Hospital on Road to Recovery

When Edward Mirzabegian took over as chief executive officer of Antelope Valley Hospital in 2007, the area’s only medical center had been bleeding money and losing patients. Doctors were reluctant to refer patients, and nurses who lived in the area preferred to travel 70 miles into the Valley for work rather than take a job at Antelope. Today, Antelope Valley’s campus is a hubbub of activity. The $32 million renovation that’s underway will add new cardiovascular and neurological centers of excellence, a bright new lobby, a new parking lot, a modernized cafeteria and eventually a new emergency room. A cancer center will open a year from now. It is attracting surgeons and specialists from as far away as USC University Hospital and Loma Linda University Medical Center. Needless to say, nurses are happy to accept jobs. Some 400 have been added in recent years. Behind these improvements is a most unlikely man — a quiet-spoken Armenian immigrant who became CEO after the board removed the former president. He began with a 10-step improvement program that turned into 650 different tasks to improve the hospital. Last year, the hospital turned a profit of $23.2 million. Getting here hasn’t been easy and Mirzabegian still loses sleep over critical issues, like how to treat thousands of patients who need care but can’t afford it. But he loves his work and that’s what keeps him going. Question: It looks like you are in the middle of a significant expansion here. Can you tell us what’s in store for the hospital in terms of facilities? What prompted the $32 investment in facilities? Answer: When I came on board, I realized the building is pretty outdated and a lot of areas needed to be modernized. The first phase was to modernize areas like cardiology and radiology and emergency room and also our site plan, which is really (a) parking lot and patient visitor area and family access areas. We call this phase one. This includes cardiovascular and neurological centers of excellence; cath labs will be modernized. Phase two is designed to modernize our emergency room. Our emergency room is one of the busiest ones in Southern California. We see 116,000 visits a year. The reason is we are geographically confined by the mountains. We pool from almost 1.1 to 1.2 million people who live in the greater area of 1,500 square miles. So we have to modernize the ER, the ICU rooms and many patient care areas. All this would cost $80 million, but we don’t have that funding yet. It’s very hard to borrow the money now. ..So we’ll have to table it and it will take a little longer than I thought — at least three to four years before it’s finished. Q: The hospital was recently certified as a Level II Trauma Center. How important is this designation to the people of this area? A: It was very important. With the number of patients in the ER, I was amazed this was not a trauma center. So I decided to go after this and make this hospital a designated trauma center. Despite this, I had a lot of people tell me I am crazy — it takes a lot of effort and dollars and plans and you need the right doctors. I felt I had most of it and the rest was not difficult to implement, so I went after it. It’s been a very successful program. We are one of the busiest trauma centers in Southern California. We see 79 patients a month — stabbing, gunshot wounds, extensive car accidents — you name it, we got here. So we can do everything here now except transplants. Q: You came on board in 2007 after the former CEO left. The hospital at that time had an $18 million loss. What happened to create that loss and what did you do to engineer a turnaround? A: When I came here in 2005, as chief operating officer to help the CEO, the management, in my opinion, was not really up to par. There were no standardized processes, procedures and protocols. The hospital was losing money for five to six years. There was a lot of chaos and it was unsettled. So a year and a half later, the board asked me to be CEO and asked the previous CEO to leave. I decided to change everybody around me and put my own team in place. Together we put a 10-step plan in place and that became 650 different steps, and everybody took a piece of it and we methodically made sure all those steps were taken care of. Q: What was step one? A: I felt I had to go after the revenue. A lot of hospital executives look at expenses and try to cut. I felt even if I cut 50 percent it would not be enough, so the best way out was to really push revenue by focusing on the quality of what we do. I felt if the quality is good, eventually the finances will come because when you take care of people they remember that the place is good and they come back. We sat and talked to every physician and surgeon in the area. I wanted to know ‘why are you not here.’ They told me your instrumentation is old. So I created a place for both nurses and doctors to do their jobs in the best way possible. I changed everything about how we charge the customer, how we collect and how we bill…the pricing. I brought the prices a little bit lower, offering managed care companies a little better pricing. I changed every contract with every payer and HMO and insurance company to make us more attractive. Q: What success have you had as a result of all this? A: When I came here we used to do 4,800 surgeries. Now we do almost 15,000. Why? I opened all the surgery rooms. We had nine but we used only four. I opened every corner of the hospital that could hold beds. There were two floors here that were never used. They were always locked and when I asked about it and people said, ‘well, we don’t have enough nurses.’ So I added 300 more people to open all this and really went after volume. The first year I took over we were $18 million under. Twelve months later, we lost only $1.9 million; by the third year, we made $8.9 million; the fourth year $4.6 million. And this past year we made $23.2 million. Q: What’s been your greatest challenge since taking over as CEO? A: Finding the right talent. It’s hard to bring people here. Housing is expensive and the lifestyle is different. It’s congested and busy. So you have to pay people a lot of money. The second challenge is the Antelope Valley. People have no clue where it is. Now things have improved. Five years ago, I had a ton of nursing openings. Now I don’t have any. My second biggest challenge is taking care of indigents. I have almost $7 million in bad debt a month. I have to take care of all these people and that has been challenging. As long as finances are good, I can take care of them, but something has to happen to help take care of these people. Title: Chief Executive Officer Education: B.S. in Medical Laboratory Science, University of Illinois; Masters of Science and Masters of Health Administration from the University of St. Francis in Illinois. Personal: Married with two sons. Q: What’s your most important long-range goal? A: I want to make this hospital a large referral center…like UCLA and Cedars. We now have a partnership with the chief of urology at USC, who will run our robotic surgery program. So instead of patients going to the doctors, we are trying to bring the doctors to the Valley to take care of patients here. We are also working with Loma Linda to bring a pediatric intensive care unit here, and we are working with a very prominent medical center here for our cancer center program. I can’t mention the name because it’s not official yet…but it’s a big name in oncology statewide. Q: Healthcare reform has everyone drawing up new strategic plans. Does it concern you and what are you doing to get ready? A: Yes it concerns me, and we are preparing. But to tell you the truth, right now…I hate to say we don’t have a plan, but it’s unclear what we need to do. I talk to other CEOs and they are all in the same boat. We’re looking at these accountable care organizations (ACOs) but you have to spend money … a minimum $1 to $2 million to organize it. Q: This hospital is the sixth largest employer in the Antelope Valley and an important engine of growth in the community. What’s the most important thing you can do to make sure it stays that way? A: We have added 300 to 400 employees over four years. Right now we have almost 2,600 employees. We’re not just a hospital for the community. We are an economic engine. I pay almost $130 million a year in salaries. We really help the economy of the Valley, so to us it is very important to be financially viable so we can continue this. Q: You come from the Midwest. Do you miss it there? A: I lived in Chicago and its suburbs for 39 years. I was born in the Middle East. I’m Armenian. My family migrated to this country when I was 22. After our kids went to college, my wife and I decided we should go somewhere a little warm so we went to Central Illinois… Q: It’s not really that warm there…. A: Yes, so finally we decided to come to California. Do I miss it? Yes. I have that picture of Chicago hanging up over there…it’s a great city. I love California, especially the weather, but I miss the people of the Midwest. Q: How did you choose to enter the healthcare profession? A: My background is in laboratory and clinical pathology. I thought I would be a researcher. But I have a type A personality, and in research, I felt I was bored. I had a boss and he said to me ‘You are wasting your time in research. You are a people person. Go get involved with management.’ So I decided to get my masters in hospital administration and after that it was just history. I liked management and management liked me. Q: What keeps you up at night? A: What keeps me up at night is …like I said before, “How am I going to take care of all these people who can’t afford the care…and do I have the right people to take care of them.’ This is a 24 hour operation and you cannot just close it and go home and say I’ll worry about it tomorrow morning. I am on the job 24 hours. You have to like it or it won’t work…that passion for doing the right thing… that keeps you going every day.