Finding the Value in Community Hospitals: Q&A With Cliff Shiepe, CEO of Tri-City Regional Medical Center

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For Cliff Shiepe, CEO of Tri-City Regional Medical Center in Hawaiian Gardens, Calif., the future success of small community hospitals like his might be like a school dance: In order to get the most out of it, you need a suitable dance partner.

Mr. Shiepe began his hospital administrator career at Massachusetts General Hospital, where he says he learned the ropes of the hospital industry. After staying there for 10 years, he moved to California to become senior vice president of the Lutheran Hospital Society, a nine-hospital system, followed by leadership positions at USC University Hospital and the Scripps Clinics, among others. Mr. Shiepe eventually left the realm of large hospitals and became interim CEO of Victor Valley Community Hospital in Victorville, Calif., and in April 2011, he became CEO of the 137-bed Tri-City.

He says after working at different sized hospitals within the healthcare industry — and now running a small community hospital — he has a newfound respect for what community hospitals bring to the table, but how they fit into the picture of accountable care systems remains to be seen.

Q: Tri-City Regional Medical Center is a standalone hospital in a market with several competing hospitals. How would you describe your hospital's situation, and what are some of the biggest similarities and difference between managing operations at a large hospital and at a smaller hospital?

CS:
We are a boutique community non-profit hospital, and we're not trying to do everything for everyone. We don't have pediatrics or obstetrics, for example, but we have all the necessary tools to provide high-quality medical and surgical care. It's like a neighborhood store as opposed to a Wal-Mart.

We have a very engaged board of directors and access to capital, but we can't spend funds without keen oversight. We also don't have the human or technological resources at all levels as they do in larger hospitals. But I see that as an asset. We have a small cohesive team of leadership that is passionate about serving the community.

Cliff Shiepe, CEO of Tri-City Regional Medical CenterBut like some of the small businesses that aren't a chain, we can do some of the things the big guys can't do. You can come right in and see me; a doctor can say something is wrong with a patient, and I'll walk down and see what's wrong. You have that hands-on element. Our goal is to provide excellent patient care in a friendly and intimate setting.

Q: What are some of the biggest challenges the hospital faces?

CS: The Affordable Care Act is coming down the pike. Patients are going to be grouped up, and they are going to be cared for with large groups. They are going to get all of their care from a full healthcare delivery system — inpatient, outpatient, ancillary, nursing — but where does a hospital like us fit? I have to get someone to "marry me," but what do I have to offer them? As a standalone hospital, we have our challenges. While we don't have a large medical group based at our facility, we have qualified and dedicated physicians, and our medical staff is growing. We have carve-out agreements with healthcare payors for our specialized services. We know who we are and who we serve. But that's one of my major concerns. I don't know if I'll get a dance partner.

We're also forced to have electronic medical records under the new legislation, and that's going to cost more than $1 million. That's a lot of money for us. They are a good thing, they really are, but we're going to have to marshal resources to get this done.

Q: How do you think potential cuts to Medicare and/or Medicaid would burden the hospital, especially considering the hospital has no other entity to rely on for backup capital?

CS: We have a lot of Medicare and Medi-Cal [Medicaid] patients. California is a beautiful state, but it is broke. If the state can't pay us, we have no alternative. The hospital industry does not have the political clout it used to have. Washington wouldn't dare refuse pay to doctors and hospitals, but the political clout has shifted.

We're looking at just trying to stay lean and mean, keep our infrastructure down and look at new sources of revenue, including our comprehensive weight loss surgery center of excellence program or our center for advanced spine care.

Q: After seeing the hospital industry from a smaller institution now, do you wish you could go back?


CS: No. I have found this experience to be professionally very satisfying. There is a tremendous need for community hospitals like us. If you have a hernia, there's no need for you to go to a Johns Hopkins. We serve as a kind of first line of defense like M*A*S*H. We are an important gap between surgery centers and large tertiary hospitals, and I have a whole new appreciation of the need of community hospitals. It's a shame when some of these can't continue.

But [being here] has revitalized me in my own career, and it's exciting every day. I grab a fire extinguisher just like anyone else, and it's kind of fun. The prior experience was excellent, and here I get a chance to do the things I was trained for.

I've been doing this for almost 40 years now, and there's always something happening. I found this type of hospital as a whole new fascination. I don't have a hobby; I just worked my whole life. I got a whole new burst of energy within the same field, but it is very different. It is very refreshing not to have the layers of management and to get things done efficiently. It's been a wonderful experience, one I didn't expect.

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From Nurse to CEO: Q&A With Marina Del Rey CEO Fred Hunter

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