When Percy Allen II became president and chief executive officer of Bon Secours Baltimore Health System in 1999, the West Baltimore hospital was losing about $10 million a year and ranked dead last in the parent Bon Secours system.
It was a time of stress for urban hospitals. That year, three in Baltimore - Liberty Medical Center, Church Hospital and Children's Hospital - shut down.
"Most employees thought I was coming here to close the place," Allen, who will retire this month, recalled recently. "I told them I'm a builder, not an undertaker."
Seven years later, Bon Secours is among the top five or six in the Bon Secours Health System, which operates 22 hospitals in nine states. It has stanched the red ink, and in its last fiscal year moved into the black with a modest profit of $2.3 million. It is no longer on the endangered list.
The hospital did trim expenses and staff (largely through attrition), for example, by consolidating five dialysis centers into one that serves as many patients. But most of the turnaround stemmed from a broad strategy of adding - not subtracting - services to attract patients, along with a successful push to drive up quality scores.
"You can't be successful by cutting, cutting, cutting," Allen said. "You'll cut yourself out of the business."
So Allen spent time prowling the patient units, asking questions to figure out how to improve ratings.
"We were at the bottom of the totem pole," he said, knowing published quality scores could influence patients' choices. "People are smart, and they go to the Internet."
Part of Allen's strategy was to woo physicians. Except for university-affiliated hospitals such as Johns Hopkins and University of Maryland, hospitals depend on doctors in the community to admit patients. "Without the docs, you don't have patients," Allen said.
Allen began meeting with doctors, but he knew that to persuade them to steer patients to Bon Secours, the hospital needed to do more.
"You need to have the right equipment, the right type of consulting specialists," he said.
He wheedled an MRI scanner from the parent system, and has since added a CT scanner. The hospital launched a vascular disease program with help from Mercy Medical Center and its vascular specialists, who now practice part-time at Bon Secours. It contracted with University of Maryland Medical Center to staff its intensive care units with specialists in critical care.
Bon Secours also built a larger and more attractive emergency department. Allen said 86 percent of patients admitted to the hospital start with an emergency room visit.
"They're now in the top quartile of Bon Secours hospitals, having come from last place," said Don Strange, chief operating officer for the Bon Secours Health System.
The hospital has also moved up on quality scores published by Maryland Health Care Commission, from near the bottom on many measures to above the state average on most.
"Most of the docs are so proud of where we are now," Allen commented, "that they forgot I was whipping on them."
Over the same period, the hospital began functioning, in effect, as a social service agency in its troubled community. Through a foundation with an annual budget of more than $3 million, it has been involved with job training, child care, counseling for homeless women, financial literacy classes, and renovation and construction of nearly 500 housing units.
"We're looking at the neighborhood in a comprehensive, holistic way," said George Kleb, executive director of the Bon Secours of Maryland Foundation. "We're really engaged in neighborhood revitalization."
Of high schoolers who got academic and career advice in a program at Bon Secours' Community Support Center and at nearby Francis M. Wood Alternative High School, Kleb reported proudly, 42 are now in college, and the first group will be getting degrees next spring.
Bon Secours Baltimore was one of four national finalists a few years ago for the Foster McGaw Prize, an award given by the American Hospital Association for "hospitals that have distinguished themselves through efforts to improve the health and well-being of everyone in their communities." It's the only Maryland hospital to win such recognition since the Johns Hopkins Hospital in 1995.
"They're a very strong model for a hospital working with a community," said Ann Sherrill, director of Baltimore Neighborhood Collaborative, which pools corporate and private contributions for revitalization projects and has helped finance projects involving Bon Secours. The range of activities and the partnerships with other community groups, she said, are "very unique."
The sense of mission in the West Baltimore neighborhood goes back 125 years to the hospital's roots. In 1881, Cardinal James Gibbons asked a French order of nuns, the Sisters of Bon Secours (French for "good help") to come to provide care. They located in West Baltimore, providing care in homes, then opened a hospital in 1919. The original building is still in use.
From that has grown the huge health system - including nursing homes, assisted-living facilities, home care agencies and outpatient centers as well as hospitals - with annual revenue of $2.2 billion. The health system headquarters shares a campus in Marriottsville with the Sisters of Bon Secours spiritual center and U.S. provincial office.
That history, however, didn't assure the future of the Baltimore hospital. Over the past few years, the parent health system "has divested itself of numerous hospitals, joint ventures, rehabilitation and long-term-care facilities, all of which were performing poorly," according to a credit rating report last month by Marcelo Olarte and John E. Wells, analysts for Fitch Ratings. In an interview, Wells amplified, "They're constantly reviewing their asset pool. It's not definite they wouldn't divest additional assets."
Strange, the parent system COO, said he wasn't working at Bon Secours when Allen arrived, but "my understanding is that it reached the point where studies were made of alternatives. The demand was made that it turn around."
The turnaround effort also was boosted by an improving financial climate as Maryland regulators allowed several years of larger-than-inflation rate increases to catch up for tight years in the 1990s.
For other city hospitals in general, excluding academic centers Hopkins and University of Maryland, profit margin increased from 2.2 percent in fiscal 2002 to 3.2 percent in fiscal 2005, according to the Health Services Cost Review Commission.
This month, the new CEO of Bon Secours Baltimore, Dr. Samuel Lee Ross, begins work. Dr. Ross has been executive vice president and chief medical officer at Parkland Health and Hospital System in Dallas.
Allen plans to retire to Virginia Beach, Va., where he has maintained a home for two decades, spend time with his children and grandchildren, and indulge his interests in golf, travel and collecting African-American art. He's particularly partial to art showing care-giving, such as his large serigraph by Paul Goodnight of a woman with arms reaching out to embrace three children.
The turnaround has secured the future of the hospital. Although its operating margin is smaller than other hospitals in the Bon Secours system, Strange said, "we continue to be content with that performance because of the significance of the ministry in that community."