Some years ago I was asked a question during a chance encounter on what was then the second fairway of Brandywine Country Club that I’ve thought of frequently since. The hospital Network I served as CEO had attempted to transition into an Integrated Delivery System and after nearly two years of negotiation had come to the realization that effort would fail.
I walked down that fairway irritated by a tee shot driven into the left fairway bunker. I was playing with the former HR VP of one of our member hospitals who, like me, had shown up to get a few holes in before dark and we agreed to play together.
Walking to our tee shots he asked the question. “What could you have done differently to get the Network hospitals to commit to integrate?”
I had visited this question constantly in my mind since failure had become obvious. Spent many a sleepless night and stared into the TV for hours on end without watching a thing.
So I was prepared for the question. And, my fellow golfer was now an Executive Recruiter with a successful practice of placing health care executives into significant leadership opportunities. My chance to impress.
I looked straight ahead, continued walking, thought a few seconds, and said:
“Not much.” And grabbed an eight iron, climbed into the bunker and missed the green to the right.
I couldn’t see it but I sure could sense the disappointment bordering on condescension I felt coming from my fellow golfer to my reply. And I understood then, and understand today, that response.
But I stand by the answer.
Let me explain.
When I was named CEO of the Network I replaced a gentleman who had previously been a VP of one of the member hospitals and had been named CEO of the Network not long after losing the competition to become CEO of that hospital.
My predecessor came into the Network CEO position believing he’d have license to do things. He didn’t. He felt stifled, pushed the issue, and found himself terminated.
I was a consultant working for the Network at that time and was engaged by the Network Board of Directors to serve as the Interim CEO while a search was conducted to identify a replacement.
I was Interim CEO of a hospital network, reporting to a Board of Directors comprised of hospital CEOs and community leaders serving as Chairman and Vice Chairman of each member hospital Board and I was damn well going to try to be impressive.
After six months as Interim I was named the permanent CEO.
Sounds impressive. But let’s be clear. The Network was a very loose confederation of hospitals formed in reaction to the efforts of two dominant area hospitals who had partnered to form an HMO to direct patients into those two hospitals. This threat to the smaller community hospitals led to the formation of the Network. While the mission of the Network was stated as a collaboration to improve cost, quality and access to care in the area in reality its purpose was to provide a forum for a competitive response to the actions of the other two hospitals.
The member hospitals could agree on the forum, and shared a motivation but could agree on little else. The Network held no authority but for its ability to persuade the member hospitals to collaborate on something. Capital commitments were non-existent and the phrase low-hanging fruit marked the strategic plan.
It was a P.R. tool.
But I didn’t know that.
With my new title, a company car with a bag phone, a couple of new suits and a pair of suspenders, I had a big ego and a head of steam. When I overheard at a cocktail party that I had been hired as a “yes man” I was duly outraged and offended.
But of course I was.
I had never worked in, let alone run, a hospital, and had only two years of health care experience. I did have some fine years under my belt selling business forms and college text books and was in my second year of attending night law school. I was not a threat to anyone else in the room.
But things started to happen.
A new CEO was hired by one of the two dominant market hospitals. I had an acquaintance who later became a mentor, who had served as the interim CEO at that hospital and he arranged for me to meet with the new CEO. Within a year, that hospital terminated its partnership with the other dominant hospital and joined our network.
The partnership of the two area dominant hospitals had been terminated and the threat that motivated the formation of the Network had been eliminated. The unstated mission of the Network had been accomplished.
But now what?
For a time we stumbled our way through any number of activities meant to demonstrate cooperation but not offend anyone’s autonomy. More low hanging fruit. We had significant success contracting as a group with managed care entities. But, even in this effort, we held no shared risk and were constantly aware that member hospitals would contract independently of the network if necessary.
Getting meaningful integration of any initiative of relevance wasn’t happening. Just good P.R. and keeping the competition at bay.
Health Care Reform. Hillary Clinton and Ira Magazineer and momentum behind strategies that would require increased integration and risk sharing among health care providers to meet the demands of a new health care delivery model.
And in our town, that other dominant hospital had been embarking on this type of strategy for years and held a significant leg up.
Fearing equally the requirements of reform and the position of the competition, the members of our Network acted. Committees were created and consultants engaged and after months of negotiation the members of our Network declared their intention to come together as an Integrated Delivery System. The signing took place at a meeting with Board members and physicians present and lobster, filet mignon and shrimp were served. A P.R. campaign was executed and a great amount of public interest was created.
Fast forward nearly two years.
It took a while but became clear our member hospitals wouldn’t close the deal. Soon after, one member hospital merged (actually, was acquired without consideration) with the dominant hospital outside the Network, two of our Network hospitals merged with a third (later closing one) and the fifth member adamantly remained independent – for a while anyway.
So back to the golf course.
And my answer.
There are two reasons for my response.
First, I couldn’t change the outcome. I held no authority and more importantly no control of any asset base necessary to create leverage on anyone that would compel anyone to act.
That we were able to move the member hospitals to the verge of action is due to a confluence of concern over national policy direction and fear of local competition. I used these circumstances and created public awareness of the member hospitals’ intent to create some sense of scrutiny and expectation of action from various groups, public and private, that might provide sufficient pressure to compel action.
That was not nearly enough to motivate five hospitals to cede authority. And, it shouldn’t have been.
The member hospitals were too diverse, had different cultures and lacked significant medical staff collaboration. Ownership and financial positions were varied and honesty about these matters were not shared within the group.
Motivation was based on a common enemy. Alone.
That’s not enough. I knew that, and knew when asked the question that I had no ability to change that dynamic.
The second reason for the answer is that I can’t change the past. I can learn from it.
The circumstances that led the Network hospitals to on one hand commit to form an IDS and then later disband it are not all known to me or in fact anyone in the process. The context underlying the actions of anyone involved in the process can never be fully known. Hindsight is great for dramatic conversation but nothing more.
The measure of the past is for someone else to score. The resource created by the past is knowledge to be used today and tomorrow.
And if asked again what I would change I’d say, ‘not much.”
But if you ask about lessons I learned, let me give you a sample.
There is no marriage of equals in business
Hindsight needs corrective lenses
Can’t lead if no one is following
Follow the money - always
The enemy of my enemy is my friend – for now
Keep your head on a swivel – especially in regard to #6
I’m not a physician and no matter the circumstance am not a member of the club (an example to be applied to many areas)
People treated as wallpaper are listening
A public compliment rarely is
Empathy, empathy, empathy – REALLY understand where the other is coming from – whether friend or foe
Personal knowledge is personal capital – expose it at your own risk
Political capital is acquired slowly, spent quickly, the accumulation is capital and spending it in any way exposes a weakness.....but if you wait too long it'll disappear
Unless an owner, leadership is just the rented help, but often can’t resist, to its ultimate detriment, acting out as though the owner
Legacy – spending the second half of your career trying to justify the title you were given – typically a waste of time and detrimental to an organization – but very often at the heart of leadership decision-making
Agreements…rarely are….but will be if unchallenged
Why – the word CEOs need to use most and don’t use enough
Consensus isn’t agreement, just the absence of loud enough objection
So Y am I writing this?
B ecause I wish I’d known these lessons before becoming CEO of the Network. If I had, a successful IDS had a better chance to be created
I also would have not been hired.