Olean General Hospital: Timothy Finan, President & CEO

by HCE Exchange on August 19, 2010

The success story of 100-year-old Olean General Hospital (OGH) could be summed up as a homecoming, of sorts, as told by Olean, NY-native Timothy Finan, who is just completing his second year as President and CEO of OGH.

“It’s wonderful to be back,” he said.  “It’s not just a professional experience but also a personal one.”

This 30-year health care industry professional noted that OGH’s mission is to provide excellent patient care in response to the health care needs of the community.  The community for OGH, a 186-bed acute-care facility, includes a two-state service area of approximately 100,000 people from the southwestern New York counties of Cattaraugus and Allegany, as well as the northwestern Pennsylvania counties of McKean and Potter. Serving those patients and their families are about 940 total employees and a 150 member medical staff.  Finan notes the following annual statistics:

  • 8,100 admissions
  • 31,000 emergency room visits
  • 800 births

Positive Economics

Finances are looking up for OGH, with 2007 numbers showing the hospital’s first surplus from operations in eight years and a 2008 operating budget of about $82 million, which also includes a projected surplus.  Those figures are being reached within the context of New York State, Finan said, where, from an operational standpoint, hospitals have lost in excess of $2 billion in the aggregate since 1998 from hospital operations.  In addition, he said that according to an economic impact study for hospitals conducted by the Healthcare Association of New York State, the hospital’s total annual economic impact in the Olean area is in excess of $137 million when you apply the multiplier effect to such things as OGH’s  annual payroll and purchasing.

“It’s a challenging environment, but nevertheless we need to be financially sound if we’re going to respond to the health care needs of the communities we serve,” he said.  “So, we’re very encouraged by the improved financial performance, which really is a function of growing the top line through a whole host of programmatic initiatives.”

Some of those initiatives include the opening of an inpatient rehabilitation unit, an urgent care center that works in conjunction with the hospital’s emergency room, a center for wound healing and hyperbaric medicine, a new dental center, and an expanded sleep center.  All of this has occurred during the past 18 months.

Other improvements continue to occur in the area of diagnostic imaging technology, where OGH now boasts a 64-slice CT and a high-field open MRI.  Advancements are also expected within the hospital’s radiation oncology program, which will be operated in conjunction with the Roswell Park Cancer Institute.  All of this, Finan said, leads to improved patient satisfaction and improved quality metrics.

“I think we’re reconnecting with the community in a significant fashion,” he said.  “There is significant enthusiasm and energy at the hospital.  It’s been occasioned by the improvements that we’ve realized over the past few years.”

Keys to Success

Finan believes that his senior management team’s passion for OGH shows how important the hospital is to the community.  The New York State Commission on Health Care Facilities in the 21st Century designated 57 hospitals in the state for closure, conversion or consolidations.

“We all understand and appreciate that we don’t ever want to be on that list,” he said.  “I’m from this community and when you come back to your hometown to run the only hospital around there’s special incentive to succeed.”

The CEO stays close to his employees, holding quarterly round-the-clock meetings and keeping staff posted on the state of the hospital.  He hosts monthly breakfast, lunch and dinner meetings with small groups of employees, where daily hospital issues and imperatives are the topic of conversation.  Electronically, employees stay informed via in-house e-mail and the hospital’s Intranet.

“This management team is very visible,” he said.  “We’re out and about throughout the hospital, all hours of the day and night.  Everybody knows who we are and we know our employees on a first-name basis.”

Human Resource Initiatives

Employees at all levels at OGH receive appropriate training and support, Finan said.  There is a leadership development program for all managers, and supervisory development programs designed for supervisors.  In addition, managers and supervisors must complete a panel interview process upon hiring.  A similar review process has been established among the nursing staff, he said, in which nurses hired for a particular practice unit are interviewed by peers within their respective units.  “Nursing is pursuing magnet status so self governance is a very important component of our nursing program,” he said.

Also, OGH recently instituted a variable pay program in which employees receive a payout if the hospital meets its financial and patient satisfaction targets.  “This has been very important in helping to drive performance improvement,” Finan said.

“We have a very positive relationship with the medical staff,” he said.  “I think that they understand that if the hospital’s strong their practices are going to be strong, or stronger than they would otherwise be.”

Rural Challenges

Physician recruitment is a challenge in a rural area like Olean, but this past year, OGH recruited physicians in the specialty areas of physiatry, thoracic surgery, cardiology, urology, emergency medicine, radiology, ophthalmology, family medicine and obstetrics and gynecology.  Finan is proud of this accomplishment, but still sees a challenge ahead as existing staff members near retirement.

“So, how do we differentiate ourselves from other hospitals in smaller communities?” he asked.  “We do so, hopefully, with our financial performance, our levels of patient satisfaction, our quality performance, our technology, the quality of our nursing staff, and the quality of our physical plant. To the extent we are able to stand out in the crowd, I believe we can be an attractive location for physicians looking for the quality of life that is found in a community like Olean.”

Another challenge based on Olean’s rural status is in the area of reimbursement and financial performance.  The Medicare wage index for OGH is .83, which is the wage index for all of rural New York.  If the hospital were located 35 miles, away, in Erie County, New York, an urban area that includes the city of Buffalo, the Medicare wage would increase to .96.  That difference equals $2 million of additional annual hospital revenue.

“In our business,” Finan said, “we’re the only hospital in this county so we’re competing against neighboring Erie County hospitals for scarce health care professionals.  To the extent that we have a wage index that is ridiculously low, it’s potentially a case where the rich get richer and the poor get poorer and the wage discrepancy just continues to grow over time by virtue of the wage index differential.”

Beyond the issue of OGH’s Medicare wage index, Finan adds that since 1997, the cumulative Medicare hospital rate increase for New York hospitals has been 15.4% while the hospital market basket increase has been 43.2%.

“So, we have a situation where Medicare reimbursement, which is our biggest payer, has not kept up with our costs,” Finan said.

Patient Safety Initiatives

The board of directors of OGH has resolved to, at a minimum, spend as much time on quality of care issues as it does on finance.  With that, the hospital is involved with the Institute for Healthcare Improvement’s 5 Million Lives Campaign, as well as focused on the Joint Commission’s 2008 patient safety goals.

A Hospital’s Vision

The hospital’s vision is to be recognized as a progressive, innovative, rural community hospital that is acknowledged for the development of programs and services which enhance the health status of the community and exceeds the expectations of those served.

“We’re pretty gung ho about our mission and vision and really driven by it,” Finan said.  “The significant success we have experienced over the last two years has bred confidence.  We understand full well what hard work and focus brings.  There’s not too much we don’t believe we can’t achieve if we want to.”

-by Kathy Knaub-Hardy

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