Get 'em well Harry.

• Author: Bailey, David
• Position: Charlotte Memorial Hospital CEO Harry Nurkin - Includes related article - Focus on Health Care

How a CEO got an ailing hospital authority back on its feet with a stiff dose of marketing and competition.

In late 1980, Harry Nurkin flew in from Birmingham, where he was chief operating officer of the University of Alabama's medical center, to interview for the CEO job at Charlotte Memorial Hospital. When he went to tour the 900-bed hospital, the search committee -- comprised of such heavyweights as bankers Hugh McColl and Ed Crutchfield and lawyer Clarence "Ace" Walker -- seemed a bit apprehensive.

"|We~ were looking at a facility that didn't look physically good," Nurkin recalls. "Ceiling tiles were out of place. It didn't look clean. And they were surprised that I wasn't upset or frightened by the physical environment. But what I knew was those things were fixable.

"I saw a structure that was basically sound, a medical staff that was superb and businessmen who were sitting there wanting the place to be good."

What Charlotte Memorial needed more than anything was a chief executive who would inflict the pain it would take to cause a cure. "We're going to operate this place," he says he told hospital employees after he took the job, "... as if we ran a private business, meaning we're going to have to minimize our expenses |and~ maximize our services.

"We're going to start that trip today, and I invite all of you to join me. Anybody who wants to blow out a tire or stop us from moving forward, I'm going to need to have a prayer meeting with."

Like any gambler -- or, for that matter, any good CEO -- Harry Nurkin took a risk. He bet that he could streamline a bureaucracy mired deep in a rut, a hospital that had been the dumping ground for Mecklenburg County's indigent, and make it a paying proposition. He did, creating Carolinas Medical Center, Charlotte's wannabe rival to Duke and Bowman Gray, with its 11-story patient tower, $13 million research center headed by the man who was the governor last year and a heart institute that annually performs 10,000 catheterizations and 1,200 open-heart surgeries.

The revenues of its holding company, the Charlotte-Mecklenburg Hospital Authority, have gone from $90 million to $610 million. The profit increased from $405,000 in 1981 to $36.2 million last year. The eighth-largest public hospital authority in the country, its revenues would rank it 22nd among the state's publicly held corporations.

From a disjointed collection of facilities that employed about 3,000 in 1980 he has fashioned a 6,780-employee organization that runs two nursing homes, a satellite hospital, a rehabilitation hospital, a mental-health center, an urgent-care center and five physician groups.

How he did it was simple: In 1980, Charlotte Memorial had almost no private patients and depended almost exclusively on Medicare and Medicaid recipients. Now nearly half pay their way or have private coverage. They come because Nurkin, mixing marketing with medicine, spent millions on things that would attract them -- state-of-the-art technology, attractive accommodations and the kind of talent a teaching hospital (albeit one without the hassles of university politics) draws.

It was easy to do all that in the '80s, before business got up in arms over health care, back when hospitals passed along the cost of their rapid growth to paying customers. In the '90s, with business -- and now government -- determined to hold down medical costs, that won't work anymore.

But Nurkin, who was paid $605,880 last year, likes the hand he's dealt himself. He weighs the odds of shrinking government reimbursements, fewer chances to shift costs and what could be the crushing burden of all that overhead against his chance to win big, which he will if health-care reformers bet on economies of scale -- favoring big med centers that already have high-tech equipment and high-powered specialists. Moreover, a national health-insurance plan would pay for indigent care, taking a big bite out of the millions of dollars of bad debt and charity care the hospital authority had to eat last year.

"We're going to be very efficient," he says, "... and we feel very secure about the future, very secure."

Harry Nurkin, 49, raised the stakes in Charlotte, making it the most-competitive medical market in North Carolina. And through competition, he raised the quality of medical care while keeping his prices well below the national average and below those of other regional medical centers of comparable size. According to a survey by the Seattle-based actuarial consulting firm of Milliman & Robertson Inc., a typical package of group health-insurance benefits in Charlotte costs only 77% of what it does in an average urban center -- and less than in Greensboro, Winston-Salem and Raleigh. Charlotte ranks 928th among more than 1,000 cities surveyed nationwide.

First Union Corp. Chairman Ed Crutchfield, still an authority director, calls Nurkin "one of the finest CEOs I've ever met. He could run any kind of business -- medical or nonmedical -- extremely well. We're lucky he has chosen to devote himself to health care rather than simply to becoming a billionaire."

The business establishment of this community has had a heavy hand in the operation of that authority from day one," says R. Stuart Dickson, chairman of the hospital authority and Charlotte-based Ruddick Corp.

As it became clear that Chapel Hill would beat out Charlotte as the site of the state's first public medical school (the final decision was made in 1945), the business and medical community got together with city and county politicians "to design something that would take the place of what you'd find if we had a university medical school," Dickson says. Initially...