Addressing growing financial challenges will top Dr. Richard Salluzzo’s agenda
by Glenn RittCape Cod Healthcare is not only getting a new president and CEO, but also a very unique emergency room physician.
Dr. Richard F. Salluzzo is succeeding Stephen Abbott as head of the healthcare system that includes Cape Cod Hospital, Falmouth Hospital and the Visiting Nurse Association. It is the Cape’s largest employer, with more than 450 physicians and 4,500 employees.
But unlike Abbott, who had run the system and Cape Cod’s largest employer for nearly a decade, Salluzzo is a practicing physician and MBA-holder who intends to build emergency room shifts into his work schedule.
That daunting game plan actually played a role in his decision to take the CEO position after a rigorous search by the healthcare system’s board of directors. As current head of the sprawling Wellmont Health System based in Kingsport, Tennessee, he has managed 14 hospitals and a dozen acute-care facilities across three states. That scope has made it impossible for him to integrate hands-on medical practice into his management responsibilities, he said.
Salluzzo, who is board certified in internal medicine and emergency medicine, will assume his new duties on July 10. He was selected from a field of 100 candidates who applied during the national search process conducted by the board.
“We are fortunate to have attracted an executive of Dr. Salluzzo’s caliber and experience,” said Robert Birmingham, board chairman. “He epitomizes the blend of proven operating experience and executive vision that we set as the benchmarks for this search.”
He led a significant financial turnaround at Wellmont, rebounding a four-year cumulative loss of $40 million in operating income from fiscal 2000 to 2004, to a four-year cumulative gain of $45 million from fiscal 2005 to 2008.
That financial performance will be critical on the Cape, where the healthcare system has seen a recent reversal in fortune with annual losses after years of running in the black. Recently, Cape Cod Healthcare laid off a handful of administrative personnel.
The financial stress is not unique to the Cape, as Wellmont’s experience attests, said Salluzzo – and it certainly is not a reflection on Abbott’s performance, one that included the successful merger of Falmouth and Cape Cod hospitals as well as two separate VNAs into the current regional healthcare system.
“Seventy percent of hospitals in Tennessee are losing money,” said Salluzzo. Financial pressures are hitting hospitals’ bottom lines nationwide – the result of several forces, uppermost being reduced reimbursements by government and insurers, as well as a migration of profitable physician services from hospitals to private practices. Meanwhile, community hospitals like those of Cape Cod Healthcare must accept emergency room patients, many of whom lack any insurance or have substandard policies.
Meanwhile, costs continue to rise for hospitals, from energy to insurance.
Financial conditions are “not dire,” emphasized Salluzzo. At the same time, he described Cape Cod Healthcare as a “well-run organization;” so, there is not a lot of “low-hanging fruit” to take immediate advantage of.
Salluzzo said he would emphasize partnerships with physicians and other health organizations, as well as efforts to retain and attract more doctors, especially given the Cape’s fast-growing population of baby boomers who will require more medical services and resources in coming years.
“Retention here is exceptional,” he said, in large part because of the special quality of life on Cape Cod. But Cape Cod also must compete with hospitals nationwide amid what experts now are calling a crisis in numbers: More than a decade ago, perceiving a potential glut, medical schools and residencies established caps. Unfortunately, the projections proved wrong – and now there are significant shortages.
There are 5,000 hospitals nationwide seeking orthopedists, he noted. Given the area’s aging population, orthopedists and geriatric physicians will be among the most required specialties her.
“We have to use the value of the Cape. It is magic,” he said. Simultaneously, the system must sustain an environment that breeds loyalty.
Salluzzo also emphasized safety as being the core of all his efforts. At Wellmont, he launched a comprehensive effort to reinvent itself as a physician-led, safety-centered organization. It led to the 2007 Excellence Award from the Tennessee Center for Performance Excellence. He also founded of the Safest Hospital Alliance, an initiative to combat the growing problem of medical errors in hospitals.
Published in Cape Business July/August 2008
Glenn Ritt Glenn Ritt is editor and co-publisher of Cape Business Publishing LLC. He is the former publisher of Cape Cod Community Newspapers and editor of The Bergen Record in New Jersey. 
