Culture before strategy: Retiring Memorial Healthcare CEO Frank Sacco provides advice from his 42-year career

Feb. 29 will be a significant day at Hollywood, Fla.-based Memorial Healthcare System. It marks the last day of Frank Sacco's tenure as president and CEO of MHS, a 28-year stretch of marked growth for what is now one of the largest public health systems by revenue in the country.

Mr. Sacco joined MHS in 1974, after serving in the Army Medical Service Corps. He earned a master's degree in healthcare management from Miami-based Florida International University and worked his way up through several management and administrative positions. When Mr. Sacco took the helm as CEO in 1987, MHS was a very different health system from today. Under Mr. Sacco's leadership, the system has grown from one to six hospitals, a nursing home, home health agency and primary and urgent care centers that collectively employ more than 11,000 and work with 1,700 physicians.

We checked in with Mr. Sacco to glean some advice from his accomplished career. Here, he reflects on the importance of culture in driving growth, transitioning between leaders and what he looks forward to most come Feb. 29.  

Question: Why did you go into healthcare?

Frank Sacco: It's interesting because I never studied for that; sociology was my major in college. I was commissioned through ROTC as an Army Medical Service Corps Officer and I caught the bug. I was stationed at Walson Army Hospital in Fort Dix, N.J. I was a medical supply officer in the Second Infantry Division stationed in the Republic of Korea, and then I served at the Madigan Army Medical Center in Tacoma, Wash. At that point, when I got out, I said, "This is the career I want."

I took a job outside of [healthcare] — a management training position — for five months, until I saw an opening at Memorial Hospital in Florida. I applied and didn't get it, but was offered another. I took the job to get my foot back in the door at the hospital and then went back to school for my master's [in healthcare management].

Q: Looking back on your career, what do you see as your greatest accomplishment?

FS: It was the development of both the culture of putting the patient first, as well as developing a high-performing, cohesive executive management team. I don't want to look at bricks and mortar — growing MHS from one to six facilities, including a first-class children's hospital known for heart transplants and soon-to-be doing kidney transplants — because the real accomplishment is developing this culture where everything we do, we do it around the patient and the patient's family. We define the family broadly, as whoever the patient considers family.

Q: As you mentioned, under your leadership MHS grew from one to six hospitals, and you were also able to develop a clinically integrated network of physicians and other hospitals. From your experience, what is your best advice to other administrators also trying to drive growth and clinical integration?

FS: The real key is first to define the culture and have that culture embedded in your healthcare system. When you do that, it's a lot easier to grow and expand. You can't ignore strategy, but a lot of people are really good at strategy, and where they break down is implementation. We excel at implementation. You can have a vision or strategy, but you have to be good implementers. That's critical.

If you have the culture that drives your system, it's easier to get physicians and employees on board as to what you want to accomplish — whether that's building another children's hospital, a rehabilitation hospital, a clinically integrated network or outpatient network — whatever it is, it's easier because they buy into the culture. That culture doesn't change as you grow your system.

Q: During your time at MHS, the system was also able to eliminate the use of tax dollars to fund uncompensated care. What strategies did you use to help accomplish that?

FS: First of all, we brought a strong financial discipline to the organization. We grew our brand through hospitals in the suburbs. We take care of all patients regardless of ability to pay, but the pay mix improves as you go into the suburbs. That's important.

Our managed care contracting and compliance strategies were critical to this. We made sure we were paid what we should be paid. We have a managed care compliance division separate from the normal revenue cycle division, so the person leading managed care contracting is also leading compliance. That helped us enormously. We moved our net revenue up to nearly $1.9 billion and collected $8 million in taxes. That $8 million in taxes only pays for the county's share of Medicaid Match.

The bottom line is we don't see a penny of the $8 million in taxes.

Editor's note: For additional details on how MHS was able to eliminate the use of tax dollars to fund uncompensated care, click here.

Q: As you transition between leaders, how does MHS maintain its momentum and success?

FS: I'm still the CEO, so the momentum is doing well. We have four internal candidates being considered by the board as my replacement, and they are doing a national search for outside candidates. The board has lost some of its traction — it got bogged down in processes I normally would have sped up if I were responsible.

Q: What has been difficult for the board?

FS: There hasn't been a search in the 60-year history of this organization. We're 63 years old, and it's the first time we've done a national search. The board wanted to make it transparent and had to retain a search firm, which took 2.5 months. When you have a board, everyone has an opinion. They burned through half of my notice going through that process.

A lot depends on when that candidate is selected and who it is. If it is an internal candidate, the transition will be smooth. If they come from outside, we have to see who that candidate is and how that will work. We may have to appoint an interim.

Q: What are you looking forward to most in retirement?

FS: I look forward to my own personal time. I plan to relocate to Ormond Beach — it's upstate about 250 miles north, on the coast. I'm going to renovate an older house and get a puppy. I'm a dog lover and I haven't had a dog for awhile, so I'm looking forward to getting reintroduced to my canine friends. I also have a cabin in northern Georgia, so I'll go hiking. My daughter is also having baby in February and my son is getting married in April, so I'll be busy.


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