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Allegheny Health Network CEO embraces challenges of hospital system management

Ben Schmitt
| Monday, June 27, 2016, 11:00 p.m.
Cynthia Hundorfean, the CEO of Allegheny Health Network poses for a portrait in her office on the North Side on June 27, 2016.
Nate Smallwood | Tribune Review
Cynthia Hundorfean, the CEO of Allegheny Health Network poses for a portrait in her office on the North Side on June 27, 2016.
Cynthia Hundorfean, CEO of Allegheny Health Network, in her office on the North Side on June 27, 2016.
Nate Smallwood | Tribune Review
Cynthia Hundorfean, CEO of Allegheny Health Network, in her office on the North Side on June 27, 2016.

Cynthia Hundorfean spent more than 30 years just up the road in Cleveland, but she hadn't experienced the welcome mat of Pittsburgh's skyline as a motorist emerging from the Fort Pitt Tunnel and had not walked through Point State Park.

She had never set foot in the city — not until she received a recruiting call in the fall to interview for the top job at Allegheny Health Network, the region's No. 2 hospital system.

Her explanation for not visiting is simple: As chief administrative officer at the Cleveland Clinic, she was always working.

“I kept my head down, and quite frankly, I loved working,” Hundorfean said Monday. “I had people come into my office and beg me to take a vacation. I had a lot of responsibility and worked a lot of hours. I never took day trips to places like Pittsburgh.”

The hustle and bustle of health care administration won't let up soon for Hundorfean, a self-described workaholic. On Feb. 10, she became president and CEO of the financially strained Allegheny Health Network and moved to a Downtown condo.

During an interview with the Tribune-Review, Hundorfean, 59, gushed about her new home's attractions, hockey team and friendliness. She acknowledged the challenge ahead in attempting to turn around cash-strapped AHN, which reported an operating loss of $17.8 million in the first three months of this year.

“I wish we had enough money to do what we need for all of our hospitals right away,” she said. “We need more capital in all of our hospitals. At Cleveland Clinic, if you needed something and presented a good business case, you usually got it. We have to work our way up that, which we will.”

The system's hospitals include flagship Allegheny General Hospital on the North Side, Forbes Hospital in Monroeville and West Penn Hospital in Bloomfield. Highmark, the region's dominant insurer, has invested more than $1 billion to prop up the health system.

“This has been new and difficult because I am new to Pittsburgh, new to the health care delivery systems in Pittsburgh and new to all of the competitive issues that go on here that I didn't really have a lot of exposure to,” she said, referencing the rivalry with health care giant UPMC. “Still, it's the best decision I have ever made. I always knew I wanted to do something different at the end of my career. I want to do anything and everything I can do to help them become successful.”

Hundorfean quickly began implementing her vision of a physician-led organization. She promoted Dr. Jeffrey Cohen, a urologist, as president of Allegheny General Hospital, and Dr. Mark Rubino as president of Forbes.

The changes mark an evolving industry belief that leaders immersed in medicine can help better direct hospital operations and key financial decisions.

“As the health care industry transfers from fee for service to quality and outcomes and patient experience, it's critical that you have physicians in leadership positions,” Hundorfean said. “It's very difficult for administrative people to be able to tell physicians how they need to practice and how they need to take care of their patients. It doesn't feel right.”

In a recent memo to AHN employees, she wrote: “It is not enough that our physicians are well versed in our enterprise goals and strategic plans — they must be leaders in setting those goals and crafting those plans, and they need to be the key drivers of our success in implementing them.”

Hundorfean said she was forthright about her philosophy during her interviews with Highmark and AHN.

“I was in an organization for 34 years where it worked very well,” she said. “I have to be confident in myself that I am OK with collective decision-making. I am perfectly capable of making all the decisions myself, but I know that it's better to do it collectively.”

Stephen Foreman, an associate professor of health care administration at Robert Morris University, said Hundorfean comes from a first-rate health system in Cleveland Clinic.

“As far as creating a physician-dominated organization, AHN has tried everything else. Why not try this?” he said. “I agree that medicine needs to be a team endeavor. I assume Highmark is also on board.”

From a financial standpoint, Foreman said improvements, if they occur, could take a couple of years.

“I think it takes one year to change the culture altogether, which she is working on now,” he said of Hundorfean. “They'll be lucky to see better results in the second year.”

Ben Schmitt is a Tribune-Review staff writer. Reach him at 412-320-7991 or bschmitt@tribweb.com.

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