9/18/11
MENDING MEMORIAL:
New CEO acts fast to make dramatic changes
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| Memorial CEO Larry McEvoy routinely walks the halls of Memorial Hospital talking with staff members, as he did recently with Julianne VanderMeulen.
2009-10-02 18:49:31
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Two patients arrived at the same time, barely breathing and near heart failure. They came in different ambulances from unrelated calls at 3 a.m. on an already busy night.
Calm became chaos in an instant as emergency workers scrambled to save their lives.
Leading their treatment was Dr. Larry McEvoy, an emergency physician, whose on-the-spot decisions helped stabilize the two patients after a frenzied few minutes.
It was there, at the Billings Clinic in Montana, that McEvoy developed his philosophy on leadership and brought it to Memorial Health System in Colorado Springs, where he took over as chief executive officer in January 2008.
True to the lessons he learned in that hospital more than a decade ago, he’s stepped up to make some tough, quick decisions as he leads an aggressive charge to put the 4,300-employee public hospital system on sound financial footing and help it weather political storms locally and nationally.
Some critics accuse him of ousting good employees and pushing change too far and too fast, but he’s widely credited by Memorial’s board, many employees and others for turning red ink to black and implementing what they say was a much-needed cultural makeover.
McEvoy, 44, says he’s moved quickly to make changes because there’s no time to wait. Major changes are afoot in medicine, he says, and Memorial needs to be ready for them. Moving fast sometimes means making mistakes, he concedes, but there’s just as much risk spending too much time waiting for everything to fall into place, as he discovered in the ER.
“Sometimes you don’t get all the pieces of the puzzle,” McEvoy said. “You get what you get, and the patients still look at you saying, ‘I need you to make a decision that counts.’”
So in his first stab at a CEO’s job, that’s what he did. In less than two years he streamlined operations, especially between the north and downtown hospitals, and instituted a new mission statement, a new executive team, budget cuts, and new policies and procedures.
In the past eight months, the hospital’s net income has gone from $32 million in the red to $14 million in the black. The mission statement has been simplified to seven words: “To provide the highest quality health care.” Employees, board members and others talk of new ways to work together as McEvoy has made it a point to break down fiefdoms, whether it’s doctors versus nurses or the north hospital versus the downtown one.
“It’s a different mindset. There’s a team approach to everything,” said Laura Lucero, the night-shift clinical coordinator in the neonatal intensive care unit.
The hospital has also seen its share of setbacks. In May, McEvoy called for Patricia Peterson to step down as president of the Memorial Health System Foundation, the hospital’s philanthropic arm. Neither has said what led to the falling out, but her departure resulted in the loss of hundreds of thousands in donations, foundation board members said at the time. And this summer, the hospital hit an impasse with its neurosurgeons, who abruptly ended their contract to provide on-call services. That forced Memorial to temporarily turn away any adult with a serious head injury. A new neurosurgeon was hired, and Memorial resumed taking such patients in September.
A few current and former employees have said privately that they resent McEvoy for cutting more than a dozen mid- and upper-level managers, many of them long-time employees with favorable evaluations. In some cases, positions were eliminated, but in others employees were asked to reapply for their jobs and did not receive them.
McEvoy and others chalk such incidents up to the pain of change.
“The whole culture of the hospital is changing,” said Mary Ellen McNally, a board member on the hospital’s foundation. “The discontent would probably be from physicians and hospital employees who don’t like the changes that are being made.”
Arrived in chaotic time
When McEvoy left Montana for Memorial in October 2007, he arrived at a time of “chaos,” he says.
The hospital was under scrutiny for its spending and financial management. It had come under fire for spending $250,000 to help sponsor the U.S. Senior Open at The Broadmoor. Discussions emerged in City Council about whether the hospital should be sold off. The system had recently opened a hospital in northern Colorado Springs and a seven-story tower downtown — projects that racked up a debt of about $200 million.
Even so, it was not his intention at the time to be the one to try to fix it.
McEvoy was hired as a chief medical officer, responsible for working with physicians and setting the course for medical care.
Then began an executive exodus. Chief Operating Officer Gus Lee left in December 2007. CEO Dick Eitel retired the following month, and Chief Financial Officer Gary Flansburg left in May 2008.
McEvoy, the only one left on the executive team, was named interim CEO in mid-January 2008. After a national job search that drew about 100 applicants, the search committee and hospital board unanimously selected him to take the job permanently, on July 1, 2008.
At the same time, the hospital was feeling the first pains of the recession. By the end of 2008, it was $32 million in the hole, down from $18.5 million in the red at the end of 2007.
Curtis Brown, who led the search committee at the time, said McEvoy’s inexperience as a CEO was a concern, but he’d proven himself as an interim leader and demonstrated he knew what to do.
“He definitely showed an understanding for what it was going to take to run the health system,” Brown said.
Given the state of affairs, he plunged into the role as if Memorial were a car crash victim. He immediately set out to hire an executive team and start work on shoring up the hospital’s operations. With the new team’s help, work on the bottom line began. Some staff members were sent home when beds weren’t filled. The hospital went from 4,800 to 4,300 positions, all through attrition. Operations at the two hospitals were combined. Bill collection stepped up. Multiple contracts were reviewed and renegotiated at better rates.
In the past eight months, the hospital has increased its net income by $46 million amid a recession in which people have cut back on elective procedures and added to the amount of bad debt.
McEvoy believes Memorial today is a fixed-up patient going home.
Reactions fairly common
Not everyone thinks so, however. Some people blame McEvoy for ousting well-respected managers and fueling low morale and fear. Speculation has emerged about his intentions, such as whether he is positioning the hospital to be sold, although McEvoy has not publicly taken a stand on the ownership.
Such reactions to a new CEO aren’t unusual, said John G. Self, a Dallas-based executive recruiter specializing in health care organizations, who was not involved in the Memorial search. Self said changes in management are typical when a new CEO takes charge, and so are sore feelings from those changes.
But overall, McEvoy seems to have made more friends than foes.
“I think Larry has done a very, very solid job,” said Mike Edmonds, chairman of Memorial’s governing board. “We wanted somebody who at their core believed in community health care, and we certainly found that in Dr. McEvoy.”
Brown, of the search committee, also said McEvoy is turning out to be a good pick.
“It’s hard to tell whether the right decision has been made or not for at least a three- to five-year period of time,” he said. “You can say (Memorial) is moving in the right direction. If you look at the financial success the hospital’s had, you would have to say that’s a high point.”
George Powell is a former business processes engineer at Memorial who resigned in February, one of at least 14 managers to leave since July 2008. He said he chose to retire to enjoy the summer and do some traveling. But perhaps unlike some other ex-employees, he lauds McEvoy.
“He’s doing everything within one man’s power to correct many of the things that were troubling or annoying (about Memorial),” he said.
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Call Newsome at 636-0198. Visit the Pikes Peak Health blog athttp://pikespeakhealth.freedomblogging.comand the Gazette’s Health page at www.gazette.com/health.
READER'S COMMENTS
10:30 AM on October 3, 2009
""The discontent would probably be from physicians and hospital employees who don’t like the changes that are being made""
No, the discontent is from working for a manager that LIES. I am a former long time employee. I was honest. But my manager LIED, and was promoted. I will never step foot on Memorial Hospital grounds, at any facility as a result. The culture of lies at Memorial is finally costing it. Reputation, customers, revenue.
3:36 PM on October 3, 2009
Larry's body language in the photo above is very closed and defensive. Wonder if he is really listening to the employee
3:53 PM on October 3, 2009
Hmm, a ridiculous analysis of a picture and a disgruntled employee. This doesn't lend credibility to the opposition. I am a fan of Memorial. The treated my Mother well as she died of cancer with no insurance and they treated me very well when I had a cardiac event. If the man can make them profitable without sacrificing overall care, I'm all for it.
9:37 AM on October 4, 2009
Hi, Citizen1, I'm so glad that it worked out well for your ex and your father-in-law. Actually it was the awesome, caring and knowledgable staff at Memorial that should be thanked, NOT Mr. Richard Eitel.
Mr. Eitel was an old, out-of-touch fool who knew nothing about running a hospital. He hired and promoted all of his friends to upper/exec level management without caring about their lack of competence. Mr. Eitel almost ran the hospital into the ground. ALL of the financial mismanagement and poor planning happened under his watch.
The wonderful care your family received was in SPITE of Eitel's leadership, not because of it. Memorial Health System (Memorial Hospital) is full of wonderful, dedicated employees who have soldiered on in spite of the chaos that the former administration created. Mr. Eitel, Gary Flansburg and especially Ron Burnside nearly ended Memorial's legacy of providing the best health care in the region. They are FINALLY gone.
I think the new CEO is making some great changes. Not every single decision he has made has been great, but overall he is improving things. And if anyone is wondering how such mismanagement could have happened in the past, it's because to speak up about it was considered betrayal and the employee would be terminated.
Memorial is a much better place today in terms of management. The nurses, doctors and support staff are a huge asset to colorado springs. I am well aware that all of the anti-government, anti-tax, anti-everything-but-my-guns fellows will wake up soon and talk about how they pay for the hospital (false--they don't) and how Memorial just takes money, but this hospital provides and valuable service to the community.
I want to say "thank you" to all of the great workers of Memorial for their efforts in spite of all the chaos that has been happening.
9:43 AM on October 4, 2009
Oh, and I'd like to thank BRIAN NEWSOME for writing a fairly accurate story about Memorial for once! The Gazette usually likes to fire up all the anti-government sentiment in this town, but this article is actually pretty well-balanced.
I'm assuming that since the Gazette employees now fear for their jobs like all of the city employees that they love pick on, maybe management is overlooking accurate reporting. Looks like times are changing for everyone...
9:59 AM on October 4, 2009
""I want to say "thank you" to all of the great workers of Memorial for their efforts in spite of all the chaos that has been happening.""
Yes, it the STAFF that makes Memorial what it is. But the LIES of management have cost us our jobs. When that is fixed, then Memorial will become the great hospital that it can be. Until then, it is just a mediocre hospital, with great staff trying to make the best of things, in spite management's LIES. When a manager will LIE to terminate an employee, that is just plain wrong!! It just goes to show the true management culture at Memorial.
10:18 AM on October 4, 2009
Jakken, I feel your pain. I truly empathize with you and your job situation. You are justified in being angry about being lied to. There are plenty of managers in the workplace that lie in order to get ahead. At Memorial, I am sure there are a few that do as well.
You will not get revenge. You will not feel that there is justice, because the odds are that nothing will happen to the manager that did this. That bites. I worked under a manager that was like that and she was able to walk away with a big fat pension and a smile.
I would argue that the majority of people who work at Memorial are not like that. The whole organization is not corrupt because of a few bad apples. I'm in no position to tell you how to feel but for me, when I was in this same sort of situation, I took it as a prime example of how NOT to treat people and made sure to learn from it.
Don't dwell on it too much. Easier said than done, I know. Trust me, I know. But you will find people like that in every workplace. It's when the majority of people are like that--that's when you can write off the whole organization.
I truly believe that the majority of employees at Memorial are good, decent and caring people that are doing a difficult job under difficult circumstances.
Full disclosure alert: I have worked at Memorial in the past and I volunteer there now. I've also had family members treated there and was always amazed at the great quality of care received.
11:09 AM on October 4, 2009
""You are justified in being angry about being lied to. """
Yes, I am. However, as you say, the majority of staff at Memorial are caring, dedicated people. I find that care there is outstanding.
But, if I can't TRUST that I am not being lied to, then I won't have anything to do with an organization that has done it not only to me, but to a few of my former co-workers also.
I must say that 20 plus years at Memorial taught me a lot. It was not until the final 3 years that things went totally crazy.
Disclaimer: I hold no ill will toward Memorial as an organization. I just can't figure out how being honest cost me my job, when a lying manager was promoted. It will always and forever be wrong, in many different ways.
Politics and morality aside, yes, Memorial is a good place for patients. It is NO LONGER an optimum place to work, however. Morale is at at all time low, employees are unhappy. Doctors are unhappy. That tends to make patients unhappy.
I can only speak for myself. I cannot and will not ever trust Memorial Health Systems with my care ever again, because of that manager. Her actions have had far-reaching consequences. And it is sad, because MOST of the employees there are upstanding people, and are there to make a difference.
11:12 AM on October 4, 2009
The new CEO is doing a fantastic job. Job cuts were absolutely necessary. As I was on duty there I would view the various people that did nothing, absolutely nothing but stand around (literally), at least during my short shift. I made many comments about how overstaffed the hospital was, at least it appeared that way because so many people were doing absolutely nothing except engaging in gossiping and complaining.
Two things that I would suggest the new CEO look into. The slow elevators create a huge amount of time wasted by employees waiting to board and reach their work environment. Secondly the cost of food items in the cafeteria is excessive. I suggest giving the consumer more or dropping the price. The hospital should not be attempting to make a profit such as The Golden Corral or any other such entity.
The people that visit the cafeteria are in distress (generally), have no alternative at that moment, poor(most cases)and hungry. If you do not wish to drop the prices overall, you should absolutely drop the prices for the employees. The lunches,lunch boxes, and containers brought by in staff and strangers create a lot of clutter, not to dismiss overstocked and dirty (unsanitary) refridgerators.
Please, someone get this message to the proper parties.
10:51 PM on October 6, 2009
Wow! what a joke. McEvoy is one of the biggest jokes there is. He hired the consultant that was brought in to evaluate the hospital for inefficiencies. This should have been a clear conflict of interest. He made a rule to not "bump" anyone from their position to make room for someone else. However, he bump one director out of her position in order to make room for someone else. He also got rid of the vice president of the north hospital and offered her a director position which was a clear demotion w/o every interviewing her for one of the two VP positions which she was more qualified for than either of the two people he promoted. If the goal was trying to cut back on overage, then why were to two directors in (lets say a certain dept. let go) but replaced by someone w/very little experience in that dept. That's not cutting back, that replacing. McEvoy is a joke. He will lie to your face and stab you in the back. Don't believe the hype in this article about how great he is. He's saved money only by getting rid of people who were doing a great job just to bring in less experienced lower paid people. This will back fire in short order. What goes around comes around, Mr. McEvoy. We'll be waiting and watching.
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