Published April 2006

Larson at hospital’s helm
Providence CEO meets challenges of health-care industry

Snohomish County Business Journal/JOHN WOLCOTT Gail Larson’s chief executive’s office at Providence Everett Medical Center is small and modest but colorfully decorated with her collection of paintings by local artists. Beside her are flowers from her husband, Jack, and sons Erik and Hans, sent as congratulations for her 2006 Executive of the Year award.

By John Wolcott
SCBJ Editor

Her friendly, down-to-earth personality and her team approach to managing have made Gail Larson a highly popular and successful leader as chief executive officer of Providence Everett Medical Center, success that recently earned her the Snohomish County Business Journal’s choice as its 2006 Executive of the Year.

The honor was presented to Larson early in March by journal publisher Steve Hawes at the Snohomish County Economic Development Council’s quarterly economic update meeting. Only a few days before, Providence Everett Medical Center was chosen by a national rating service as one of the country’s top 100 cardiovascular-care hospitals and one of the top 100 hospitals overall in America.

Providence begins second century with health-care honors, expansion Providence Everett Medical Center was recognized early in 2006 by Solucient, a national health-care research service, as one of the top 100 hospitals in America for cardiovascular care and one of the top 100 hospitals in overall services nationally. Adding to the stature of the cardiovascular-care award was the fact that it made Providence one of an elite group of only 60 hospitals in the country who have received that honor four times. Excellence in health-care service has been a hallmark of the hospital since it was founded by the Sisters of Providence more than a century ago in Everett, in 1905, when the Catholic religious order bought the Monte Cristo Hotel for $50,000 and established a hospital with 75 beds. More than 400 patients were treated in the first year. By 1923, population growth in the city spurred the construction of a $200,000 hospital with 126 beds, built on a site east of the original hotel-turned-hospital facility. By 1962, a $145 million reconstruction project had upgraded the facilities and added a new service wing for obstetrics, radiology and dietary services. In 1994, 100 years after the founding of General Hospital — the city’s first hospital — the two facilities merged to become Providence General Medical Center. In 2000, the name was changed to Providence Everett Medical Center. Entering the next century of medical care in Snohomish County, Providence Everett Medical Center has embarked on a five-year, $500 million master plan to expand and upgrade its Colby Campus facilities, beginning with a $62 million cancer center now under construction. For more information, visit the hospital’s Web site at www.providence.org/everett. — John Wolcott, SCBJ Editor

Larson is chief executive of Providence Health & Services Northwest Washington Service Area, which includes Providence Everett Medical Center, a 362-bed general and acute-care hospital with two campuses — on Colby Avenue in north Everett and on Pacific Avenue on Rucker Hill.

She oversees one of the state’s busiest emergency rooms, serving nearly 100,000 patient visits annually. The hospital staff has more than 3,000 employees and nearly 1,000 volunteers, plus a medical staff of more than 600 medical professionals with 41 specialties.

More than 21,000 patients are admitted each year; more than 6,000 surgeries are conducted; and nearly 4,000 babies are delivered at Providence facilities, as well as serving more than 195,000 outpatients and providing more than 5,100 outpatient surgeries.

Also, the hospital opened the Everett Healthcare Clinic in January 2004 for those who are poor, vulnerable and often have no health-care insurance. During the past two years the clinic has served more than 13,000 patients there.

But Larson’s responsibilities also include the $56 million Pavilion for Women and Children that opened on the Pacific campus in 2002, the Providence Physicians Group of 70 health-care providers at 12 clinics in the county, and Providence Hospice and Home Care Services.

Specialized Providence services include a cancer institute, chemical dependency program, diabetes program, maternity center, heart and vascular institute, midwifery care and lactation services, musculoskeletal institute, nutrition center, a maternal-fetal medicine clinic in partnership with the University of Washington, a sexual assault center and a sleep health institute.

In the course of operating a regional health-care system that serves Snohomish, Skagit, Whatcom, Island and San Juan counties, there have been more than enough challenges, particularly in a public service arena that has its own inherent problems.

“We’ve had to deal with everything from figuring out how to provide services to Medicare and Medicaid patients, even though government programs don’t provide adequate reimbursement of our costs, to how to partner with Everett Community College and the University of Washington to train more nurses to fill shortages,” Larson said.

In 2003, less than two years after becoming CEO, she had to face every executive’s nightmare — how to make emergency staff cuts and pare budgets to cover unforeseen losses. A year earlier, the hospital had opened the Pavilion for Women and Children but didn’t realize it was losing money during its first year until final figures were tallied, revealing that some accrued costs hadn’t been included. By 2003, it was clear the hospital’s $333 million budget would show a $12 million loss for the year.

“We had to lay off about 50 employees, after many others left through attrition or retirement. But we were able to turn our finances around by making significant changes in various departments and focusing more on our core services,” she said, noting that the hospital staff “had to learn to think differently and be even more creative.”

Larson: ‘It’s a very human business we’re in’ When Gail Larson arrived from Ohio five years ago to take the reins as chief executive of Providence Everett Medical Center and its related facilities, she was returning to a region where she grew up. She attended Lincoln High School in Seattle and later met her husband of 41 years, Jack, an Arlington native, at the University of Washington. She left Seattle in 1972 for graduate studies at the University of California-Los Angeles, then worked in health care in California for 16 years before moving to Ohio for 13 years where she was CEO of three hospitals in the poorer sections of Cleveland. “When I came here, I was used to working in places where our mission was to serve everyone in the community and never turn them away. At Providence, the most exciting and moving thing for me has been seeing how the spirituality and mission of the Sisters of Providence touches people, including myself,” she said. She loves her career field, she said, because “through knowledge and skills we’ve been able to make an impact on people’s lives, improving their health. ... It always feels like I’m making a difference. ... It’s a very human business we’re in.” After she received her Executive of the Year 2006 award last month, in typical fashion she deflected the praise from herself to the Providence staff, board of directors and volunteers. “This isn’t about me; it’s an award for a team that makes me look successful because they do excellent work every day,” she said. When she has spare time, Larson loves to cook and enjoys reading. And, living near the Stillaguamish River in Arlington, she tries as often as she can to practice her fly-fishing techniques, quiet times that contrast sharply with her hectic, fast-paced days in health-care administration. She’s also a member of the Everett Rotary Club, the Washington State Hospital Association’s Strategic Planning Committee, the Tulalip Tribes Planning Commission and the American College of Healthcare Executives. — John Wolcott, SCBJ Editor

Staff looked at what suppliers they were using, the effectiveness of their outlying clinics around the county, whether they had too many people in various places, how the hospital compared nationally with others of its size, how efficiently its two campuses were operating and what the revenues were from each program.

“When we isolated some of the operations, we found we were losing money with our Mill Creek pharmacy, our rehabilitation services in outlying areas, in our occupational medicine services and with our very robust wellness program,” Larson said. “We sold some facilities, discontinued some programs and closed that pharmacy. They simply weren’t part of our core business.

“But we knew we needed to continue our sexual assault center, midwife services and children’s center because nobody else provides those services that are greatly needed by the county. So we had to figure how to finance them,” she said.

Once the adjustments were made, the hospital ledgers showed Providence Everett Medical Center had recovered from the $12 million loss, moving to a $19 million net income — even while it was maintaining some costly but necessary programs.

“In 2005, even though we lost $7 million in serving the poor — part of a $50 million subsidy we’ve provided between 1994 and 2005 for those who couldn’t pay for essential medical care — we ended the year with a net operating income of $34 million,” she said.

“This wasn’t done by Gail Larson sitting in her office, it was done by the work of the medical staff, the board of directors and the regional office of the Providence Health System in Seattle,” she said.

Now, as CEO, she faces the challenges of preparing for the second century of service to the community as population projections warn of a 50 percent growth rate that is expected to expand Snohomish County’s residents from 660,000 today to nearly 1 million by 2025.

Being a nonprofit organization receiving no public funding, Providence is counting on good management, efficient operations, financing help from the Providence Health System and an anticipated $40 million from the Providence General Foundation to meet the challenge of providing for county growth by expanding and upgrading its Colby Campus.

A five-year, $500 million, master-planned construction and reconstruction project has begun with the building of the first facility, a five-story, $62 million regional cancer center. Two tower cranes will arrive on site in April to erect the facility adjacent to the hospital campus. It is being made possible through an innovative public-private partnership that includes The Everett Clinic, Western Washington Medical Group and Northwest Washington Radiation Oncology Associates.

The scope of the project includes not only the new cancer center but also replacing older buildings dating back to 1924, constructing a new hospital tower with additional rooms and high-tech wiring, plus installing new equipment. Two new parking garages also will be built on the Colby Campus site to reduce parking congestion in the north Everett neighborhood.