Mercy's new president pinpoints challenges

In the face of industry challenges brought on by the Affordable Care Act, an aging population and a looming doctor shortage, Dr. Alan Scarrow takes the helm of Mercy’s local operations.

On Jan. 26, the St. Louis-based hospital system formally announced 12-year neurosurgeon and clinic leader Scarrow as president of Mercy Springfield Communities. In the role, Scarrow manages a footprint of hospitals and clinics in Springfield and surrounding communities, including Aurora, Rolla, Mountain View and Berryville, Ark.

Scarrow is aware of the headwinds as he leads an area operation that generated around $1 billion in 2014 revenue and employed nearly 10,000 people.

“There is no better time to be in health care. If you want to have big challenges, what better place to be in than in this place and this moment,” Scarrow said. “Sure, the challenge is great, but that means the opportunity is equally great.”

With Medicaid expansion taking place in other states, but not on the horizon in Missouri, many rural health systems are poised for shrinking reimbursements. It’s a changing landscape that led Skaggs Regional Medical Center to merge with CoxHealth a little over two years ago and could mean similar partnership opportunities for Mercy.

“Over the next few years, health care is going to change even more rapidly. Not all health systems are going to survive,” Scarrow said from his Fremont building office. “I would argue that those that have the culture to grow and lower their costs are the ones that will be successful.”

Scarrow, previously the president of Mercy Clinic Springfield Communities, has worked as chairman of neurosurgery and president of Mercy Clinic Virtual Care since he came to the system in 2003. He completed his medical and law degrees from Case Western Reserve University and his neurosurgery residency at the University of Pittsburgh, where he met his wife, Dr. Meera Scarrow, a Mercy OB-GYN who also holds a law degree. In their spare time, the Scarrows run a beef cattle farm and sell their Ozarks Natural Foods brand at Farmers Market of the Ozarks.

Scarrow took over for Jon Swope, who had filled in as interim president since Dr. Robert Steele moved to Little Rock, Ark., in May to take a job as chief strategy officer for Arkansas Children’s Hospital. Scarrow said he has been working under a new organizational structure he helped create last fall.

“A lot of the senior leadership started sitting down and saying, ‘OK, let’s look at our history here. We’ve been an integrated health system since about 1996, so we’ve been in this game a long time. And we’ve grown this hospital and clinic [operations] in silos.’ We had separate administrations, and it began to feel like, in many ways, we were beginning to trip on our own feet,” Scarrow said. “Our industry is changing at a very rapid pace. And if the industry is changing faster than we are, then the end is in sight for us.

“We need to be on the cutting edge, not the bleeding edge.”

In early November, Scarrow said Mercy modified its administrative structure to integrate clinical services with hospital operations. He said the 18 vice presidents charged with leading Mercy Springfield Communities are more unified in working across systems that largely had operated independently.

“It’s no longer that you are an advocate for your patients or section or specialty, you are accountable for results, you are responsible for what happens in that integrated clinical service going forward,” he said. “You’ve got a margin and you’ve got a mission, and you can’t take your eye off of either one of them.”

As a board member for Mercy Springfield Communities, SRC Holdings Corp. President and CEO Jack Stack was involved in the process to secure Steele’s successor. He said Scarrow is realistic about the challenges and can learn from his mistakes.

“There’s no question he is a strong personality, and I think he has the capabilities of being a strong leader,” Stack said. “I’m impressed that he’s digging in. He’s not making any false promises. A lot of people don’t like change and that’s an industry that’s changing like crazy. So, you need someone who has the skill set of a doctor and the common sense of a businessperson.”

Among the challenges Scarrow faces is a potential doctor shortage.

In 2013, the Association of American Medical Colleges projected the health care industry would need 91,500 new doctors by 2020 and 130,600 by 2025 to keep pace with demand. According to the U.S. Bureau of Labor Statistics, job prospects for physicians and surgeons is projected to grow 18 percent from 2012 to 2022, faster than the average for all occupations.

Scarrow said it’s not clear how the health system will attract and retain the best doctors amid health care reforms that demand lower costs. But the integrated approach is the broader path. Scarrow said administrators would closely watch the relationships between costs, patient outcomes and experiences, and complications.

“We have to grow just like any other health care system needs to grow. In nature, there is growing and there is dying,” Scarrow said. “And if you’re not growing, you’re going in the other direction.”

Before Steele’s exit, there had been a push for unionization among some nurses. Scarrow said that talk seems to have died for now following what he described as open dialogue and a direct effort to ensure staffing needs were being met.[[In-content Ad]]