As president and CEO of the Western Wisconsin division of Hospital Sisters Health System, Stephen F. Ronstrom oversees two hospitals, 344-bed Sacred Heart Hospital in Eau Claire and 150-bed St. Joseph's Hospital in Chippewa Falls. The Hospital Sisters Health System is a 13-hospital Catholic system based in Springfield, Ill.
Mr. Ronstrom has more than 25 years experience as a hospital executive, including more than 10 years at the helm of Sacred Heart Hospital. He was recently appointed to the board of the Wisconsin Hospital Association.
He discusses how his hospitals have thrived in the challenging economic climate.
Editor's note: Mr. Ronstrom's insights will be featured in each of the six issues of Becker's Hospital Review in 2010.
Q: In these difficult economic times, has it still been possible for you to keep a positive operating margin?
Stephen Ronstrom: My two-hospital division had a double-digit operating margin for last fiscal year and this year we're setting a pace for a record year. We are the most successful division in our health system. However, we are taking the recession very seriously and continue to tighten operating costs. For example, we are working with our health system to control purchasing expenses.
Q: Your high operating margins have allowed you to invest in a level of medical technology that is rarely seen outside of a large academic medical center. You have some expensive, cutting-edge equipment such as the iMRI in your Smart OR and the da Vinci robot. Can you tell us a little about the strategies behind your use of high technology?
SR: While a lot of other hospitals are trying to pull back on technology, technology has been fundamental for our mission. If you make investments in technology, it pays off in volume. For example, if the urologists in our area uses our new da Vinci robot, they are more prone to do initial surgery in our hospital OR than in a freestanding one.
Technology can deliver higher market share and patient volume. It can also save money. For example, our Smart OR has lowered reoperation rates for brain tumor surgery. Our costs per case are being properly controlled.
Q: For a hospital that is not within a major metropolitan area — Minneapolis is a two-hour drive away — you have had a great deal of success recruiting physicians. How did you do that?
SR: The longer I'm at this job, the more important recruitment seems to me. It's really the key to this business. Your success is based on who you hire. Technology is a big lure for physicians. For example, we recently recruited two urologists because we could offer them robotics. This strategy is especially effective in attracting young physicians who are just coming out of training and want to use the technology they had in their programs.
When recruiting, we look for quality. Once you have brought in a few highly regarded doctors, it gets easier to attract more physicians. Bringing in one great neurosurgeon attracts other great surgeons. To get the best physicians, you have to meet them on their terms. Generally, we'll go along with whatever works for them, whatever meets their needs. For example, a lot of physicians want to keep their autonomy. Rather than integrating physicians into the hospital, we have let them join single-specialty groups independent of the hospital.
This kind of strategy requires a great deal of flexibility, which puts us at an advantage over a large academic medical center, where everyone is bound by particular ways of doing things. A smaller organization is better able to configure policies more flexibly. We can create innovative joint ventures. We can be entrepreneurial.
We also want to recruit more primary care physicians. Primary care physicians are leaving small towns. If coverage is extended under health reform, there won't be enough primary care physicians to take care of everyone. We used to recruit physicians from Canada; now we're looking at Africa.
Q: Many hospitals have been hard-pressed to maintain efficiency, such as low OR turnaround times. You've had a great deal of success with this. How did you do it?
SR: We worked very hard at improving turnaround times, and now it's paying off. Our surgical caseload has increased by 15 percent. We have also improved processes in the ED. We had a flow problem there because of some longstanding bottlenecks. For example, in the past, oftentimes it would take a while for us to move patients from the ED into the hospital itself. Making these changes takes organizational discipline. We've come a long way but we can still get better at it.
Q: You have also been a strong proponent of keeping staff trained.
SR: One of my real passions is educating our staff. We use "just-in-time" training with neurosurgery and heart surgery staff, which involves working with the individual as they go about their tasks. You can see where the employee needs some help and give instruction right then and there. We have a full-time educator and an education center where employees can use computerized programs and go onto the Internet.
Q: What do you think the future looks like for hospitals?
SR: I believe the recession is a prelude of what things will be like for hospitals. We are going to have to do more with less. We're going to have to make do with lower levels of reimbursements.
I see a real shakeout ahead for this industry. You're going to see a greater discrepancy between successful and the less successful hospitals. Hospitals are going to have to focus on growth, not price. You won't be able to raise your rates, which means you've got to add volume and market share if you want to increase your revenue streams.
Whatever kind of health reform we get, hospitals will need to respond by being innovative. I believe some of the old restrictions on hospital improvement, such as the antikickback laws, will be loosened up a bit, so that we can work more closely with our doctors.
This is such an exciting time now. We're right on the cusp of a golden age in medicine, with innovations such as genetics, medical technology and telemedicine. I see a whole new wave coming at us.
Stephen F. Ronstrom has more than 25 years of hospital leadership experience, having served for the past 11 years as an executive in the Hospital Sisters Health System. He is currently president and CEO of the Hospital Sisters' Western Wisconsin division, which includes 344-bed Sacred Heart Hospital in Eau Claire, Wis. Learn more about Hospital Sisters Health System.
Mr. Ronstrom has more than 25 years experience as a hospital executive, including more than 10 years at the helm of Sacred Heart Hospital. He was recently appointed to the board of the Wisconsin Hospital Association. He discusses how his hospitals have thrived in the challenging economic climate.
Editor's note: Mr. Ronstrom's insights will be featured in each of the six issues of Becker's Hospital Review in 2010.
Q: In these difficult economic times, has it still been possible for you to keep a positive operating margin?
Stephen Ronstrom: My two-hospital division had a double-digit operating margin for last fiscal year and this year we're setting a pace for a record year. We are the most successful division in our health system. However, we are taking the recession very seriously and continue to tighten operating costs. For example, we are working with our health system to control purchasing expenses.
Q: Your high operating margins have allowed you to invest in a level of medical technology that is rarely seen outside of a large academic medical center. You have some expensive, cutting-edge equipment such as the iMRI in your Smart OR and the da Vinci robot. Can you tell us a little about the strategies behind your use of high technology?
SR: While a lot of other hospitals are trying to pull back on technology, technology has been fundamental for our mission. If you make investments in technology, it pays off in volume. For example, if the urologists in our area uses our new da Vinci robot, they are more prone to do initial surgery in our hospital OR than in a freestanding one.
Technology can deliver higher market share and patient volume. It can also save money. For example, our Smart OR has lowered reoperation rates for brain tumor surgery. Our costs per case are being properly controlled.
Q: For a hospital that is not within a major metropolitan area — Minneapolis is a two-hour drive away — you have had a great deal of success recruiting physicians. How did you do that?
SR: The longer I'm at this job, the more important recruitment seems to me. It's really the key to this business. Your success is based on who you hire. Technology is a big lure for physicians. For example, we recently recruited two urologists because we could offer them robotics. This strategy is especially effective in attracting young physicians who are just coming out of training and want to use the technology they had in their programs.
When recruiting, we look for quality. Once you have brought in a few highly regarded doctors, it gets easier to attract more physicians. Bringing in one great neurosurgeon attracts other great surgeons. To get the best physicians, you have to meet them on their terms. Generally, we'll go along with whatever works for them, whatever meets their needs. For example, a lot of physicians want to keep their autonomy. Rather than integrating physicians into the hospital, we have let them join single-specialty groups independent of the hospital.
This kind of strategy requires a great deal of flexibility, which puts us at an advantage over a large academic medical center, where everyone is bound by particular ways of doing things. A smaller organization is better able to configure policies more flexibly. We can create innovative joint ventures. We can be entrepreneurial.
We also want to recruit more primary care physicians. Primary care physicians are leaving small towns. If coverage is extended under health reform, there won't be enough primary care physicians to take care of everyone. We used to recruit physicians from Canada; now we're looking at Africa.
Q: Many hospitals have been hard-pressed to maintain efficiency, such as low OR turnaround times. You've had a great deal of success with this. How did you do it?
SR: We worked very hard at improving turnaround times, and now it's paying off. Our surgical caseload has increased by 15 percent. We have also improved processes in the ED. We had a flow problem there because of some longstanding bottlenecks. For example, in the past, oftentimes it would take a while for us to move patients from the ED into the hospital itself. Making these changes takes organizational discipline. We've come a long way but we can still get better at it.
Q: You have also been a strong proponent of keeping staff trained.
SR: One of my real passions is educating our staff. We use "just-in-time" training with neurosurgery and heart surgery staff, which involves working with the individual as they go about their tasks. You can see where the employee needs some help and give instruction right then and there. We have a full-time educator and an education center where employees can use computerized programs and go onto the Internet.
Q: What do you think the future looks like for hospitals?
SR: I believe the recession is a prelude of what things will be like for hospitals. We are going to have to do more with less. We're going to have to make do with lower levels of reimbursements.
I see a real shakeout ahead for this industry. You're going to see a greater discrepancy between successful and the less successful hospitals. Hospitals are going to have to focus on growth, not price. You won't be able to raise your rates, which means you've got to add volume and market share if you want to increase your revenue streams.
Whatever kind of health reform we get, hospitals will need to respond by being innovative. I believe some of the old restrictions on hospital improvement, such as the antikickback laws, will be loosened up a bit, so that we can work more closely with our doctors.
This is such an exciting time now. We're right on the cusp of a golden age in medicine, with innovations such as genetics, medical technology and telemedicine. I see a whole new wave coming at us.
Stephen F. Ronstrom has more than 25 years of hospital leadership experience, having served for the past 11 years as an executive in the Hospital Sisters Health System. He is currently president and CEO of the Hospital Sisters' Western Wisconsin division, which includes 344-bed Sacred Heart Hospital in Eau Claire, Wis. Learn more about Hospital Sisters Health System.