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The Return of the Native
Former Saint Rafe's CEO Cullen finds a new home, and a new challenge, at Gaylord
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Business New Haven
3/18/2002
By: BNH
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In 1998, James J. Cullen left the Hospital of Saint Raphael in New Haven to helm the St. Joseph Medical Center, owned by Catholic Health Initiatives, in Towson, Md. Last October he returned to Connecticut to become president of Gaylord Hospital in Wallingford. He spoke with BNH March 7 about the challenges of managing a major rehabilitation facility in rapidly evolving health-care environment.
What lured you from New Haven to Maryland?
[In 1998] there was a lot of consolidation going on in Catholic health care, and at that time Catholic Health Initiatives (CHI) was the largest [Catholic health-care provider] in the U.S. There was also a personal draw because the kids went to school at Loyola in Baltimore. And being in a town where you've been [competing] against a nationally recognized hospital [Yale-New Haven Hospital] does get you some points and some recognition. In the land of the University of Maryland and Johns Hopkins that was attractive to CHI, and I was attracted by the concept of having the advantage of the national organization. That all seemed very attractive - a new challenge, a new opportunity.
Why did you leave?
Unfortunately, as happened to a lot of hospitals, the Balanced Budget Act came along and the boss who I came to work with left to go work for Catholic Healthcare West. So the combination of losing the connection regionally and the Balanced Budget Act [of 1997] shut everything down, and CHI adapted a centralized approach. [The Balanced Budget Act] really took a lot of us by surprise in terms of the depths of reduction in Medicare reimbursement. At that time, CHI had 72 hospitals around the country with $6 billion in net patient revenue and about 25,000 employees.
When this hit, the autonomy of the local CEO to have some room to make decisions was greatly curtailed. That was a critical point for us at Towson because we were planning a $40 million renovation and expansion of our services. We had invested in another hospital. We were heavy into marketplace dynamics that required quick decision-making from the standpoint of our medical staff. CHI was treating everyone pretty much the same and that certainly didn't match up with what I was looking for personally so as time went on, it was clear to me that it was not a good fit between me and the national organization. At the end of 2000 I went to my boss and told him it wasn't working out and they agreed to let me look for another appointment.
How is the reality of Gaylord compared to your expectations? Mission of hospital?
The reputation that Gaylord has is certainly as strong as it ever has been. One thing we'll build on, though, is people being more aware in more detail of the specific services that we provide. When you ask people what they know about Gaylord, they say it's a rehab hospital for people with traumatic brain injury. That's true, and we do a fine job, but we also do some other things as well. Because we're a small organization, I think a lot of money was not invested in that, and I am a strong component of image communication. I was not aware, until I got into the recruiting process, that we have five sleep labs around the state. It is a tie-in to both pulmonary [rehabilitation] and neurology. A large number of people who come here come for pulmonary therapy or occupational therapy, and oftentimes various issues related to sleep are dealing with your respiratory system. That's the connection for us. We've got a sleep center here in Wallingford and four others around the state. We did want to branch out more with outpatient services, not all services where you came to the [Wallingford] campus or went to Long Wharf. The Long Wharf facility only began about ten years ago. The other four have opened in the last five years. Seventy-five percent of the people in the state are within a 25-minute drive to one of our sleep centers.
Is that approach - bringing the services to where the people are - working out?
Absolutely. To date we have two ancillary physical therapy sites at Long Wharf and the Jewish Community Center in Woodbridge. Down the road, the area of ambulatory physical therapy sites is competitive. A lot of orthopedic surgeons are involved in physical-therapy sites. Physical therapy on an ambulatory basis is a little more diffuse. So that's something that we're going to want to look at a bit more carefully.
What are one or two or three overarching challenges faced by that institution that keep you awake at night?
Clearly the ability to manage it financially. The inpatient side is similar to acute care and I would think similar to the long-term care - that will be a continual challenge. We are also going to a new prospective payment system. We're always concerned about the ability to generate enough funds from third-party payments to support the expertise of the professionals who provide the care. I think that will continue to be a major challenge forever. Everyone who pays the bills is looking to get people the appropriate care, but at the lowest cost possible. Because we provide very highly skilled therapy services here, [the care-givers] certainly deserve to earn a professional wage and that's costly, no two ways about it. A day [as an in-patient at Gaylord] costs in the range of $1,000 to $1,500 a day. That is not inexpensive, and I think that will always be a challenge.
What else?
Another challenge is that we are providing the right services in the right environment. So as we reach out into the community, the types of services that we provide and where they are located will become important strategic issues for us. I'm always going to be concerned about our financial condition because that's the nature of health care. There is always going to be pressure on the financial side. Philanthropy will take on a bigger chunk of my time.
Is the financial model of an operation like Gaylord different from or similar to an acute-care hospital like Saint Raphael or Yale-New Haven, albeit on a different scale?
We are blessed with an endowment fund with an excess of $30 million, and the income from that fund does help us pay for some of our operating costs. Not all hospitals have that. Yale certainly does, and Saint Raphael's is building one right now. Hospitals generally raise money when they're building buildings. When people stay at Gaylord, sometimes they stay [as long as] a year. The average length of a stay here is 30 days, which is much longer than an acute-care hospital. So you can bond a little more. And patients here are in a therapy mode. We like to say 'It's the best place to begin again.' We're building a relationship with people after their traumatic situation - whether it is an accident, disease or stroke. The vast majority of our revenues do come from patient care. We probably have a little more revenue from managed-care organizations here. The population we get has not reached the Medicare age yet. So we have a little bit higher managed-care population than I saw at St. Joe's or even at Saint Raphael's.
How does working in health-care administration in Connecticut in 2002 differ from when you started in 1982?
It's still personally gratifying to be working with people and helping an organization move forward in a human-service environment. We're very education-oriented because there's so much new technology, whether it be pharmacology, or in the therapy area. For me, being a relative newcomer to this aspect of health care, it's exciting and gratifying. It's changing at a faster pace than it did back in the 1980s.
Overall, how do you feel about returning to Connecticut?
I'm thrilled to be back in Connecticut. I'm very appreciative of the warm welcome I've had to come back. I'm feeling very lucky.
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