Chapter 07: Responding to Immediate Challenges
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Description
In this Chapter, Dr. Mendelsohn talks about the process of applying for the position of president of MD Anderson and then explains the economic situation he discovered when he assumed the position. Dr. Mendelsohn was invited by the search committee to apply, and he was pleased at that point in his career to have the opportunity to head an entire cancer center and notes that when his wife, Anne, first saw the Texas Medical Center, she asked, “Is this Oz?” Dr. Mendelsohn was impressed with MD Anderson because he saw an institution-wide passion for clinical care based on research. He did not know about all of the institution’s economic problems before his arrival, nor did he know of plans to downsize beds by fifty percent, for example. It was clear that there was a faculty of physician scientists who were looking for a leader. Dr. Mendelsohn gives some examples of the challenges he saw when he arrived. (The hospital and the cancer center had different chief financial officers, for example. ) He received good advice from a friend: Don’t do anything for one hundred days. Dr. Mendelsohn spent the time talking to departments about what they needed. He discovered, for example, that a new phone system had been installed and users had to push nine buttons before hearing a live human voice, a frustration that caused twenty percent of callers to hang up. He heard complaints about how long it took for x-rays to be read and pathology reports to be generated. These conversations led to concrete action: new hires in pathology and radiology, and putting back the old phone system, for example. Dr. Mendelsohn also observes that quickly doubling the size of the institution also sped up the process of reorganization. He gives the example of how moving faculty offices (and their secretaries) out of the clinics, there was more room for clinical services. Teams were set up to study efficiency and cut costs by twenty percent. He states that this process will again be important if insurance companies bundle services (reimbursing a total of $75,000 to treat leukemia, for example, instead of reimbursing for individual treatments and services required).
Identifier
MendelsohnJ_01_20120926_C07
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 - Building the Institutio; nCharacter, Values, Beliefs; Character; Joining MD Anderson; Personal Reflections on MD Anderson; MD Anderson Past; On Texas and Texans; The Healthcare Industry; The Administrator; Evaluating the Institution; The Business of MD Anderson; Understanding the Institution; The Institution and Finances; 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:
We didn’t know a soul in Houston, except we did know the provost at Rice, which was very important. Anne called him up and checked it out. Each time we’ve moved, we had 3 rules. It has always been because an opportunity came up that I felt I had to check out. One was that there was something exciting and important to be done at the new place, where my talents and my interests fit. The 2nd was that they were committed enough to it so they would put resources into it to make it happen. The 3rd is that we would enjoy living in the community. Fortunately my wife, like me, enjoys meeting new people and doesn’t mind moving around. We know people that are in the same house that they got married in. We’ve moved every 10 or 15 years for something special. We decided that the job of being head of MD Anderson was a special job. What they seemed to need was the kind of thing I had skills in and experience in. Then we did a little investigating about Houston and found out it was a city that, once you move there, was hard to leave. And I remember coming down here and showing Anne the Texas Medical Center. She looked at me and she said, “Is this Oz?” It’s pretty amazing. It’s something that Houston should be very proud of, and of course, MD Anderson is one of the jewels of the medical center, which is a jewel in itself. When I was offered the opportunity, I had to make my mind up in 5 minutes, incidentally. I didn’t know this.
Tacey Ann Rosolowski, PhD:
How did that happen?
John Mendelsohn, MD:
I came down for the interview, along with a few other candidates, and at the end, they called me in and they said, “John, you’re it, and you’ve got to tell us whether you’re going to do it or not tonight. We want to know tonight.” So I said, “I don’t even have a letter of offer. We haven’t talked about a salary or resources or anything.” Bill Cunningham, who was the chancellor, and B. Rappaport, the chairman of the Board of Regents just said, “You’ve got to trust us. We want MD Anderson to be one of the great things in Texas, and we want it to be one of the great cancer centers on the planet. You’ll get what you need.” Cunningham took an envelope out and wrote a salary on it. I conferred with my wife, and I said, “You know, it feels good.” The big decisions in your life, they’re not entirely rational. Who you marry, you become a doctor, your job; it has to be something that feels good. Of course, there’s rational input first. Well, so we did it. It paid off. It was a good fit.
Tacey Ann Rosolowski, PhD:
What was it that you saw about MD Anderson and about the people that were your entry into the institution that impressed you so much?
John Mendelsohn, MD:
I saw a place that was passionate about clinical care, and the clinical care was very much research based, and I liked that. I didn’t know about all the financial problems. I knew about some of them. I didn’t know that they were advised to downsize their beds by close to 50%. That was this report I told you about. I met enthusiastic, smart clinician scientists and lab scientists who were really looking for a leader and who I had the feeling would kill for this place, which turned out to be true. Most of the people that I worked with for 15 years would fall on their sword for this place and became very loyal supporters of the programs we developed together. Being president of a university and being the head of a cancer center that I would aspire to make the number 1 in the country: that was appealing. I could have stayed at Sloan-Kettering and continued my research and run a fine department. I could have hoped, someday, to be head of Sloan-Kettering, but those jobs are rare. You shouldn’t pin your hopes on them. Here was this offer. We had lived on the East Coast together, and we had lived on the West Coast together. My dad came from the south, Baton Rouge, and a lot of her family came from Virginia. We said, “You know, it might be fun to live in the south.” And it is.
Tacey Ann Rosolowski, PhD:
When you came and you began to get the real lay of the land, once you assumed the position of president, what were the challenges that you saw coalescing? Obviously you got a clearer picture of the economic situation and the management team’s report, so how did that take shape for you into a field of challenges that needed to be met?
John Mendelsohn, MD:
Everything was being challenged. The hospital and the cancer center had different chief financial officers that didn’t agree. You’ve got to have a budget. I arrived in July. The budget guy for the cancer center said, “We’ve got to cut another $70 million.” We had already cut $90 million. The budget officer for the hospital said, “Don’t cut more than $10 million.” The faculty said, “Don’t cut another penny. You’ve got to put more money in. We’re on life support right now.” I don’t think I want to go into all the tensions that I saw, but this was a very tense place that was at a crossroads. I got incredible advice. We have some good friends in Louisville. They invited us to go to the Kentucky Derby. I’d never been. So I’m coming to Anderson in July, going to Louisville in May or April. I spent some time with the head of Sears Roebuck, an extroverted, nice man. Incidentally, I’ve had no business school training. I’ve never been to a class. I’ve relied on smart people and what I’ve learned. (My first recruit here was to hire Leon Leach to lock arms with me and do the business side of this place, and he’s incredible.) I said, “I’m going to be going down to lead a large cancer center with a budget of $600 million, and I’ve had some experience running UCSD’s cancer center. Can you give me some advice?” He said, “Yes, don’t do anything for 100 days, and go around and meet everybody and find out what makes the place tick and what they think needs to be done, because they know, and you don’t.” So I did that. I’m a yellow tablet guy. I made arrangements to meet with each of the departments the first 100 days. I go into a room, sometimes with 50 or 100 people in it, and I’d sit down in a chair in front of them and say, “I have 1 question for you. If you had my job, what would you do differently so your job would work out better and you’d be able to achieve your goals?” They just poured it out, and I took notes, and assimilated it. It was pretty clear to me that there were a lot of functional problems here. They put a new phone system in to save money. You had to push 9 buttons to hear a human voice, so 20% of the people hung up before they made a contact at a hospital. One of the first things I had to do was say put in the old phone system, and you’ve got to have a human voice within 1 button. Now, that is the most mundane decision. But, that was so important. We had cut the budget over 2 or 3 years by $90 million. We had cut programs. We had cut secretaries. We had cut orderlies. We had ruined the phone system. I found out that everybody had a different need. Some people said that we need more secretaries. We need orderlies. The operating room needed this. What I figured out, probably wisely, was I had gotten good advice. They knew what was needed. Instead of cutting budgets, if each of them got a little extra money that they could put into what they needed, it would work. We had a big faculty leadership meeting offsite within a month, and I wanted to discuss what was needed here. I kept getting complaints about how long it took to get x-rays read and get pathology reports. It was ruining the efficiency of the clinics. I’m getting this from the medical oncologists and the surgeons and the radiotherapists. It was pretty clear to me that in the eyes of the faculty here, they were the guts of cancer care. Pathology and radiology were looked upon as primarily ancillary support services. At the end of this meeting, I remember I was summing it up. I said, “You know what I’ve heard you tell me? For the next 30 recruitments here, the majority have to go to pathology and radiology, not to your departments that you’ve been talking with me about, because they’re very important for cancer care, and we’re woefully understaffed and under-resourced in those departments.” Everybody shook their heads in amazement, but then they said, “You’re right.” We redid the whole pathology department and gave it a lot of resources, and we strengthened the radiology department. That’s the kind of things that turned up by listening to the faculty.
Tacey Ann Rosolowski, PhD:
When I spoke to Benjamin Lichtiger, he was talking about how at the blood bank they did this microscopic analysis of all their processes to see how they could make things more efficient, what was being done on the basis of tradition and not logic, all those kinds of things. They found a lot of places where they could just reorganize, the old layout of the lab, just rearranging labs so that people spent less time going between their various work stations. Over the course of the day, the technician walked 5 miles.
John Mendelsohn, MD:
Yes, we do that a lot here. We were doing it before I came, too. They did an analysis of a breast cancer patient, put a pedometer on her. She’d go to see the surgeon in one building and the medical oncologist in another building and go down to radiology in a 3rd building. She was a patient with breast cancer and walked over a mile. They began reorganizing their clinics and organizing around the disease rather than around the specialty, which you know is how we do it here now. In the process of doubling in size, which we did over a period of probably 6 or 7 years, you have the opportunity to rearrange a lot of things. We were able to accelerate that process. The building that we’re in right now, the faculty building, was built to take faculty out of the clinic area and put their offices in a separate area so we could expand the clinics. The faculty and their secretaries are no longer officed in the clinic. Now, that wasn’t as convenient. It was awfully convenient to have your office, step out and walk 3 steps. A senior official in the UT system advised me, “You’re crazy to put the faculty across the street. They’ll never go to the clinic.” They did, because that’s the way we were. The faculty had their own building. Now we have 2 faculty buildings for the clinical faculty because we kept growing. We had a chance to reorganize things, and we spent a lot of time trying to figure out efficiencies. We’re not good at that. We’re not bad at it, but we’re not good at it. We could be more efficient.
Tacey Ann Rosolowski, PhD:
Nobody sets out to be inefficient, so how did that happen?
John Mendelsohn, MD:
The way the operating procedures and the way things are done grow partly out of a plan but partly out of just empirically observing what’s working and trying to change things as little as possible. People don’t like change. We began a project my last year as president. I set a goal of trying to cut our costs 20%. I don’t know if that’s still the way we talk about it, because I went away temporarily right after I retired as president. I went away 6 months on my sabbatical and purposely got out of the patter of what goes on here. We had set up many teams to try to figure out how to cut costs. I don’t think that has progressed as rapidly as I think it needs to, because we’re still doing fine financially, but something is going to happen in the next 2 or 3 years where it’s going to be incredibly important that everything we do is as efficient as possible. The way medical reimbursement is going to change if they bundle. We’re going to be told, “You get $75,000: take care of leukemia,” instead of getting a reimbursement for each test you order and each patient visit and each procedure you do. That’s going to change all the incentives. You want to have some funds left over to grow with, so you’re going to have to do your leukemia treatment as efficiently as possible, and that’s going to be a huge incentive. Now our incentive to cut costs is not as strong because it’s all billable. I’m exaggerating, but that’s the way American medicine works today. I’m sure the administrators in Washington are aware of that and are figuring out how to handle that.
Tacey Ann Rosolowski, PhD:
Let’s go back in time a bit, because we didn’t really talk fully about the context when you arrived. What was going on? You said that the economy was growing, doing fine.
John Mendelsohn, MD:
Healthcare was changing.
Tacey Ann Rosolowski, PhD:
Healthcare was changing. In 1995 Texas legislature had just passed the bill that allowed self-referral to MD Anderson, so there were a number of factors going on that were going to influence MD Anderson as you took over; some positive, some that were troubling. Could you talk a bit about that context and how you saw the ripple effect inside the institution?
John Mendelsohn, MD:
Well, you’re right. It was a confluence of challenges, like managed care and opportunity created by the ability for our patients to self-refer. The field of cancer research was getting more and more exciting in terms of what we could bring to the patient. For reasons that were not clear to me, which I ignored; the institution was set on a very stringent reduction in service mode. Again, after meeting with the faculty and assessing what the faculty and I thought the opportunity was here, if we could get the phones answered so you could get an appointment.
Recommended Citation
Mendelsohn, John MD and Rosolowski, Tacey A. PhD, "Chapter 07: Responding to Immediate Challenges" (2012). Interview Chapters. 1423.
https://openworks.mdanderson.org/mchv_interviewchapters/1423
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