John Haupert is used to doing a lot of listening and research. That habit will be tested as the new CEO of Atlanta's Grady Memorial Hospital, the city's public hospital, takes the reins in October. The erstwhile chief operating officer of Parkland Health & Hospitals in Dallas was named Monday to head a hospital that less than three years ago was mired deeply in debt and political strife.
Before predecessor Michael Young took over Grady in September 2008, the hospital's operational oversight had been turned over to a private, nonprofit corporation in the wake of several years of financial missteps, a series of failed and controversial leaders.
Young, seen as a professional "fixer," after resurrecting the public hospital in Buffalo, NY, did as advertised, and dramatically improved Grady's financial underpinnings while driving a culture of innovation and quality improvement. Then he moved on, by heading back home to lead Pinnacle Health in Pennsylvania.
His brash style and bold decisions put off many, and, despite his successes, like many former Grady CEOs who didn't achieve much, Young's departure was undoubtedly welcomed in certain circles.
Such is the nature of a public hospital CEO's lot. Unlike many other hospitals or even large health systems, everyone seems to have a stake, and a say, about the decisions made concerning a public hospital.
No matter what decision you make as the leader, somebody's not happy. Haupert, still quite busy as COO of Parkland, is overseeing the construction of a $1.27 billion hospital and campus, had been seen as the possible successor to longtime Parkland CEO Ron Anderson, MD, who's been at his job 30 years. Haupert's opportunity, it seems is now, and it's not at Parkland.
So, a public hospital on the mend has its man, but will he be able to keep the momentum without ruffling too many feathers to be successful? I spoke with Haupert hours after his confirmation as the new CEO by Grady's board. Following is an edited transcript of our conversation:
HealthLeaders: How do you feel following the board vote?
John Haupert: It's exciting. For the next two months, I'll be in in-between-land between hospitals. So we've got a lot to get wrapped up between now and September.
HL: Where do you start at Grady?
Haupert: As with any transition, you start by doing a whole lot of listening and research. There are lots for me to catch up on how Medicaid funds are flowing in Georgia, and to really understand their whole revenue cycle. That's the starting point.
Texas has one of the lowest (Medicaid) rates in the country. Georgia is a bit more attractive. You can see the impact that's had on Grady. In fact, they've experienced declining OB cases because Medicaid is more attractive to private practitioners than it is here. Part of that whole revenue cycle look will be how to position Grady from a service level, because the quality is already there.
HL: You're familiar with the turnaround work of Michael Young, your predecessor, who's known as kind of a fixer. What role do you see yourself playing as the new CEO?
Haupert: I'm definitely a consensus builder and my tenure will be about developing consensus that will lead to the institution's long term viability. Most of the challenges are physical plant-related. The problem for Grady all along has been on the net revenue side.
How much of DSH and upper payment level funding is actually flowing to the institution? Mike did a lot of work on the revenue cycle, but Grady is not complete with that turnaround. Another area they've paid a lot of attention to is on service to patients, and that's another area that has be exploited going forward for Grady to build profitable market share.
HL: Parkland is among the top one or two public hospital systems in the country, by a variety of measures. What fiscal disadvantages does Grady have compared to Parkland?
Haupert: The two systems have a lot in common. They operate large acute care hospital enterprises at the main campus. We're both in downtown areas. Parkland's primary care network is larger and looks different in terms of how we've intensified the capacity and size of the offices so they can see between 20,000 and 80,000 annual visits.
Most of Grady's are around the 20,000 level. There's probably a need to expand that primary care practice to get preventive and chronic disease care into the communities. The hospital itself is a 1950's facility and there are no plans to replace it. Parkland is fortunate to have an allocation from the property tax that brings in around $370 million annually. Grady has nowhere near that contribution from the counties flowing into its mission. The big puzzle is to make sure the funding is there to continue the mission.
HL: What immediate measures do you plan to take to make Grady into center of clinical excellence?
Haupert: I will have to make that call once I get there. Their relationships with Emory's and Morehouse's medical schools are really solid. I met with leaders at Emory when I was there and I came away very impressed with their commitment to Grady and the care provided. I don't have any grave concerns about quality, but I can look at it more closely once I get there.
HL: What are the political differences between the two, best you can tell?
Haupert: One of the big differences is that the business leaders of Atlanta back in 2008 approached the county commissioners about taking over the governance of the hospital. Since that happened, it's had a really positive impact.
Commissioners are well-intended, but you want a consistent stable governance structure and the business leaders have provided that. And the Woodruff Foundation's $300 million tied to that change in governance is a huge plus for Grady, compared to other public hospitals. As you know when you mix politics with governance, politics sometimes wins out and it's not the best for the patient.
In Texas, each public hospital is single-county based. The issues are the same. There's more demand for care from the uninsured and underinsured than there is money to provide it. It's working with those counties to figure out how best to use the dollars available.
But [there aren't] enough dollars to do everything that everyone needs. One of the big issues for Grady is that do you provide care to people in counties outside of those that support you with funding? The board at Grady has been discussing whether they can continue to provide that. We have that discussion here at Parkland all the time, and have pushed the legislators to give up something, especially in the outer counties, and that's not easy.
HL: Can you think of one particular thing in your career that has prepared you best to take this step, what would it be?
Haupert: So often executives go into difficult situations with their own version of a fix and don't take time to create the level of buy-in or collaboration that is needed to make that fix. I do take that time. That's just a part of who I am. It has served me well in my career, and they want someone who will invest the time to create lasting relationships and lasting improvement. These things are never just a quick fix.
HL: Michael Young made some unpopular, but mostly ultimately vindicated moves to turn Grady around financially. What initiatives were left unfinished, and what would you like to carry over from the previous regime?
Haupert: Several things need to be enriched. The way he went about productivity management is in place, and it was good. The revenue cycle work is huge--that has got to be continued. The focus on patient satisfaction that Mike began is still in its beginning phases.
He had really started looking at clinical service lines that weren't available in the market to try to create them in partnership with other institutions. They did that with stroke care, which is an amazing program that is not duplicated elsewhere. We need to find more like that. Those kinds of programs create profitable growth for the system which funds care for the uninsured and the poor.
One line of departure from the previous strategy would be reflected in my thoughts about how to balance the use of funds between the community clinics vs. acute care. We need to make an investment more on the community side than on the acute side.
Philip Betbeze is the senior leadership editor at HealthLeaders.