You have to understand what it takes to be successful in the marketplace (competition then was more focused on the local Blues plan), what it takes to manage an organization. None of us on the medical side had that management experience.
Within a fairly brief period of time, Sam restored the confidence of key people that we were being led and had direction, that although the odds were against us we had a chance to succeed.
He had to revise the marketing strategy. It took three years to accomplish what was necessary, moving away from dependence on the Blues. He led the plan in the direction of taking the risk. In one year we have saved up to $750,000 and did the job better.
He had good judgment about people, who ought to staff the key positions in the organization. He saw when it wasn't going very well in an area and then bit the bullet and made critical personnel decisions. He could define what the organization needed and make the right replacement.
He took responsibility but could share this to make others feel that they were critical to success. His relationship with physician leaders was outstanding. He was respected and trusted; he had authority in areas where we needed it. He was able to create an atmosphere in which we who were leaders believed in the long-term worth of what we were doing, that new ground was being broken, that we had the potential to make a big difference. People were willing to engage and struggle to resolve differences of opinion. He had good instincts about what was not going well. You trusted his instincts and judgments based on his presentation. The physicians had strong institutional ties with a different culture than fee-for-service, which helped.
He developed a strong relationship with the leadership of the board, who were inexperienced in health care but of enormous stature and who knew they were in trouble. Within a few months, they had confidence that Sam knew how to lead or would get help when help was needed. The red ink that flowed then should not be underestimated. The stupid, ill-conceived, and uninformed decisions we made in those early days would fill a big book. How do you manage a tight ship? We didn't know how to respond when clinicians wanted more staff to do well.
He forced the issue of getting the two medical groups into one. He lived with that two-group setup for 18 months. He would continuously point out the problems it was causing, that decisions took too long. It was based on assumptions, no longer valid, that the two groups would be based in two facilities. In the first few months, you felt you were working for this-or-that hospital and had been assigned to the HMO. It took a while for people to change their identifications. Paychecks were changed to HMO when the groups were merged. He never made it feel like a power play. His attitude was we are all in agreement that we want to survive, and this decision-making structure gets in the way. He forced the issue, not the exact timing or form, but its resolution and direction.
The executive committee of the board was his source of power. The dean and associate deans, who empowered him to be their representative-they worked together closely. There was this quality of believing in what we were doing and wanting an effective leader. When he came on the scene and demonstrated these qualities, the situation fit with what he brought to it. This went a long way in empowering him. He had a remarkable presence. He made us feel that the boat was being guided-partly through his political sense, his common-sense judgment and ability to work with people, to get them to come together and work effectively.
I think he had the feeling that the clinicians didn't have high enough in their value system (1) how much members who made only $12,000 or $15,000 a year had to pay to belong and (2) making the visit feel like a humanly enjoyable experience for the patient. (From the viewpoint of the physician, doing a good job was diagnosis and treatment.) How closely identified with the teaching hospitals can this program be over the years? (In 197- we dealt with it by getting our own hospital; in 198- expanding our hospital was more expensive than tying back to a teaching hospital.) He would have liked to have seen us more productive, cost-conscious, making every visit feel right to the patient.
We had a genial bond. I was fresh out of residency, in my first management job. He was new to the city, supposedly in charge of marketing, and the ship was about to go under. There was closeness about the working relationship and the feeling about it. Other managers have more purely intellectual, analytical abilities. He has more ability to separate the wheat from the chaff-deciding when and where to move and what it takes to move, managing the human enterprise. I want Sam to set the agenda for the analysis and to pick the right analyst for where the organization is trying to go. His toughest decision here, which he handled masterfully, was the separation from Blue Cross. We weren't risk takers; we were closely tied to the medical school. Sam said, we’re going into the insurance business regardless of Blue Cross's $8 million in reserves. There were too many things we needed under our control that we couldn't control in that relationship (for example, each change in benefits had to go through the Blue Cross benefit committee).
He's straight, honest. I enjoyed coming to work with him, although we were in conflict 30 percent of the time. Our disagreements were related to the bigger context rather than being translated into personal conflict.
A little slow off the mark-Sam came with limited experience, but he was a very fast learner. If Sam wasn't the major reason, it was because of him and the dean that we survived. He was effective and did a first-rate job and made us feel the organization was going the right way.
On cost containment, in the early days he would say, this is what must be according to the budget. The delivery system was split, with M.D.'s reporting to the medical director and other workers to the executive director. It was tough then to make trade-off decisions. Chiefs in specialties had difficulties. Now there is a medical director in each center who is responsible for budget and personnel in that center.
On quality assurance, his focus was on service. With respect to technical quality, he assumed that the medical leadership would take care of it. He focused attention on the importance of service by his selection of managers, by developing training programs emphasizing those features.
Effective managers empower those under them to define and deal with problems, enabling the managers to do the broader, strategic planning.
