Chapter 13: A Prescription for Fiscal Health: Be Pro-Active

Chapter 13: A Prescription for Fiscal Health: Be Pro-Active

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Description

Dr. Leach begins with segment by explaining that institutions tend to hold onto the old rather than moving ahead into change. He then talks about activities that will enable MD Anderson behave pro-actively in the current and future economic context. He notes the importance of commercializing technology, of moving science to the bedside, and establishing relationships with other institutions. MD Anderson, he says, does well with managed care companies, as they recognize value, though he is not certain that the federal government will do the same. He says that health care is a current target of the federal government as health care represents 20% of the economy. He expects that the institution will create savings from a more streamlined organizational chart and continued strategic positioning. He discusses his roles with the state government in Austin.

Identifier

LeachL_02_20121127_ C13

Publication Date

11-27-2012

City

Houston, Texas

Topics Covered

The University of Texas MD Anderson Cancer Center - MDACC in the Future; Overview; The Administrator; Contributions; Institutional Mission and Values; The MD Anderson Ethos; On the Nature of Institutions; Fiscal Realities in Healthcare; Building/Transforming the Institution; Growth and/or Change; Beyond the Institution; MD Anderson and Government

Transcript

Leon Leach, MBA, PhD :

From the strategic positioning, there’s a tendency to hang on to the traditional, hang on to the old, and I think there is value in that. I don’t think you should throw out your traditions, but you can’t become a dinosaur either. You can’t be making buggy whips in this market. You’ve got to be progressive. You’ve got to react to your environment. What I preach is a proactive environment. Another line I’ve used a lot in presentations and stuff and in the paper—I quoted all these great writers on strategy and strategic positioning and all of that, but the best explanation of strategy I’ve heard—Gordie Howe claims to have said this, and Wayne Gretzky claims to have said this—but it’s skating to where the puck is going to be. That’s what we need to do—we need to skate to where the puck is going to be. So that means strategically repositioning yourself before you have to. You need to get to where that puck is going to be, not to where it is or to where it was. So we need to be thinking ahead about what’s going to happen with these external pressures, take our best guess, and get there before anything happens.

Tacey Ann Rosolowski, PhD:

What are some ways in which MD Anderson could be doing that now?

Leon Leach, MBA, PhD :

Well, we are. Remember the things we’ve talked about—the regional centers, what we’re trying to do with commercializing our technology. One of the main reasons why Ron was so attractive to the Board of Regents is he’s got experience in moving science to the bedside, literally in commercializing it—the Banner-type relationships and some of the things we’re looking at certainly with the Moon Shots. And if you do those things, the business will come. If we can move the bar significantly on those eight cancers that you just read, the business will come. Now whether or not it’s business that you can handle on a profitable basis having that surplus, that’s going to be more determined by the federal government and by managed care companies and how you can fare with them in negotiations. I think we can do reasonably well with managed care companies, because I think they do perceive that value and will pay for value. The federal government—I’m a lot less comfortable with them in this environment because we basically have a huge financial problem that we have to solve. We can’t keep spending more money than we have year after year and run up a huge federal deficit without there being some repercussions. When you take up twenty percent of the economy, which is what healthcare does—just rounding off slightly, I think it’s like 18.7 or something like that—when you’re one out of every five dollars that is spent in this country, you’re going to be a target. You’ve got to fix something about healthcare if you’re going to fix the economy. So you’re going to be a target, and whether or not society lets us grow to the point where we can continue to reinvest and continue to move forward trying to cure cancer, that’s a decision that we don’t control. That’s a decision that is going to be made more on society’s terms, but we’re going to have to live with whatever comes out of that. So we’ve got to skate to where the puck is going to be and figure out what is most likely to happen and where do we need to be delivering the services that will help support what we need to do longer term in order to stay at the very cutting edge of cancer care, and that means investing in research. So how do we do that?

Tacey Ann Rosolowski, PhD:

What are some projects that you are going to be taking on in the immediate future? Leon Leach, MBA, PhD Well, I think the administers say things could come from a cleaner organizational chart—simpler organizational chart. I think that’s one that I’ll be involved with closely over the next couple of years. I think the continued strategic repositioning of MD Anderson to keep us in front of the curve, in front of the wave, so to speak—skating to where the puck is going to be—I’ll be very much involved in that. The planning for those things—the Economic Forecasting Model that ties it all together, and the governmental relationships in Austin and DC—I think I’ll be involved in those quite a bit.

Tacey Ann Rosolowski, PhD:

What about those governmental relationships? How will you be involved with that?

Leon Leach, MBA, PhD :

Well, I already sit on the Executive Committee of the Alliance of Dedicated Cancer Centers. That’s a group of the twelve comprehensive exempt cancer centers exempt from the DRGs. They have been very involved in financial and legislative issues in Washington and Austin—I’m going there Thursday. There’s always—I sit on the Health and Human Services Counsel. I was appointed by Governor Perry several years ago. This is my—I’m in my second term now, near the end of my second term actually. It’s those types of things. Dr. DePinho will be very much involved in those, too. He’s the face of MD Anderson obviously. But when it comes to the business and financial and how decisions that are made in Austin or Washington can affect our ability to operate, then that falls a lot to me.

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Chapter 13: A Prescription for Fiscal Health: Be Pro-Active

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