A desire to drive institutional change opened new doors—and new challenges—for a former emergency medicine physician.
Ginger Williams, MD, once dreamed of a career as a job-hopping ER physician, moving around the country to interesting destinations. Something happened along the way: She got hooked on driving administrative change.
"I thought I had a great business model when I got out of my residency. I had no overhead as an ER physician. My plan was to stay four to five years every place I went, and move on when I got bored," she says.
"That worked really well for the first place I went, and the second place I went was here, and that was in 1994."
"Here" is Oaklawn Hospital, a 94-bed independent nonprofit hospital in Marshall, MI. Williams is no longer an ER physician. She's been the president and chief executive officer since 2013, when the longtime CEO retired at the end of six-year transition process. No, that is not a typo.
The long transition to a new CEO was fortunate for Williams, who never intended a career in administration. It was her big mouth, she says, that got her in trouble.
"I came here as an attending in the ER and there were some things in the way it operated that I thought should be changed, so I sort of tactlessly brought those up to the CEO," she says. "He said: 'Change it then.' He walked me through it."
That happened a couple more times before Williams realized she was "kind of getting hooked on it even though I didn't want to be in administration."
The progression continued. She was named emergency medical director. She was chief medical officer in 2007 when mentor Rob Covert announced he would retire in 2013 after 36 years at the hospital.
She insists she did not pursue the CEO position with the intention of landing the job. She simply agreed to learn the skill set necessary and agreed to see what happened
What awaited her was an unusually long apprenticeship. The CEO nominated her and two other internal candidates to the board as the three finalists, though one dropped out fairly early on, she says. The board agreed and there followed a lot of time "growing up in a fish bowl" with the other candidate, Williams says.
"He very much wanted an internal candidate and identified more than one to the board. I'm not quite sure why he wanted so much lead time. I'm not planning to provide that much lead time," she jokes. "It made for interesting way to grow up administratively."
Most of Williams' education in administration to that point had been through some physician administration classes through the American College of Healthcare Executives. After becoming CMO, she earned a masters degree in medical management from Carnegie Mellon University.
The board chose Williams to succeed Covert as president about nine months before he retired, and she took over the CEO title in January 2013 when he left for good.
Rumblings of Trouble
Here's where the story gets interesting, says Williams.
The 2014 fiscal year for Oaklawn ended March 31, three months after Williams took over. Though leadership thought it was on budget at that time, with a 3% operating margin, the fiscal year-end and its aftermath brought some nasty surprises.
"At the time, I thought there were a few things we needed to change in order to get even better, but overall we were comfortable," Williams says. "We appeared to be doing well, and it seemed disaster struck everyone but us. I think we had a sense of complete immunity from bad stuff."
There was no burning platform for change, but there were warning signs.
In February 2014, the bottom dropped out with volumes—not just at Oaklawn, but regionally. "We're small so we didn't have other buffers," she says. "We lost a million dollars in February and another million in March."
That led to some buy-in for radical change, but there was a sense that the volume drop was temporary and things would recover without much effort.
By late May, Williams started to hear rumblings from the hospital's auditors.
"Ultimately, that turned into an earthquake," she says.
The auditors had not discovered improprieties or criminal activity, but the mistakes they found were devastating for a small hospital system.
Errors that led to inaccurate estimates on payments made to the hospital had been substituted for actual receipts. As a result, the hospital's FY14 results were inaccurate, piling another $2 million loss on that year's results.
In addition, those problems had lingered deep into the start of the 2015 fiscal year before they were discovered. There had been a small profit prior to the adjustments.
"These were truly mistakes that had to do with not tying the cash accounts to reconciliations. There was estimating going on rather than checking," she says.
Additionally, carrying those errors forward into the first few months of the 2015 fiscal year meant the hospital was already in a more significant hole than it thought for that year.
Williams got her wish to make substantive changes, though not necessarily in the way she wanted. With those losses, the fire on the platform was raging out of control.
Time to Take Action
"At that point, our troubles were apparent to everyone," Williams says.
She went on the offensive on radical change.
"I was completely transparent without throwing anyone under the bus," she says. "I was transparent with staff and community leaders and, without going into detail about how we were going to get there, I told them to expect to see some changes. Community leaders with whom we had contentious relationships said 'do what you have to do' so the hospital could still be here."
She hired Newpoint Healthcare Advisors to conduct a leadership exercise early in Oaklawn's turnaround process.
Stroudwater Associates was brought in for six-months to mentor leadership in identifying targets for cost saving and revenue improvements.
By the end of 2014, the hospital had an action plan and began the turnaround in early 2015. Williams says the effort identified $9 million of improvement. The challenge was executing the plan.
During the analysis they discovered they were staffed at 90th percentile compared to other hospitals of their size. Cuts and attrition brought that staffing level to the 75th percentile on the clinical side. Support and administration were cut to the 50th percentile.
Leadership renegotiated commercial contracts. Oaklawn's biggest payer agreed right away.
"They were good partners for us because they knew we were high quality," Williams says.
After adjusting for the bad estimates, Oaklawn was left with a $5 million loss for the 2014 fiscal year. One year later, FY15 ended with a $1 million margin. The hospital is tracking toward a $2.2 million margin in FY16.
Williams says the turnaround is sustainable. Other executives should take heart, she says, that even a small hospital with its back against the wall can turn things around.
"When you read about this it all sounds dry, but when you live it it's a different thing," she says. "We figured out what we should be measuring and why we should be measuring it."
Decreasing the capital spending plan didn't help on the profit and loss side but it did on the cash side, she says.
"We also looked to expand our provider mix and expand in services where we knew we had more market need, like in pediatric physical therapy, where there wasn't anyone in the market," she says.
"The Toyota stuff was very important, and getting the line people thinking about their environment is healthy and productive. They're no longer victims of circumstance. They're empowered to diagnose what isn't working and figure out the trigger points on what to change and how to measure to see if it made a difference."
She recognizes the importance of empowerment through the initial experience that led her to administration. Her former CEO empowered her to change processes for the better, and she's learned to let her people do the same things.
"It's easy to make good plans, but the challenge is to execute," she says. "Harder than that is sustaining them—that's the completely unsexy part."
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Philip Betbeze is the senior leadership editor at HealthLeaders.