Primary care: Thomas Priselac, head of high-profile Cedars-Sinai Medical Center, can't escape industrywide problems of rising costs, nurses' union unrest. (People).

IT'S a tough time to be a hospital executive -- just ask Thomas Priselac, chief executive for .the past nine years at Cedars-Sinai Medical Center the largest private hospital in the west with 750 beds and a $1 billion annual budget. Health care inflation is out of control and fingers are now pointing to doctors and hospitals. Yet as some employers drop coverage and the county health department weathers yet another fiscal crisis, thousands more uninsured and underinsured are showing up at Cedars-Sinai's doors. The hospital spent $44.7 million on such patients last year, up from $24.5 million in 2001.

Cedars-Sinai nurses recently voted to join the California Nurses Association after a tough campaign by both sides. Now the hospital is disputing the vote with the National Labor Relations Board, accusing the union of interfering with a fair election, while the union accuses the hospital of intimidating nurses during the campaign.

Meanwhile, the Westside complex continues to be on the cutting edge of treatment. Each year, it spends $75 million on medical research. It's also in the midst of a $620 million building and capital improvement program.

Question: Health insurers are saying that medical care providers, as well as drug companies, are the main reasons for skyrocketing health care premiums. Do you buy that?

Answer: It's true that the amount for healthcare spending for hospitals has been increasing in recent years, but the (biggest) drivers are increased use of services. You have the aging population and increases in technology and medical knowledge resulting in a very different product. If somebody comes in today with a heart attack, what hospitals and doctors are able to do is very different than 20 years ago or even 10 years ago.

Q: Are aging Baby Boomers seeking more medical services?

A: Absolutely. It really started to first show up in the last three or five years, and it's certainly showing up in increased use of orthopedic services. It's also showing in cancer and cardiac services.

Q: Are labor costs increasing?

A: There is more demand for services so there is more demand for people to provide the services. This is a very labor intensive business.

Q: Is the key reason you opposed the union drive because you would have to cut an expensive labor pact with nurses, thus driving up already escalating costs?

A: People often assume that is a driver in the organization's decisions. I don't believe that is the case. The marketplace for personnel is really what determines things of that nature.

Q: So what is the marketplace for nurses for Cedars-Sinai?

A: The No. 1 thing we have to do is to continue to provide a competitive wage and benefit program. Our philosophy is to always make sure we are in the top 20 percent in the community, which is frankly, if you want to be a leader, the only realistic way to look at it.

Q: So why did the hospital feel the need to oppose the nurses' unionization drive so strongly?

A: We believe that our ability to deal directly with our staff, nurses and others is the best way for us to achieve the institution's mission and achieve high quality health care.

Q: But the CNA says the hospital stepped over the line and intimidated nurses?

A: Those are false charges.

Q: Then why would the union make them?

A: I think the union feels very strongly about what it is they believe in, and so I think they engaged in a very aggressive series of tactics.

Q: The union also tried to personalize its campaign by accusing management of betraying the hospital's Jewish heritage and highlighting your salaries. How did you feel about this?

A: I didn't take it personally at all. That kind of tactic is a very common union tactic to try and draw lines between management and employees. I lived in a household where my grandmother and aunts and uncles were members of the unions associated with the various mills in the Pittsburgh area. The union was an issue around the dinner table and breakfast table.

Q: Wasn't that odd, then, finding yourself on the opposite side of the table?

A: Not at all. We believe that our model here works compared to what the union was advocating.

Q: But at this point why not just accept the vote, negotiate a contract with the union and move on?

A: We think the union engaged in activity that prevented (a fair and free election) from occurring.

Q: In order to maintain your position as a leader you are also pursuing a $620 million capital improvement and building program. Is that level of spending truly necessary?

A: Everything we do is in response to the services we feel the community is demanding. One of our biggest challenges is that we are running full. We've got people who spend an inordinate amount of time in the ER department. People are coming here because we provide high quality services, and we would like to continue to meet the needs of the community.

Q: One of the ways insurers have tried to deal with rising hospital costs is by putting hospitals in tiers, forcing patients to pay more for more expensive hospitals. Is this hurting Cedars-Sinai?

A: Each of the health plans has taken a slightly different approach, but in some cases we have found ourselves in a tier that would basically require a person to pay extra out of pocket in order to come to Cedars-Sinai.

Q: Is that fair?

A: The notion of establishing tiers is rooted in the concept that one hospital is more efficient than another. We have a broader array and a higher volume of more complex services than just about any other hospital in the state. Nobody has the high volume of high-risk obstetrics, neo-natology, cardiology, highly complex cancer cases that we do.

Q: How do you offset that in your negotiations with insurers?

A: To the extent that people believe you are a high quality provider does give you an advantage.

Q: So the reputation of being the "hospital of the stars" helps?

A: There is media attention that comes with that, but more importantly it helps when people see that individuals who have the choice to go anywhere want to come to Cedars-Sinai.

Q: Have the troubles of the county health department, which have resulted in the closing of primary care clinics, made it worse?

A: We have seen an increase in our utilization of our emergency department by all groups, including people who are uninsured.

Q: Is there a way out of this mess?

A: The most pressing need to be solved is how to expand access to health care coverage than exists today. An important first step in that is to see if we can get an agreement on an essential benefits package (each patient would be guaranteed health coverage.)

Q: Are you talking about some new big federal program?

A: Finding consensus on health care policy is so complex that it's more realistic and likely to emerge on a state by state basis. People really need to come to a conclusion about what they really think about health care. Is there a social benefit that people think needs to be provided.

Q: How difficult is it running a hospital right now?

A: It's as difficult now as it ever has been.

Q: How many hours do you put in a week?

A: I am here no later than 8 a.m. and I rarely get home before 7:30 p.m., and I work in one way shape or form on weekends and in the evening catching up on paperwork.

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Thomas M. Priselac

Born: 1951, Wilkensburg, Pa.

Title: President and chief executive

Organization: Cedars-Sinai Health System

Education: Bachelor's in biology, Washington & Jefferson College; Master's in Public Health, Health Services Administration and Planning, University of Pittsburgh.

Career Turning Point: Attending career night in college.

Personal: Married, two sons

Hobbies: Participatory sports of all kinds.