One year ago, Summa Health was in the middle of its crisis.
Its longstanding emergency medicine residency training program was about to end on July 1 after its national accreditation was revoked. That was six months after the abrupt changeover in Summa’s emergency room physician staffing, followed by the resignation of then-CEO Dr. Thomas Malone amid demands by hundreds of doctors for a change in leadership.
The Akron-based health system was in a financial free-fall, with its interim President and CEO Dr. Cliff Deveny citing a $30 million loss and predicting a staggering $60 million loss by the end of the year. That was a stark difference from Summa’s historical $30 million profit levels. Deveny had also just announced a layoff of 150 people and said 150 jobs wouldn’t be filled.
This July, Deveny said things are on the slight upswing, but there are still rough waters ahead. Summa ended 2017 with a $28 million loss. Earlier this week, Deveny reported to his 7,000 staff members that through May, Summa is showing a year-to-date operating income of $7.2 million, or a positive operating margin of 1.3 percent. That exceeds Summa’s original budgeted operating margin of $6.1 million.
And Deveny has agreed to stay on as interim leader for another year, saying his work is not done.
His message now is in stark contrast to a year ago, when he said finances needed to improve — or “I can assure you the name on our badges will no longer say Summa Health, our employees at all levels of the organization will see unprecedented change, and our independent physicians will be faced with the reality of what it means to practice in a community that no longer has an independent, local option for them.”
Reflecting on that statement, Deveny said in an interview last week: “That was a public challenge; a year ago we were in a pretty dire situation.
“What you saw was people, rather than becoming victims, became architects and drove the performance and owned the issues. We’re in a better situation,” he said.
Still, different challenges abound.
“The fact is, people aren’t moving to Akron. We aren’t seeing jobs, and [changes] in commercial insurance still affect us. We have to evolve as the community evolves. That’s playing out, and we’re trying to be pretty public and transparent about how we do that,” Deveny said.
Shortly after he arrived in March 2017, Deveny began taping a two-minute video message that gets sent out to employees every Friday. Deveny said his “Cliff Notes” are a way to talk about important topics and offer kudos to employees because “there was a lot of focus on the negatives.”
The videocast gets the most views of any Summa internal communication, with 1,500 to 2,000 views weekly.
The videos are an excellent way to engage employees, said J.B. Silvers, health finance professor at Case Western Reserve University’s Weatherhead School of Management.
“Cliff’s a smart guy, and he knows the people and knows how to get the organization to focus,” said Silvers, a former board member of Summa’s SummaCare Insurance.
Deveny knows Summa has an uphill battle. He knew he had to mend relationships with Summa doctors and independent doctors, who were steering patients away from the hospital system amid worries of quality. He had to convince community leaders that the hospital was here to stay and wouldn’t be a target of a sale or takeover. And he had to convince community members to once again trust Summa for their health care needs.
“This is a journey to re-engage people one by one,” Deveny said.
An important group to re-engage is the independent physicians in Akron, said Tom Campanella, director of the health care MBA program and a professor of health economics at Baldwin Wallace University. Akron has an unusually large number of independent physician practices.
Things have gotten much better, said Dr. Kevin Mineo, chairman of the board of Unity Health Network, one of the largest independent physician groups in the Akron area.
“The relationship we’ve had with Summa has been greatly improved,” he said. “We’ve been very happy to see all the positive steps they’ve put forth,” he said.
Still, there are some concerns, Mineo said, referring to a recent wrongful death lawsuit filed against the hospital and the company running its emergency room in a case of a man who came into the Barberton emergency room last August. Plaintiffs allege the patient was never seen by an attending physician after a stroke and heart attack.
Deveny agreed that relationships with independent doctors are better and still developing.
“There’s clinical trust,” he said.
Soon after he arrived last year, Deveny also worked to end an ugly three-year court battle with Western Reserve Hospital, a physician-owned hospital in Cuyahoga Falls with ties to Summa (several of Unity’s doctors are also investors in Western Reserve Hospital). In November, the two sides settled their differences.
Mineo said with Deveny, “there’s definitely been a big cultural shift the other direction in a much more positive way.”
Deveny decided to renew his contract for another year because “it is personal to make sure this organization thrives and sustains itself.”
“Every week I come back, I feel we are making a significant amount of progress. This organization is near and dear to me, not only professionally but the care of my family. My kids were born here; I’m invested in this company.”
Deveny grew up in Akron, graduated from Firestone High School and spent about 20 years of his career at Summa as an OB-GYN and administrator before leaving in 2011.
He calls himself an unintentional leader and wasn’t looking to be interim Summa CEO when he got a phone call last year.
But he’s proud of the way people have rallied.
“We’ve gotten through a lot of turmoil and we continue to have turmoil. People are stepping up, solving problems,” he said.
Said Campanella: “You need to have the right culture in regards to creating the type of energy and engagement from employees at all levels. That culture starts at the top. It starts with recognition of being a leader and facilitating team efforts. I think that’s what they feel they have in Cliff.”
Campanella said it’s good that Summa has diversity in its health system, including a 25-year-old health insurance company and a growing home-health care business.
Deveny said the home-health care business is growing at a time when national trends show inpatient and outpatient volumes decreasing with advancements in care.
Deveny also said the goal of a recently named external firm looking at performance efficiencies is to get approximately $40 million in additional improvement through initiatives “such as more efficient care for our patients and members, streamlining supply chain, improving revenue cycle and reducing pharmacy costs for both Summa and SummaCare.”
Deveny said he does not expect any large-scale layoffs, saying there are always some individual positions that are cut and the health system has 270 open positions and is hiring.
“We’ve now got to continue to grow the revenue. No successful company makes it by just cutting expenses,” he said.
Summa also needs to get its bond rating back up. In November, it was downgraded $350 million of debt from Baa1 to Baa2. The bond rating carries a “moderate risk” for investors, according to Moody’s Investor Services. In its report explaining the downgrade, Moody’s blamed a decline in patients seeking care at Summa as contributing to operating losses last year. Summa said it hoped to regain its bond rating within 24 months.
Silvers said its growing profit margin is within striking distance. The average for the next similar level is 2 percent to 2.9 percent. Summa is at 1.3 percent.
Financial turnarounds don’t happen quickly, said Silvers. In a study he conducted, it took two to three years for a turnaround to happen for troubled hospitals.
When asked what a success would mean for Summa, remaining independent or being sold, Campanella said it’s a matter of perspective.
“I personally think Summa has the ability to stay independent. They may have to establish a collaborative relationship similar to what they have with [minority owner] Mercy in addition to physicians in the area.
“It’s not a one-size-fits-all. The answer is not always get bigger and bigger and bigger.”
Medical writer Betty Lin-Fisher can be reached at 330-996-3724 or firstname.lastname@example.org. Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ and see all her stories at www.ohio.com/betty
Summa Health’s interim chief signs on for another year to build on initial turnaround successes
One year ago, Summa Health was in the middle of its crisis.