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Former Cleveland Clinic CEO Shares Insight on Healthcare

Healing Leadership: 11 Insights from Former Cleveland Clinic CEO to Guide Today's Leaders Through the Storm

Healthcare reform will drastically change provider management. Rising costs, reduced reimbursements, a tough bond market, low investment returns, and increased patient demand all make it a challenge for these organizations to stay afloat, let alone prosper. (Data released in March by Thomson Reuters suggests that half of all U.S. hospitals are currently running at a loss.) Only outstanding leadership--at all levels of the hierarchy--can pull a hospital through. But (and here's the trillion-dollar question) what does outstanding leadership actually look like?

Leadership and Medicine (Fire Starter Publishing, 2009, ISBN: 978-0-9749986-0-2, $32.95) by Floyd D. Loop, M.D., does a compelling job of answering that question. Of course, there's no simple formula. The facets of healthcare leadership are as plentiful and varied as hospitals and medical systems themselves.

"In addition to understanding as much as possible about the healthcare field, a successful leader must hold everyone accountable, top to bottom," he writes in his introduction. "Advancing the mission, personal accountability, and sense of responsibility are incentives, not threats. The convergence of innovation, clinical value, effective communication, and follow-up comprise real leadership."

Dr. Loop's expertise in the subject is undeniable. As chief executive of the Cleveland Clinic, he led a transformation from an enterprise known mainly for its heart care into one of the world's most successful healthcare organizations. Under his 15-year tenure, the Clinic grew into a fully integrated medical delivery system, a renowned medical school, and an industry blueprint for growth and innovation.

He tells this story in Leadership and Medicine, of course, but it's his practical advice that makes the book so valuable to hospitals. The book is packed with valuable lessons for leaders from midlevel to C-suite--lessons that will improve their own leadership skills and, ultimately, the prosperity of the organizations for which they work.

Here are some of Dr. Loop's tips and insights, excerpted from Leadership and Medicine:

Remember that we are not in the business of business; we're in the business of medicine. Medicine is a unique field, Dr. Loop points out. Our product is a changed human being. The business of medicine is providing advice that saves a life, treatment that adds quality to living, and sometimes just making the final days comfortable. And while there must be financial profit for those who provide such services, we must never pursue it at the expense of the well-being of the people we exist to serve.

"Like politics, the business of medicine can make strange bedfellows," he writes. "It involves a complex web of relationships and motives that may distract us from the highest ideals of our profession. So we must never forget that the goal of every hospital is to be the best place to receive care, the best place to practice medicine, and the best place to work.1 This is the intellectual capital where value in medicine resides. Value respects and honors patients and protects their interests and privacy. Sometimes, the best specialty medicine is the least expensive treatment over time, and thus a better value. Value in medicine is far more important than money to the patient, but cost seems more important to society. It is difficult to put a price on hope, wisdom, skill, and compassion."

Change is inevitable. As leaders, we can manage it in one of four ways. In Leadership and Medicine, Dr. Loop writes:

We can resist change, but this doesn't advance the organization, and the tide of change carries the resisters along anyway. The fates lead the willing and drag the unwilling.

We can whine, which some people think makes you feel better by "getting it out of your system." Actually, it's better to substitute handwringing with activity. As Osler pointed out, "waste of energy, mental distress, nervous worries dog the steps of the man who is anxious about the future."2

We can panic, which could be fatal. In Hampton Sides' book, The Ghost Soldiers,3 he describes a group of 1,600 American prisoners during World War II who were placed in a small cargo hold--way below deck, ill-ventilated, unbearably hot, and dangerously life-threatening. The prisoners were gasping for air, passing out, and because they were suffocating, they panicked. Then their captors shut the hatch and made it even worse. When all seemed lost, a man, not high ranking, stood up and shouted, "We're in this together and if any of us want to live, we're going to have to work together. Calm down. The men in the far corners are suffocating. Take off your shirts and fan the air toward them." The improvement was immediate. He then negotiated for water and brought those who had passed out up to the deck. So, this seemingly nervous, intense, overeager fellow rose to the occasion on that day in
a remarkable act of poise and resolve. You can fight panic through faith in leadership and faith in each other. Sometimes people rise to greatness at critical times and you can't predict who it will be. That's why leadership development is important.

Taking a lesson from that story, the fourth option is what our group model of medicine is all about--to pull together...to act as a unit. Real teamwork is unity of purpose and a natural diversity of excellence.

Strive to live by the four proven principles of enduring success. There are numerous principles of enduring success, says Dr. Loop. But he has narrowed them down to four time-tested ones:

Exploit before you explore--i.e., exploit existing assets and capabilities before you develop new ones (exploitive actions are generally local and market-driven).

Diversify the business portfolio.

Remember your mistakes.

Be conservative about change. Great companies very seldom make radical changes.4 Major organizational change rarely creates value.

"'The company should redesign only if there is compelling evidence that the current structure is suboptimal and can't address this shortcoming less invasively,'"5 writes Loop. "For academic medical systems, concentrate on innovation, selective growth, and process experimentation--all of which entails risk. A strategy is not based on hope. Strategy is what you work for to achieve real progress. 'There is no security on this earth...only opportunity.'6 That is why good planning is essential. However, all your collective brain power is wasted if nothing happens afterward."

Make sure your growth efforts fit a deliberate strategy. If a merger or acquisition is in your future, be careful. A blind allegiance to growth can waste a lot of money. Growth by itself may add revenues, but it can also induce market share conflicts that end up costing more than the organization gains in true profit. As Dr. Loop writes, "Growth by itself is the scoreboard; it's not the game.7 In healthcare the 'game' is how to consistently add value wherever the organization assumes responsibility.

"If expansion is in your plans, be sure that the new alliances can add value to the system by improving healthcare in the community served," he adds. "Don't buy hospitals just to match the competition's acquisitions...In our zeal for expansion, we should all be reminded of Drucker's admonition: 'I will tell you a secret: Dealmaking beats working. Dealmaking is exciting and fun, and working is grubby. Running anything is primarily an enormous amount of grubby detail work, and very little excitement, so dealmaking is kind of romantic, sexy. That's why you have deals that make no sense.'"8

Pay close attention to competitors. Their vulnerabilities can provide good ideas--and perhaps even a new direction--for your organization. Are your competitors passive or aggressive? If they fall into the latter category, what is their next move--almost always it is local expansion or acquisition. They could be recruiting your talent for development of a highly competitive service or business. Remember, they have the same interests as you: to seek or create demand, accelerate access, improve the quality metrics, market value and grow most services internally and by outreach.

"If your competitors are passive, your strategy could awaken them and you have to anticipate their countermoves," Dr. Loop writes. "Competitiveness must be thought of as a relative comparison of growth rates, or benchmarking of performance to assess how well each participant has done in developing the capabilities for innovation and growth, and not about the mutual potential for damaging one another.9 Don't let yourself become so obsessed with your competition that you can't see them clearly or learn from them. In other words, don't underestimate your opponents, but don't waste your time 'hating' them."

Even if the people on your team don't like each other, they must trust each other. Trust between two people does not necessarily mean that they like one another. It means they understand one another.10 Diversity in talent and personality matters. Homogeneous teams do little to enhance expertise and creative thinking.11 "Give me strong-willed, tough but fair, dedicated and really smart executives, and we will show great results and real progress no matter how onerous the market or the reimbursement," writes Loop.

"As one of the Cleveland Clinic founders wrote, 'What a remarkable record Bunts, Crile, and Lower have had all these years,'" he adds. "'We have been rivals in everything, yet could differ in opinion about anything and through all the vicissitudes of personal, financial and professional relations, we have been able to think and act as a unit.'"12

Before you make a decision, ask yourself three key questions. Dr. Loop says that when he has a decision to make, he asks himself these three questions: 1) Do I really understand the issue at hand and could I explain it to my colleagues? 2) Will there be any unintended consequences? 3) What will happen if we don't decide now?

"As James Thurber wrote in the New Yorker many years ago, 'It is better to ask some of the questions than to know all of the answers,'"13 writes Dr. Loop. "It's said that Japanese businesspeople, once they have all the facts, will ask why five times before making a decision. Personally, I took notes at team meetings as the discussion proceeded--to summarize the pros and cons and also to review as the decision was followed up. The group is inspired and encouraged by successful decisions probably more than any other factor. Inaction demoralizes people far more than failure."

Learn the fine art of partnering with community physicians. Obviously, doctors are attracted to hospitals with a good reputation, a consistently high standard of care, and high patient satisfaction. But when you're trying to get them to collaborate with your academic center, make it easy for them. They will not tolerate heavy-handedness, intimidation, or silly rules, says Dr. Loop. Community physicians can be fiercely independent, street-smart, and sometimes as good or better in the care of patients as their counterparts on the academic staff.

"In our merger experience, we began by interviewing the leading physicians in each hospital to find out how we could help them with their practices," writes Dr. Loop. "Most physicians want to grow their practices, and for proceduralists this means workflow efficiency. In operating room management, we offered them extended hours, fast-track scheduling blocks, variable staff scheduling, and faster room turnover time...Surgeons have relatively simple requests, such as a preferred time slot; a consistent operating room team; a good and reliable floor assignment; competent anesthesia. Academic center executives can win the trust of the community hospital by attending community hospital meetings."

Call an ideological truce regarding healthcare reform. A good portion of Leadership and Medicine is devoted to exploring the future of healthcare. Dr. Loop believes that there is no one solution. He calls for an "ideological truce" and urges leaders to acknowledge that any proposal for achieving broader coverage will have some downsides. He is quick to assert that complete government coverage is unsustainable without massive tax increases. Dr. Loop says the best reform must achieve three goals: 1) preventing the deprivation of care caused by the inability to pay; 2) avoiding wasteful spending (controlling cost); and 3) permitting wide latitude in choice.

"The most practical approach is to target waste," he writes. "Clean up costly state mandates; eliminate complex insurance purchasing; reduce the regulatory burden on providers and insurance companies; revise tax codes that contribute to the unaffordability of individual health insurance. Step up the efforts to make medicine safer through better and continuous education for doctors and patients. Develop an integrated and secure electronic patient record nationwide. Concentrate on keeping people healthier, not just providing broader coverage. These measures won't solve all our problems, but they will improve the financial dilemma that causes our political gridlock." (NOTE TO EDITOR: See tip sheet below.)

Support efforts to urge consumers to take control of their healthcare costs. All stakeholders look at healthcare reform based on their own economic interests. People are far more likely to respond to economic incentives than social engineering.

"Corporations, insurers, and pharmaceutical manufacturers are trying to pass risk (cost) onto the consumer whenever they can," writes Loop. "This trend cannot be stopped by further regulation or even by mass movement to a government-run healthcare system. Consumers are still going to have to take control of and make decisions about their healthcare expenditures. The consumer has finally reached the crossroad--either take control actively by educated self-interest or become a passive participant and assume the risk allotted to you."

Never forget the importance of a satisfied patient. In healthcare, as in any business, a brand is a statement of trust between you and the customer. Satisfied customers will often tell other people about your "company" and many of those who are told will become your customers. Therefore, the best opportunity for increasing sales is through satisfying your present customer base and cultivating new customers. Superior service will bring in customers, keep them, and multiply the value of their accounts. Remember, it takes five times as much time, effort, and money to attract a new customer as it does to keep a current one.14

"Hospital executives often don't understand that most complaints never reach the chief of staff or the chief executive's office," writes Dr. Loop. "It's in human nature that people complain in different ways. Therefore, it is the role of the ombudsmen or the department head or the individual doctor to listen and follow up with corrective action and to make amends. The worst 'diseases' among healthcare personnel are arrogance and ignorance. This is another example where prevention is the best medicine. A patient can be a great source of innovation. The best advertisement is a satisfied patient."

Of course, this is only a small sampling of the wealth of information in Leadership and Medicine. Dr. Loop covers a rich variety of topics, never failing to enlighten and inspire--and never failing to shine a light on the bonds of human brotherhood that define a great healthcare leader.

"In healthcare, we are part of a process, a community, a movement, and a historical continuum that exists by the mutuality and trust of all involved," he writes. "Without trust, a leader cannot practice or lead in medicine. With trust, you can energize staff and employees to reach heights they may never have imagined possible. You might not be able to always inspire the team, but you can stretch their performance. Measure your success the way Hall of Fame basketball player Bill Russell did: 'I'll judge the game on how I made my teammates good enough to win.'"15

About the Author:

Dr. Loop is a distinguished cardiothoracic surgeon and former chief executive of the Cleveland Clinic. He received his M.D. degree from The George Washington University, Washington, D.C., and postgraduate surgical training at The George Washington University and at the Cleveland Clinic. He joined the Department of Thoracic and Cardiovascular Surgery at the Cleveland Clinic in 1970, was named chairman of the department in 1975, and was appointed chief executive officer in 1989, a position he held for 15 years.

Dr. Loop has extensive experience in heart surgery and is widely published. He and his colleagues at the Cleveland Clinic were responsible for today's widespread use of arterial conduits in coronary artery surgery and innovations in valve repair and techniques in reoperations. He has served on numerous editorial boards and has received international citations and awards.

During his tenure as chief executive, Dr. Loop and his leadership team reorganized the Clinic and transformed it into a major academic medical center. A new health delivery system was established in Cleveland through the acquisition of hospitals, the construction of outpatient clinics, and expansion into Florida. Research, eye, cancer, and heart institutes were designed and built. A new medical school was inaugurated in 2002. Revenues grew from $645 million in 1989 to $3.6 billion in 2004.

The Cleveland Clinic is consistently recognized as one of the 10 top hospitals in the United States and honored as one of the best managed medical centers.

About the Book:

Leadership and Medicine (Fire Starter Publishing, 2009, ISBN: 0974998605) is available at bookstores nationwide, from major online booksellers, or directly from the publisher at www.firestarterpublishing.com. Copies also can be purchased online through the Studer Group website at www.studergroup.com.

* For a review copy of Leadership and Medicine or an interview with Floyd D. Loop, please contact Dottie DeHart, DeHart & Company Public Relations, at (828) 325-4966.