Leadership Lessons From "Little" Failures: Q&A With Health Management Associates CEO Gary Newsome

The state of the hospital organization has changed drastically in the past few decades. Many hospitals now work collaboratively with each other, perhaps sharing resources or service lines, and others have joined forces completely to become part of a larger health system. Gary Newsome, president and CEO of Naples, Fla.-based Health Management Associates has seen this shift in hospital restructuring firsthand. Health Management, through its subsidiaries, currently owns and operates 66 hospitals in 15 states, and he says for hospital leaders to guide an organization that large to success, they must recognize and utilize all of the different invaluable resources at their disposal.

Mr. Newsome shares his insights on how failure can be a learning moment for hospital leaders, who hospital leaders can learn more from, and how the current healthcare environment lends itself to numerous partnerships between for-profit and non-profit hospital organizations.

Gary Newsome, president and CEO of Health Management AssociatesQ: What key leadership issues have impacted you the most since arriving at Health Management?

Gary Newsome: It's interesting, over the span of my career, going from the responsibility of operating one hospital to becoming president and CEO of a healthcare company; it is a quantum leap. All of sudden, the weight and responsibility, the strategic direction — everything is in your lap and on your shoulders. It's not only your own career in your hands, but you have the responsibility of a countless number of people and the organization as a whole. The associates throughout the company depend on me, and to a large extent, it made me want to do even better and stretch myself even more. It made me try to understand all of the different aspects of the business and try to steer the company in the right direction.

I was brought in for a reason. There were several years here of lethargic growth, and it was really viewed as a mature company. The past few years, though, there's been a great deal of growth, and that's a lot more exciting. Over the past three years, I've learned to appreciate the talented people I work with even more than I appreciated them before, and I realized it's important to have the best talented people in your organization. With the fast changes in healthcare, the people and the thought processes have to be able to keep up.

Q: What is the best way to develop other leaders? Have you seen more successful ways to lead than others?

GN: Throughout my career, at every organization I've been at, one of my biggest responsibilities was to develop people. If I did a good job of developing people, that would result in direct and sustained growth in the company. I've always felt I needed to surround myself with great people, but when you have great people, what you can't do is put restraints on them. Obviously, we have to be within the bounds of the regulatory environment, but the best I can do is to give them the big picture direction and let them go. And sometimes people fail, but that's okay. That's when they grow, and that's when I've grown as well. If you're willing to let people fail a little bit, you're going to have a great organization — not that people have failed in a big way, but in little ways.

Q: What stumbling blocks have made your leadership stronger over the years?

GN: I think probably when I've learned the most is when I failed to make a hard decision that needed to be made in a timely basis. When you're dealing with people and dealing with people's lives, it's hard to make difficult decisions. In reality, to guide an organization of this size, 40,000 associates, you have to make hard decisions sometimes. When I've failed to make difficult decisions, typically it comes back worse. I've learned a lot over the years to deal with difficult situations, and the best way is to hit them head on.

When a new leader comes into an organization, some approach it from the standpoint, "I'm going to bring my team together." Frankly, when I came [to Health Management], it had some very talented people that were underutilized, and there were others where it was more appropriate they move on to other opportunities. I learned to surround myself with great people here but also have been able to develop people that previously didn't have the opportunities to grow and develop.

Q: You were named CEO at Health Management a little more than three years ago. What things have you learned in those three-plus years that you didn't realize would be issues going into the job?

GN:
In healthcare, I've been exposed to a lot from a management standpoint. One of the things that became very apparent to me that I've learned over time was how to tap into the talent of a very experienced board of directors. It is filled with an array of people with tremendous healthcare and business experience. You must tap into those individuals and use them because they are there and want to help and have valuable insight from a leadership standpoint. I have enjoyed getting to know my board of directors and tapping into their talent.

One of the things that healthcare is noted for, on the clinical side, is that we've always been very innovative in terms of technology and other things, but on the business side of health, I feel we haven't been very innovative. It's been the same structures, same type of focus, and we need to step it up from an innovation standpoint and have innovative people, people from outside of healthcare. For example, using the data and analytics that we have in healthcare, we found out in 2010 that [Health Management] has 3.5 million patient contacts annually. If you think of the data layered in below that, it's just millions of data points that have critical value for running our business. I don't think our business has ever tapped into that, and we've been able to pull out some things that we didn't know we did well for some of these years. Data analytics have helped us on the revenue cycle side, the marketing side — and we can use analytics going forward as other aspects of the [Patient Protection and] Affordable Care Act are being implemented. Bringing people in that understand that data was very important for us.

Q: Since Health Management is a for-profit hospital operator, are there certain things that are harder to manage than non-profit hospitals? Do you have any examples?

GN: It's quite interesting. My whole career has been on the investor-owned side, so I can't really speak for the not-for-profit side. But I think this is true for not-for-profits and a lot of industries: How you manage short-term expectations and long-term success and growth. That's a dynamic that is sometimes the most challenging for us from the investor-owned side. There are certain short-term expectations we have, and it's important for us to also see where we're going to be down the road. In healthcare, there are certain expectations in terms of same-hospital growth, financial performance, which we've done very well, and it makes it easier when you're performing well on a short-term basis to plan long-term as well.

For example, we're in an era where a lot of hospitals are struggling. They can't handle the rapid pace of change, the complexities associated with the [Patient Protection and Affordable Care Act]. We have not-for-profit partners that aren't able to tap into cheap money, so they can't invest. What it's done for us is we continue to invest in all of the fundamental things that have allowed us to expand our footprint in the marketplace. We've been able to develop great partnerships with not-for-profit partners out there. For example, the Shands hospitals here in Florida: We have a joint venture with three hospitals, and this is recognizing where we have core competencies in running a community hospital. We also just recently announced a letter of intent with Integris Health in Oklahoma. Integris is by far the leading provider of healthcare in the state of Oklahoma. Great performance, great quality. And here's a situation where they have community hospitals, and we're partnering with five of them as majority owners. That, to me, is the long-term opportunity for organizations that have the cultural mindset to be able to partner, and we feel like we have that culture.

We have great results from our partners, and not just on the business side. On the clinical side, we have stroke centers, chest pain centers, and I'm pretty excited about that going forward. It's all about putting process and discipline into what we do, and it all goes back to having people who are innovative and who are thought leaders. And my job is to let them do what they do best.

Q: What projects or goals are you and Health Management most excited about for 2012?


GN: We're focused on developing and spreading our footprint in the marketplace, and a big part of that is having the right network of physicians. And another one of the most important aspects of any hospital is the emergency room. By far, most admissions, patient contacts, family contacts and physician contacts all surround the ER, and we have to have the environment and experiences in our ERs that will set us apart in the marketplace. You can tie that in with our physician development and marketplace development.

We also will be looking into surgery centers, diagnostic labs, and the key to all that is the physician network and primary care. When you are becoming a place where associates want to work, where patients want to come and where physicians will want to work, you are doing the right things. Health Management has really great people at all levels, and our hospitals and the people at the bedside are doing remarkable things.

Related Articles on Hospital Leadership:

Avoiding "Stupid" in Healthcare Leadership: Q&A With Glenn Fosdick, CEO of The Nebraska Medical Center

A CEO Walks Into a Patient Room: Q&A With Dr. David Feinberg, CEO of UCLA Health System

From Nurse to CEO: Q&A With Marina Del Rey CEO Fred Hunter

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