Dr. Mike Jablonski rushed into the Indian River Medical Center conference room last Tuesday, out of breath, late from surgery, frazzled from rush hour traffic.
He almost missed his chance to speak on behalf of Orlando Health. As it turned out, as the final speaker, he left a lasting impression. If that was the healthcare system’s intention when it invited a physician who isn’t even an employee to speak on their behalf, the strategy seemed to pay off.
Jablonski all but dropped to one knee to ask the IRMC board and trustees of the Indian River County Hospital District to pick his favorite hospital group, which includes the Orlando Regional Medical Center.
“They asked me to drive four hours to talk 10 minutes, and I said sure,” Jablonski told an amused room of IRMC leaders during the first of four meetings the group held last week in its search for a partner.
President of Orlando’s large Jewett Orthopedic Clinic, Jablonski launched into an off-the-cuff testimonial to Orlando Health’s spirit of collaboration with physicians. It had all started, he said, the week he moved back to town, and was invited to dinner by CEO David Strong.
Jablonski said Strong asked him “why a group like Jewett doesn’t work more with Orlando Health.”
“At the end of the meeting, he said, ‘Tell me anything that we can do together.’ That was a question that was foreign to me. I had never been asked by the CEO of a hospital what they could do for me,” he said.
The next day, Jablonski called with ideas. “And from there, it’s just blossomed.
“I can’t get half my group to show up at my meetings. But when we have Orlando Health meetings, everybody’s there. And they’re asking, why aren’t we meeting more?”
Orlando Health’s receptivity to ideas put forth by physicians has been talked about in Vero too, according to one hospital board member. And it extends to the patient suggestion box. “We don’t want the community to check their brains at the door,” said Strong.
If there were a metric for C-suite bedside manner, Orlando Health’s team would score at the top. The panel of presenters – and no one topped Jablonski – projected warmth, reassurance and candor. They also displayed humility, in part because Orlando has had its own financial travails, at one point even searching for a partner, as IRMC is today.
The dynamic between speakers and audience seemed to alternate between mentor and student, both sides receptive to the insights of the other.
That was not by chance. If IRMC leaders have found the partnering process grueling, Orlando Health has been through an exhaustive expansion search as well.
“It’s been extremely selective. We’ve gone through a process where we have looked at every health system across the state on a quantitative basis – population growth, household income, current market share. Then every health system is ranked on quality, culture and readiness to change.
“We look at both of those, and we have selected possible partners. You’re one that we would like to partner with,” said CFO Bernadette Spong. “It was a pure pleasure to tour the facility. It is gorgeous.”
The Vero hospital is not the only one in Orlando Health’s sights. And whether Orlando Health is large enough now to provide the capital necessary to revitalize IRMC is a question warm feelings can’t resolve. Currently, the system has less than half the total revenues of the next smallest competitor in IRMC’s search for a partner.
At the same time, the nine hospitals within the Orlando Health system are impressive: Arnold Palmer Hospital for Children wins awards for its pediatric trauma center and five other specialties. Winnie Palmer Hospital for Women and Babies delivers 15,000 babies a year and is the second biggest birthing hospital in the country. It also has one of the largest neo-natal intensive care units. And Lakeland Regional Health, the newest collaborator in the Orlando Health system, has the busiest emergency department in the country – with 217,000 visits, and no wait.
System-wide, only one of Orlando Health’s nine hospitals relies on taxpayer money for indigent care – South Lake, which gets $5 million a year. Even Orlando Regional Medical Center, considered a safety net hospital, gets no indigent care funding. “It comes out of profits,” said Strong. “We’re the only level-one trauma center that does not receive some indigent care.”
Orlando Regional is the busiest level-one trauma center in the state. Last year, it won accolades for its response to the Pulse nightclub shootings.
“We believe we have sufficient scale to meet your needs,” said Strong. “At the same time, we don’t think that we’re too big that you’re going to be lost.”
Again and again, the organization wowed the audience with the scope of its services. When District trustee Allen Jones expressed concern about continuation of the Partners in Women’s Health program, a collaboration of IRMC and the Hospital District that provides prenatal care to indigent women, Dr. Jamal Hakim, Orlando Health’s COO, spoke up.
“That kind of thing would be our obligation,” he told the IRMC leaders. “We are quite proud of our women’s services. We receive the sickest of sick moms from all across north and central Florida.”
As for quality metrics, the system has seen its all-cause mortality rate fall by 49 percent over five years. Infection rates have been lowered 81 percent in five years. “Now we’re up among the best of the best,” Strong said.
Readmission is another area of concern. Florida has the second worst rate in the nation, he said, and within the state, the central and southern regions are the worst. In those same five years that mortality fell by nearly half, Orlando Health reduced readmissions by 19 percent.
“We used to think we were good,” he said. “We were only good compared to the locals, and that’s not good. We don’t benchmark ourselves to local. We benchmark national. And we don’t talk top quartile. It’s top decile.”
Asked about the average tenure on the hospital staff, Strong’s mind went straight to an upcoming celebration. Friday night, the annual service awards were to be presented at what he described as “a huge party” for 4,800 invited guests – all of whom have worked for five, 10, up to 50 years with Orlando Health.
“Now that’s a positive,” he said. “But it also carries some baggage. It’s wonderful to have people with history, but you also want to have fresh blood.”
Some of that fresh blood comes from teaching programs. Currently Orlando Health has seven medical school residency programs with 256 residents and 18 fellows. “One of the great advantages of having all those teaching programs is the ability to get doctors. It’s rare for somebody to turn us down simply for ‘Oh, I can get a better job.’”
As for executive talent, Orlando Health board vice-chair David Brown said, “We see growth interrelated to being able to attract talent, the kind of talent to manage what is going to be an increasingly challenging environment. We think we’re at Step One of what’s going to be a lot more to deal with and face.”
Brown believes that health systems must focus on improving patient outcomes. “We can attract market share, but you’ve got to deliver patient outcomes. You can’t fail. That’s a condition that precedes anything you do.”
Just four years ago, in 2013, Orlando Health was losing money; Modern Healthcare magazine reported it ran a $9.5 million operating deficit that year and was losing market share to Adventist’s Florida Hospital and nearby HCA hospitals (both now also being considered as partners for IRMC).
The CEO stepped down, and like IRMC, Orlando Health debated selling to another company. Moody’s Investors Service downgraded its bond rating, management responded with pay cuts, and in November 2012 announced the biggest layoff in the system’s 100-year history – a reduction of up to 400 jobs in its work force of 16,000.
By late summer of 2013, staffers were looking at unionizing. In October, Moody’s downgraded Orlando Health to an A3, lowering its outlook to negative following dismal revenues and a drop in patient volume.
The cuts had almost immediate results: more profits in the first quarter of FY 2013-2014 than in the entire previous year. Net income went from minus $12.7 million in the first quarter of FY 2012-2013 to plus $30.9 million in the first quarter of FY 2013-2014. In addition to staff cuts, the health system offset reductions in in-patient stays with an increase in out-patient treatment.
Dr. Hakim, an anesthesiologist who was the system’s chief quality officer, was named interim CEO. Under his leadership, the health system ended its long affiliation with the MD Anderson Cancer Center and in 2014 partnered with the University of Florida in creating UF Health Cancer Center – Orlando Health, allowing both UF Shands and Orlando Health to share patients in clinical trials.
CEO David Strong finally relieved Hakim in 2015, bringing in from his Chapel Hill days Bernadette Spong as CFO. Moody’s revised its outlook from negative to stable. Those actions and Strong’s arrival “should produce results that return the system to its long history of favorable performance,” Moody’s noted.
Both Strong and CFO Spong came from the Research Triangle area of North Carolina. Both had worked for Rex Healthcare, a nonprofit system with more than 5,400 employees and a member of the $3.8 billion UNC Health Care System based in Chapel Hill.
Under Spong, Orlando Health recovered its rating from Moody’s, which today applies to some $769 million in debt issued by the Orange County Health Facilities Authority. In June, its stable outlook was upgraded to positive. Moody’s cited its “disciplined approach to capital spending” and trends indicating that Orlando Health is “retaining a solid market position” in a “highly competitive market.”
The most recent addition to the Orlando Health system was finalized in October of this year, when it affiliated with Lakeland Regional Health System.
That affiliation bumped up revenues to $3.7 billion, making Orlando Health the second largest system in the state, after Adventist Health Sunbelt. Total beds, including rehab facilities, are just over 3,000.
Interestingly, as explained in the Lakeland Ledger newspaper, Lakeland Regional Medical Center is owned by the city of Lakeland and leased by Lakeland Regional Health System for around $13 million a year, much as the Vero hospital is owned by Indian River County through its Hospital District, and leased to a separate nonprofit company.
The Lakeland lease arrangement did not change with Orlando Health’s affiliation. The deal called for the Lakeland Regional Medical Center to continue to be run by its own board with the addition of one member from Orlando Health. And two Lakeland Regional board members were to join Orlando Health’s board. Lakeland’s CEO was to report to Strong.
Other Orlando Health hospitals include Sand Lake, built in 1985; the Arnold Palmer Hospital, built four years later; South Seminole Hospital, which joined in 1992; and South Lake Hospital and Lucerne Hospital. In 2004, Orlando Health opened the Hospital for Women and Babies that became the Winnie Palmer Hospital in 2005.
Of the nine hospitals currently in the system, Lakeland Regional is the farthest from the center – about an hour away from Orlando Regional.
Vero Beach would be the geographic outlier in an Orlando Health orbit.