Upstate University Hospital, State University of New York: Dr. John McCabe, Chief Executive Officer

by HCE Exchange on April 9, 2012

Located in Syracuse, N.Y., Upstate University Hospital is Central New York’s only academic medical center and its largest employer. Affiliated with State University of New York (SUNY), Upstate is also a component of the Upstate University Health System, a $1-billion-a-year enterprise with the hospital accounting for $650 million of the budget.

The system itself offers training in four medical disciplines through its colleges of medicine, health professions, nursing, and graduate studies. Reaching 1.8 million people, 4,200 of the system’s 9,460 employees serve Upstate University Hospital.

Dr. John McCabe, chief executive officer of the hospital, said Upstate is vital for the region, especially since geographically, it sits in the center of New York and some of its core patients live 80 or 90 miles away.

“If you look at the geography, we play an incredibly important role,” he said. “If we were not here, there’s a large swath of New York State that would be uncared for, so we are an important cog for the citizenry, and we really view ourselves as a growing regional academic medical center.”

Therefore, staying abreast of healthcare’s changing paradigm is critical for Upstate.

Upgrading for the future

McCabe said that Upstate has been striving to upgrade its facilities and technology over the past several years. Recently, Upstate opened a children’s hospital and expanded its inpatient space. It has purchased an ambulatory-surgery center that sits adjacent to the hospital and is closing up an acquisition of Community General Hospital, a 300-bed licensed hospital in Syracuse. This will add capacity to their system, McCabe explained, and it will help Upstate build better relationships with the private nonacademic medical community in Syracuse.

Upstate is also in discussions with the county to take over its 538-bed nursing home with the goal of building it out differently so it will offer a wider range of services from assisted living to specialized nursing-home care.

The hospital has also broken ground for a cancer-center addition that will serve as an outpatient facility designed to house all of Upstate’s cancer services in one location. This is important, McCabe said, because the hospital has a regional reputation and a regional draw for oncology services. Right now, everything is too spread out across the campus to maximize efficiency.

The center will feature an intraoperative MR suite and a three-room hybrid space with one space devoted to MR, the other to an operating room, and the last space to biplane angiography equipment.

“Patients will be able to move freely on the table from angio to OR to the operative suites,” McCabe said, adding that the center will also offer specialized pediatric services. This is important since Upstate is the only provide of pediatric oncology in the area.

Managing care under high regulatory demands

McCabe explained that running a hospital in New York is a unique challenge because of the state’s highly regulated environment.

“Maybe about three percent of my budget comes from the state of New York, and yet being a part of the state of New York, I’m burdened with their procurement process and their contracting process,” McCabe said. “I’m a totally unionized labor force where all of those contracts are negotiated by the state. They’re not negotiated locally, so I get stuck with someone negotiating the rate increase for benefits and then no dollars coming my way to pay for it.”

He jokes that three percent of his dollars and 100 percent of his rules come from New York State. With healthcare reform looming on the horizon, McCabe expects more complications to ensue. He said healthcare reform is the reason why Upstate is acquiring smaller medical organizations around them as part of an ongoing effort to position themselves as a larger system instead of an isolated academic center.

Even though healthcare reform is meant to cover the uninsured, McCabe said there is already so much Medicaid disbursed in New York that the uninsured population is relatively small, thus making hospital reimbursements in New York smaller than in a state like Texas.

“The academic centers are all worried about what’s going to happen with disproportionate-share payments or the federal payments for uninsured and underinsured,” McCabe explained. “The idea is they’ll go down as insurance goes up, and places like us depend upon that because of teaching load and the indigent patient population we see.”

Expanding regional influence

In the next three to five years, McCabe said Upstate is focusing on becoming more regional, especially as smaller organizations flounder.

“We think the smaller hospitals in the periphery of central New York are going to have more and more difficulty staying in business on their own,” he explained. “We’re already picking up the care for many of the things they either don’t want to or can’t provide anymore.”

To that end, McCabe said that Upstate will be increasingly involved in establishing clinics, using telemedicine, and training physician assistants, nurse practitioners, and residency graduates to provide care in areas where patients are 60 or 90 miles away from Upstate, but still being referred to Upstate by their local hospitals.

“We’re trying to be good regional citizens,” he said.

Prior to serving as Upstate’s CEO, McCabe spent 30 years as an emergency physician. McCabe feels it is this background that has prepared him to confront the demands of modern healthcare.

“Emergency physicians know everybody because we deal with every specialty,” he said, “so there’s no rock around here that I haven’t turned over in my 30 years of being in the emergency department. Furthermore, I’ve always had 15, 20, 30 patients at the same time, so it’s easy to juggle multiple things. And emergency physicians tend to have to make decisions on incomplete information, so I’m very comfortable with getting 80 percent of what I’d really like to have and then making a reasoned decision with other people.”

-by Pete Fernbaugh

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