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Pittsburgh Business Times: St. Clair Health CEO looks back on career

James M. Collins on Friday finishes his 16-year tenure as president and CEO of St. Clair Health as one of the region’s longest-serving health care top leaders.

The veteran health care executive, who had for a decade been CEO of West Penn Hospital before arriving at St. Clair in 2006, has been in health care management since his late 20s and became CEO of West Penn Hospital when was 38. He said that he has had his eye on retiring earlier, having been happy with the way the organization sat, but also felt an obligation to remain while St. Clair and the rest of health care faced the acute phases of the Covid-19 pandemic. Now, Collins said, he feels is the right time to hand over the reins to SVP/COO Michael Flanagan.

Collins’ tenure at St. Clair has been one of high achievement, building out the organization’s national reputation for quality, a growth in services from its South Hills base, as well as a commitment to lean-engineering principles that have guided St. Clair to its high ratings from the Center for Medicare & Medicaid Services, Healthgrades, the Leapfrog Group and U.S. News & World Report, among others. In 2016 it reached a clinical affiliation with the Mayo Clinic, which provides medical expertise and resources far beyond what a standalone community hospital has access to. And the size and capability of the St. Clair Hospital campus has grown with the 2021 opening of the Dunlap Family Outpatient Center, a $162 million state-of-the-art facility that increases the size and scope of St. Clair.

But Collins, in interviews and throughout his career, shies away from the spotlight.

“I’ve always felt the success was about the great people who work here and not about me,” Collins said.

The metrics tell a story that isn’t all that common in health care, especially among the hospital sector that had been battered long before the Covid-19 pandemic challenged the entire system. St. Clair Health, a 329-bed hospital with 600 physicians and 2,500 employees, as well as a medical group and outpatient centers, has been designated one of the country’s 100 Top Hospitals from IBM Watson Health.

Inpatient volume during Collins’ tenure is up 20%, while outpatient volume has grown 142%, bringing up St. Clair Health’s market share by 33% even as it does business in one of the most competitive landscapes in the country and is shadowed by much larger systems, UPMC and Allegheny Health Network. St. Clair’s case-mix-adjusted-cost per case, which is a measure of financial health as well as economic value, has only risen 1.38% over the past 16 years, well below the general inflation rate, let alone health care’s. And its operating margin has gone from breakeven in 2006 when Collins arrived to an average of 5%.

“St. Clair was a classic community hospital in 2006 and, in 2022, the organization is that and so much more,” Collins said. “We’re nationally recognized now for the quality of care that we provide here and the exceptionally high patient satisfaction, and the services that we’re able to offer to our community are so much more than they were 16 years ago. And I think St. Clair is going to continue to evolve to match the changing demands of the industry and evolving need.”

Collins credits St. Clair’s culture of quality, based on lean engineering principles that focus on constant improvement and reinvention, principles that were advocated by former Alcoa President Paul O’Neill and the work of the Pennsylvania Regional Health Initiative on reducing medical errors and improving health care quality.

“If you eliminate errors, not only are you improving your patient care, but you are eliminating waste in the system. That has been an enormous factor not only in our national recognition of quality patient care and safety, that has helped us eliminate costs,” Collins said. “It’s another factor that has allowed us to be successful despite the consolidation you see in the industry.”

Collins had worked on lean principles and health care quality while at West Penn Hospital, but he said they were mostly limited to process improvement.

“By the time I came to St. Clair, I realized it was powerfully a culture building tool, and I wanted to premise our culture around that and communicate to our employees and medical staff we are totally committed to do what it takes to improve patient care and do what’s right for the patients, and the ancillary results will follow,” he said. “That has been borne out.”

Collins has said that has also been a key factor in its financial position, which includes a three-notch improvement in its bond rating to AA-, one of the best in the nation among its peer standalone hospitals. And that commitment is throughout the hospital and health system.

“It’s a lot more than me,” Collins said.

That success also has given St. Clair a sturdy position even as others in the industry, including hospitals nearby, have merged. He said St. Clair’s success has been to not take the way things are for granted, to work every day for patient satisfaction and quality.

“Make no mistake, we have very good competitors and those competitors have multiple facilities all throughout the regions we serve,” Collins said. “UPMC is a very fine institution, AHN is a very fine institution, Washington, Heritage Valley. We take nothing for granted. We say to our employees every day, we have to earn it every day.”

That’s gotten more challenging with the pandemic, including the impact of labor shortages. Collins said that labor shortages for some positions, such as nurses, have occurred from time to time, but this one is different.

“We’re experiencing shortages for all types of positions, and that’s unique,” he said. He also noted the impact of inflation on goods and services, and the pressures on hospitals for reimbursements and other changes.

“There’s no question that is going to challenge this industry over the next, I would say, five years. But the industry will work its way through the issues,” Collins said.

By Paul J. Gough  –  Reporter, Pittsburgh Business Times