming to a smaller hospital. Insurers are beginning to recognize that by developing innovative incentives to do so. They recognize that, if you can meet 95{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of your patient needs in a much lower-cost setting, that’s a good deal, and everyone wins. Financially, we can compete extremely well.”

Perry is clearly a believer in the local model, and he’ll need to bring that optimism to Noble, which has traditionally struggled to stay in the black and was in negotiations several years ago to become part of the Baystate system before talks fell apart in 2006.

“I think people will eventually understand that the community-hospital model, the local hospital, is the model across much of the world,” Perry explained. “Here in the U.S., we’ve gravitated more and more toward big, tertiary medical centers, but that’s not the model in most industrialized countries.”

Instead, he explained, hospitals overseas tend to operate on a tiered system where most patients patronize a local hospital and move up to specialty hospitals only as needed.

“It’s well-documented that, the more you do something, the better you are at it, and when you specialize in something very sophisticated or complicated, like the big hospitals do, you need to focus on those things so people get and stay good at it. I’m all for big, tertiary teaching hospitals, but as a citizen, I think we need to preserve the local option. We all win when that happens.”

The question everyone is asking, he said, is simply, will Noble Hospital survive?

“My answer is, if this community supports Noble Hospital both in terms of their feet — coming here to use us — and their financial generosity, then we will generate the capital we need to acquire equipment, replace facilities, and continue to ensure that they have a local option available going forward. If they do not support us, we will struggle.”

This month, Perry talks to The Healthcare News about why not enough people have been seeking services at Noble, what the hospital can do to change that, and why he believes the future looks bright.

First Impressions

Perry, most recently CEO of St. Clare’s Hospital in Schenectady, N.Y., was hired for an initial term of nine months, with an open-ended contract after that.

“It was wise of the board to do that,” he said. “Noble has had a CEO for almost 20 years, and before looking for another one, perhaps it’s a good idea to take a breath and get a fresh look at things, then decide.”

So far, he’s impressed. “I’ve been blessed; the leadership of this organization at the board level has been terrific and very supportive of the many changes we need to make. I couldn’t ask for a higher level of commitment.”

He called Noble “very much a community jewel,” noting that the facility has a service area of well over 60,000 people, factoring in Westfield, the hilltowns, and some of Agawam, Feeding Hills, and Southwick. But physician losses over the past few years have hindered access to care and harmed the hospital’s bottom line.

“A hospital in a relatively affluent community like Westfield should be able to do very well,” Perry said. “But when you’re small and have relatively small departments, like two physicians, when one leaves, 50{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of your capacity is gone. You don’t have a fudge factor.

“So you have to be very diligent about planning for physician succession,” he continued. “Sometimes you’re surprised when people retire or pass away, but most of the time you should be able to pay close attention to succession for the practice.”

Being caught short affects the ability of the hospital to fulfill its mission, he explained, and, indeed, shortages of emergency physicians and specialists were doing just that, causing access problems at Noble and forcing patients to look elsewhere for care — reducing the hospital’s revenues in the short term and also long-term, in the case of those who never come back.

“I don’t think people leave town to get health services if they have viable alternatives in town,” he said, adding, however, that they’re quick to look elsewhere if they have no local option. “People always find a place to get health services. If a donut shop leaves town, you can live without donuts for awhile. But if you need your gallbladder out and there’s no surgeon in town, you’ll find a place to go.

“Some people migrated a while back because they didn’t have the availability of services here,” Perry continued, noting that a hospital that once boasted seven orthopedic surgeons now has just one on staff. “It’s a challenge for us, and for hospitals all across the country.”

Clearly, then, part of the solution to making Noble viable in the long term is to ensure that enough doctors, nurses, and specialists are on hand to provide enough access to the community, and then to market the hospital as that place where residents of Westfield and surrounding towns can get the vast majority of what they need in medical care.

“We’re working hard to fill those gaps,” he said, “but we’re not 50 doctors away from taking care of the community; we’re four or five doctors away. Then, once we fix this, we need to take better care of succession planning.”

Getting Better

The decision to replace Koller came amid a string of down years for the 97-bed hospital financially. Noble lost $226,000 in the fiscal year that ended Sept. 30, 2009, following a loss of $294,000 the previous year.

Capital improvements to upgrade equipment and facilities are obviously a challenge at a time when hospitals run on such tight margins, but Perry said Noble has done well keeping up with technology. For example, the hospital offers all-digital imaging, including a 64-slice CT scanner, and a fully integrated picture archive communication system that transmits and receives X-rays digitally. “We’re up to snuff,” he said. “I don’t wake up at night worrying about the equipment we have.”

That said, he conceded that the only hospitals making money these days are the large teaching institutions, and everyone else struggles to generate the capital necessary to purchase equipment and make other improvements.

“The chances of generating that from operations is slim, so we look to the generosity of our community for philanthropic help,” he said. “We’ve had the support of the community in the past, and we will continue to seek that out. In return, we will give them a product worthy of their support — high-quality, low-cost medical care available in their community.”

In addition, he noted that Noble employs some 600 people and maintains a payroll around $25 million, “so we’re a major part of the economic culture of Westfield, in addition to providing a vital service, including roughly $2 million in free care to people of this community.”

Perry spoke warmly about Westfield and its environs as a place to live and work, which can be a marketing tool when selling physicians on coming to work there.

“There’s probably no better place to practice than Noble Hospital,” he said. “It’s a wonderful community, very safe, with excellent schools, recreation, and cultural activities. It’s a great place to raise a family. The hospital itself has the highest patient-satisfaction scores in the whole valley. Add the fact that this is a relatively affluent community, and the payer mix is first-rate, and physicians will tell you that they’ve made a good living here and enjoyed being part of this community.”

But Noble isn’t resting on its laurels, seeking to make improvements as finances allow, as in its ongoing Emergency Department project.

“We have 30,000 visits a year in our emergency room — that’s enormous for a hospital of this size,” Perry said, quickly touting the expertise of the 10 ER physicians on staff, nine of whom are board-certified in emergency medicine and the other board-certified in internal medicine. “People will tell you that’s as good a group as you’ll find in an emergency room. That’s a huge asset for this hospital and this community.”

With that in mind, Noble officials decided to dedicate proceeds from its annual ball last year — $425,000 in all — toward making improvements to its ER, adding treatment rooms and upgrading lighting, furniture, and equipment. With a total remodeling of the Emergency Department out of reach funding-wise for the moment, Perry sees the current makeover as the next best step.

“We’re in the middle of making those improvements now, and it’s a challenge — like having 30 people over for dinner while you’re doing a kitchen makeover. We’re doing a little at a time, and it’s complicated. But those who choose to come here are getting superb care.”

Indeed, Perry is an optimist — not an easy thing in a time of financial hardship for hospitals across the spectrum.

“Noble has a bright future,” he said, “as long as everyone recognizes that this jewel needs to be protected, sustained, and nourished. If they do, we’ll be fine.”