There's new blood at the top of Minnesota's best-known hospital and clinic chains -- Mayo, Park Nicollet and Allina.

The three CEOs share some similarities: All were picked from within. All succeed visionary leaders. And all will have to steer their organizations through some of the most challenging times in health care -- a period of rising bad debt, patients with ever-higher expectations, and reform at the state and federal levels. All three spoke recently with the Star Tribune about the challenges facing their organizations and the outlook for health care in Minnesota.



Age: 58

Education: University of Minnesota Medical School

Residency (internal medicine): University of Minnesota

Family: Wife Susan, five children, two grandchildren

Replaced: David Wessner

Domain: Methodist Hospital in St. Louis Park and a chain of primary care and specialty clinics.

The son of a rabbi, David Abelson says he's guided by the spiritual side of medicine and awed by the "fragility of life."

Yet his career path shows a guy who's driven by cold, hard results.

Since joining Park Nicollet in 1983, Abelson has worked on improving systems of care. In the mid-1980s, during the age of managed care, he sent nurses and social workers to the homes of the frail elderly, to check on them and keep them out of the hospital. More recently, he spearheaded a pilot program for patients with congestive heart failure. Patients discharged from the hospital were asked to phone in regularly, enter their weight and answer a short list of questions. If they reported weight gain or shortness of breath, a nurse would call back.

The program slashed hospital readmission rates and saved Medicare $6 for every $1 invested. But Park Nicollet lost money on it. "It was not a sustainable model," Abelson said.

Like other Twin Cities health systems, Park Nicollet had a terrible 2008. It lost millions in the Wall Street crash even as patient volumes dropped because of the recession and cutbacks in insurance coverage.

To cope, former chief executive David Wessner cut jobs and closed clinics. At the time, that sparked "fear and anger" among doctors and nurses, Abelson said. But the moves helped the organization turn around, and Park Nicollet finished 2009 with an operating margin of 3.5 to 4 percent.

Going forward, Abelson believes Park Nicollet will benefit from being small and integrated; it owns just one hospital and employs 7,100 people, far fewer than giants such as Allina and Mayo.

Now, for example, a patient who comes in with a lung ailment can feel "like a pinball in a pinball machine," he said, pinging from primary care doctor to pulmonary doctor to radiologist to oncologist. Park Nicollet is trying to bring all that together.

"We do some of that very well," he said. "We're positioned to do that better."



Age: 50

Education: Augustana College, Rock Island, Ill. (Biology)

University of Minnesota, master's in health care administration

Family: Wife Dianne, two teenage sons

Replaced: Dick Pettingill

Domain: 11 hospitals, 60 clinics

Ken Paulus has a competitive streak. He has trained faithfully for triathlons for years and, having just turned 50, thinks his time has arrived.

"This is my year," he said in an interview last week.

That's true in more ways than one.

Paulus, who joined Allina four years ago as chief operating officer, has taken over the top job at the Twin Cities' biggest hospital and clinic chain.

A Wisconsin native, he went to the University of Minnesota, then worked at health systems in San Diego and Boston before returning to Minneapolis to join Allina. Paulus said he wanted his two sons to be raised in the Midwest.

Shortly after his arrival, Allina launched a major effort to measure their performance at getting patients the right care at the right time. By doing things such as reducing hospital-acquired infections, Allina improved its hospital quality measures from the 60th to the 90th percentile in the country.

Knowing that the changes would rile physicians, Paulus' predecessor, Dick Pettingill, hired physicians to lead the quality charge. Paulus is equally sensitive to the fact that he's a non-physician leading an organization full of them: He says he never gets his picture taken without a doctor by his side.

Like other Twin Cities hospital organizations, Allina, which has 24,000 employees, has slashed costs during the recent recession. It consolidated its many business offices into one, laid off workers and declined physician requests to add new MRI and CT scanners. And the pain isn't over yet.

"We're preparing for what we think will be three very difficult years," Paulus said.

Health reform -- if it happens -- will likely bring lower reimbursements for hospitals as the federal government stretches to pay for expanded insurance coverage.

In this lean environment, Paulus thinks prevention is going to be more important than ever. "Just like a financial adviser keeps your financial house in order, our job should be to keep your health home in order," he said.

In that vein, Allina recently launched an ambitious experiment dubbed The Heart of New Ulm, aimed at cutting the number of heart attacks in the city over 10 years. A big part of that involves cajoling New Ulm's 10,000 residents to eat better, exercise more, lose weight and stop smoking.

Paulus practices what he preaches, rising at 5:30 each morning to work out. He thinks Minnesotans in general can stand to get healthier.

"You take one walk around the Minnesota State Fair," he said, "and you can tell we're not there yet."



Age: 58

Medical education: Dalhousie University, Halifax, Nova Scotia, Canada

Residency (neurology): Dalhousie University, University of Western Ontario

Family: Wife Patricia, two grown sons

Replaced: Denis Cortese

Domain: Mayo Clinic's three locations in Rochester, Minn.; Jacksonville, Fla., and Scottsdale, Ariz.; as well as Mayo Health System.

John Noseworthy is the quintessential Mayo doc -- a true believer.

"We have 59,000 employees and all come to work and do one thing: meet the needs of the patient," he said recently.

But he's also a pragmatist, and he knows that even Mayo has to change with the times.

For more than 100 years, patients have come from around the world to Mayo and Mayo has done well by them. Now it's facing some of the toughest financial times since the Mayo brothers started their group practice model in the Minnesota countryside.

"It's a challenging landscape -- spiraling health care costs, the worst economy in 70 years, consumer-driven health plans, patients are getting older, patients have different expectations," Noseworthy said.

Faced with falling Medicare payments and a sharp drop in its investment portfolio, Mayo barely broke even in 2008 on revenue of $7.2 billion. While Mayo is nonprofit, it does a lot of expensive education and research. Financials for 2009 aren't available yet, but Noseworthy says Mayo recovered and had a strong year.

Noseworthy, who recently led a task force -- "Mayo Clinic in the Year 2020" -- thinks that in the future Mayo will reach out more: seeing patients remotely, partnering with other health care organizations and extending its influence around the country and the world. It's already made moves into the Twin Cities market. Mayo has announced plans for an outpost at the Mall of America and is running radio spots reminding people that most insurance plans pay for care at Mayo and that they don't need a referral to be seen.

Part of the challenge, Noseworthy thinks, is a perception problem.

"People think Mayo is for the rich and famous," he said, yet "half our work is with Medicare patients."

In today's world, he said, it's not enough to be a trusted name: "You need to [be] trusted and affordable."

A Massachusetts native who went to medical school in Canada, Noseworthy was recruited to Mayo 20 years ago. He has no regrets.

"I haven't had a bad day in 20 years," he said. "You can't possibly have a bad day if you work at Mayo Clinic."

Chen May Yee • 612-673-7434