Retiring PBMC leader Andrew Mitchell reflects on 20 years at the helm and the transformation of a struggling community hospital

As endings go, this one was a bit anti-climactic.

The CEO who transformed Riverhead’s struggling community hospital into a regional medical center in his 20 years at the helm sat alone in his corner office, his desk and conference table empty, the walls bare, the lights out.

Andrew Mitchell looked uncharacteristically relaxed, dressed in casual clothes, leaning back in his chair as he gazed out the window, watching an osprey deliver a fish to its hungry offspring in the nest. It’s an unusual place for an osprey nest, atop the neighboring bank building, and Mitchell, an avid and talented nature photographer in his spare time, is going to miss his neighbors.

Sixteen months ago, Mitchell transitioned from running Peconic Bay Medical Center to leading PBMC’s foundation, a separate nonprofit organization he established years ago to better position the hospital for fundraising.

The foundation was an important step for the hospital, and the next logical one after Mitchell pulled then-Central Suffolk Hospital out of the existential crisis it was facing upon his arrival in May 2001.

Mitchell, a Yale-educated health care administrator raised in Bay Shore, said he was lured to Riverhead because he loves the challenge of “a turn-around.” Central Suffolk Hospital certainly presented that challenge.

“In my first couple of weeks, I was looking at a stack of repossession notices,” Mitchell recalled. “Creditors wanted the hospital’s CT scanner, MRI, oxygen tank and many other pieces of vital equipment. The hospital hadn’t paid its bills and couldn’t pay them,” he said.

“Two or three weeks later, KPMG [the hospital’s auditors] issued a ‘going concern’ statement, basically saying we were going to be out of business by the end of the year,” Mitchell recalled. “It was bad. We didn’t have supplies, stuff for the operating room. It was bad,” he said.

“The hospital’s billing system had collapsed, the whole computer system was end-of-life. And they couldn’t bill for any of the services that were being provided,” he recalled. “I was always concerned about whether or not we were able to make payroll.”

“So that was the really challenging first year, trying to just keep the place going without having any money to do anything,” Mitchell said.

Did he know what he was getting himself into when he left his position as an administrator with the North Shore/LIJ Health System for the job at Central Suffolk?

“I knew there were financial challenges,” Mitchell reflected. “I didn’t know the scope of it.”

Despite the challenges that greeted him in Riverhead, Mitchell said he saw the hospital’s “tremendous potential” from the start, thanks to its location and the growth that was occurring in the area, with major development on Route 58 breaking ground and the the 55-and-older communities being built.

“It just had to get through the crisis,” Mitchell said. “So it was definitely crisis management for the first year or two.”

He went to the State Dormitory Authority, which held the bonds on the hospital property. The authority was holding a debt service reserve that Mitchell tried to get released. Authority officials wouldn’t go for it and Mitchell said the hospital would have no choice but to default. “We went back and forth and ultimately they agreed to give the hospital a $2 million Health Care Restructuring Act loan,” Mitchell said.

“Then we went out and rapidly selected the Siemens SMS computer system that North Shore was using, one that I’d used my entire career. We hired some people and did a record install of that — the fastest one ever done,” he said. Then he hired a few people he’d worked with at North Shore “to straighten out the patient billing in the business office. And the money started coming in. And a lot of money that started coming in, because so much hadn’t been billed out,” he said.

Mitchell said to raise cash, the hospital also sold a couple of residential properties that had been donated over the years, “just to keep the payroll paid, basically,” he said.

Hospital board members who were active when Mitchell was hired say he was exactly what Central Suffolk needed.

“He was no doubt the right person at the right time,” said PBMC Foundation board member Gordon Huszagh, who was on the hospital board when Mitchell was hired.

Board members recall Mitchell’s efforts to improve the hospital’s facilities — and its reputation — even as it struggled to keep the lights on.

There was the emergency room “First Aid” project, conceived after Mitchell volunteered to help build a Habitat for Humanity home. In the months following his arrival in Riverhead, Mitchell and hospital board members got materials donated and rustled up about 100 volunteers to give the Central Suffolk ER a desperately needed facelift. The “First Aid” effort saved the hospital over $100,000 and received national recognition by the American Hospital Association.

“It was a defining moment for me,” Mitchell told RiverheadLOCAL in a 2011 interview. “It really epitomized the spirit of the Riverhead community and the spirit of the staff at the hospital. Rotary, school kids, business people, the Coast Guard, the fire department, the ambulance corps…everyone in the community came together and we rebuilt an emergency room in four days, without any professional help. And it worked,” Mitchell said.

“It told me that if everyone came together and just rolled up their sleeves, we could do anything,” he said.

“Andy was always a roll-up-the-sleeves, hands-on kind of leader,” Huszagh said, crediting Mitchell’s approach with his ability to “relate to everyone on the staff,” whether physicians or buildings and grounds crew members.

He made a few key hires to help tackle the hospital’s problems.

“We said, we’ve got to put a stake in the ground and modernize this place so that we can attract quality doctors,” Mitchell recalled.

He also hired planners to develop a strategic plan for the hospital.

“We went out to the community and asked people what they thought of the place and what they needed,” he said. “It was very clear that people came to the hospital for emergencies…but for any of the surgical services, they were going elsewhere,” he said. “And the way the reimbursement systems are designed, it’s surgery that is the profitable business. So we had to figure out how we were going to grow our surgical business.”

Mitchell said specializing in joint replacement was a “no brainer” given the area’s existing demographics and the construction boom in senior housing. Updating the operating rooms wouldn’t require a ton of capital, he said. The hospital already had the skilled nursing facility for rehabilitation and a home care agency for home care.

“So we hired some top-flight orthopedic surgeons,” Mitchell said, noting that surgeons who coming out of the best programs didn’t want to go work for groups anymore. They wanted to become employees of healthcare systems — a harbinger of things to come in the medical profession.

The joint replacement program “became a real hit,” Mitchell said. Its success was the catalyst for Central Suffolk to be able to go out into the bond market again, Mitchell said.

“Two years after having a going concern letter — where no one was going to touch the hospital’s bonds.” It took two attempts, but the bonds sold.

“We used [the bond proceeds] to fix major infrastructure issues and build the Kanas surgical wing with state-of-the-art operating rooms, and that allowed us to continue to recruit top-flight surgeons,” Mitchell said.

In 2004 the hospital formed its foundation, which quickly kicked off its first capital campaign — to help fund the surgical pavilion.

Central Suffolk then began hiring primary care physicians, a move Mitchell said was very controversial at the time. “Hiring physicians in general was controversial, never mind primary care physicians,” he said.

“And then a watershed moment came, when one of the major primary doctors in the area said he couldn’t work in New York anymore. It’s just too expensive and he can’t keep his practice going. And that’s when we began to acquire practices and help the primary care physicians. That was the beginning of the medical group,” Mitchell said.

“If you look back on it, after the fires were put out and the initial bond issuance got done, the future success would be generated from the foundation’s success, the formation of the multi-specialty medical group and a unique commitment from the staff and the community as a whole, who were completely committed to the success of this hospital. They were not willing to let it fail,” Mitchell said.

“So you take those ingredients, and you throw them into the pot, and you know, the place was ultimately destined to be a great success. And it just kept on building on itself. It all just kept on clicking,” he said.

In 2006, the hospital changed its name to Peconic Bay Medical Center. In 2012, it rebranded as PBMC Health, a more inclusive name to include the medical center, the doctors’ offices and the then-under construction Manorville campus, which was to house specialty practices and an urgent care center.

“He basically transformed our little community hospital that no one wanted to go to into a hospital of choice,” said PBMC Board Chairperson Sherry Patterson, who joined the board two months before Mitchell arrived.

After completing a $15 million capital campaign for the Kanas surgical center, which opened in 2009, the PBMC Foundation, a separate nonprofit entity, continued to aggressively fundraise for capital improvements. In the past decade alone, the foundation has raised $112 million, Mitchell said. The fundraising has allowed the hospital to improve and increase its facilities, including the construction of a new $67.8 million critical care pavilion.

For all its growth and success, Peconic Bay, like all independent hospitals, remained under a great deal of economic pressure to become part of a larger health system.

“In order to take things to the next level, you’ve got to have the financial capital, and you’ve got to have the intellectual capital. And that’s the conclusion we came to. And then it was just a matter of finding a partner that shared that vision, and demonstrated through other mergers along the way that it was credible and it could execute,” Mitchell said.

In 2015 PBMC announced an agreement to merge with North Shore-LIJ, becoming the system’s 21st hospital, including at the time three others in Suffolk County.

The merger with North Shore — which would be rebranded as Northwell Health by the time the merger was completed — was “mission-driven,” in that it would enable PBMC to provide urgently needed services on the East End, most notably cardiac care, cancer care services and trauma services.

Northwell immediately set out to establish an interventional cardiac care program in Riverhead, to provide East End residents who need coronary angioplasty with the lifesaving procedure locally, avoiding a long ambulance trip to Stony Brook University Hospital. In an emergency, quickly clearing and stenting a blocked artery saves lives and heart muscle, and North Shore’s commitment to immediately establish that program in Riverhead was a driving factor for PBMC’s board of directors.

“If you had a heart attack on the East End, you were pretty much guaranteed to have heart damage. There was no way, given the geography, you could get to a cath lab quickly enough,” Mitchell said.

PBMC’s cardiac cath lab opened in October 2018. And it did so under the auspices of Dr. Stanley Katz. “Northwell agreed to allow probably the top interventional cardiologist in their entire system, and the chair of the entire system…to come out to the community hospital to get the program going and stay here. That’s remarkable, Mitchell said.

The medical center has also since been certified as a Level III trauma center.

“So philosophically, the Northwell merger was right on target,” Mitchell said. It guarantees PBMC will continue to grow to provide the East End with the medical care and health services it needs for years to come, he said.

The $14 million purchase of the 24-acre former McGann-Mercy campus in 2020 was “crucial,” Mitchell said. It allows the medical center room to grow.

PBMC is the largest private employer in the Town of Riverhead. And it continues to grow, with ripple effects throughout the local economy.

“The economic multiplier of the hospital is huge. I’m not sure everyone recognizes it,” Mitchell said. “Look at all of the medical office development that’s gone on. There’s a lot of spin-off economic activity from having all of these people and services being provided locally. And they’re generally well-paying jobs, with good benefits.”

Last year, Mitchell handed the reins of the medical center to PBMC Deputy Executive Director Amy Loeb, who joined the Riverhead hospital in 2016 as its chief nursing officer.

Together, they had guided the hospital through what Loeb called “the toughest year in modern health care” — 2020, the year the COVID pandemic arrived.

Mitchell stayed on as president of the PBMC Foundation, and moved his office out of the hospital and into PBMC’s Entenmann Campus on East Second Street, where the foundation offices had relocated after the hospital bought the former Suffolk County National Bank’s headquarters and other buildings from SCNB’s successor, People’s United.

On his last day with PBMC, Mitchell sat in his office on the third floor of the building, watching the ospreys and reflecting.

Mitchell’s tenure at PBMC was sometimes tumultuous. The hospital’s alliance with the other two hospitals on the East End, forged to gain more clout in negotiating reimbursement rates with insurance companies, was often rocky. PBMC’s relationship with Stony Brook University Hospital, with which it had contracted to operate its emergency room was fraught.

Mitchell could be blunt and sometimes brash, and, in an atmosphere of sometimes not-so-friendly competition, was regarded by other hospital administrators as aggressive in his pursuit to make PBMC a regional medical center.

A state commission formed to assess health care facilities and make recommendations for consolidations and closings said PBMC, Eastern Long Island Hospital in Greenport and Southampton Hospital should become part of a health system led by Stony Brook. But Mitchell and the PBMC board embarked on an independent investigation that led to a decision to merge with North Shore-LIJ instead.

The decision angered then-State Senator Ken LaValle, a champion of Stony Brook University who pushed for the three East End hospitals to form a Suffolk County health system with the university hospital as its hub.

“I’m not willing to sit by and watch health care on the East End be ceded to a Nassau County facility,” LaValle told RiverheadLOCAL in March 2015, after PBMC announced its intention. “We’ll see if there are antitrust violations. A Nassau County hospital coming into Suffolk would be a monopolistic system,” LaValle said.

“We’ll see if the health department will approve this,” the senator said.

Ultimately, the state health department did approve the merger later that year. Southampton and Eastern Long Island hospitals subsequently became part of a new Stony Brook system.

Mitchell said he feels good about where he brought the Riverhead hospital in his 20 years as its president and CEO. It grew to become the regional medical center he envisioned, it’s in a solid financial position and its future prospects are bright as an important facility in the largest hospital system in the State of New York.

But at 64, Mitchell is not quite ready for full-time retirement. He’s already formed a new company, named for the large raptor that fascinates him: Osprey East Development.

While his vision for the company is still a work in progress, Mitchell said he is looking to combine his love of construction with his love of philanthropy — pursuing development projects for nonprofits, perhaps assisting them in fundraising efforts for capital projects, clearly something he knows a thing or two about.

Wherever that pursuit takes him, Mitchell said, he is looking forward to a less consuming work life and spending more time with his wife Mary and their family, especially their grandchildren.

“Change isn’t something to be scared of. It is something to be excited about. Though the natural tendency is to worry about change,” he said.

He said imparting that philosophy at Central Suffolk was a core goal when he came to Riverhead.

“I mean, at the end of the day, did we fix the emergency room? Yes,” he said, referring to what he calls his “Habitat for Humanity” emergency room rehab in 2001.

“But the real intent of that was always to have the staff do something that they could be proud of. And they could realize we weren’t this downtrodden thing that couldn’t get out of our own way. We could do something. If we got our act together and we put a combined effort together, we could accomplish anything we wanted to,” Mitchell said.

“That was a big transformation,” he said. “Because there was something — a sense of a defeatist attitude. I mean, certainly the staff had been through all kinds of crap. I mean, they couldn’t get supplies, they didn’t know if their paychecks were going to clear. So there was this whole defeatist attitude,” he said.

“And it was true pretty much of Riverhead at the time, too,” Mitchell said. “This town that was very poor, socioeconomically. And you had to see the potential in both Riverhead and the hospital. It was there — it was totally there,” he said.

“Gordon [Huszagh] always talked about the importance of execution. I’ve known people that are brilliant that can’t execute. We probably weren’t brilliant, but we executed. We did. And we persevered, no matter what got thrown our way. We just kept on going at it.”

Disclosure: The author worked at Peconic Bay Medical Center as vice president for external affairs and foundation from July 2009 to July 2010.