Chapter 21: Streamlining the System

Chapter 21: Streamlining the System

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Description

Dr. Leach describes the review of administrative processes conducted in 2012, shortly after Dr. DePinho’s took over as president of the institution. He gives background on the review and explains why Dr. DePinho requested that MD Anderson perform it earlier than required. He describes the constitution of the committee in charge of the review and their recommendations: reducing administrative overhead and staffing, reducing redundancy in staffing.

Dr. Leach asserts that, despite the economically challenging times, the institution needs to continually invest in research to preserve what MD Anderson’s leading thinkers and doers in care. Research, he states, is the “driver for who we are.”

Dr. Leach repeats, however, that the institution must learn to operate differently or risk not being as robust as it is currently.

Identifier

LeachL_04_20130429_ C21

Publication Date

4-29-2013

City

Houston, Texas

Topics Covered

The University of Texas MD Anderson Cancer Center - Institutional Change; Institutional Mission and Values; The MD Anderson Brand, Reputation; The Business of MD Anderson; MD Anderson in the Future; Critical Perspectives on MD Anderson

Transcript

Tacey Ann Rosolowski, PhD:

I wanted to ask you just a few more kind of general questions. There was the— I remember you had mentioned a—yes— There was an analysis that McKinsey & Company did for Dr. DePinho after he arrived. I wonder if you could tell me why that study was requested and how the findings are being used.

Leon Leach, MBA, PhD This is the administrative—?

Tacey Ann Rosolowski, PhD:

Uh-hunh (affirmative).

Leon Leach, MBA, PhD That was actually an edict that came out from the UT system, and there’s kind of a history behind it. When chancellor—Francisco [Gonzalez] Cigarroa [MD] became the chancellor, he formed a small committee to look at what the UT system did and how they did it—I think it was five people on that committee—and give him recommendations on how he could streamline the UT system. I was one of five people on the committee. He took our ideas and implemented them almost across the board. There were a couple of things that were timing issues, but he basically did everything we recommended. And we didn’t use an outside consultant. He made one available, or he said, “You can go get one.” He made the funds available, but for UT system we thought we had enough knowledge on that committee to really deal with it. And it’s a completely different animal than MD Anderson. There’s no healthcare delivery involved directly. So after that worked, between him and the executive vice chancellor of business affairs, Dr. [Scott C.] Kelley [PhD, MBA], they decided it was a good idea for the healthcare components to go through that. And they suggested one per year, and I think they were also putting their—the academic components, I think they were doing two or three a year on that. But you were to do your own review, and they kind of had a page and a half—if it was that long—outline of how the review was to be structured. It was pretty broad, but it had certain committee members that were kind of mandated by it by category.

Tacey Ann Rosolowski, PhD:

So what sort of guidelines were they offering? Leon Leach, MBA, PhD Well, they were very broad as far as just who you have participate on a committee. They wanted to have a president of another healthcare component. You need to have a business professor. It was just very broad categories and maybe four or five of them in all. It wasn’t really big. And so we were not scheduled to do— We were towards the end of the schedule. And I talked to Dr. DePinho, and we thought it would be a good idea with him coming in to kind of do this—volunteer to do this up front. So we volunteered to do it up front, and that was accepted, and we basically went through a similar process—or they went through at UT system. Only we did use an outside consultant—that was McKinsey, and we— The person that we had chair the group was a guy by the name of Joe [Joseph V.] Simone [MD]. I half kiddingly tell people that Joe Simone’s claim to fame in life is that he was John Mendelsohn’s boss at [Memorial] Sloan-Kettering. (laughter) So he’s well known, and he’s written a couple of books, and he’s an icon in the cancer world. And we had Kirk [A.] Calhoun [MD] who is in Tyler as the peer group president who participated. We had Ron [Ronald A.] Williams who is the chairman of the board at Aetna. Well he’s the former chairman of the board. He stepped down about a year ago. He was president, and then he became president and chairman of the board. So he brought the payer’s perspective. We had Osama [I.] Mikhail [PhD] who was a business professor at the University of Texas School of Public Health in their Healthcare Policy and Business Program. I think it’s called Policy and Management Program. We had a gentleman who was the vice chancellor of Health Affairs at the University of Texas. He was kind of a financial type that they wanted to have appointed. And I don’t know if I’ve covered them all. No, there might have been another member or two, but that was essentially it. And we pretty much followed the— They were pretty brief. I mean, there was room—by design, there was room to kind of customize it to what you wanted to do. McKinsey’s role was more of staffing the committee, if you will. But even there, they worked very closely with Dwain Morris and some of our other resources here at MD Anderson just to kind of tee it up and give the committee an independent arm. They wouldn’t be relying just on Dwain just to tell them. So the process was relatively short to do that. I think we had— I know we had three, we may have had four committee meetings. They were basically once a month. They went pretty quickly. A series of recommendations, most of which we’re in the process of implementing on the business side, a number of which we were already in the process of implementing in the continuous process improvement thing. They went from fifteen percent to eleven percent. We were already well down that road having less people than we had in 2008. But the major finding from my standpoint was the—and again, this wasn’t an ah-ha. This was well known. We have a lot of redundancy in staffing. You have your CFO that has financial staff. Then you have financial people in the clinics, and you have financial people in the research areas. And that could be much tighter. It could be standardized. They could report in line to the CFO instead of taking direction from people that aren’t financial experts. Same type of issue in IS, only we had dealt with centralizing a number of the IS functions. There still are areas that we haven’t centralized. But that was met with more push back, if you will, because it’s kind of, yeah, we need to save all that money, but you’re not taking about my administrative perk, are you? (laughs) So you get into that a little bit. So it’s been productive. We have saved money on it. There’s still more that we can do.

Tacey Ann Rosolowski, PhD:

So this was primarily on staffing issues then? Leon Leach, MBA, PhD Yeah.

Tacey Ann Rosolowski, PhD:

Okay.

Leon Leach, MBA, PhD And as administrative staff, but— Well, people commonly think that, well that’s the way I’m made. Well, I have maybe sixty percent of them. I do have the majority. But there are a bunch that are embedded—the IS and the financial people—in other areas, and they may or may not be getting the direction that they need on the technical—the finance and the IS. Also on the finance end particularly, we wind up having people in Dwain’s area checking on what the people— You obviously have checkers checking on the checkers. So there are inefficiencies there that we need to get at as an organization. We haven’t taken a big enough bite of that apple yet.

Tacey Ann Rosolowski, PhD:

It sounds like a really slow process to unravel all of that.

Leon Leach, MBA, PhD Well, it has grown and— It is. I mean, it’s grown up out of kind of perceived needs, and frankly a lot of the IS got recentralized when it was perceived—this was before I got here—when it was perceived that central IS wasn’t responsive. When I got here, we had a dozen e-mail systems—people putting in their own e-mail system. You know, wow, come on guys. You know? So we have driven up a lot of that. That’s why it went from fifteen to eleven. There are a lot of things that we did do.

Tacey Ann Rosolowski, PhD:

Well, I always say that people don’t set out to be inefficient. There’s usually a reason why.

Leon Leach, MBA, PhD Yeah. It evolves into that oftentimes. And there’s a lot of what we’re being asked to do in compliance, that you may not have a system to do so you kind of string something together. And it’s hard to justify. You want to be compliant, but my God, do we have to hire four people to do that—or whatever? So yeah, things evolve for a reason. So it was a good time, we thought, to take a look at it and try to put things together and tighten things up.

Tacey Ann Rosolowski, PhD:

I guess I just have a few more questions left. You’ve already talked about what you think will insure MD Anderson’s health in the future in terms of being nimble and responsive to the environment and willing to do that work of changing. If MD Anderson is able to do all of that, what do you thing the MD Anderson’s name will mean in seven years or ten year? Leon Leach, MBA, PhD One of the reasons we need to be nimble and we need to be efficient is so we do have the funds to continue to invest in Moon Shots or in technology that’s going to drive the future. So I think there is a window through which we have to do all of this to keep the MD Anderson persona that we have today—who we are—and we’re leading thinkers and doers in cancer. The world is changing. If we don’t change, I would argue before it— We know the world is going to more efficiency. No one is talking about paying us more. A lot of people are talking about paying us less. We need to get ahead of that curve and be there so that at the end of the day we’ve got enough money going through to continue investing in our research, which really is the driver of who we are. Because that does get translated into care for the patient. So I think it’s possible for MD Anderson to continue being at the forefront, but we have to do things differently if we’re going to do that. There is some risk that we can be—if we’re not responsive—we could become pushed into an entity that is not as robust as we are today. As Cancer Centers of America and others, they might preclude certain patients from the ACO. It may preclude certain patients that we need for our research to keep that base large. So to the extent that we can be out in the suburbia or have regional operations, I think it enhances our ability to get the kind of patients that we need for the medical research that we do to move cancer ahead.

So it is about the mission. It is about being nimble. It is about reading— I’ve heard this quote attributed to Gordie Howe and Wayne Gretsky. Do you know those two names?

Tacey Ann Rosolowski, PhD:

The names are familiar, but I’m not a sports person. (laughs) Leon Leach, MBA, PhD They are both hockey players.

Tacey Ann Rosolowski, PhD:

Oh, okay.

Leon Leach, MBA, PhD They’re both really good hockey players. And both of them claim that their strategy is to skate where the puck is going to be. If you stand around and see where the puck is, you’re not going to be there any more, you know? (laughs) So I’m trying to get MD Anderson to skate where the puck’s going to be. And you’re not the first blank face that I’ve used that analogy with in Texas. (laughter) If I could only come up with something that had to do with longhorns. (laughter) It might work a lot better.

Tacey Ann Rosolowski, PhD:

Or a lasso. (laughs) Leon Leach, MBA, PhD Yeah, exactly.

Tacey Ann Rosolowski, PhD:

The lasso’s got to be where the steer’s head is going to be.

Leon Leach, MBA, PhD Yeah, exactly. (laughter) You’ve got to kind of time things. You’ve got to care when a steer’s going in. That’s a good one. I like that. (laughter)

Tacey Ann Rosolowski, PhD:

There you go. I helped you out. (laughter) Leon Leach, MBA, PhD Now if we could only find where Will Rogers or Gene Autry said something to that effect.

Tacey Ann Rosolowski, PhD:

There you go. I’m sure somebody has to say it. (laughter) Physics works in every field. Leon Leach, MBA, PhD Yeah.

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Chapter 21: Streamlining the System

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