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Building on the hospital’s advantages

The corridors, rooms and equipment at Lakeside Memorial Hospital are clean and as up-to-date as one might expect of any well-kept U.S. hospital. But after a quick tour, “gleaming and modern” would not be the first description that springs to mind for the small Brockport facility. Well-kept but well-worn would be more likely.
The office of Michael Stapleton, the 39-year-old CEO of the hospital and of its associated health system, is modest and cramped. It sits midway down a long corridor and far from the hospital’s main entrance, behind a plain door bearing a sign that identifies it as nursing administration.
Papers are strewn casually on the desk. The modest and worn office furniture is of a certain vintage. Decorations include crayon drawings taped to walls, products of Stapleton’s five children ranging in age from 4 to 11.
The sign on Stapleton’s office door is an anachronism. It refers to the job-chief nursing officer-that he was hired to do at Lakeside in 2007. Stapleton, who also was Lakeside’s chief operating officer, was named acting CEO after his predecessor, Kevin Nacy, died unexpectedly in December.
After the hospital’s board voted to hire Stapleton as CEO in May, Stapleton declined to take over a larger second-floor office that Nacy had occupied.
“I’m hardly ever there, anyway,” Stapleton says. “I don’t spend much time in the office.”
Stapleton, who three years ago was a front-line hospital staff member as the top nursing official in Strong Memorial Hospital’s burn-trauma unit, says he spends as much time walking the hospital’s halls as he does in the office.
The CEO’s penchant for spending time on the hospital floors is appreciated by the front-line medical staff, says James Gaden D.O., an Orleans County doctor in private practice who has been on the staff at Lakeside for 15 years.
A CEO with clinical experience who keeps a direct hand in the hospital’s day-to-day operations has a different perspective, Gaden says.
“For an administrator to have a clinical background is a bonus in my book. It’s like the old-time CEOs who worked their way up from the mailroom,” he says.
While Stapleton has a penchant for spending time on the hospital floors, he also seems uncomfortable with the prospect of occupying quarters any better appointed than the cramped and modest nursing office.
Nacy was 53 and in seemingly good health when he died of an apparent heart attack in his sleep. Nacy was overweight but not markedly so, and he had been exercising regularly, watching his diet and dropping excess pounds when he died, Stapleton says, shaking his head.
“Kevin and I worked hand and glove every day, so we were prepared to take over with no break. But Kevin’s death is a blow we all still live with every day,” Stapleton says.
A tall, slightly beefy man with brown hair and a pleasant manner, Stapleton tends to speak in rapid, information-packed staccato bursts. A conversation with him can seem like the verbal equivalent of keeping up with a speed walker. He is likewise direct in action.
When Stapleton’s father, a retired businessman and former Rochester-area resident now living in Florida, visited recently, he mentioned that he had been experiencing shortness of breath and was on a waiting list to have a stress test in Florida in three weeks. Stapleton took him to Lakeside for a test that day. And when the results indicated a need for quick action, Stapleton arranged to have Peter Knight M.D., one of the University of Rochester Medical Center’s best and most in demand heart surgeons, operate immediately. His father came through with flying colors, Stapleton says.
Moving into a job as health system chief had been a goal of his, Stapleton says, but it is not something he expected to occur at his age.
“It’s something I was hoping for, and I am glad that it did,” Stapleton says. “But I’m sorry about the way it happened.”
After coming to Lakeside as director of nursing in 2007, Stapleton quickly was promoted to COO, managing both jobs simultaneously. A relative newcomer to the 75-year-old Brockport hospital, he has become its fierce advocate.

Occupancy rates
Lakeside in recent years had seen occupancy levels drop to the range of 50 percent to 60 percent. During the same period, occupancies soared at larger hospitals serving the city of Rochester.
For hospitals, an occupancy rate of 85 percent to 90 percent is a sweet spot, busy enough to assure adequate revenue and efficient use of facilities but not so busy as to overwhelm systems. While Lakeside routinely was seeing half or more of its rooms occupied, the area’s three biggest hospitals-Rochester General, Strong Memorial and Unity in Greece-often had occupancy exceeding 100 percent.
Lakeside Health System Inc. had $40 million in revenue last year, with the hospital accounting for most of it. The system reported a 2.3 percent operating margin for the year. That is below the 4 percent to 5 percent margin considered adequate in the industry nationwide but far better than the negative results reported by roughly 50 percent of New York hospitals.
The need for cases involving major heart surgery or severe trauma to be handled at bigger hospitals that are better equipped for complex cases accounts for some of the discrepancy in occupancy rates, Stapleton says. But people also check into the city hospitals for procedures that could have been done just as well at Lakeside. To some extent, he says, Lakeside’s occupancy declines were a product of the intense competition among the city hospitals in the late 1990s, when they vied to grab each other’s market share and reached out to outlying feeder areas such as Brockport.
The days of cutthroat competition are past, Stapleton says, and the intense rivalry among area hospitals during the late 1990s and early 2000s has been ratcheted down. Still, moments later he pointedly mentions a billboard advertising a city hospital that sits beside Route 531 at a spot where Brockport residents driving into Rochester would find it hard to miss. Stapleton would not say which hospital put up the sign, but it belongs to Unity, a growing west-side health system whose officials have in the past expressed an interest in making Lakeside part of their health system.
In the end, Stapleton says, he does not blame any urban hospital for Lakeside’s occupancy shortfalls. The hospital itself should take responsibility.
“We dropped the ball,” he says. “We let them take our market share. It doesn’t really matter to us what Strong, Unity or General is doing. We’re not looking to compete with anyone. We’re looking to regain our share.”
Local patients left Lakeside partly because the city hospitals wooed them, Stapleton says, but more because services had slipped at the hospital’s associated health system, which includes a 144-bed nursing home, a child care center open to the public and a newly opened urgent care center in Spencerport. Statistics on mortality rates kept by the Center for Medicare and Medicaid Services, the federal agency in charge of administering the government insurance programs for the elderly and the needy, tell the tale, he says.
Through the 1990s, Lakeside was run by Robert Harris, a longtime CEO who retired in the early 2000s when he was in his 80s.
Harris, Gaden says, “did the best he could under the circumstances.”
The period was a rough one for all area hospitals, which had to cope with steady cuts in Medicare and Medicaid reimbursements at the same time when cooperative bonds among local hospitals gave way to the period of fierce competition. Harris’ immediate successor did not last long. In 2006, the Lakeside board appointed Nacy, who had been the health system’s chief financial officer since 1991, as CEO.
Under Nacy and continuing through Stapleton’s administration, Lakeside has started to revive and regain the share it lost during the preceding decade. Occupancy percentage rates now average in the 70s. Stapleton aims to push them up to the 80s and 90s.
“Today we’ve got 48 patients here,” he says, which means that more than 75 percent of Lakeside’s 61 beds are occupied.
Under Nacy, the Brockport hospital added hospitalists, physicians who specialize in treating hospitalized patients and work exclusively in and for hospitals. The relatively new specialty gained currency in the 1990s. Some primary-care doctors, who would prefer to follow the older practice of acting as attending doctors for their own hospitalized patients, see the rise of hospitalists as an unwelcome intrusion and a likely interruption in the continuity of care.
The addition of hospitalists, who now attend to 80 percent of Lakeside’s admitted patients, “has clearly made us more efficient,” Stapleton says, who concedes that for the system to function well, “there need to be clear lines of communication with the primary-care doctors.”
In establishing those lines of communication, Stapleton says, Lakeside’s relative smallness works to its advantage. The Lakeside system has 800 employees and the equivalent of 500 full-time workers.
Staffs at the area’s urban systems number well into the thousands. The University of Rochester is the area’s top employer with nearly 20,000 workers, and its medical center, which includes Strong Memorial, is the biggest component of UR. The Unity and Rochester General health systems employ more than 5,000 people each. The Lakeside system’s size makes it far easier to manage, with faster turnaround times in implementing changes, Stapleton says.
“Recently I asked staff to draw up a plan. They started working on it in the morning, and it was on my desk by 4 in the afternoon,” he boasts.
Size can be a competitive advantage, Stapleton adds. But one of the community hospital’s selling points, he says, could be cost. Bigger institutions have higher operating costs, and operating costs play into the rates government and private payers set for hospital stays and procedures. The spread between reimbursement rates for the same procedure at larger and smaller hospitals can be as much as $3,000. If quality is the same, lower cost and the advantage of being treated closer to home could bring more locals back to Lakeside.

Outlying hospitals
The role of outlying hospitals, including Lakeside, was part of the 2020 Commission’s extended review of the requests by Strong, Unity and Rochester General to add several hundred beds among them. In a special meeting held last year in Canandaigua, Nacy and other officials of outlying hospitals told the commission that they hoped the often-underoccupied community hospitals could take some of the patient load off the urban facilities. City hospital officials said they saw the outlying institutions’ role as limited by their inability to handle more complex cases.
Stapleton does not disagree, but he still sees Lakeside and other outlying institutions as having a major part to play in relieving the urban hospitals’ overcrowding. The community hospitals should not be doing open heart surgery or transplants, he concedes. But patients from those hospitals’ immediate service areas are now going to Strong, General or Unity for problems that an outlying hospital could and should handle easily. For residents of Brockport or the town of Sweden, Stapleton notes, Lakeside is not an outlying facility.
“We’re not on the west side of anything,” he insists. “We’re in the center of our market.”
If Lakeside Memorial is to attract more local patients, Stapleton says, it should get top-ranked local surgeons to operate there. He is not looking to transform the Brockport hospital into a small version of a larger urban hospital, he says. Only appropriate procedures such as relatively simple ambulatory surgeries and those requiring a one-night stay would be done.
“We’re not going to put in a da Vinci or anything like that,” Stapleton says, referring to a $1 million computer-assisted robotic device used for a variety of procedures, including hysterectomies, cancer surgeries and heart operations.
David Gentile M.D., a member of URMC’s University Urology group, has done many robotic prostate procedures. Stapleton recently approached Gentile, holding a series of meetings with the urologist, hoping to woo Gentile and other members of the URMC group to Lakeside.
“Before we joined URMC, we were a three-person private urology group and we actually used to practice at Lakeside,” Gentile says.
He ended the Lakeside affiliation mostly because a time-consuming weekly drive to Brockport created too many scheduling conflicts, Gentile says. After several sessions with Stapleton, he agreed to start doing consultations at Lakeside one day a week. If the arrangement works out, Gentile says, he and other members of the URMC group would start doing relatively simple, ambulatory procedures at the Brockport hospital.
Rochester Brain and Spine Neurosurgery & Pain Management LLC, a Henrietta neurosurgery and pain management group that Stapleton also courted recently, has agreed to start a limited practice at Lakeside. Other plans for the Brockport hospital include physical upgrades, including refurbishments and expansions of its emergency department, intensive care unit and maternity facilities.
Still, says Stapleton, “We’re not going to try to make this place into a 120-bed hospital.”
Upgrades and expansions will be in line with Lakeside’s position as a small-town facility, he says.

Career path
Stapleton did not plan to be a nurse, he says. He majored in psychology at SUNY College at Oswego, earning a bachelor’s degree in 1991. After working for the Hillside Family of Agencies for two years, he got a job as a psychiatric technician in Strong’s emergency department.
“I was thinking of getting a counseling degree,” Stapleton says. “Then a male nurse at Strong pulled me aside and told me how many doors would open for me with a nursing degree, and I decided I should try for that.”
Stapleton earned a bachelor’s degree in nursing from St. John Fisher College in 1998 and went to work in Strong’s Golisano Children’s Hospital. He and his wife, Julie, a Rochester-area native whom he met at SUNY Oswego and married in 1994, were starting a family.
Julie, a speech therapist, now is a stay-at-home mother, caring for the couple’s five school-age children and Penfield home. Four years ago, she gave birth to their youngest, Erin, who has Down syndrome.
Stapleton is a devoted family man whose non-work activities mostly involve his family. He likes golf and would like to play more, he says, but “my happy place is at home in the yard with my kids.” So instead of playing golf, he coaches his children’s baseball and basketball teams.
In addition to his duties at Lakeside, he is on the UR nursing school’s faculty and serves on advisory boards for the nursing schools at Roberts Wesleyan College, St. John Fisher and SUNY College at Brockport. Stapleton also has joined the Flower City Down Syndrome Network board, where he serves as treasurer.
Down syndrome children have a variety of symptoms in varying degrees. They are most commonly associated with learning disabilities and cognitive dysfunction but also can have heart defects. Not so long ago, individuals with Down syndrome were thought to be incapable of functioning in society and often were institutionalized, but that thinking has changed. Stapleton says he and his wife have never considered any course for Erin but one that would have her as fully integrated into society as possible.
“We fully expect Erin to live on her own and to work and take classes,” he says. And so far, “she’s been awesome.”
As his family and his responsibilities grew, Stapleton started to think about hospital administration. He went back to school, earning a master’s degree from UR’s School of Nursing in 2007.
Stapleton had advanced steadily at Strong. He moved through several jobs at the children’s hospital, becoming a nurse leader in the pediatric unit in 1999. Roughly two years later, he was named nurse manager in the hospital’s adult emergency department, arguably the region’s busiest. The position put Stapleton in charge of 125 employees and a $6.8 million budget. In 2005, he moved into the nurse manager’s job at Strong’s Kessler Family Burn Unit.
In his positions at Strong, Stapleton got high marks from his superiors.
The emergency department positions Stapleton held at Strong were high-stress, says the hospital’s chief operating officer, Kathleen Parrinello.
“You need to interface with doctors, nurses and emergency medical people. (Stapleton) did a great job; he’s a good facilitator and good team player,” she says.
Steven Goldstein, CEO of Strong and Highland Hospitals, concurs. In contacts he now has with Stapleton as a peer, Goldstein says, he has found Stapleton to have an impressive grasp of state and local health care issues.
“He keeps very well-informed with what’s going on in the state and the federal level,” Goldstein says. “I’ve been very impressed.”
Stapleton recalls that when he was working at Strong in 2006, he got a call from a recruiter.
“It came out of the blue,” he says. “I wasn’t thinking of going anywhere. When he said that it was for a chief nursing officer job, I wondered who could be leaving.”
Lakeside did not immediately spring to mind, Stapleton says. But the Brockport hospital and he turned out to be a happy match.
“One of the things that has impressed me most about Lakeside is the staff,” he says. “They are great people, and most of them have been here a while. The Brockport community is great too; people really care about their community.”

Michael Stapleton
Title: CEO, Lakeside Health System Inc.
Age: 39
Education: B.A. in psychology, SUNY College at Oswego, 1991; B.S. in nursing, St. John Fisher College, 1998; M.S. in leadership of health care systems, University of Rochester School of Nursing, 2007
Family: Wife Julie; sons Timothy, 11, Daniel, 7, and Joseph, 6; daughters Moira, 9, and Erin, 4
Residence: Penfield
Favorite leisure activity: spending time at home in the yard with his children
Quote: “(Lakeside is) not on the west side of anything. We’re in the center of our community.”

rbj@rbj.net / 585-546-8303

07/17/09 (C) Rochester Business Journal

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