Straub’s new man with a plan

By Helen Altonn
Star-Bulletin

Jon Grimes had never been to Hawaii until arriving in January from Nashville, Tenn., to succeed Blake Waterhouse as Straub Clinic & Hospital's chief executive officer.

But while the climate and scenery here may be different, he says Hawaii's hospitals are facing the same problems as those plaguing mainland facilities.

Because of reduced payments for services and regulatory requirements, he said, "There are no parts of health care that are doing well economically.

"The problem is being phenomenally exacerbated by the Budget Balance Act of 1997. That's going to be the tsunami that's going to roll over health care providers across the United States."

A health care executive for 20 years, Grimes came from the Nashville-based PhyCor Inc., where he was vice president for development. Straub merged with the medical management company in January 1997.

Claiming deteriorating conditions under PhyCor, some Straub nonprofessional workers are seeking representation by the International Longshore & Warehouse Union. A National Labor Relations Board election is scheduled for Friday.

Accused by ILWU organizers of being anti-union, Grimes says, "We're not doing anything other than sharing the facts of our business with our employees.

Straub physicians praise Grimes' leadership. "He's the most forthcoming, unpretentious guy. He doesn't sugarcoat things," says Dr. George McPheeters, secretary of the board for Straub's physicians' corporation.

Grimes said he's spent his entire health career "in and out of Nashville -- the Silicon Valley of health care."

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'If you have providers that
can't reinvest in technology or can't
be competitive in attracting great
talent, there's certainly going to
be a price to pay for that.'

Jon Grimes
STRAUB CLINIC & HOSPITAL'S
CHIEF EXECUTIVE OFFICER

What brought him to Hawaii and Straub sight unseen?

"It's the challenge of one of the last integrated medical delivery systems in the United States," he says.

"There are not any like Straub where you have a long history of excellent physician delivery. ... A lot of providers across the U.S. have tried to re-create what's here and failed."

Grimes said Straub, with 200 physicians, a hospital and 15 neighborhood clinics, is always on top or shares the top in quality reports on morbidity and mortality across the country.

He pointed out that PhyCor has spent about $15 million in the past year on new technology at Straub.

Cost-cutting changes also have occurred: Home services were discontinued for about 150 patients; two Oahu clinics were consolidated with others; and about 40 employees were laid off.

Grimes said he doesn't anticipate any more such layoffs, pending unforeseen conditions, but restructuring to improve efficiency will continue.

He said Straub is seeing as many or more patients than a year ago and yet is "paid significantly less" than last year. "Therein lies the industry challenge."

In an attempt to fix their problems, he said Hawaii's health care providers "are talking about how to collaborate and coordinate better, how we cannot be all things to all people and what services we each should focus on without antitrust collusion."

Straub and the Queen's Medical Center are discussing options. Straub also is collaborating with other providers, including the Hawaii Medical Service Association, Grimes said.

"But ultimately, this is public policy. ... Until you get voters to raise a hue and cry in Washington, it won't change."

Grimes said his grandmother is 90 and both his parents have Medicare.

They're part of an aging population with increasing health care demands while "public policies in Washington are clearly in an opposite direction," he said.

"Home health care is a perfect example," he said, pointing out no home health care providers are breaking even and most have closed.

"Some states have none and it is one of the most cost-effective methods of care available."

Grimes said health care in Hawaii "is outstanding, very comparable to the best markets on the mainland, with very well-trained physicians."

But costs of providing health care are 140 percent to 150 percent higher in Hawaii while insurance payments are the same as areas with lower costs, he said.

"I am concerned about the industry's health," he said. "If you have providers that can't reinvest in technology or can't be competitive in attracting great talent, there's certainly going to be a price to pay for that."