Cape Cod Hospital clings to independence

Big donations, Brigham and Women’s ties help the hospital and its parent stay independent, expand emergency services

Brett DeMayo said he waited more than 90 minutes one recent morning to see a doctor at Cape Cod Hospital.
Julia Cumes for the Boston Globe
Brett DeMayo said he waited more than 90 minutes one recent morning to see a doctor at Cape Cod Hospital.

HYANNIS — By 10 a.m., all the beds in the emergency room are full. Other patients wait on gurneys in the halls, as doctors and nurses tend to foot injuries, heart attacks, and drug overdoses.

On a typical summer day, 330 people in need of medical care will come through the doors of Cape Cod Hospital’s emergency department, rivaling Boston’s busiest hospitals. That’s 100 more people per day visiting the Hyannis emergency room between Memorial Day and Labor Day than during the rest of the year.

The Cape’s population nearly triples in summertime, and Cape Cod Hospital is the default destination for most anyone who gets sick — even those from Provincetown, who have what’s said to be the longest ride to a hospital anywhere in the state. As many as 10 ambulances can pull up to the curb at once to deliver patients through the sliding glass doors to the emergency room.


“We just don’t have enough beds. In the summertime we’re really stressed,’’ said Dr. Craig Cornwall, chief of the emergency department, observing the hum of activity on a recent August morning. The hospital has launched a $20 million expansion to double the available bed space in the department by 2015. For now, Cornwall said, “there are patients who’ll spend their entire visit in the hallway.”

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Plans to expand emergency space are just the latest in a list of ambitious efforts at a community hospital that was in dire financial straits in 2008 and holding talks with Boston hospitals to find a buyer. Two chief executives later, Cape Cod Hospital and its umbrella organization have recovered financially and are clinging to independence.

Cape Cod Healthcare — which also includes Falmouth Hospital, several outpatient centers, and the Visiting Nurse Association of Cape Cod — has worked on its relations with doctors, expanded a clinical affiliation with Brigham and Women’s Hospital in Boston, and courted well-heeled donors who want reliable medical care on their side of the Sagamore Bridge. The system is on track to raise up to $22 million this year, nearly twice its $12 million goal. And the latest fund-raising comes on the heels of a $100 million campaign completed last year.

The recent gifts come from a deep vein of people with ties to the Cape, from former Blue Cross of California chief executive Leonard D. Schaeffer and his wife, who gave $1 million, to the Yawkey Foundation, started by the former Red Sox-owning family, which last month committed $3 million to the new emergency rooms at Cape Cod Hospital and its sister hospital in Falmouth.

“We were very impressed with the way they turned around the hospital, and with how they were able to take care of the patients in spite of the small emergency rooms,’’ said James P. Healey, the president of the Yawkey Foundation who summers in Falmouth.


Five years ago, it might have been hard to imagine the flood of donor money that would come into the hospital, and the long-range plans accompanying it. Cape Cod Healthcare lost $25 million in 2008. It had just 80 days of cash on hand and a bond rating near junk level, making borrowing more costly.

And there was a lot of change at the top. The hospital’s longtime chief executive, Stephen Abbott (now interim head of fund-raising), retired in 2008, as the economy was heading south and expenses were surging. His successor, Dr. Richard Salluzzo, was a controversial figure credited with helping turn around the operation and with pressing the board to consider selling the hospital. He resigned after two years and was later disciplined by the state medical board for writing prescriptions for himself and family members.

The board promoted Salluzzo’s deputy, Michael Lauf, to chief executive in 2010. Lauf led the launch of a physicians network, to encourage doctors to perform more services locally and rein in referrals to competing third-party facilities, including the doctors’ own medical start-ups. In two years, he said, 340 of 550 doctors who practice on the Cape have joined the group.

Last year, the hospital expanded its affiliation with the Brigham in Boston for cardiac surgery, radiology, and gynecological oncology. Under that partnership, Cape Cod doctors are trained by their counterparts at Brigham and Women’s, and more complex cases are referred to the Boston teaching hospital.

Annual revenues for Cape Cod Healthcare, which employs 4,700 people, have climbed 26 percent since 2008, to $680 million in 2012. The group is again profitable and has more than doubled its cash on hand.


Through the ups and downs, donors have fueled Cape Cod Healthcare’s ability to keep growing. In 2008, James and Ruth Clark of Falmouth gave $10 million to build a cancer center at Falmouth Hospital, to spare patients the trip to Boston for treatments. And in 2006, Boston businessman David Mugar wrote his second $5 million check in four years, for a patient tower at Cape Cod Hospital with ocean views and original artwork on the walls.

Mugar, who has a home in Cotuit, is credited by hospital executives with kicking off the era of major gifts. He said he has used the emergency room in Hyannis many times and also had two back surgeries. At Cape Cod, he said, “You’re not 43d in line.”

Lauf, the chief executive, said donations went to capital improvements, “not to prop up operating losses.”

The hospital faces numerous challenges going forward. With the Cape’s older population and many low-income residents, Cape Cod Hospital relies on government payments from Medicare or Medicaid for more than 60 percent of its revenue. Fitch Ratings in Chicago said the hospital is financially healthier but also “highly exposed to reimbursement pressure at the state and federal level.”

Indeed, Lauf said the hospital stands to lose $226 million in revenue over the next 10 years due to lower Medicare reimbursements under the Affordable Care Act.

“It’s going to be increasingly difficult for hospitals, no matter how good and how isolated they are, to remain independent,” said Marc Bard, codirector of the Tufts Health Care Institute, a Boston group focused on improving the delivery of care. “With increasing consolidation by providers and payers, I don’t see that being independent is a long-term viable option.”

That could lead Cape Cod Hospital into the arms of Brigham and Women’s parent company, Partners HealthCare, the state’s largest hospital operator. Partners already owns the community hospitals on the nearby islands of Nantucket and Martha’s Vineyard. But its effort to acquire South Shore Hospital in Weymouth faces an inquiry by the Justice Department and the state attorney general’s office, which are examining whether the deal gives Partners too much market control.

Lauf said he thinks Partners has its hands full. And so does he. “We think we can remain a community, independent, not-for-profit health care system,’’ Lauf said. “But we can’t forecast that far into the future due to a lot of things that are way outside of our control.”

The future of government payments is just one factor beyond Lauf’s control. Another came Cape Cod’s way last week, when a noted physician stepped down. Dr. Robert Rizzo, a doctor at Brigham and Women’s who has run the open-heart surgery program at Cape Cod Hospital since 2002, resigned from his posts at both hospitals over a road rage incident.

Cape Cod Hospital spokeswoman Robin Lord said the staff remains committed to providing “expert cardiac surgery care to patients on the Cape” and is recruiting a new doctor to run the program. In the interim, the Brigham’s chief of cardiac surgery, Dr. John Byrne, will oversee the program, and a surgeon who has operated on the Cape for many years, Dr. Paul Pirundini, will continue to run the care locally.

Meanwhile, Lauf said the hospital has worked to improve emergency room wait times that routinely ran up to one and two hours in 2008. Today, 90 percent of patients get into a room within 25 minutes, he said; a red bar on Cape Cod Healthcare’s website gives regular updates of wait times.

But on the busiest days, it can still take longer to get help. Brett DeMayo of Boston and East Dennis said he waited on a hallway gurney more than 90 minutes to see a doctor one recent morning. “It was quiet when I got there about 7 a.m.,’’ he said, “but then it got busy.”

Lauf acknowledges the surge in traffic, which is all but certain to slow in a week or so. By summer’s end, Lauf said, “Everyone's a little tired, I won’t lie to you.” Come Labor Day, “it’s a little bit of a summer hangover.”

Beth Healy can be reached at Robert Weisman can be reached at