Chapter 08: A New President Takes MD Anderson into Growth Mode
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Description
Here Dr. Mendelsohn gives more detail on how he set up to use good business management models to turn around MD Anderson’s trend toward reduction in services just at a time when the field was developing exciting therapeutic possibilities for patients. The Board of Visitors, he explains, was key to the process, being comprised of excellent businessmen, and he told them, “I’m going to pretend you are my fiduciary board.” The Board advised him to hire a chief financial officer who knew how to make deals (resulting in the hiring of Leon Leach) and to develop business plans based on very clear balance sheets.
Next, Dr. Mendelsohn explains that the first four or five years of his presidency were devoted to making MD Anderson a more user-friendly place. He notes some of the accomplishments of the period: reducing wait times, scheduling appointments by hours (instead of less precisely as morning or afternoon), and working to reduce the wait time for an intake appointment to 8-10 days. The first year, in particular, he says was a difficult time as he and his advisors got rid of 80% of management people and also embarked on the project of writing a very bold mission statement. He brought in the Richards Group to design a new logos and theme-line, “Making Cancer History,” both of which enabled the institution to stop being inward looking and embrace the goal of becoming the premier cancer center. The institution’s values were also articulated, which also helped solidify the culture and community.
Identifier
MendelsohnJ_01_20120926_C08
Publication Date
9-26-2012
City
Houston, Texas
Interview Session
John Mendelsohn, MD, Oral History Interview, September 26, 2012
Topics Covered
The University of Texas MD Anderson Cancer Center - The Business of MD AndersonThe Administrator Understanding the Institution Institutional Change Understanding the Institution Professional Practice Leadership The Administrator at Work Fiscal Realities in Healthcare The Administrator On Leadership
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.
Disciplines
History of Science, Technology, and Medicine | Oncology | Oral History
Transcript
John Mendelsohn, MD:
Then I had a lot of encouragement from our Board of Visitors. There were some very good businessmen on the Board of Visitors. There were no women involved at that time. I set up a Mendelsohn 101 economics course, and I met with five of them 3 or 4 times for a couple of hours. Of course, they knew our plans. The Board of Visitors is not a fiduciary board, but they’re a very involved board, and I explained to them that I thought we had to grow rather than cut, and it would require community support. It would require a belief in the information that I presented, and I got their backing.
Tacey Ann Rosolowski, PhD:
What was their response when you presented this alternative retrenchment mentality?
John Mendelsohn, MD:
Encouragement.
Tacey Ann Rosolowski, PhD:
What was some of the wisdom that you got from these people who were really wonderful in business and corporate?
John Mendelsohn, MD:
I remember the advice that one of them gave me. Very early on, we were assessing what I needed to do internally. He said, “You’ve got wonderful people here. You’ve got to hire a chief business officer that knows how to make deals, not an academic, but somebody that’s been out there and has made deals.” Underlying that is the simple idea that you need to plan your business operation. Running a hospital is a business. You have to plan that on the basis of experience in running hospitals and negotiating and making contracts, and it’s not based on a theoretical balance sheet, on the basis of which I’d been advised to cut the budget another $70 million. It just didn’t make sense. So we got a search firm, and I was lucky enough to find Leon Leach.
Tacey Ann Rosolowski, PhD:
When you’re working with an academic institution, the faculty likes to feel as if they’re involved and that they have control. Was there a bit of a controversy, or was there some unease about hiring a chief business officer who was not an academic?
John Mendelsohn, MD:
No. There was and still is a lot of pushback about the number of people that are in administration as against patient care and research. I can’t tell you how many people we had in Billing and Compliance. They’re all needed. Is it being done as efficiently as possible? No, but neither is the clinic, and neither is the research operation. Let’s face it; when you’re growing your budget and income from $650 million to $3 billion, probably tripling in size, doubling the number of faculty, you have the luxury of just moving along, and you don’t want to take your time out to work primarily for efficiency. You want to build the new programs. It was only in the last couple of years when I was president that we had to spend more and more time thinking about how big did we want to be, and maybe instead of building new buildings, we should be more efficient and use the buildings we have better. We can’t keep growing at this rate. If you double in size from 25,000 to 50,000 patients, you’ve added 25,000 patients. You double in size from 50,000 to 100,000 and you’ve added 50,000 patients. If you keep growing in a linear way, the amount of resources and the infrastructure you have to build keeps going up in a way that’s unsustainable, so we had to start thinking about that.
Tacey Ann Rosolowski, PhD:
What were some of the other pieces of wisdom that you got from the Board of Visitors at the time?
John Mendelsohn, MD:
I relied on their advice more than my predecessor, who had great relationships with them, but I went to the Board of Visitors and I said, “I’m going to pretend you’re my fiduciary board if you’ll pretend you are, and I’m going to tell you everything. I’m going to tell you the dirty laundry, and I’m going to tell you my problems, because I want your advice. You’ve all run companies.” They gave us a lot of advice on many, many things. The person running the hospital was a subcommittee of the Board of Visitors. It began to run through. How do you build efficiencies in? How do you do it in business? How can we do it here?
Tacey Ann Rosolowski, PhD:
I interviewed Nancy Loeffler. I think she served on that committee. I remember her telling me about some of the processes they were looking at.
John Mendelsohn, MD:
Well, Harry Longwell ran that committee. You’ve got to interview him. He was the number 2 man at Exxon. That’s the biggest company in the world, and he really knew about management and budgets. I used to go to some of those meetings, and he would outline a strategy, and then the physician running our hospital, Dr. Tom Burke, who respected him, would follow that advice. We had other committees helping us on marketing. You’ve got to market. I think there are 10 or 12 places in Houston that call themselves cancer centers. There are a lot of ads. Even though we think it’s a no-brainer, you probably ought to come here for cancer care or advice; you have to explain that to people.
Tacey Ann Rosolowski, PhD:
Even in the ‘90s, wasn’t it the case that the services here were slightly more expensive, and so there would have to be some justification? Not that it was not worth it, but that the patient would need to know.
John Mendelsohn, MD:
We’re not that much more expensive. The service here was not as good, though.
Tacey Ann Rosolowski, PhD:
In what ways was it not as strong?
John Mendelsohn, MD:
Longer waits, getting the phone answered. We spent a lot of time the first 4 or 5 years making this a more user-friendly place for the patient. I still was meeting people who remembered “the old MD Anderson.” You came into the clinic and pulled a number off the way you do at the meat counter at the popular grocery store. We started scheduling appointments by the hour instead of, “you’re in the morning, and you’re in the afternoon.” We had a lot of things we could do to make this a better experience. That wasn’t true in all the clinics, but it was true in some of the clinics. Come at 8:00 in the morning or come at 1:00 in the afternoon. Patients still sit a lot. You know why they sit? Because we’re very busy. One patient walks into that clinic acutely ill instead of just having cancer; they have a serious problem, and you’ve got to spend time on them, and it throws everybody else off behind you. In cancer, those kinds of things just happen. Between our wonderful volunteers and the nursing staff being more attuned to this, the patients here seem to tolerate it. I don’t hear complaints about the waits for first appointments. When I first came here, I got a lot of complaints about the waits. There was a lot of complaint about getting in. The wait time to get your 1st appointment could be many weeks or even months. We set a target a few years ago to try to get the average wait down to a week to 10 days. That slips every once in a while, and it’s not because people are evil. It’s that there are other things. There are logistics. A big, new research program comes along, and a few more people want to stay away from the clinic and do their research. I don’t know if we’re still doing it, but for a while, we had reports for each clinic every month of what the wait time was and it was made public. You didn’t want to be a 21-dayer, because your peers are looking at you saying, “What the heck is going on?” It turns out transparency and the competitive aspirations of the faculty to be doing their job right is one of the great motivating forces for efficiency.
Tacey Ann Rosolowski, PhD:
Was that something you learned on the job here, or was that a bit of wisdom that you got from somebody?
John Mendelsohn, MD:
It’s a “we.” It’s not “me.” We had an executive committee that met every week. I met one-on-one with the 3 executive vice-presidents: the head of business, the head of academics, and the head of clinical. Honestly, I don’t know where the ideas came from. They came from the group. It worked very well. It was very much by consensus. I’m sure I contributed at least 25% of the ideas, but they all contributed.
Tacey Ann Rosolowski, PhD:
When you arrived, this interesting kind of confluence; you’ve got your planning for growth, because that’s part of why you came, but you’re also playing catch up with some of the systemic difficulties that were created by past growth, things that needed to be tweaked, and then you’ve got this economic situation. That’s a bunch of thorny bushes to walk through.
John Mendelsohn, MD:
It was. That 1st year was amazing. The 1st year I was a very hands-on leader, not only making decisions but conducting a whole lot of meetings. Of the top administrative decision-making people on the staff here, more than 80% were gone a year later, through many different routes. I think I only really told one person, “You’ve got to go,” and the for the rest of them things turned up and “Oh, congratulations. I’m glad you got that job.” I’m not a very ruthless person, but we had to change things. During the transition we brought in faculty temporarily to take charge of things that did a great job.
Tacey Ann Rosolowski, PhD:
This was a process of kind of getting people who shared the vision?
John Mendelsohn, MD:
Right. Well, figuring out what our vision would be. We had to write a vision statement, incidentally.
Tacey Ann Rosolowski, PhD:
How did that take place? Tell me about that process.
John Mendelsohn, MD:
The head of our hospital, who at that time was an MBA, said, “John, we don’t have a vision statement.” We didn’t have any value statement, a list of values. I remember talking to one of the faculty members who is very strongly opinionated and much respected. “I don’t know our values. Come on, our mission is to cure cancer. That’s all we need to know.” We had committees to do the vision statement, and it took about a year. I think I really wrote the final draft. I’m very proud of it. It was bold. “We shall be the premier cancer center.” We talked a lot about that. We were number 2. “Do you want to put that in writing?” “Yes.” “Based on the excellence of our people, our research-driven patient care, and our science.” It was very simple. I think that was very good. Then we got our tagline, “Making Cancer History,” and that was good. We hired the Richards Group to do that. We had gone through logos with other consultants; it was a joke. Our new logo, cancer with a line through it, finally came from the Richards Group, too. This was so obvious. We had committees for the values: there were 12, then it was down to 6, and then it was down to 4. There were 3 or 4 subcommittees. Then we had a meeting, and the committee chairman presented me with “caring, integrity, and discovery” and why they had landed on them, and it worked. Those values are important. All of our personnel evaluations are pegged to those values, for example. Every business person knows you’ve got to have your vision statement and your values to create your culture. Well, I accepted that and said, “We’ve got to have it here.” We did.
Tacey Ann Rosolowski, PhD:
What was the feeling amongst the rank and file about doing that? Was there a sense, “What’s happening here? What are we turning into?” You were recognizing this was an enormous place. It needs to be run like a business, so we need to step up and start doing the things that a business will do. Was there a bit of resistance to that?
John Mendelsohn, MD:
No, because it wasn’t looked upon as business. It was looked upon as building upon our caring and the culture. It was a statement of our culture.
Tacey Ann Rosolowski, PhD:
What kind of responses did you get to the theme line “Making Cancer History” and then the mission statement, in particular, and also the values? Did you find that having them articulated made people feel more strongly about it? What was the reaction in the wind?
John Mendelsohn, MD:
I think the vision statement helped rally an institution that was in the process now of recovering from this drastic cut in budget and this inward look by saying, “We’re going to be the premier cancer center.” It’s a whole different view of the world, if you think about it. I think it was a home run. The values helped us build better communications and more meaningful collaborations between all the various interest groups, the nurses, the secretaries and the data managers, and the doctors. And we wrote sentences after each. I spent a lot of time on that. There’s a descriptive sentence after “caring.” I remember, “We care for our patients and each other.” It’s right in there. People are busy. They’re worried about their family, they’re worried about their wife’s job, they’re worried about their research, and they’re worried about their patients. Here is something you can hold on to.
Tacey Ann Rosolowski, PhD:
The shared culture.
John Mendelsohn, MD:
Yes. It’s verbalized. It’s not just ethereal.
Recommended Citation
Mendelsohn, John MD and Rosolowski, Tacey A. PhD, "Chapter 08: A New President Takes MD Anderson into Growth Mode" (2012). Interview Chapters. 1424.
https://openworks.mdanderson.org/mchv_interviewchapters/1424
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