I work with Sam on issues related to our competitive standing- what do we do and how do we do it to put ourselves in the best strategic position (for example, the failed merger and patient relations program and how this is packaged)? I also work heavily in the areas of negotiating mergers and acquisitions, expansion, and new products. I act as a sounding board. Sam will say to me. How does this play? (Talking about reorganization of the corporation and who's capable of what kind of job, for example). And I work in the political arena.
Without understanding the history, culture, and environment of Wilson, you're doomed to fail-history and an appreciation of the fact that Wilson had many defects and flaws, but there were valid historical reasons why. The plan was underpinned and underfinanced when it started, piggybacked on physicians who were entitled to say that Wilson was supported on the backs of their service. They were paid, but not enough.
Culture and environment-you must accept the premise that Wilson is an institution in this city. There are linkages with power forces here that cannot be ignored. Compromises and concessions have to be made: for example, when we converted city employees to the HMO, we agreed to let them go outside the system for a year or two and we would pay the bill. Sam overlooks episodic anecdotal evidence of medical group insensitivity in dealing with members, be-cause the groups are still grappling with rapid change in their lives. We take the long view. If behavior is in the right direction and if they understand the basic premises, positive behavior will become the rule rather than the exception.
Reorganizing Wilson so that we can function as an organization has been Sam's paramount accomplishment. He's been able to do this through consensus rather than bloodshed. He's been able to turn the image of Wilson around. Now we are considered an organization with integrity, and we are seen as trying to do a good job. Sam switched the authority and responsibility to central management and has gotten it accepted (it had been all over the place-there were power brokers who were quasi managers, everything was muddy). He's been able to attract and build a competent management team that wants to do a good job. Before, managers came here to die.
Sam was able to obtain a solid understanding of the history and culture of the organization before he took the job; when on the job he touched base with everyone he could and got a lot of opinions from everyone. He then put himself in the skin of those whose behavior he wanted to change-negotiation, not coercion, was the key to success (he lacked the power levers then anyway). Sam was able to devise ways and means of getting various constituents to agree to changes; he devised strategies for allowing them to see changes as in their interest. For example, we didn't tell the 26 medical groups they had to be nine groups, but we financed combined larger groups at a higher rate (because they did extra things). In the same way we provided financing to buy out their facilities and gave them assurances that it was in their interest. It's less that he's a wizard than that he has a good sense of timing in terms of what you can and cannot do.
Sam, basically, did what his predecessor was trying to do many years previously. For example, in one locale we have three medical groups instead of one; there is no reason for that. If we had pushed too hard in that area, however, we might have lost some of the other medical group mergers. We didn't have enough levers to force that merger, so we backed off. We did end up with fewer than the six or seven medical groups that had been in that area.
He did what he did because he believed that we could not be efficient and prepaid unless we followed more closely the genetic code of Kaiser: no system without a functioning health plan and no health plan without the ability to determine the system's facilities, organization, and direction. Previously we were more like an insurance company. We could not finance what we wanted to do without capturing the hospital savings. We could not be competitive without large full-time groups.
Sam finds challenge challenging and maintenance of an organization unchallenging. To take an organization from struggle to success was attractive. At that time in the industry it was either fee-for-service or group practice. There were no multilines of business. He figured out the way we should be organized, set his priorities so the dominoes would fall. We needed to go HMO; then we could finance the groups and buy their facilities.
Interaction with Sam varies, depending on what’s a hot-it range from intense to minimal. Sam gets things done: there is general agreement that Sam has integrity. If you are part of his team, you feel you're not being set up. If you're not part of his team at a given moment, you don't feel that you have been simply used and discarded. If people trust you, and they do trust Sam, it helps get things done.
Sam's priorities now are (1) iron out the rest of the glitches in the system; (2) raise the esprit de corps of the organization, the sense of pride and professionalism (Kaiser has done an excellent job on this- the employees' sense of pride in the organization contributes heavily to its success); and (3) do what's necessary to be one of the survivors when the national shakeout is over. This will take more than a local HMO; whether regional or national, you will need a lot of members, money, to be price-sensitive, and you need several lines of business. How do you do that without losing your integrity and sense of social purpose?
His predominant source of power is his ability to understand the tenor of the times, to present proposals that keep Wilson strong and to win consensus without damage to the organization. Managers in some other settings are bulls in a china shop; they accomplish as much but with enmity as the fallout. Sam is able to see the broader picture, accept that the world isn't perfect, you've got to give to get. He is able to compromise on issues without compromising his personal integrity.
I'd give him an A for performance. He accomplished what others said couldn't be done. It was accomplished without losing anyone we wanted to keep.
Sam has changed a lot in the past year or two. He understands that our world is far more complex. It's no longer just prepaid versus fee-for-service practice. He is no longer capable of having the only answer to a problem. He's more receptive to input and advice. For example, I was able to talk with him about our strategy for expansion-about doing IPAs upstate, expanding to new states, and creating new product lines such as PPOs.
People approach me to see how something will play with Sam- to try out new ideas with me, to see if Sam will be receptive, and to see if they can recruit me as an advocate for what they want to accomplish.
The primary way he influences the cost of care is by facilitating prepaid multispecialty group practice, which saves on hospitalization and takes advantage of economies of scale. The other major way is that Sam has initiated incentives to foster cost-effective behavior- for example, the hospital bonus for physicians who are below the target on hospitalization, with a limit on the upside for individual physicians. At first, seven of nine groups were getting nothing, so he backed off the formula and gave partial rewards for getting closer to the target. This has enhanced medical groups' support for more hospital monitoring.
The first step in quality assurance was getting multispecialty group practice; that way you get peer review and true self-policing, which is happening. Groups are now interdependent on Wilson. A full-time physician in the Wilson system now has his or her success tied to Wilson's performance. It's starting to happen that, if a physician is not performing according to our standards, other physicians understand it will affect their own economic survival and self-esteem. This does a lot to enhance quality, as does the strong quality assurance program we have implemented.
Sam has been trying to institute quality of performance. We're building a management team and a code of ethics. Also, you can't allow Wilson to be kicked around if you work here.
