Remaining independent and competitive in today's healthcare environment: 5 questions with Marin General CEO Lee Domanico

Greenbrae, Calif.-based Marin General Hospital wouldn't be what it is today without Lee Domanico.

Mr. Domanico, who currently serves as CEO of Marin Healthcare District and Marin General Hospital, helped the hospital transition from a large system to become a successful freestanding facility. He oversaw Marin General's recent process of raising $400 million in public funding for recapitalization and led the hospital to break ground on a new facility in July. With bachelor's and master's degrees in industrial engineering, Mr. Domanico previously served as CEO of Mountain View, Calif.-based El Camino Hospital.Domanico.Final.10.2.13

Here, Mr. Domanico spoke with Becker's Hospital Review about the recapitalization and construction processes and how Marin General stays competitive despite its freestanding status.

Note: Responses have been lightly edited for length and clarity.

Question: How have your industrial engineering degrees helped and hindered your career in healthcare administration?

Lee Domanico: It's actually been helpful in two areas. The first is that those degrees have taught me how to approach and analyze problems. In addition, back in the mid-70s, industrial engineering techniques were being applied to hospitals. Early on, the degree allowed me to get into the hospital industry, where I had the opportunity to study nearly every aspect of the hospital operations over a couple years, including scheduling and staffing.

It allowed me to analyze issues, and at the same time, the degrees allowed me to enter the healthcare industry when the demand for an industrial approach was high.

Q: Why has Marin General decided to stand alone despite the continued uptick in healthcare mergers?

LD: In most health systems, there are hospitals that contribute to the corporation and there are hospitals that tend to be receivers. In deciding to stand alone and become independent, we had the opportunity to commit 100 percent to our community as opposed to contributing to other communities throughout a large healthcare system.

In addition, we had to reconstruct the hospital due to the age of the facility as well as California seismic standards. As an independent hospital, we knew we'd have the opportunity to go to voters and raise capital through a general obligation bond. That would have been impossible as part of a large healthcare system.

There is a combination of three elements that allow any hospital to remain independent. The first is a medical community that seriously decides to partner with the hospital. We had that in place.

The second is a geography that creates some barriers to entry. We have that. To the south we have the Golden Gate Bridge, to the east we have the bay and to the west we have the ocean and the mountains. Marin County's a defined community, and we felt we had some barriers to entry because of our geography.

Finally, you need an alternative revenue source. That was the GO bond. We had voters who could support the building of the hospital, so we felt we had the strong backing of a community.

We had those three things going for us: a cooperative medical community, good geography and an alternative revenue source for capital.

Q: Marin General recently raised $400 million in public funding for recapitalization. Could you discuss that process?

LD: Passing a GO bond is much like passing any measure. It's a specific campaign that's run by a campaign consultant we use who works with various hospitals and school districts. It's very sophisticated.

Process-wise, we analyze who the likely voters will be and within the likely voters, who the likely yes voters will be. For example, senior citizens are likely to vote yes for healthcare. While we do general public education about the matter, we also conduct focused communication with those likely to vote and support the measure. We run a phone bank and call our likely voters to get them committed to voting.

California requires a 66.6 percent approval, and we got 68 percent.

Q: This summer, Marin General broke ground on a new facility. How's the construction coming along?

LD: We continue to be on budget, and we hope to be finished in early 2020. The project is underway, and we are in the process of putting the foundation in. The steel should go up in early 2017.

The facility will be at the intersection of highly complex medical care and healing. In addition to all the advanced technology, the hospital's designed to be a healing environment. We have tons of natural light, and we have about nine gardens around the campus and on some of the rooftops. We also have a sound engineer who's working with the architect to make the hospital quiet for patients.

Additionally, in order to free up space, we completed a parking garage to move all our staff off the surface lot into a parking garage, which came in 2.5 percent under budget.

Q: How does Marin General stay competitive despite many larger facilities in the surrounding market?

LD: We stay competitive through collaboration and partnering. In 2010 when we became independent, we partnered with over 150 physicians.

We've partnered with our physicians on imaging centers and cardiac testing centers. We've also partnered with two of the closest medical schools to bring more sophisticated medicine to work with our doctors. We have half a dozen partnerships with the University of California and some with Stanford University, all of which help us remain on the cutting edge of bringing sophisticated care to Marin.

As another example, we put together a $90 million, 15-year partnership with Phillips Corp. to take us from the old hospital into the new one. It's a long-term partnership that will embed one or two technologies at the hospital and get us early access to new technology if we choose.

In our market there are several large systems. When you're all independent, those systems that were formerly competitive with each other now become potential partners. When you become a freestanding independent hospital, the doors that were closed due to competition become open.

Overall, we are partnering to gain what we need that we can't do ourselves so that we can remain freestanding.

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