Kathryn Correia's career in hospital administration did not get off to the most glamorous start.

As part of her yearlong training at Hennepin County Medical Center in 1979, Correia was asked to conduct a study on restroom accessibility for people with disabilities.

"I measured every toilet," Correia recalled.

At the time, Minneapolis was brimming with talk about building a state-of-the-art sports facility, and HCMC was concerned about how construction of the nearby Hubert H. Humphrey Metrodome would affect parking. Correia's task: counting parked cars at different times of the day.

"Now (the stadium) is obsolete," she said. "What does that tell you about how old I am?"

Correia, 54, who earlier this year became the first new chief executive officer in more than two decades at the St. Paul-based HealthEast system, clearly doesn't mind poking fun at herself.

But her stories also explain something deeper about her appreciation for the complex array of things that must come together in a well-functioning hospital - everything from top-notch surgical skill and compassionate nursing care to more mundane matters, like parking lots and toilets.

Correia's curiosity about health care goes back to childhood, she said, when she visited the Cleveland Clinic for a pediatric heart condition.

"When I would go (to the clinic), I was always snooping around and trying to figure out what was going on," Correia said.

"I think the same thing back then is what intrigues me today, which is: How does this all come together?" she said.


"In today's world, we would say: How do you make this as seamless, as safe, as efficient as possible?...Back then it was like: How do all these people know what to do when? And how do they get that all done?"

Correia is only the third CEO to run HealthEast, an unusual conglomeration of faith-based hospitals created through a series of hospital mergers in 1986 and 1987.

Those mergers ultimately resulted in the closure of two St. Paul hospitals that were founded by Baptists - Midway and Mounds Park - as well as the shutdown in 1994 of Divine Redeemer Hospital, a Catholic medical center in South St. Paul.

The remaining hospitals include the oldest hospital in the state, St. Joseph's Hospital in St. Paul, which was founded by Catholics in 1854. Lutherans founded St. John's Hospital in Maplewood and St. Paul's Bethesda Hospital, where Correia's office is located.

HealthEast opened Woodwinds Health Campus in Woodbury in 2000.

"This is really an ecumenical system," Correia said. "There's an immediately humanistic, pretty wide embracing of diversity in this organization - a lot of respect for people. The culture here is the first thing that you notice about HealthEast and how different it is.


From a financial perspective, the job of running HealthEast isn't the most enviable health care post in Minnesota. Bond rating agencies, for example, are more impressed with the larger, more profitable Mayo Clinic and Allina systems.

A February report from Fitch Ratings, by contrast, noted that HealthEast's main credit concern is the system's "weak liquidity position, which provides HealthEast limited financial flexibility."

The federal government's overhaul of the health care system may spur further consolidation among hospitals, said Steve Parente, a health economics professor at the University of Minnesota. If that happens, systems like HealthEast must decide if they have the strength to take over other hospitals or will be acquired by someone else, Parente said.

Compared with other hospital groups, HealthEast has a relatively low number of "days cash on hand" - a common benchmark for assessing the financial strength of hospitals. Considering the financial position, HealthEast is more likely, Parente said, to become a larger system's target.

One potential acquirer: South Dakota-based Sanford Health, which Parente pointed out has in recent years merged with several hospitals and clinics in western and central Minnesota. Sanford is already advertising in the Twin Cities, he noted, though it doesn't have facilities here.

But Correia said there is likely less need for consolidation in the Twin Cities because so many hospital beds were taken out of the system in the 1980s and 1990s.

Making HealthEast more profitable clearly is a goal, Correia said. To some extent, the relatively low cash position reflects historical weakness in the finances of the hospitals that merged into the system, she said.

But with its history of consolidation, HealthEast already has improved its finances significantly, she said. The system has a dominant position in the east metro market, Correia added.

In 2010, HealthEast accounted for 37 percent of hospital admissions in St. Paul and the east metro's suburbs, according to the Minnesota Hospital Association. Hospitals currently operated by the Bloomington-based HealthPartners system had just under 30 percent of the east metro hospital admissions that year while the Allina system's United Hospital in St. Paul had almost 26 percent of admissions.

"We are in a relatively solid position," Correia said.

Raised in the town of Kent, Ohio, Correia was treated at age 1 for a heart murmur at the Cleveland Clinic. The heart condition resolved itself over time, Correia said, but her interest in health care remained.

She studied English at Denison University in Granville, Ohio, but moved to Minneapolis for the HCMC training program, which she learned of through a college friend, immediately after graduation.

From there, she obtained a master's degree in health care administration from Ohio State University and then worked for a doctor's practice in Columbus and a health system in Pennsylvania.

Finally, she was hired to manage a large primary-care clinic that's part of a health system based in Appleton, Wis. now called ThedaCare. The experiences gave Correia a strong background in running integrated delivery systems, where doctors and hospitals operate under the same corporate umbrella.

She's had a front-row seat for a couple of attempts at health care reform, including the version proposed in the 1990s by the Clinton administration.

"The original idea...was that physicians, hospitals and insurance would come together," Correia said. "The financing of health care and the delivery of health care would be paired to deliver the right incentives."

The idea was to tie payments less to reimbursements per procedure and more to better health outcomes for patients. But the Clinton legislation never happened and some of the health care changes implemented around that time didn't stick.

Health maintenance organizations, for example, fell out of favor as consumers viewed the insurance entities as restricting their choices of doctors and hospitals.

But some themes from that era, Correia noted, are back again with the federal overhaul of the health system passed by Congress and President Barack Obama in 2010.

A key piece of the legislation is the creation of "accountable care organizations," which again attempts to compensate doctors and hospitals according to patient outcomes, Correia said.

In a world of accountable care organizations, the success of health systems including HealthEast, Correia said, will depend on their ability to eliminate waste and be more efficient in providing care.

"Once you learn to see the waste, you understand how much there is - even in the best of systems," she said. "I think that that's health care's challenge. How do we see the waste? Because reducing waste...will improve quality."

It also will help deliver more profit at HealthEast. The system needs a stronger operating margin, both to improve its bond rating and to launch initiatives, Correia said.

Could those initiatives include building new clinics or running hospitals in new markets?

Correia said it was too soon to say.

But she added: "Every organization needs to develop or it will wither."

"Money in the bank," Correia added, "gives you an opportunity to try things and take chances."
