Doctor's Orders

One year at the helm of the West Penn Allegheny Health System, Dr. Christopher Olivia, M.D., M.B.A., aims to unify the organization and improve health care in Western Pennsylvania.



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He's a trim guy, a runner. Not an extra pound on him. He has great dark eyes and repeats the points he wants to make like a good teacher.
Dr. Christopher T. Olivia, 46, who has just completed his first year as president and CEO of the West Penn Allegheny Health System (WPAHS), is not comfortable being called "Dr. Olivia." "Call me Chris," he says. The "Dr. Olivia" designation makes him think someone is talking to his dad, a retired physician.

Olivia came to Pittsburgh for two reasons. "I really like the people here. We have excellent nurses and doctors. Medicine starts with that... The No. 2 reason is to prevent the monopolization of health care services in Western Pennsylvania." And he says the latter without referring to the University of Pittsburgh Medical Center (UPMC), the 20-hospital burgeoning medical system that has gobbled up most of the Pittsburgh-area hospitals in the past several decades - and has expanded internationally with facilities in Italy, Ireland and Qatar and other operations in the United Kingdom.

Olivia states, "UPMC is a fine institution." But he also stresses repeatedly that WPAHS is "in Pittsburgh, for Pittsburgh." One major difference he sees between the two systems is about whether excess earnings from a health care system such as UPMC should be used to fund college scholarships for local students or be returned to the health care system to fund research, improve services and serve those who have little or no health insurance. "It's all been about money and excess earnings that go into things outside of health care," he says, referring to the Pittsburgh Promise, UPMC and its $100 million commitment to fund college costs for Pittsburgh city and charter high school graduates.

Scholarships, Olivia acknowledges, "are all good from the standpoint of societal good, but they have nothing to do with health care." That mission," he says, "has to be about taking care of people; about educating [medical] students, residents, fellows; investing in research and taking proceeds and reinvesting in programs to cover the uninsured. The debate needs to be shifted away from money."

People always ask Olivia how he feels about competing with UPMC. He says when he wakes up in the middle of the night, he's not thinking about "what UPMC is doing." He's worrying about what WPAHS "is doing and not doing."

What kind of guy is Chris Olivia, the man who came to town to play David against the Goliath of UPMC? Read his bio and you'll guess he's a hard-working, pragmatic, clear-thinking leader. He's "old-fashioned" enough, he says, to read hard-copy newspapers daily: The Wall Street Journal, The New York Times, Pittsburgh Post-Gazette, Pittsburgh Tribune-Review. He likes watching movies with his wife, Laurie, and sons, Joseph, 10, and Alex, 8. He admits to bleeding blue and white for Penn State, his alma mater.

Meanwhile, back at the challenging task of reorganizing a lot of diverse organizations into a single working entity: Olivia finds the job as exciting as a roaring Nittany Lion. WPAHS has developed a mission statement over the past year that Olivia feels it can achieve, including "quality health care, personalized service for patients and educational programs and research that support those programs." The vehicle to get there, he maintains, is "financial stability." His team has found $100 million in cost-saving and revenue enhancements by eliminating duplication of back office work, renegotiating contracts (including one with Highmark) and considering more flexibility in staffing, though not all have been implemented.

Olivia has guided a reorganization of the medical system's senior management with appointments of vice presidents and medical officers in each hospital. He's also done some heavy-duty recruiting from UPMC. "We've been blessed," he says when talking about the hiring of Dr. Peter Linden, a critical-care specialist who handles patient care in the intensive-care unit; Dr. Michael DeVita, a medical ethicist; and Dr. Kasum Tom, a transplant surgeon, who joined Dr. Ngoc Thai, director of abdominal transplantation, who left UPMC a year ago.

"Physicians will vote with their feet to be part of something they have a bigger say in," Olivia told the Pittsburgh Business Times in February. And three more UPMC physicians did just that in early March: Dr. Steven Bowles, senior critical-care specialist at UPMC Mercy, and critical-care fellows Dr. Christopher Brackney and Dr. Subbarao Elapavaluru.

Both Allegheny General Hospital and the Western Pennsylvania Hospital, original components in the founding of WPAHS, were recently listed among the 100 top hospitals for cardiovascular care in the country by health care analysts at Thomson Reuters. They were the only Pittsburgh hospitals so recognized. Substantial WPAHS strengths Olivia cites are in transplantation, cardiovascular care, neuroscience, trauma and critical care, bone-joint disease, cancer and the West Penn Burn Center. The Pittsburgh Pirates medical staff, headed by Dr. Patrick DeMeo, director of sports medicine at Allegheny General and the key physician in bone-joint disease, was named the best in the nation by major-league baseball.

Discussing hospitals that struggle financially, Olivia points out the disparities between Eastern and Western Pennsylvania in the payment of Medicaid. "Hospitals in Philadelphia of the same ilk, of the same background, the same team or non-team status are paid substantially more than hospitals in Western Pennsylvania" because of an initial flawed formula, he says. Describing the problem, Olivia goes on to explain:

"Originally, the program was based on what hospitals and doctors charged. And in 1987 [with introduction of Medicaid], the state fixed the reimbursement based on that historical charge rate [and] inflated it relatively equally for hospitals over the next 22 years. So that if you have a disparity when you start, and inflate everybody's reimbursement 2 to 3 percent each year, that compounding effect will widen that disparity over time. And that's what happened. And so when you look, we believe there could be as much as $100 million, maybe in excess of that, largely because of the East versus West disparity."

For example, Bryn Mawr Hospital, in one of the most affluent areas in the state, is paid more than Armstrong County Hospital. Olivia sees that disparity as having hurt hospitals depending on Medicaid such as St. Francis, which has closed, and Mercy, now part of UPMC, as well as West Penn. Such distributions he terms simply as "unjust."

According to the American Hospital Association, hospitals nationwide have slipped 2 percent to 3 percent in volume of business. People are putting off elective surgery in today's economy, but says Olivia, "Our volumes [for all surgeries] are actually up this year. So that's a good sign." However, he told the Pittsburgh Tribune-Review in March that the recession and decrease in numbers of people with health insurance will cut into profits. Charity care, given to those who can't pay, went up by 20 percent in the first half of the fiscal year, he noted.

One key area of focus for Olivia is the integration of the WPAHS hospitals and the creation of a more cohesive system, including the reorganization of the leadership structure.

When Olivia's predecessor at WPAHS, Jerry Fedele, resigned in July 2007, one reason for his departure could have been not achieving that goal. A Pittsburgh Post-Gazette report at the time said that a group of Allegheny General physicians approached WPAHS chairman David McClenahan "with concerns about the CEO." The article cited they "lacked confidence" in Fedele's "ability to complete the long-promised, full-fledged consolidation" of Allegheny General and West Penn Hospital.

(According to IRS forms, Fedele earned $861,000 at the time of his resignation. A WPAHS spokesman declined to comment on Olivia's compensation.)

Olivia, on the other hand, was praised by WPAHS temporary president/CEO Keith Smith as having "a strong penchant for relationship building." Smith praised Olivia's "ability to bring people and programs together in a most cohesive and productive fashion."

A few weeks after Olivia started on the job, he was faced with a more immediate challenge - a financial one. WPAHS is cooperating with the Securities and Exchange Commission, which is conducting an inquiry into a $73 million writedown - which means "reducing the book value of an asset because it is overvalued compared to the market value," according to Investopedia - in its financial reporting, caused by overestimating patient revenue. That resulted in a reduced bond rating, which was recently raised to BB again.

Olivia has had success in handling financial problems in the past. He came to WPAHS from Cooper Health System in Camden, N.J. Recalling his arrival at Cooper, Olivia recently told the Pittsburgh Post-Gazette, "We had hours of cash on hand... We were in danger of not making payroll." That system faced bankruptcy when he took it over. It was located in "one of the poorest, most violent cities in America," he says.
 

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