THE HUNTER GROUP: Helping or Hurting Ailing Hospitals?

      The Sunday New York Times profiled David Hunter, "a slash-and-burn cost-cutter who can do the dirty work that floundering hospitals cannot bring themselves to tackle on their own." Hunter, "a no-nonsense management expert with 11 years of experience operating on wounded hospitals," said, "If [hospitals] are using guys like us, the problems have to be enormous." A former hospital executive at Duke University, Hunter started The Hunter Group with two partners in 1988 and recently sold it, but remains CEO. The firm's 70-some consultants thrive on "emergency work," capitalizing on the widespread financial woes and slow decision-making processes of academic medical centers. Consultants travel from their base in St. Petersburg, FL to centers nationwide that are "under growing pressure from government and private payers to take yet another tuck in their world-class expenses." Within about 14 weeks, the group presents hospital officials with an analysis of patient wards, surgical suites, billing departments and executive suites. Some of The Hunter Group's most recent solutions include 20% job cuts at the University of Pennsylvania Medical Center, which reported operating losses of $198 million for FY 1999; closing Mount Zion Hospital, a "money-losing satellite hospital" of the soon-to-be- defunct University of California-San Francisco-Stanford system (see story 2); finding a new CEO for centers in Detroit, Chicago and San Francisco; flattening management, reducing numbers of lab tests, cutting salaried physicians and scaling back teaching budgets at nearly every center; and "simply sell[ing] the hospital" when financial problems are beyond solution, as in the case of George Washington University Medical Center. But not every Hunter Group suggestion is accepted. New England Medical Center opted not to follow a proposal that it sell out to a for-profit company and later arranged a merger with a not-for-profit health care system. And now, with a plethora of hospitals hurting financially, a growing number of health care consulting firms are competing with Hunter Group, who still maintains "the lion's share of assignments."

Not Everyone's a Fan
      Critics say "Hunter Group's shock therapy endangers the triple mission of medical centers: educating doctors, treating patients of all income levels and conducting the breakthrough medical research that has little or no place at for-profit hospitals." Dr. William Kelley, CEO of the University of Pennsylvania Health System, said, "What is happening today is the invisible destruction of the great academic medical centers. We will be more efficient and able to deliver care at a lower price, but we will not be able to do the things that made us great. Our ability to develop the medicine of tomorrow is going away." Other doctors and nurses have complained that they have little chance to contribute suggestions or influence how the consultants make cuts. And some critics have charged that the cuts the Hunter Group has suggested make "it harder, not easier to stanch losses." For example, the New England Medical Center found it difficult to collect outstanding bills after it made cuts in the billing department. Others, who have seen jobs cut, have complained that lower staffing levels have caused additional problems. Dr. Lee Goldman, acting dean of UCSF medical school, said of his center's experience with Hunter Group, "What is really at risk here is clinical innovation, the interface between a faculty that does research and tries to make advances and the clinical care. The U.S. is indisputably the leader in this. ... Now everyone comes here. It's a great American triumph. But we could screw it up." But Hunter says "the real choice facing most troubled medical centers ... is not one of preserving research financing or cutting it back; it is a choice of ruthlessly cutting expenses or closing the doors. Like it or not, the money to operate the old way simply will not be there in the future." Hunter doesn't appear to have much good news in store for medical centers, as he predicted revenues falling at 10% annually "for the foreseeable future" (Freudenheim, 10/31).