HealthCare Voice

The Gospel of Service, Accountability

MOUNT PLEASANT, Texas (July 3, 2009) – When Ron Davis arrived at Titus Regional Medical Center (TRMC) in 2003, life for the organization and its employees was anything but good. Finances were a wreck, service was, at best, uneven, and the community was quickly losing confidence.

A national management company had been running the 164-bed hospital for years. The CEO who was assigned to the contract was a Monday through Friday Mount Pleasant resident and was not connected to the community in any meaningful way. The Chief Nursing Officer, a former Joint Commission surveyor, was seen as “distant” and the staff was not engaged. In fact, the hospital’s performance with quality care, patient safety, and satisfaction was less than stellar. Physician satisfaction was poor.

The Chief Financial Officer was splitting time between hospital business and a private audit practice, Mr. Davis later learned.

Representatives of the management company attended board meeting after board meeting as losses mounted. Nothing seemed to change.

The elected board, an extraordinary group of business and civic leaders, finally had seen enough. They terminated the management company, ending the tenure of the CEO who was on the payroll of the Plano-based organization. Directors began to take decisive steps to solve what they saw as clear-cut problems that were seriously threatening the hospital’s future.

After a rigorous nationwide search, the board appointed Ron Davis, as their new Chief Executive Officer. Mr. Davis, an engaging former pastor who earned a graduate degree in healthcare management after retiring from the pulpit, was previously the CEO of Southwest Iowa Regional Medical Center, an 80-bed hospital in Creston, Iowa.

With the reputation of a leader who could build Titus Regional into a respected regional hospital and armed with strongly held values that patient care, safety and customer satisfaction should be the organization’s number one priority, Mr. Davis began to rebuild a new culture of performance and accountability.

With his positive outlook and an infectious enthusiasm for TRMC and Mount Pleasant, a city of more than 15,000 residents 115 miles northeast of Dallas, Mr. Davis epitomizes the same values espoused in the new Harvard MBA Oath – honesty, a focus on service, a commitment to do what is right for the hospital, his employees and the community and a belief in leadership transparency.

With a new Chief Financial Officer and CNO, he launched a plan to stabilize the organization’s shaky finances. Physicians, who were skeptical of his ideas concerning growth – they feared he would dilute their existing practices – stepped up their criticism when the inherited financial crisis required layoffs. These were tough times but Mr. Davis was convinced that there was extraordinary untapped market potential. The TRMC board agreed.

The leadership turnaround plan moved this public hospital from a $6 million loss to financial stability, producing 8 to 10 percent margins over the past four years.

They established a foundation that raised more than $4 million for a new cancer center named in honor of Lonnie “Bo” Pilgrim and his wife. Mr. Pilgrim is Chairman of Pilgrim’s Pride, a national poultry producer. Patient volumes for this newly constructed state-of-the-art center, operated as a joint venture with U.S. Oncology/Texas Oncology Physician Associates, have doubled market forecasts.

Meanwhile, Mr. Davis and his team are completing a $33 million expansion and renovation, including expansion of the emergency department, updating ancillary departments and redoing the patient tower.

Working with his medical staff, who are much happier with TRMC today, Mr. Davis has dramatically expanded services and grown patient volumes. Surprisingly, Mr. Davis said that he enjoys a secret advantage over his larger competitors in Texarkana and Tyler. Pediatrics. “Our group is phenomenal. They offer extended hours and they see patients seven days a week. They may not generate a lot of direct admissions, but they support our efforts because they help us capture the family.” The group is continuing to grow to keep up with the increasing volume. Mr. Davis credits his excellent primary care physicians with supporting a growth into specialty care including more sophisticated types of surgery and cardiology services.

In the interest of self disclosure, my firm, JohnMarch Partners, recruited the turnaround team for TRMC – Mr. Davis as well as the Chief Financial and Chief Operating Officers. We specialize in helping hosital boards recruit turnaround executives, a much more cost effective alternative to the national firms whose fees range from $2 - $12 million per engagement.

He believes that the key to his success is really no different than for any other CEO. “You have to be authentic, you must set a clear vision that people understand and support, and you must be consistent.”

He stresses service and accountability. The community knows that if something is amiss with service at the hospital, Mr. Davis wants to know. “I am accountable and the community knows that. They prove it when they call me at home,” but he admits that these calls come much less frequently than during the early days. The hospital, with the enthusiastic support from the Board, adopted the Quint Studer principles of service and delivery. “The board set the example when they insisted on attending the training programs.”

There are still challenges, Mr. Davis admits, but his outlook for Titus Regional as an independent community hospital is very positive. “Our community is growing. There is a can-do sense of pride here that is remarkable and that is reflected with our outstanding hospital board,” Mr. Davis concluded.

Mr. Davis’ days in the church pulpit may be over, but he is still preaching the gospel of leadership – quality care, exceptional service, customer satisfaction and the importance of being accountable.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders. You can contact Mr. Self at 214.220.1234 or JGSelf@johnmarch.com. Or you can follow him on Twitter at Self_JohnMarch.

MBA OATH: A Worthy Pledge In Troubled Times

CHICAGO (June 28, 2009) -- “…my purpose is to serve the greater good…this oath I make freely and upon my honor.”

At first read, I thought these words must have come from an oath for politicians, far too many of whom will eventually succumb to the temptations of public office or the corrupting influences so inherent in the re-election process.

No, surprisingly, these words come from the Harvard-inspired MBA oath that more than 1,100 MBA graduate students around the world have signed as of last Tuesday, according to Financial Times Columnist Michael Skapinker.

That these students felt compelled to write such an oath in the first place clearly shows how far our nation has slipped over the past four decades. But here we are.

The Oath is a remarkable document, and worthy of your review. It exudes a fervent hope that these future business leaders can help us move to a better place, away from the business shenanigans of the past 4 decades.

A startling theme of this Oath is the implicit rejection of the shareholder-first way of thinking that has shaped, controlled, and, over time, allowed for Anglo-American business values to be twisted in a way that bred greed and corruption.

Graduate business students around the globe have pledged to “…safeguard the interests of my shareholders, co-workers, customers and the society in which we operate. I will manage my enterprise in good faith, guarding against decisions and behavior that advance my own narrow ambitions but harm the enterprise and societies it serves” and includes a commitment to pursue “…sustainable prosperity” while promising to “…take responsibility for my actions, and that I will represent the performance and risks of my enterprise accurately and honestly.”

“It would be easy to dismiss it (the Oath movement) with an indulgent smile. Easy but wrong. The MBA oath comes at a time when capitalism’s claims to efficiency and legitimacy have been shaken,” Mr. Skapinker writes.

While the Oath was conceived and written by Harvard MBA students, they were inspired by business professors Rakesh Khurana and Nitin Nohria who argue “… that the answer to business’s crisis is to turn management into a profession like medicine or law”, according to Mr. Skapinker.

While physicians and lawyers may cross the ethical or legal boundaries by putting moneymaking ahead of patients and clients’ interests, they have codes of conduct by which they must abide if they are to continue to practice, the legal consequences notwithstanding.

There is no question that there is a measure of idealism at the core of this Oath, but keep in mind that MBA students tend to be considerably less idealistic than their graduate school counterparts in the liberal arts. The key to the success of this Oath movement will be how these students react when, upon entering the real world of Wall Street, for example, they confront a boss who, with an eye on his bonus, agrees. Then he smiles and winks while crossing his fingers.

It will take a long time to override the me-first entitlement culture that is so pervasive in business today. That assumes that our acceptance of the greed, patterns of bad behavior and ethical lapses can ever be reversed.

BRAVO HARVARD! I am hoping this Oath will become a driving force in business, not a passing fad. Some idealism may help us reach a better place.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders. You can contact Mr. Self at 214.220.1234 or JGSelf@johnmarch.com. Or you can follow him on Twitter at Self_JohnMarch.

Credit Report: A Blunt Weapon in Hiring

DALLAS (June 17, 2009) -- For years, corporate recruiting executives and managers barely checked candidate-provided references – much less criminal, civil or credit records before making employment offers. Now, in a country known for not finding the middle ground if it had a map, a compass and a finely tuned sense of direction, companies are eliminating otherwise qualified candidates who are out of work. The reason? They are behind on their bills and some are in bankruptcy trying to save their homes. Why? Because they are out of work.

Today, 33 percent of all companies are using credit checks as part of their employment screening process. Use of credit record checks in the pre-employment process is up by 55 percent over the past five years, according to a June 7 story in the LA Times authored by Tiffany Hsu.

According to this dispatch, companies are finding the so-called red flags in criminal records 9.5 percent of the time. Employment verification issues are a problem 48.1 percent of the time and problematic credit reports raise red flags 42.9 percent of the time.

I am not opposed to comprehensive background reporting. My firm, JohnMarch Partners, is known for its rigorous background checks. There is no shortage of candidates who have consistently demonstrated bad judgment. They have made decisions that were illegal or ethically questionable. At JohnMarch Partners, we look at criminal, civil, and driving records in all jurisdictions where our top candidates have lived or worked. We look at credit histories as well. Of course, we validate credentials, prior employment and we require eight references – two superiors, two peers, two subordinates, and two personal references. We also check secondary references – those individuals with whom the candidate has worked in the past but are not listed on the candidate’s own reference list. We insist on this three-dimensional review to be sure the candidate’s story “hangs together.”

I want to focus in on the use of the credit report. If the candidate will be a C-suite or senior level executive, the credit report findings are important. If the candidate will handle money, it is very much an issue. However, for others, we look at the credit report to corroborate bad behavior – fraud, theft, or a history of bad judgment. We know that otherwise good people can encounter tough times, especially now, in this devastating depression brought on by runaway government spending, incompetent regulatory enforcement, the greed of the entitled investors and a total lack of accountability on the part of the leaders we elected.

In our searches we have encountered executives with otherwise impeccable records who have run into a buzz saw of plummeting real estate prices and job loss that was related to the economy, not performance. To use a credit report to deny employment to someone whose record is otherwise acceptable is to misuse this tool. Employers should look for patterns of bad behavior or repeated poor judgment, not circumstances out of the candidate’s control.

It is a highly competitive job market. Employers are certainly well within their rights to make the argument that they should not have to take on new employees with financial problems, even if they were caused by the aforementioned incompetent oversight by a list of leaders that is long and “distinguished.” That is certainly their prerogative.

I believe that there is a more rational roadmap when making employment decisions. Check the references. Get the 3-D perspective concerning performance. Check for drug use and criminal or civil issues. Look at the credit report. If there are no patterns with bad judgment or behavior, then rely on reasonable judgment.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders. You can contact Mr. Self at 214.220.1234 or JGSelf@johnmarch.com. Or you can follow him on Twitter at Self_JohnMarch.