The Governance Institute released a new multimedia case study analyzing the leadership decisions that Chris Van Gorder made during his 14 years as president and CEO of Scripps Health in San Diego--and how they helped save the struggling system.
When Van Gorder took over in 2000, the hospital had an operating loss of more than $20 million, an average turnover of between 17 and 20 percent, and a labor shortage that led to premium labor costs to meet state-mandated nurse-to-patient ratio regulations, according to the report.
Van Gorder implemented culture-changing strategies within the system to engage physicians and middle management and operate it as an integrated system. The health system dramatically improved its financial performance, turnover rates and employee morale, saving $240 million and increasing profits more than 1,200 percent.
The case study examines the techniques Van Gorder used to turn his health system around, including:
Filling the information gap. Scripps provided its leaders and employees with transparent and comprehensive information so they could see and understand why decisions were made.
Partnering with physicians. Van Gorder created a Physician Leadership Cabinet that had a say in recommendations to the board about strategy and other issues. This let the board work with physicians rather than against them.
Developing leaders. Van Gorder implemented the Scripps Leadership Academy, which met monthly, allowed middle managers to ask questions about any topic, and fostered an environment of responsibility, authority on issues and accountability, according to the report.
Investing in human capital. Van Gorder insisted there would be no layoffs--instead he repurposed and positioned people to do a job that better suited their individual skills. That made hiring more selective and based on the needs of the organization.
Implementing a horizontal management structure. Van Gorder moved the COOs at each hospital to the corporate level and gave them responsibilities for services across the system, which resulted in savings through standardization practices. "Our operating margin right now is around $300 million. Had we not created the horizontal structure and taken out this non-value added variation, we would be at a point where we don't have an operating margin," Van Gorder said.
The American College of Healthcare Executives awarded Van Gorder the Gold Medal Award for excellence in healthcare leadership at this year's ACHE conference in Chicago, FierceHealthcare previously reported.
To learn more:
- read the report (membership required)