The Interview: Memorial Hermann CEO Chuck Stokes

Philip Betbeze, February 1, 2018

"The board really wanted to see me continue the legacy of anticipatory leadership that we've had for over a decade. We have a history of proactively anticipating the changes in the healthcare environment and responding to those before the rest of our market. As an example, we have 292 delivery sites across Houston, but we started putting hospitals in the suburbs years before the competition did. We put hospitals in The Woodlands and Kingwood and Katy and Sugar Land because we anticipated needing to be more consumer-friendly. Given the local, state, and national headwinds, they want me and our team to continue to anticipate changes, which is pretty scary. The benefit to me is that neither the medical staff nor hospital or health system leadership have to get used to a new person or leadership style.

"My leadership style is open, honest, transparent, and respectful of the talent in this organization. I think that's the type of leader everyone wants to follow and work with.

"What's next? Well, we know no one is going to pay us more money. Consumers and payers are looking for value. Our care redesign effort is a five-year journey with a goal of taking out $500 million in cost to make us financially sustainable. For example, we've implemented multidisciplinary rounding on patients. That means physicians, nurses, social workers, care managers, and PA professionals are making rounds when patients are admitted to the hospital to anticipate their discharge disposition within the first 24 hours. Will they be discharged to home, homecare, hospice? If we do a better job of anticipating, we can make those accommodations earlier in the patient's stay, which keeps us from scrambling and increasing length of stay trying to find a place for the patient.

"Our 20,000 employees and 5,500-person medical staff can submit ideas on how to improve care or reduce waste through a portal we developed called iGenerate. It's a simple thing but the people who know best about how to improve care are the docs, nurses, and the frontline people who do this every day. We've been doing this systemwide for about a year. This was generated from my experience with Baldrige. For example, one of our employees found our shredding service was charging us for every bin. But according to the contract, we should only be paying for the site. That will save us $100,000 a year, and not only that, they redid the contract and gave us a refund. Baldrige is not about winning the award, it's about the journey of getting better faster.

"Houston was growing at almost 100,000 jobs a year, but when oil dropped below $50 a barrel, it became a crisis. It's coming slowly back. The city is still growing at about 25,000 jobs a year but it's been more in service industry jobs, where people either do not have health insurance or have a $3,000–$5,000 deductible. They're using services but not paying the bill, so bad debt and charity care has continued to rise. We have to figure out how to mitigate that because I don't think it's going to go away.

"There's no going back: We've eliminated the COO position. In fact, we've eliminated two layers of senior leadership. I don't have an answer on how many years I want to stay, but the board has asked me to prepare this organization for both the changes we know are coming and those we don't. I'm in the best position to prepare us for that. I will know, and the board will know, when it's time for a leadership change. I'm comfortable with that, and so are they."

Philip Betbeze

Philip Betbeze is the senior leadership editor at HealthLeaders Media.

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