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Retired Methodist Le Bonheur Exec Gives Strategic Advice on Market Share

Analysis  |  By Jack O'Brien  
   January 03, 2019

After nearly three decades in the Methodist Le Bonheur Healthcare system, Chris McLean is serving as CFO of Shelby County.

After a lengthy career in healthcare, Methodist Le Bonheur Healthcare chief administrative officer Chris McLean intended to retire at the end of 2018. His plan was to move to Florida and "take it easy." However, in the midst of a nearly two-year retirement transition process, McLean was approached by recently elected Shelby County Tennessee Mayor Lee Harris about joining his administration as chief financial officer. 

McLean says one of his retirement goals was to continue to give back to the community, so he accepted Harris' offer and took over as county CFO this year.

McLean discussed his tenure at Methodist Le Bonheur Healthcare with HealthLeaders, highlighting the ever-changing nature of healthcare and what he learned over the course of nearly 30 years in healthcare.

The following transcript has been lightly edited.

HL: What has been the biggest or most notable change at Methodist Le Bonheur from the time that you joined to the time that you're leaving? 

McLean: When I look back, I was at [Methodist Le Bonheur] for over 28 years, but I spent six years in another market during that period. In the 80s and early 90s, we were a regional healthcare system with up to 18 hospitals spread over Arkansas, Mississippi, and Tennessee, conscientiously starting on the sale of our Mississippi hospitals and then the sale of our rural west Tennessee hospitals in order to focus on Memphis. [That decision] was one of the key strategic directional changes [with] the belief that we would be better by focusing on our main market than being in the rural settings. I think that has proven to be a good decision.

[Also,] taking advantage and expanding our academic relationships with the University of Tennessee has been a critical component. When I was gone, Methodist merged with Le Bonheur, the children's hospital, and that got us much heavier into academics and tied to UT. Then Baptist left the medical center area in early 2000, and we picked up many of the adult educational relationships. Staying in all parts of the community and expanding our academic presence and adding Le Bonheur was a huge positive for us.

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Lastly, focusing on meeting the needs of all sectors of the community in Memphis, both the affluent and non-affluent parts, [is what] we think helped us be successful in growing our market share, especially our commercial market share.

It's not one thing; I think it's a series of steps that have helped us grow and be successful. We grew by shrinking. By coming back to Memphis, we went from a $1.2 billion healthcare system to a $2 billion healthcare system. We focused on growing in Memphis and growing regional and national referrals, especially at Le Bonheur Children's Hospital.

HL: How do you view the current state of healthcare in comparison to when you first entered it?

McLean: I think we have a great healthcare system in our country, but what we have is one that's unaffordable. The biggest challenge going forward is going to be how do we stop healthcare from continuing to grow as a percentage of GDP and squeezing out other investments and opportunities?

When I came into healthcare in the early 80s, we were 12% of GDP. I never thought we would get to 15% or 16%, and we're headed quickly to 20% of GDP.

I think the biggest challenge going forward is how do we rein in the growth? I don't think anybody's trying to take it back to 12% of GDP, but it can't keep growing at this pace. How we deliver in a more cost-efficient manner that's affordable for businesses, affordable for individuals, and affordable for governments is going to be the real challenge [and], at the same time, improving our quality and surface outcomes. 

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It is going to get much more difficult because I firmly believe the ability to cost shift is gone, which means we've got to do business differently than how we've done it in the past. We've been saying this now for four or five years and haven't really moved the ball forward, but it's going to happen, and that's where the next generation has got to take us.

HL: What advice would you give to a younger healthcare CFO that could help him or her transition in this new world of healthcare?

McLean: Learn from other industries, be flexible, and be good communicators. I tell everybody [that] payer mixes are everything today: those with high-commercial mixes are going to do financially well, those with low commercial mixes are going to have more trouble. That could, and probably will, change in the future.

Understand what is your financial engine and what's the risk of it being disrupted. Work with the senior team to come up with new strategies, because what has worked in the past will definitely not work in the future, what's going to be successful in the future is yet to be determined.

It's going to be an interesting and challenging time. Looking back on my career, we thought every year was going to be terrible. DRGs were going to kill us, the Balanced Budget Act was going to kill us, yet it's been a lucrative time just given the growth of healthcare expenditures, and how we grew it through cost shifting and in some unique governmental payment opportunities, like 340B drug savings.

In my career, we took advantage of those opportunities when they presented themselves, but we did not predict those. You know it when you see it, and that's what the new generation is going to have to do, is look for those opportunities and then react quickly when they appear to be working.

HL: Is there one accomplishment that you're most proud of from your time at Methodist?

McLean: The accomplishment comes from the entire team at Methodist. The one thing I am most proud of is the fact that we stayed in all parts of the community, both the rich and the poor, and our mission never wavered.

We were going to serve the entire community, regardless of ability to pay. To do that, we had to have a very substantial commercial market share. I've always said it was sort of the 'Robin Hood' strategy. We took advantage of the commercial margins to take care of the poor. That's what kept me in healthcare—that is a sense of purpose—and something I'm proud of that I've been part of.

Gary Shorb was the CEO most of the time I was here, and the one comment he made that always drove me crazy but turned out to be true, was 'We will do well by doing good.'

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.


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