Methodist Turnaround: CEO Ian McFadden on leadership and transformation - October 20, 2013

Courtesy of the Times

When Ian McFadden came to Methodist Hospitals as the new President and CEO in September of 2008, the organization had been through a tough period of decline with a series of chief executives after the retirement of John Betjemann Jr. in 2003.

The biggest challenge was changing the culture of the organization. “Morale was low in the employee population,” McFadden explained. “Many of our doctors were referring their patients to other hospitals and many of our nurses were working on contracts. When an organization is on the decline there’s an aura, I could feel that in the culture.”

By then, McFadden had become known as a turnaround specialist who could evaluate and transform healthcare systems in situations similar to Methodist. Immediately prior he was working at Chicago’s Roseland Community Hospital, but before that he had been with FTI, a consulting firm specializing in putting hospitals back on their feet. His experience also included stints at large healthcare systems including Hospital Corporation of America (HCA). HCA is not only one of the largest healthcare companies in the world it is a for-profit corporation. As Ian McFadden describes it, he was lucky to get a lot of experience early in his career where he really had to manage the bottom line.

McFadden was also driven by a personal mission. “I had taken a trip to Haiti with my church. We were trying to help build a clinic down there in a very difficult environment with extreme poverty and a lot of underserved people. When I came back I decided that I wanted to devote my life to helping hospitals that had a mission of working to serve an underserved population.”

Ian McFadden never doubted his ability to restore and transform Methodist in terms of economic vitality as well its reputation as one of the finest healthcare organizations in the region. “I knew we’d be successful, part of doing this kind of work, is that you never consider failure on option.”

Success came quickly; it took McFadden and his hand-picked, top tier executive team just a year to return to profitability, surprising skeptics, especially those who were outside the organization.

McFadden was surprised himself, but not in a bad way. “I inherited a willing organization with a solid board and some committed physicians. The Board od Directors here has been tremendous. They let me bring in the people I needed to bring in, and recent nurses and physicians i n areas where we had previously used a lot of contracted staff. I was surprised that both the board and the physicians were so optimistic about the potential of the organization after having been through so many tough years.”

The way Ian McFadden sees it, the enthusiasm from the doctors and other employees who were still there were willing to take a chance and believe in his plan and that of his executive team, and feel confident that the environment was going to get better. Most of the physicians did not know McFadden at all. “But they trusted our new leadership team and said, ‘This is a team guy that we want to try and work with or I’d like to come back to Methodist and try again.’ The key was relationship building.”

The keys are always the same, according to McFadden, relationships and recruitment.

In the first four months of his job Ian McFadden met with every physician on staff at Methodist and many that had previously referred their patients to Methodist. They asked him to make corrections, some were easy. “If you take care of that elevator,” they told him, “If you would get enough skilled nurses back on the floor. I’ll come back there and help if you want to give your patients a better experience,” the doctors said.

“It wasn’t a big selling position, but that’s how the trust was built,” McFadden explained. “You have to make sure the physicians, who are your key customers felt that they could get things done in order to provide their patients with great quality care, and if you weren’t serious about certain things, then it wasn’t going to work.”

Even though he had worked in close by in Roseland, Northwest Indiana was a world away. He could identify with the urban inner city and Gary, where the north campus is located and he also had experience with hospitals in a suburban environment like Merrillville.

Other than recruiting his first move was to look at the mission and vision statements. “The values seemed to be pretty good,” he said. “But I didn’t see any behavioral standards.” So he put together a group of about 30 people to generate standards and then they trained other employees on those standards and that’s the way it grew.

Now everybody’s very serious about it and they want everyone else on board.”

After standards, McFadden prizes visibility. “We had to get a different message out to the community: We’re going to be fine. We have turned it around. We have all the best doctors at the table.”

“I think Evelyn (Morrison) said it in an internal campaign that was started at this time, ‘We’re the new spirit of Methodist.’ We started the state of the organization address every year to build relationships again and communicate to the community our progress.”

The new Methodist is one system with facilities in Northlake and Southlake “Everybody looks at Northlake and Southlake as one organization. We do most of the psychiatry, high-risk obstetrics, and trauma up here (Northlake). At our Southlake Campus we handle a lot of neurology and stroke care, but both campuses need each other to create the entire system.”

McFadden’s vision was for Methodist to become known as being a specialized medicine and technology leader in Northwest Indiana. That meant that early on he made a decision to remove a new IT system that had recently been purchased and go with the Epic EMR system instead.

Epic has since become the standard for excellence in the industry, used by most sophisticated hospital groups in Northwest Indiana and nationwide. McFadden’s determination to be aggressive in his philosophy at Methodist has led to the hospital being first in offering the latest technology in the market in order to provide the best care to patients and to give physicians the tools to do so. “We were the first in 3-D breast-imaging, the first implementing EMR hospital-wide. We wanted to be the first in neuroscience and bi-plane technology. With any new technology that surfaces, our doctors are able to see it here at Methodist first…usually before any other hospital i n the market acquires it.”

“Right now the organization’s doing very well,” McFadden said. “We have good cash flow, good margins and most importantly, the morale of our physicians and employees has improved immensely. We continue to work on this cultural momentum and will continue to mnake this one of our top priorities. There is much uncertainty about what is going to happen with the Affordable Care Act. We may not be able to see the same levels of growth in the margins, but we want to still have the best outcomes for our patients.” Right now, Methodist is ranked #13 in the state, #30 in Chicagoland, by U.S. News and World report. McFadden added, “We are the only hospital in Northwest Indiana to achieve this rank.”

“It’s not going to be easy navigating through this. In the United States we are going to have to look at being more efficient. We want to operate the system as one provider with different locations. We just created a partnership with the YMCA in Porter County; we are working with the City of Gary to create similar partnerships with the Hudson-Campbell fitness facility. We’ve added physician clinics in outlying markets. We’re positioniong ourselves to have a regional presence, a specialized referral base and more of a primary care presence.”

One of the things he thinks about a lot is the amount of power the consumer has. “The consumer is going to determine where he or she thinks that they will have the best experience.”

Total transparency on quality is already the norm and McFadden predicts that soon pricing will be out there for comparison as well. “The consumer is going to make the choice.”

“We know our organization here. We know that our culture is consistent and we believe in taking care of your fellow employee is the responsibility of every employee in the organization. An unhappy employee cannot take care of a patient.

Our employees know our leadership. They constantly challenge us to become better too, even in meetings. It’s good to have that kind of interaction with our people and produce a culture where we take care of each other first, and then turn around and give that to the patient.”