Creating a Growth-Oriented Hospital: Q&A With Mark Newton, CEO of Chicago's Swedish Covenant Hospital

Mark Newton has been CEO of Swedish Covenant Hospital for 11 years, during which he helped the independent hospital grow into the largest academic community hospital on Chicago's North Side. Known for his entrepreneurial attitude in what can be a very bureaucratic industry, Mr. Newton held management roles outside of the hospital sector before he joined Swedish. At the height of the recession, Mr. Newton had to ask employees to withhold their pay increases, promising to repay the lost wages once the hospital was on improved financial footing. In April of last year, he made good on that promise, paying out $1.5 million to employees. And in the last eight months, he has helped the hospital launch the Chicago Back Institute, a Genomics Medicine Institute and a combined medical office building and ambulatory surgery center in partnership with physicians. Here, he discusses his successes at Swedish Covenant and how he plans to lead the hospital into a new era of healthcare. 

Q: Swedish Covenant has a fairly strong market share in the very competitive Chicago market and remains an independent hospital in a time when many independents are struggling. What gives Swedish its edge?

Mark Newton: I've always nurtured and focused on a growth agenda with an aggressive timeframe. Other industries have the ability to transform their service and market approach fairly rapidly, but hospitals generally take much longer to transform themselves. What we've always been focused on is trying to undertake transformation at a much faster pace than what is perhaps the industry norm. To remain an independent hospital going forward, we must continue to grow by transforming, capturing new market opportunities and being an innovative thinker in the market.

Q: In terms of implementation, how were you able to transform Swedish Covenant into a hospital focused on aggressive growth?

It's really centered in the management systems. [Swedish Covenant] is structured on a service-model or service-line basis. These systems are imported from manufacturing and other companies that view their enterprises in terms of product and service lines. We aim to be service-line leaders in all clinical areas. As an independent hospital, you really can't thrive on just one or two strong service lines. We have about 15, which is due to a large extent through the management systems we use.

This is an industry that’s constantly reinventing itself, and we’re in a geographical market that is very fluid as well, so to be successful we must be flexible and able to quickly adapt to meet the demands. The focus must maintain centered on providing the best patient experience and growing by taking calculated risks and making smart investments — and making the best of opportunities as they arise.

I’ve also worked to foster this type of thinking among employees to create a culture of innovation throughout the organization. For example, I ask that all service line managers run their service line as their own business — they are the day-to-day experts in their area and therefore they are in a position to determine areas for growth and areas where improved efficiencies can be realized. Any manager can come forward with a business plan for a new program or technology, and their proposal is reviewed by a committee based on qualitative and quantitative criteria.

This type of thinking is not only encouraged among managers, but among all employees: Through monthly e-mail messages, employee open forums and regular communications, I ask all employees to think outside their daily roles to consider new ways to improve the patient experience or improve the way tasks are accomplished at the hospital.

This approach instills a sense of ownership and freedom that brings about entrepreneurial ideas, which our executive team then supports with the necessary resources as appropriate. There are numerous examples of how such unique ideas have truly made a difference, and I believe this is one way Swedish Covenant has set itself apart and been able to grow and transform over the past decade.

Q: Swedish Covenant recently launched the Chicago Back Institute and the Genomics Medicine Institute and also recently gained approval for a ambulatory surgery center and medical office building. What was the strategy behind these recent projects?

All three are representative of strategies to get ahead of a transforming market and where the consumer is going. Minimally invasive approaches to back care is increasingly gaining consumer attention, as is genomics. An ASC itself isn't a novel thing, but it’s part of a strategy to align physicians as well as to open up space in our main OR, which is currently congested from increased volumes in our neuro and robotic surgery lines.

We want to lean toward change instead of falling away from it or just waiting for it to happen. As a community hospital we are rare in our ability to provide many of the advanced clinical services, renowned physicians and high quality care that can be found at academic medical centers. We strive to provide this level of care, paired with our patient-centered focus, to give our patients everything they need under one roof, right here in their community.  

In addition to these service line and campus expansions, we’ve also recently invested in several new technologies — including the latest generation of da Vinci robotic surgery technology and the newest Seimens CT scanner — to further enhance our abilities to provide advanced clinical services. Our clinical expertise has been recognized through various achievements in the past year, including Magnet recognition for nursing excellence, Chest Pain Center Accreditation from the Society of Chest Pain Centers, and recognition as a Distinguished Hospital for Clinical Excellence by HealthGrades — placing us in the top 5 percent of hospitals in the nation for clinical performance.

Other growth strategies we’ve implemented include expanding our medical residency program and strengthening our partnership with our affiliated medical fitness center, the Galter LifeCenter, to further integrate our services. These efforts are especially important as the healthcare system moves toward an increased focus on wellness and prevention and the concept of bundled services.

Lastly, with an eye toward meaningful use and healthcare reform, we continue to invest in electronic medical records technology. We have been recognized as national leaders in implementing EMR and have achieved HIMSS Stage 6, placing us in the top 3 percent of hospitals in the U.S. for healthcare informatics. We recognize the important role EMR technology will continue to play in healthcare, and we plan to stay ahead of the curve.

Q: What do you think will be the biggest challenge for the hospital this year or in the next few years? How will you confront it?

MN: I think the biggest challenge is trying to understand not just hospital involvement, but individual involvement, in healthcare reform. I'm trying to look at healthcare reform from the vantage point not just of the hospital but also of the average person on the street. How are they going to seek care and get coverage? How will consumer behavior in response to reform play out? The answers to these questions will drive the nature of the delivery systems we put in place. Our plan is to remain very flexible, allowing us to participate in multiple types of delivery systems. Some hospitals are vertically integrated — they want to control every piece of the delivery system. While that is one approach, our response as an independent hospital is that we need to cater to individual physician needs and maintain a high degree of flexibility to adapt to how doctors and patients want to relate to hospitals.

Q: Healthcare reform has brought about many changes for hospitals, and one that has been making headlines recently is the accountable care organization. Does Swedish have any plans to develop or join an ACO?

We have to maintain a lot of flexibility. We're at a point where we have a PHO (physician-hospital organization) already in place, and we already accept capitated payments, assuming financial risk. We have these structures in place and can build upon them. There are a number of questions about how ACOs will work — how will consumers be assigned? Will they be informed of their assignments? Who will tell them? People travel, people move. How do we keep them within the ACO?

Personally, I am more excited about growing the use of bundled payments for episodes of care. [Under these payments], hospital and physicians have an incentive to lower cost and improve quality of care. Delivery systems will need to understand the implications though, such as the importance of bringing physicians to the table for bundled payment. There are also implications for patients. The nature of these payments reduce consumer choice.

Q: You entrepreneurial attitude is somewhat unique for the hospital industry. What made you realize you wanted to enter healthcare administration?

MN: What I find most rewarding about healthcare is that the people I'm privileged to work with are here because they have a fundamental drive to help people, not to increase stock price. That is a very powerful motivator, but it has to be balanced with business intelligence. Many people who work in healthcare have not worked in a corporate environment, and because of this, risk-taking, conflict resolution and accountability to meet performance goals are often management challenges for hospitals. If you put in place a leadership team that is focused on the hospital's mission but has additional skills in these areas, it is very exciting. That for me is the most rewarding part.

I would also say that running a hospital is the most complex management task of any industry I've had exposure to. One might argue that a $1 billion corporate enterprise is more complicated, but that's really a matter of scale, rather than a matter of complexity. For example, in the airline industry there are maybe three key standards of success, but what's the standard of success for hospitals? There are many.

Q: Throughout your career what has been the most important thing you've learned about leading a hospital successfully?

You really have to in some extent be a judge. You have to have the ability to look at two different perspectives and come up with a resolution that's fair. This is an environment where there are many countervailing trends and motivations. You really have to have the ability to look at a situation and determine "what is the right thing to do?"  This has kind of been a guiding force for me. If you're doing the right thing, it requires sacrifice and compromise but that is part of running a hospital with a sense of mission.

Q: Any other advice to impart to others on how to be a successful hospital leader?

One of the things I've learned is you have to have a culture of transparency in the organization. If I create a culture of transparency and involvement that means leaders have to check their egos at the door. I encourage employees to call me by my first name, and myself and all hospital executives make rounds throughout the hospital regularly. 

What we're really trying to do here [at Swedish Covenant] is grow on multiple levels. And you need transparency and accountability to create a growth-oriented organization.

Learn more about Swedish Covenant Hospital.

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