Stewardship:The Noblest Form of Leadership

Part I

PROFILES IN HEALTHCARE LEADERSHIP

An Interview with R. Edward HowellChief Executive Officer

University of Virginia Medical Center

Compass Clinical Consulting’s “Profiles in Healthcare Leadership”

These profiles are the result of interviews with transformational leaders in today’s healthcare industry—men and women who have demonstrated courage, ingenuity and the hard work needed to create dramatic, measurable and sustainable improvements in their hospitals. They challenge assumptions, see things differently and enable remarkable breakthroughs. These leaders freely convey insights that we all can use to improve the way we deliver healthcare, and in the process, give us new ideas on how to make better American hospitals.

Compass Clinical Consulting

1

Key Lessons for Hospital Leaders

LEADERSHIP

Stewardship is not about keeping the organization intact; instead, you must make it better than how you found it. Stewardship is about being accountable. It is future-tense thinking and decision-making with only one goal: leaving your organization better than it is today to serve those who come to us for care.

CHANGE

Recognize that you will create turbulence and discord when implementing change initiatives. Your job is to maximize the amount of change for the turbulence and discord created. It’s a part of true change-agent leadership.

THE FUTURE

• The balance sheet is just as important as the income statement. Limit your debt. Don’t mortgage your future.

• Great achievements are not children of marginal successes. • What’s your plan for leaving your organization better than

you found it?

An Interview with R. Edward Howell, Part I

2

A Daunting LegacyThe old man sat down to write. His time was short. He thought back through the events of his life. From any perspective, it was a life of turbulence, war, love, grief, joy, industry and 50 years of public service. He’d been a writer, horticulturist, lawyer, philosopher, architect, political leader and revolutionary. Many world-altering moments and events in which he’d been involved would be inked into the history books for the ages—but not into this document.

He began to write. Short. Concise. His criterion was simple. How had he made the world a better place? When he was finished, he realized that there were only two things: He was an author and a father. This was his epitaph, and it was to be inscribed on his tombstone. What was remarkable was what he left out—that he had been the third President of the United States and had served two terms.

“HERE WAS BURIED THOMAS JEFFERSON, AUTHOR OF THE DECLARATION OF INDEPENDENCE, THE STATUTE OF VIRGINIA FOR RELIGIOUS FREEDOM AND FATHER OF THE UNIVERSITY OF VIRGINIA.”

He put the pen down. Those things had made the world a better place. But … it would take the greatest of leaders with courage and skill to protect, grow and steward them through the ages. It would take noble people that could put aside their own self-interests.

Thomas Jefferson founded the University of Virginia (UVA) in 1819, and he considered it to be one of his greatest achievements. It was envisioned to have a distinctive national character and stature. At the first board meeting, a School of Medicine was authorized, and it officially opened in 1825.

Fast ForwardIt was into this legacy in 2002 that a new CEO stepped. He was a former high school biology teacher from Zanesville, Ohio. He’d also coached football, basketball and track. He is an educator, coach, team-builder, visionary. This CEO was mindful of Jefferson. His presence permeates the institution from the terraced green space surrounding the residential and academic buildings to

Compass Clinical Consulting

3

the majestic rotunda at the north end of the lawn, which Jefferson himself had designed.

But this CEO was now eight years into his leadership role and was concerned about the UVA Medical Center’s future. Yes, they were nationally ranked as one of the top hospitals in America by U.S. News and World Report. Yes, their doctors were some of the best in the world—providing the highest quality care. But there are big challenges on the horizon: healthcare reform, physician shortages and technology and operational efficiency issues.

By most standards, the UVA Medical Center was a successful and high-performing organization. They were good ... very good. But were they the best of the best? Did the UVA Medical Center have the national character and stature Thomas Jefferson envisioned?

The CEO knew it would be easy to coast until retirement. No one would notice. But this was not your typical CEO. He quotes Emily Dickinson and Ralph Waldo Emerson then segues into the wonders and opportunities of the molecular age of medicine.

Yes he could coast, but would that leave UVA a better place than he found it? Change brings discord and turbulence. The risk was that the changes he was contemplating might backfire and make things worse than they were—which was “pretty darn good.”

What would Thomas Jefferson do?

The Interview—Part ICary D. Gutbezahl, MD, Chief Executive Officer of Compass Clinical Consulting, sat down with University of Virginia Medical Center Chief Executive Officer, R. Edward Howell, to find out—in his own words—what he decided and why.

An Interview with R. Edward Howell, Part I

4

Dr. Cary Gutbezahl (CCC): You’ve led the University of Virginia Medical Center (UVA) for many years. It’s been quite successful and has a tremendous national reputation. But you decided that you needed to make operational and leadership changes. What led you to that belief?

R. Edward Howell (REH): It was a combination of factors. By most standards, we were a high-performing organization; we had strong market share, real volume-growth, good quality and solid financial performance. But at the end of the day, we weren’t in the leadership position that this university deserves, or that the people we serve deserve.

We hadn’t become that source of national pride, which is one of the goals this institution has. By most standards, the University of Virginia is regarded as one of the finest public universities in America. So if the medical center functions at a level that the best university is prideful of, then that’s a level of achievement that no one could argue with.

Additionally, the environment was changing for us. We’re talking about health reform and a market that’s going through considerable consolidation. It occurred to me that we could take the easy way and coast for three to five years or more, but if we did that, we would never achieve what we need to achieve.

The Two Roles of CEO: Management and StewardshipREH: At the heart of that is a belief that I serve two roles: management and stewardship. Under the context of management, by all of the standards and benchmarks one looks at, we were a high-performing organization compared to other academic and community health systems.

But under the concept of stewardship, I was concerned that I might not actually leave this place a little better than when I found it. That’s the template for stewardship—leaving this institution in a better place than when I first arrived.

Therefore, I felt that we needed to make a change. There was not a clear or present danger that I, in my leadership role, faced—but my successor might.

Compass Clinical Consulting

5

Courage to ChangeCCC: Making changes in that light, takes courage.

REH: I didn’t think of it like that. It was more about a commitment and leadership decision you have to make when you’re truly trying to lead by stewardship. I don’t view it as courageous as much as being responsible. It was the right thing to do.

CCC: I think that’s a characteristic of courage. When you talk to people who’ve done heroic things in battle, they never say, “You know I thought about this.” But what they usually do say is, “This is the only thing I could do. It was the responsible thing to do, and it’s what I had to do.”

Accountability Sometimes Requires RiskREH: I never thought of it as being courageous; I thought of it as being responsible and committed to the future of the organization. I understood there was a certain amount of risk. It isn’t necessarily being courageous; it’s being accountable for what the organization expects you to do.

CCC: There are a lot of people who confront similar situations and allow themselves to be satisfied with the status quo—to think that they’ve done enough. Responsible may be a better word because it’s more comprehensive. But you can be responsible and still have a fear of getting started. I think that’s where the courage comes in. It’s the willingness to take those risks. Those risks are different for a brand-new CEO than one like you who has been in place for 10 years.

REH: I think that in our case, clearly the news clippings (the positive press) were there—awards, successes, high-quality care and solid financials. I did, however, think this could all go horribly wrong and fail. I might actually make the situation worse when it was already good. There was a clear understanding—risk that was involved.

Inflict Challenges on Your PeopleREH: All of us who serve in an executive leadership position have a stewardship role as well as a management role. It was that stewardship belief that drove me to

An Interview with R. Edward Howell, Part I

6

make changes—to inflict some challenges on the people I work with, and to say, “Let’s create some disruption.”

Much of what we read about the value of organizational disruption looks at management expectations from the perspective of solid management. We do need solid management, but we also need solid stewardship. I believe, particularly in healthcare, that we have to fulfill that stewardship role.

Leadership has to be accountable, but not just leadership—all of us have to be more accountable. The concept of accountability to those that we serve is a responsibility of management and of stewardship. I was accountable for leaving this place better than I found it. That’s really what prompted me to make the changes.

CCC: Any time you create changes, especially at the senior-management level, you run the risk of people taking their eye off the ball and becoming more involved in internal politics than focusing on organizational performance.

REH: Yes, but there’s one way to fix that. Be committed to make the change so clear and crisp that no one misunderstands it on any level. Do that, and people will keep their eye on the ball.

Honest Self-Appraisal is ToughCCC: You said you looked at your organization and it wasn’t at the same level of reputation that the University of Virginia deserves and could take pride in. Was that a difficult thing to acknowledge?

REH: Yes, very difficult. It flew in the face of our self-image to some degree. We’ve been a Top 100 Hospital for eight out of the 10 years I’ve been here. US News and World Report ranked seven of our services in their reports. To say we weren’t meeting expectations was at odds with what we believed in many regards. In reality, if you asked 100 or 1,000 people across the country to name an institution that you think represents top-line quality and specialty care, UVA probably wouldn’t be listed very often across the country—certainly in Charlottesville. But we aren’t the University of Charlottesville; we’re the University of Virginia.

Compass Clinical Consulting

7

So that’s the kind of stature the University enjoys when you talk about top institutions.

The reality was that we were pretty good, but we’re talking about being part of a great institution and a great national enterprise. Pretty good is not great.

The Commitment: No Sliding AllowedREH: We weren’t meeting the goal of being a great institution and a great national enterprise.

I didn’t think we would ever meet that goal unless we made changes and was convinced we would slide if we left in the current structure and management. I decided to not permit that slide. Time was on our side. We had resources. We had solid, consistent operating performances. Our balance sheet is among the strongest in the country, so … we had the capacity; we just needed to make the commitment.

CCC: For a lot of people, making that commitment is hard. It’s hard looking in the mirror and seeing something you don’t like. It’s a lot easier to just look at the positives. What is different about you, or the culture of UVA that said, “We can’t rest and enjoy the successes we’ve had; we have to push ourselves to achieve more”?

Future-Tense Leadership: The Stewardship QuestionREH: In part, for most every leadership issue I look at, I tend to look at it in the future tense. Almost every decision I make, by the time it actually has its full impact on an institution, it’s at least 18 months into the future. From that perspective, I didn’t think we could become fully realized as a great institution unless we made changes.

When you look at things with an eye not for today, but for the future, it allows you to objectively and realistically exercise stewardship for your organization. A great part of leadership, I believe, is having the integrity and guts to make your decisions on this one principle:

Will this decision leave our organization better than we found it?

An Interview with R. Edward Howell, Part I

8

Great Achievements are Not Children of Marginal SuccessesREH: Realistically, from a future perspective, we had to make the changes. However, I would tell you that I tried a number of approaches with the previous organization to change the performance and enhance the direction. They weren’t failures, but they were only marginal successes. You can’t tolerate marginal successes if you want to achieve great success. We had to make fundamental changes.

CCC: It’s interesting that you had other, multiple attempts to bring about the results that you mention. Even had they been failures, were they really failures if you learned something? And the organization learned something? Weren’t they more like experiments?

REH: Yes. Many of the change attempts were perceived as innovative, but they really weren’t significant enough to move the organization to where it needed to be.

Succession Planning is Not Succession ManagementCCC: One of the things you did to help make this change process quick and as painless as possible was to install someone on an interim basis to hold your new change concept together, although you knew all the time you would eventually hire someone to fill the position.

REH: All of us understand that we sow the seeds and reap the harvest. We sowed the seeds early so that the new person coming in didn’t have to begin with tilling the soil. I’m using a lot of metaphors, but I thought that was an important part of what we were trying to do—not scorch the earth. Sow the seeds—let the person get to work and not have to do the fundamental work of tilling the soil. That’s succession management.

We often talk about succession planning, but we don’t always think through succession management. To have succession, you need both. Allow whoever is making the decisions to decide to bring someone in from the outside or utilize internal talent; but success doesn’t end when you make that decision. You have to manage the succession process as well.

Compass Clinical Consulting

9

CCC: You mentioned earlier that you had attempted to make changes, and they were minimally successful. You also talked about how sometimes leaders initiate projects then results don’t turn out as anticipated. That’s a more common story than most would like to admit. How, as a leader, do you keep the organization positive and willing to keep driving forward? To try new things in the face of prior experiences that were less than optimal?

Encourage Progress and Stop Punishing Good DeedsREH: All too many organizations recognize the idiom of “no good deed goes unpunished.” Keep your organization from punishing good deeds. That’s an effective tool in keeping people positive and driving on.

When you make big changes, you have to understand that people are going to be impacted. I made a concerted effort to be very respectful and supportive of the people who might be negatively impacted. That’s a responsibility of leadership—when the organization sees that you won’t stifle creativity and initiative.

You have to handle changes in a respectful manner. If you don’t handle those changes respectfully, you scorch the earth that you’re asking someone else to plant and harvest the benefits from. There’s no sense in scorching the earth.

CCC: In many organizations, there are certain parts that lag in comparison to others. People get used to that, and it’s just accepted for what it is. That’s not the case here. How do you fight the tendency of organizations to accept a persistent problem instead of actively trying to fix it?

REH: Quite candidly, I tend to want to try to give too many things just one more try.

I’ve been criticized by some of my leaders who said, “Well, I didn’t know you were really going to terminate that program or that initiative.”

And I would respond, “We had a conversation that it wasn’t working. How many of those conversations did it take to make you conclude too that it wasn’t working?”

An Interview with R. Edward Howell, Part I

10

Their answer was, “Well, yes, I got the message that it wasn’t working, but I didn’t know that you were going to terminate the program now.”

I realize that the decision of when and where to terminate unsuccessful programs or leaders is one that I haven’t developed a good barometer on. For me, it’s too instinctual. I suspect that could be a little unfair to the people sometimes, although I think our organization does a good job of evaluating and giving feedback to unsuccessful programs.

It’s just that point where you make the change that is almost always a little uncertain. That’s something this organization and I personally will have to do a better job of—creating greater predictability and a clear understanding of if and when the change will take place.

CCC: How would you assess the effectiveness of the organizational change you initiated from a stewardship perspective?

REH: The fact that we’ve had two very good financial years that have strengthened the college of medicine and university as a whole is good. That’s investing forward, so from that vantage point, it would receive some pretty decent stewardship marks.

We needed to implement a new EMR, but we had a lot of organizational fatigue from the failed effort in the past. The fact that we hadn’t implemented EMRs had disadvantaged us competitively. That was one of the driving forces behind trying to do it all in one year. And we did do it in one year. We endured the financial impact during implementation. Now it’s looking like we’re going to have another good year financially, so you’d have to call that a success.

We now also have a very structured and clearly articulated plan to get our quality to where we need and want it to be. Those were the real critical drivers behind the change.

Because of the changes made, we discovered some individuals within the organization whose candle was hidden under a bushel. These changes allowed us to remove that bushel, and their lights burn brightly now. That’s been very

Compass Clinical Consulting

11

good for the organization. Looking back, we can say with objectivity that it was absolutely the right thing to do.

Three Feet from the GoldREH: You asked me about when to pull the trigger and say that what you have done is a failure—let’s terminate that effort and move on. That is the question isn’t it? What if we quit three feet from the gold—and never discover it?

It is one of the biggest challenges for any leader—when to hold or when to fold.

In retrospect, we may have held onto the trigger longer than we should have. There’s an old adage about three physicians going bird hunting. One says, “Ready—aim, aim, aim.” Maybe we aimed just a little too long, but we did pull the trigger and achieved what we hoped to achieve.

We’re a much stronger organization because of it. Better than we were before.

The Five Golden WordsREH: Those five words, “better than we were before,” are the true measure of successful stewardship.

End Part I. Continue to Part II.

An Interview with R. Edward Howell, Part I

12

About R. Edward Howell, CEO of University of Virginia Medical Center

Ed Howell has been the Vice President and Chief Executive Officer of the University of Virginia (UVA) Medical Center since February 2002. He oversees all operations of the university’s hospital and clinics, the UVA primary-care network, the UVA Transitional Care Hospital, the UVA HealthSouth Rehabilitation Hospital, and the UVA dialysis network, as well as business development and finance, marketing, strategic planning, and information technology functions for the UVA health system.

For over 30 years, Mr. Howell has dedicated his life to academic medicine. He served for eight years as Director and CEO of the University of Iowa Hospital and Clinics; as Executive Director of the Medical College of Georgia Hospital and Clinics for eight years; and, prior to that, ten years on the administrative staff of the University of Minnesota Hospitals.

Mr. Howell has served as a member of the Executive Committee of the Association of American Colleges, a member of the American Hospital Association Long-Range Policy Committee, Chair of the Council of Teaching Hospitals, Chair of the Accreditation Council for Graduate Medical Education, Chair of the University HealthSystem Consortium Board of Directors, Co-Chair of the Advisory Board for Clinical Research at the National Institutes of Health, and Chair of the Novation Board of Directors. He currently serves as a member of the Virginia Hospital and Healthcare Association Board of Directors.

Mr. Howell is appointed Professor of Medical Education at the University of Virginia School of Medicine and Clinical Professor at the UVA School of Nursing.

Mr. Howell holds a Bachelor of Science degree in Biological Sciences from Muskingum College and a master’s degree in Hospital and Health Services Administration from The Ohio State University.

Compass Clinical Consulting

13

About Cary D. Gutbezahl, MD President and CEO of Compass Clinical Consulting

Dr. Cary Gutbezahl understands what it takes to make better American hospitals. In addition to being a seasoned consultant, he has worked as interim hospital CMO in three different organizations, as well as served as medical director for two multi-specialty medical groups and several HMOs. He has a solid history of leading medical staff through improvements in utilization management, changes in peer review practices and corrective-action procedures. As Chief Executive Officer of Compass Clinical Consulting, he is armed with a diverse background in hospital, medical-group and managed-care settings and has immersed himself in developing the strong knowledge base and extraordinary skill set needed to successfully improve today’s hospitals.

While Dr. Gutbezahl served on active duty in the U.S. Navy, he was Head of the Quality Assurance Department of the Navy Medical Command, National Capital Region, in Bethesda, Maryland. He board-certified and completed a laboratory medicine residency and an immunohematology fellowship at Washington University in St. Louis. In addition to his numerous national speaking engagements, Dr Gutbezahl has authored a number of publications including “Hospital Service Recovery” in the Journal of Hospital Marketing and Public Relations. He also has been published in Hospital & Health Networks Magazine, Trustee Magazine, SmartBusiness Magazine, The CEO Refresher and writes frequently for the Better Hospitals and Hospital Accreditation Journals. Dr. Gutbezahl can be reached via email at cgutbezahl@compassgroupinc.com.

About Compass Clinical ConsultingCompass Clinical Consulting (Compass) has been caring for hospitals for over three decades so that providers can deliver efficient, effective care to patients. We have walked miles of hallways at hundreds of hospitals. We bring experienced eyes that have seen just about every kind of issue possible. We have achieved remarkable results, working in close collaboration with our clients. Compass assists leaders of hospitals in reducing the cost of delivering safe, quality patient care through workforce planning and productivity, management of clinical departments, patient throughput and case management, executive leadership, board development, physician relations, accreditation, and regulatory compliance (surveys, immediate jeopardy, and CMS recertification).

Compass Clinical Consulting is a brand of Compass Group, Inc. © 2011 All Rights Reserved. Form 1020 3/11

2181 Victory Parkway Cincinnati, Ohio 45206

P: (513) 241.0142 F: (513) 241.0498

Regulatory Compliance• Hundreds of successful

assignments involving CMS and TJC regulatory compliance, Immediate Jeopardy, and Never-Events for over 15 years.

• 100% success at CMS recertification and threat remediation.

Turnaround Interims• Achieve rapid changes after a crisis, e.g., a sudden leadership/management vacancy; a clinical unit teetering on the edge

of implosion; or a CMS/TJC concern or threat.

Leadership & Operational Consulting

• Executive Leadership, Board Development, Physician Strategy, Clinical Operations, and Community Needs Assessments.

Senior healthcare consultants assisting hospital leaders in delivering compliant, safe, quality patient care since 1979.

Compass Clinical Consulting

Profiles in Healthcare Leadership Email: editor@compassgroupinc.com