Quint Studer talks with Mark Clement, CEO and President of TriHealth, about how the $2.1 billion Cincinnati Health System is navigating the COVID-19 crisis.
Healthcare has been one of the hardest hit industries. Mark talks about how TriHealth took a $100 million loss in the first few months of the pandemic and came back stronger, more aligned, and more cohesive. Their success lay in how they approached one of the most crucial leadership competencies: communication. Not only did COVID force TriHealth to get better at using video technology to reach distributed stakeholders in a timely and effective way, it reinforced the benefits of on-the-ground tactics like leader rounding (executed safely, of course). With more than 12,000 team members, real time communication was key.
Great communication alleviates anxiety and keeps people engaged and connected to their sense of purpose in a time of uncertainty and rapid change. It keeps organizations nimble, adaptive, highly aligned, and able to innovate in the face of a crisis like a pandemic. Mark talks about communication on two levels: one, how to say what needs to be said in a direct and transparent way, and two, how to hardwire the right tools (monthly senior leader meetings, town halls, rounding, daily huddles, etc.) to cascade communication and keep messages consistent.
When you get communication right, it will accelerate your performance in the good times. It’s what will move you from good to great. In the bad times, it’s what will save you.
Nicole Webb Bodie (00:13):
Welcome to the Busy Leaders Podcast, a catalyst for inspired action, hosted by Quint Studer. I’m Nicole Webb Bodie, the Chief Impact Officer of Vibrant Community Partners. Clint is the author of 10 books, including two Wall Street Journal Best Sellers, The Busy Leader’s Handbook, How To Lead People and Places That Thrive, and Results That Last. Quint not only teachers it, he’s done it. Tune into this podcast as Quint chats with leaders from all industry and corners of America on how they’re tackling the biggest challenges of our time. He showcases his gift for harvesting best practices and simplifying them.
Nicole Webb Bodie (00:47):
In this two-part episode, Quint Studer talks with Mark Clement, CEO and President of TriHealth, about how the 2.1 billion Cincinnati healthcare system is navigating the COVID-19 crisis. Healthcare’s been one of the hardest hit industries. Mark talks about how TriHealth took a $100 million loss on the first few months of the pandemic and came stronger, more aligned and more cohesive. Their success lay in how they approached one of the most crucial leadership competencies, communication. With more than 12,000 team members, real-time communication was key. Great communication alleviates anxiety and keeps people engaged and connected to their sense of purpose in a time of uncertainty and rapid change.
Nicole Webb Bodie (01:24):
Under Mark Clement’s leadership, the system evolved as a clinical and operational integrated health system and has earned national recognition for excellence and clinical quality efficiency and value. In recent years, Tri Health has been recognized multiple times as one of the 15 top health systems in the country by IBM Watson Health and two of the system tertiary care hospital has been recognized as 100 top hospitals, also by IBM Watson Health. Please join me in welcoming Mark Clement and your host, Quint Studer.
Quint Studer (01:52):
Well I’m here again with Mark Clement, you’ve already heard his introduction. And something you might not know, you might because anytime I think I ever spoken, I get questions like, “Who’s your mentor, who do you respect?” And the first name I give it Mark Clement. I met Mark in November of 1982 (note correction: 1992) and it was a life-changing experience for me career wise, it was incredible. I didn’t understand the value of leadership development. I remember Mark when he brought in Clay Sherman, from the New American Hospital, and said, “We’re committing to two days of training every 90 days,” and I thought, wow, that’s incredible. And I went there, and I tell you, I went there thinking I was a good leader. By the time I left, I thought, “I’m not that good leader at all, but I’m certainly want to be a better leader.”
Quint Studer (02:38):
So he really convinced me the value in investment in leadership training and development. The other thing that’s always impressed me about Mark is, and I’ve known him for years, and when I work side-by-side with him, I work for Mark, there are certain times in anybody’s life, when they have a decision to make of revenue versus realities. And in the book, Built To Last, which is another thing that Mark introduced me too, by Jim Collins, they say, you can tell a long term organization is when they pick values over revenue, and I’ve seen Mark, when he had to make that tough decision, “Do I lose some revenue but go with values,” he’s always gone with value, there’s never been a doubt.
Quint Studer (03:19):
Now the other thing about Mark, and he could do every podcast I ever do because he’s so experienced in all aspects of leadership, but his communication is, I think, the best that I’ve ever seen. I’m lucky enough to be on the TriHealth Board and, because of that, I get how he’s communication his organization and I use it all the time for my own organizations, because he’s just such an expert in communication. So we’re going to talk in this podcast about communication and basically a lot of internal communication. So, if you don’t know Mark, Mark’s the CEO, President of TriHealth, which is a large health system in Cincinnati area. He has thousands of employees. And I know I talk to a lot of non-healthcare leaders and this COVID-19 thing is caused all sorts of communication challenges. But imagine if you’re also the CEO of a healthcare provider. So now you’re communicating the patients, or potential patients. But internally, you have a lot of challenges in communication because there’s the fear of what’s going on, some places that have told they can’t do surgery, some are overwhelmed and working more than they thought of. So I’m going to focus on internal communication and messaging because I think Mark is the best I’ve ever seen. So Mark, you are a young CEO. How old were when you got your first CEO job?
Mark Clement (04:43):
Quint, thanks for the opportunity to have a fun conversation with you about leadership. Certainly communication is an important competency for effective leadership. But gosh, I think I was probably 34 or 35 when I had the opportunity to lead Holy Cross Hospital where you and I worked together. And it was funny, it was in 1992 that I stepped into that role, and very shortly after that, that was in September, I was fortunate enough to meet you, and trick you into coming to Holy Cross to be really in effect number two in that organization, and we had a lot of fun working together. Felt like I was a late bloomer because probably 25% of my graduate class, I graduated with a degree in Health and Hospital Administration, probably 25% of my class were in CEO jobs before they hit 30. That was a different era, that was a different time, that was in the ’80s. So late bloomer, first CEO role at 34 or 35, and it’s been a terrific ride since. I’ve had the privilege of leading four organizations throughout my career and it’s been a great privilege to return to my hometown, Cincinnati, and we’re fortunate to have you, Quint, on our Board of Directors.
Mark Clement (06:09):
I grew up, I’m going to do my adit. I grew up in Cincinnati, my dad was a doctor, he actually trained at one of our facilities here in Cincinnati, and one of my brother is a physician, who actually now practices at one of the TriHealth facilities. And I was born at one of the TriHealth facilities. And when I was working in Upstate New York, in Rochester, leading a big integrated delivery system four, five years ago, five or six years ago, and was given the opportunity to return to my hometown, it just seemed like that’s where God wanted me to be. And it’s been a great privilege to lead this organization. More than 12,000 team members, more than 2,000 physicians, really serving more than one in three Cincinnatians, we care for, in excess of 600,000 member of community. And I really do feel privileged to be a part of this organization and it’s fun to be with you today doing this podcast.
Quint Studer (07:09):
When you look at it again, maybe it’s me, but I just remember, early on, the pressure… it seemed like communication was the weekly or monthly newsletter that’s somebody in commune relations published, that went out to all the staff. And truly, that was sort of the communication. Periodically, some CEOs did town hall meetings, but many of them did not do town hall meetings. What your biggest adjustment of CEO when it comes to keeping a workforce engaged.
Mark Clement (07:44):
Yeah, boy it’s a great question, and I made the comment a moment ago, that I think communication, and effectiveness around communication really is a leadership competency. If you think about leadership, leadership, contrasted slightly with management, leadership’s about leading an organization through change. Management is an important dimension, but management is really about managing operations or managing in a relatively stable environment, it’s the seven functions of management, managing it’s staffing, it’s organizing, it’s directing, it’s planning. And those are important, but when you think about leadership, leadership’s really about change, it’s about bringing an organization to a higher level of performance. And you and I, when we worked together at Holy Cross Hospital in the ’90s, the early to mid-90s, it was really, in many ways, a leadership laboratory and you took the work that we did together and you created the Studer Group and you’ve help organizations across the country, healthcare organizations, higher education organizations, to improve by investing in leadership and helping those leaders to build stronger, better, higher performing cultures.
Mark Clement (09:05):
But the leadership really is about, if you’re going to be effective in leading change, leadership, by definition, is building followership. And you and I used to talk about this, if you look to the right and you look to the left and no one’s following you, you’re probably not leading right? And one of the ways we get people to follow us is by connecting with their sense of purpose and by touching into their own personal ambitions and aspirations and connecting those ambitions and aspirations and their own personal purpose to the higher aspirations of the organizations that we lead. And there’s no way to do that unless we are effective communicators. And the communication style and tactics that you talked about a moment ago, as you framed the question, really I think in some ways, the monthly updates and the occasional forums, I think those are okay and maybe serve a purpose in an organization that’s relatively stable and all they want to do it just kind of maintain their current level of performance and operations.
Mark Clement (10:17):
I’ve lead organizations, throughout my career through major change, starting at Holy Cross. And then a two hospital system, MetroWest and Chicago. And then most recent, before returning to Cincinnati, Rochester Regional Health System, a five hospital system. And in every one of those cases, and now as well at TriHealth, in every one of those cases, those organizations were underperforming and we needed to change and to foster support on the part of our diverse workforce and our physician community around the need to change really required an effective communications strategy. And I would tell you that, in coming to TriHealth five years ago, and join TriHealth, which was a good organization. But at a time when our industry is in the midst fundamental major transformation as we transform from an organization that was transactionally oriented, fee-for-service financed, to what our country is increasingly expecting, which is health systems that can deliver on what has been referred to as the triple aim, better care, better health, better value, and really improving the health of the community. We really need to evolve and transform our care models and our financing systems.
Mark Clement (11:48):
So when I arrived in Cincinnati five years ago, our agenda was a pretty bold agenda really to lead the transformation of healthcare to get healthcare right. And I knew to do that, we needed to create a more aligned, integrated health system then we were in the past. We were largely a… my predecessor had done really a terrific job of assembly the parts of the system, six hospitals, a 10 or 11 major ambulatory campuses, nearly 700 employed physicians, another 500+ independent physicians, that we operated really more as a holding company. And in order to get healthcare right and deliver on that triple aim that was coined by Don Berwick, who found the Institute For Healthcare Improvement, we knew that we needed to operate as an integrated system of care, some refer to it as an operating model, or an operating system where we are one system, one culture, one underlying set of beliefs or values guided by a compelling vision and set strategies that will enable us to achieve that vision and future state.
Mark Clement (13:08):
And in order to do that, I needed to capture the hearts and souls and minds, whether it was me or anyone else, our senior leadership team needed to capture hearts and souls and minds of our very organization and inspire them to really embrace that vision, underpinned by our values and our mission of more than 167 years. And to do that, we needed to improve our communications because when I arrived here five years ago, we communicated a lot like those organizations that you touched on. Well, we had a newsletter and occasionally we would do, and it’s not a criticism, we were a pretty stable organization at the time. And we are now in a transformation mode and we’re moving quickly and that requires that we communicate more effectively to align and engage out team member in helping us to achieve that vision.
Mark Clement (14:04):
So as I look to the right and I look to the left, I see a lot of people following now. In part, because we’ve, and it’s just not Mark Clement, it’s our senior team, it’s our nearly 900 leaders that really have embraced this vision, and communication’s been an important lever in creating that alignment, creating that engagement, which has ultimately led to really unified action to take TriHealth from a good organization, coin another Jim Collins expression, “From a good organization to a great organization,” as part of our journey to get healthcare right. So I could go on Quint, but let me just pause here.
Quint Studer (14:45):
Well, I was thinking Mark, one of the things I was telling our Chief Impact Officer at Studer Family Companies, I want her to go to Cincinnati. Because I can describe walking through your hallways, but until somebody’s there, they don’t get it. I mean, you can’t be in an elevator at TriHealth, you can’t be in a lobby, you can’t be anywhere, where you’re not, not only reading your vision, your mission, your goals, but you’re even showing your performance, you’re showing what measures. So I think your communication channels are, and I’m not saying this in a wrong term, they’re sort of in your face, you have no choice but to be communicated with.
Quint Studer (15:23):
The other thing I’ve seen you do, Mark, and I’m going to get into a few other things in a bit is, you’ve sort of used visual. I mean, you seem to be doing more and more broadcast or video [crosstalk 00:15:37]. Tell us about that, because I just watched one of yours with Mardia Shands, for example, on your diversity initiatives. So you tend to be out there in video a lot, which is wonderful because people appreciate that.
Mark Clement (15:51):
Yeah, boy, great question Quint. And it’s I think a really efficient and effective way of reaching a very large organization that’s pretty distributed throughout the greater Cincinnati area. We have 150 unique sites of service throughout the greater Cincinnati area. Six major hospitals, now 13 major ambulatory campuses, more than 100 physician offices and practices. We have post-acute facilities, we have hospice centers. And as much as I round physically through all of our facilities and our senior leaders and all of our leaders round through our facilities, it’s just impossible to be in all of those facilities as often as I would like. And I would tell you that COVID-19, this pandemic that we are continuing the manage our way through, there have been a number of, I think, kind of blessing in disguise that have come out of this, or lessons that we’ve learned from this.
Mark Clement (17:00):
And one is, the ability of technology to reach your distributed stakeholders, physicians, volunteers, team members, board members, and to do that in a really timely and effective way. If I can, let me talk to you a little bit about, I talked about the importance of communication as a leadership competency and creating an aligned and engaged and committed workforce of team members, doctors, and others. Let me tell you how we’ve done. I’ll talk about how we did it pre-COVID-19 and let me tell you how it’s kind of evolved since we have really adapted in many ways to this virus. In the need to socially distant, I’ve never stopped rounding, even in the face of this virus. But given the pace of change that’s occurred as we’ve innovated and adapted and really had to figure how to live with this virus that we didn’t even understand six months ago, we had to do that without a playbook. The uncertainty and the pace of change really required us to adapt our communication channels and mechanism and I’ll talk about that in a moment, but let me give you kind of a baseline.
Mark Clement (18:18):
So in the early part of my tenure here at TriHealth, we put in place and hardwired a number of communication mechanisms and channels that really, I think, have enabled us to really accelerate our transformations and dramatically improve our performance, and build a higher performing culture where everyone within this organization is an owner, everyone in this organization, at least that our aim, we’re working towards that, and everyone has responsibility for helping us to achieve that vision of performing at the highest level, in the top decile of all the domains that really define our success. Ranging from safety and quality, patient experience, to team member engagement and culture, to growth and then lagging indicator, financial performance. We set really ambitious goals every year within those five pillars. And our communication strategy has helped out team members understand, not only the goals and how we’re taking TriHealth from a good organization to a great organization, but what the role in helping us to achieve those stretch goals is each and every year, as we continue to get better in our journey from good to great.
Mark Clement (19:39):
So some of the things that we put in place, when I arrived here, we didn’t even have regular senior leadership meetings, so I put in place, and that’s not a criticism because the organization was performing pretty well, but it wasn’t moving very quickly, and so we put in place monthly senior leader meetings, about 150 of our senior leaders, directors and above. We instituted quarterly town hall meetings, where the CEO, along with other members of the senior team would literally go on the road and we’d conduct 15+ forums around the system at our major hospitals, major ambulatory facilities. We began to invest in our leaders, leadership development institutes on a quarterly basis, where we would being all 900+ leaders together, both administrative leaders as well as physician leaders.
Mark Clement (20:36):
From those monthly senior leader meetings, we would create a information communication cascade deck, that would get pushed out and each of those senior leaders would be responsible for cascading it to their leaders, who would be responsible for cascading it to their leaders, who would be responsible for cascading it to our frontline team members, our heroes at the frontline. We instituted, about three years ago, and hardwired daily huddles in all of our hospitals, all of our departments. Every functional, operational and staff department and division through health system, those huddles cascade up. Safety issues as well as other issues and I conduct, what we call, a Tier 4 huddle, so all of what comes out of the frontline huddles, hospital huddles, the division huddles, roll up to the senior leadership huddle so there’s bi-directional communication around safety and other important issues. I instituted, five year ago, first a monthly update, and about two years ago, I evolved that to a weekly update that’s a message from [inaudible 00:21:51] to all of our stakeholders.
Mark Clement (21:55):
And about a year ago, we evolved that, required that our local hospital presidents and ambulatory and business unit leaders would actually forward that to their organization from them with a message from them. And just as importantly, we require everyone of our leaders, from me to senior leaders, middle management, frontline supervisors to round and round on team member regularly. I round on a weekly basis, that’s an expectation. Our frontline leaders are responsible for rounding on all of their team members at least on a monthly basis, individual one-on-one rounding. And that enabled us to dramatically improve engagement, we went from the bottom quartile to nearly the top quartile in just a few years. And as we facing this pandemic, we pivoted very quickly. One of the things that we’re proud of is, as a result of the investment that we’ve made in our leadership and the work that we’ve done to create a system wide culture, a high-performing culture that nimble and adaptive and highly aligned where we’ve pushed responsibility and authority out to the frontline of our organization, we’ve been able to adapt and adjust and innovate in the face of this pandemic in ways that just have blown me away.
Mark Clement (23:22):
So literally, the first week in March, as our Governor in Ohio was enacting shelter-in-place orders, we initiated weekly town hall meetings, all team members, video format, virtual meetings that were bi-directional, team member could ask it because I couldn’t bring all of our leader together in person. We initiated virtual, all system leadership meetings on a weekly basis. We continued our rounding, I pivoted a little bit with me weekly update to send it directly out to our team members and that, during a time of great uncertainly, and there was enormous uncertainty with COVID-19, we didn’t understand the virus, we didn’t understand really how it spread, we didn’t understand how to treat it. There were a lot of open questions, given the pace of change and how we were adapting and innovating, putting in place mitigation measures in our hospitals and ambulatory facilities. Mitigation measures ranging from screening stations to use of masks to limitations on visitors and a whole host of others, that we needed real time communication with our stakeholders.
Mark Clement (24:42):
And these virtual town halls and the opportunity to hear their questions, our team member’s questions in the virtual leadership meetings and the opportunity to share updates, decisions that we were making, and issues that we were struggling with, really served out organization well. And I would tell you that the investments that we made in our leadership team, and again building that culture, really readied us for this kind of crisis. And I have to tell you, just a few minutes ago before starting this podcast, I met with all of our hospital presidents, our CNOs around our system, other senior leaders, observing social distancing norms, and I just told them I’ve never been more proud of an organization then I have been at this organization and the leadership that they provided at the local level.
Mark Clement (25:28):
I’ll share one last thing, Quint, through this pandemic and even continuing, our senior leaders, including myself, would round in all of our hospitals and ambulatory facilities and I’d go onto COVID units and I would go into our emergency departments, where we were caring for COVID patients, wearing a mask and taking appropriate precautions, and talk to hundreds and hundreds of team member throughout, probably thousands throughout this pandemic firsthand, not virtually, and one of things I heard more often than not, I heard it every time I went out was, how much they appreciated the level of communication and openness and transparency, not just from me, but from the entire organization. As we were struggling with a lot of questions and uncertainties and fears, our team members and stakeholder felt, I think, re-assured knowing that we were being open, even if we didn’t have the answer to a question, to be able to say, “That’s something we’re working through right now and when we have an answer we’ll share it,” people appreciated that.
Mark Clement (26:37):
And then almost without exception, when I would hear this, they would go on to say, “My sister at this organization and my brother as this health system and they’re just feeling in the dark there. And we so much appreciate how this organization is committed itself to transparency.” So I guess I’d close with this question and my answer to your question is, transparency, real-time communication is critically important when an organization is going through a level of change and adaptation like we’ve seen with, and uncertainty, like we’ve seen with this virus. It’s essential to keep our troops, our team members, our physicians at the frontline feeling supported and feeling in the know.
Quint Studer (27:31):
Mark, I’ve always said, whenever you’re doing an employee engagement survey, there’s three areas that are always going to be low, I don’t care if great at them. It’s parking, paying benefits, and communication. And those are the three, and even if you’re really good, they’re still going to be some of your lower rated things. And I think people sometimes will rationalize why do I want to over communicate, or I’m just sending too much stuff out and I’ve said, I’ve never had anyone say I’ve gotten the perfect amount of communication. I’d rather err though on too much then too little and I get your communication because I’m on the Board and it’s just unbelievably great.
Nicole Webb Bodie (28:08):
Stick around for two part, as Quint and Mark talk about cascading and hardwiring communication.
Quint Studer (28:15):
So there’s two other tip of points I want to make in this podcast. One is, cascading. Because I’ve often thought, when I go to work for an organization today, what I’ll do Mark, is I’ll take a whiteboard and I’ll have the executive team and I’ll have the executive team talk about how many people report to them, and we add that up. And I’ll say, “How many employees do you have?” And then I’ll say, “So basically like 92% of all your workforce reports to somebody that doesn’t report to you. So whoever has the best middle management team wins.” And you’ve done great training of your middle management team but you also, I have it right in front of me right now, because I just got it today because I’m a Board member is, you’re talking points to share with your team. Now talk about how you hardwired the messaging to help your middle managers deliver and align the message to the front employee? Because I think sometimes we hope they do it, we feel they do it, but we don’t hardwire it and you’ve hardwired and cascaded communication. Can you share with the listeners a little bit on how you did that?
Mark Clement (29:24):
Yeah, another great question. So I think it’s important to point out that our, I think, effective communication, and I talked about it a moment ago, I think communication is really an important leadership competency that is absolutely essential in creating and engaged, committed workforce, team members that will really give, we talk about engagement, my definition of engagement is that our team members will voluntarily choose to commit their discretionary effort to help the organization achieve its vision and it’s goals. And so we are very intention and very deliberate about how we communicate and what we communicate. There two dimensions to communication, it’s sort of how you do it and what you’re communicating and you’ve taught me Quint, you always start with the why, you have to start with the why. And so that’s part of how we communicate, start with the why. But our communication, the content always links back to our vision, getting healthcare right, improving the health of our community, improving the experience of care and delivering greater affordability, greater value, all while creating a more engaged physician community and team member community.
Mark Clement (30:49):
And so, when we communicate, it’s always within that construct. So as we communicate updates, as we communicate wins, as we communicate accomplishments, it’s all within the framework where we are going as an organization and the milestones that we’re achieving as well challenges that we might be facing that are barrier or impediments in continuing to move the organization forward. It’s not all happy talk, it’s honest straight talk. But it’s all within the framework of our mission, vision, values and annual [inaudible 00:31:23]. And so we’ve hardwired the cascade of that content, which is cascaded every month. And during COVID-19, when we were meeting literally on a weekly basis in town meetings and in leadership meeting, we were asking leaders to… because the pace of change was so rapid, things were changing so frequently, we needed to cascade literally weekly, so we pushed out talking points and our communication cascade literally on a weekly basis. Things are kind of settling in with COVID-19 as we’ve learned how to mitigate and manage and keep this virus in-check, and at the same time, get back to the work of getting healthcare right and taking TriHealth from a good organization to a great organization.
Mark Clement (32:15):
The pace of change, as it relates to adapting to this virus, and again combating this virus, had really settled in because we put in place all of the measure, many of them mitigation measures, and the new treatments and all those kind of things. So we’ve gone back to monthly cadence but we’ve retained the virtual town hall format, I did one yesterday, and those are now done on a monthly basis. If we get back to a period where we need to communicate more regularly, we can dial that back up to weekly, or bi-weekly. And we’ve gone back to monthly all system leadership virtual meetings. But coming out of those all system leadership meetings, we generate, as you saw, a communication cascade and it’s every leader’s responsibility to cascade those to their team members. First leaders, and then leaders to team members. And we hardwired what we called monthly meetings and as part of those monthly meetings, there’s conversation between the leader and their one-up about cascade, about questions that might have occurred as that they were cascading and conducting their department meetings or rounding on their team members. That’s part of the conversation that’s about hardwiring communication, again up and down and across the organization.
Quint Studer (33:33):
You’ve always been so good at that, from the time I was at Holy Cross. So my last question, and everything been so positive, I wrote a column, I write a weekly column, and a lot of my material comes from looking around. One of the things I noticed about you is, when you’ve made rough decisions, and the roughest decisions we make on healthcare, outside of let’s say letting a performance issue go, is a reduction in force. And if you’ve been in healthcare long enough, you’ve probably had at one time, or multiple times, had a reduction in force.
Mark Clement (34:09):
Quint Studer (34:10):
And my column, Mark, was based on something I read that you sent out, was basically, how you let people go might really tell the values of an organization, because these are people aren’t working for you anymore, so you can say, “Well, they’re gone, let’s just worry about the people that are here.” But people that are still here, know how you treated their co-workers that just left. And I don’t know if another organization that I’ve ever seen that did that better than TriHealth, because you had, like many, your revenue’s down, elective surgeries were gone. And if you’re not in healthcare, unless you’re doing campers, boats, kayaks, bikes, RVs, your revenue is probably down per se. So everybody has reductions, I’d say 80% of the companies in the United States had a reduction in force. And those are painful for an organization. But for tips for our listeners, tell people how you did it, because I don’t think I’ve ever seen an organization, including any one that I’ve ever run, do it better than the way you’ve handle it with the… because I think TriHealth had a reduction in force throughout this process.
Mark Clement (35:28):
We did, this is a first for me, Quint, yes, I’ve had to manage through organizations that have led through reductions in force. But never in a situation I wasn’t new. So, as you know, when I arrived at Holy Cross Hospital, the organization was… we needed to turn it around. And so, that was something in inherited, same was true in previous organizations. We were here at TriHealth, through February we were poised to have another terrific year financially, then COVID-19, the pandemic arrived. And the Governor of this state appropriately, correctly, instituted a shelter-in-place order and required hospitals and health systems to discontinue elective services. So with the stroke of a pen, TriHealth went from a $2.1 billion system, defined as revenue, to a one billion dollar system. And that discontinuation of elective services continued really from mid-March through most of May for elective in-patient services, we staged the re-opening of some of the out-patient services. But for the month of March, April, May, June, we lost over $100 million, again a $2.1 billion system.
Mark Clement (36:59):
And none of us really expected to come back fully, given that this virus was continuing to lurk and create and public health threat, linger in our communities and that we were going to have to continue to manage surges and hotspots and spikes. We anticipated, and we were right, that our clinical activity, our clinical volumes would not return to 100% of pre-pandemic baselines. And we estimated that we’d probably be somewhere and 90% and 95% of pre-COVID baselines in terms of volume and revenue. Not as bad as the cruise ship industry or the airline industry but not as good as the grocery industry of the RV industry, right, where they are over 100%.
Mark Clement (37:58):
But if we got to 95, and this planning was done in April, if we got back to 95% of baseline, that still represented over $100 million in financial shortfall and $100 million reduction in revenue. So we know in April that we were going to need to make adjustments in our cost structure, to adjust our cost structure to the new reality of our clinical volume and in revenue. And during those town meetings, I began talking openly and honestly and transparently with our team members about current losses from the shutdown, and our anticipation that we were not going to return to full pre-pandemic levels of activity and revenue, and that we needed to begin preparing for that.
Mark Clement (38:59):
And given that 60% of our costs are directly invested in and tied to our people, we didn’t believe there was any way to make those necessary cost reduction without impact our people. So the first thing that we did, in response to your question, was to begin to prepare the organization that this was a possibility. As we got further into our re-opening, and had better visibility around how quickly we were going to return, and how fully we were going to return to previous baselines, it became very clear that we were right. Sadly, we were right, now that we’re three months into re-opening, we’re at about 95% of our previous levels or revenue and clinical activity. And so, in June, following eight weeks of very thoughtful deliberate work around how we could adjust our cost structure down, particularly in the overhead and fixed areas, because we flex our staff up and down in our clinical areas and in our variably staffed areas.
Mark Clement (40:11):
We knew we needed to take about $100 million to $150 million dollars of fixed costs out of our operation and I was very open with our team members about that. So your question is, how do you do this first, is you prepare the organization. You remain completely transparent about, and open and honest in real-time about the challenges that we’re facing. And fortunately, with this pandemic, this was not anyone’s fault, it was not of our own doing, it was an externally imposed public health crisis that created a secondary financial or economic crisis. So in addition to being open and transparent and honest in the moment, and preparing the organization honestly, no happy talk, being straight and honest with the team members, I think the message has to come from the CEO, I don’t think you can delegate this. As hard as that message is to deliver, and I will tell you that it was not fun to have to do this and it was not fun to have to deliver this message, but it was the right and necessary to do.
Mark Clement (41:22):
TriHealth has been serving this community for more than 167 years. And I have the privilege of standing on the shoulder John, who preceded me in leading this organization. My responsibility is to ensure that this organization will be serving this community for another 167 years. And that means confronting, as Jim Collins, who you referenced earlier, mean confronting the brutal facts the brutal reality. And our brutal facts and our brutal realities were that, we were going to continue to lose tens of millions of dollars a month, which could put this health system in financial jeopardy and our mission in jeopardy if we didn’t step up and do the right thing, as difficult as that was and as difficult as it is.
Mark Clement (42:11):
And so in preparing the organization, we developed what we refer to as our COVID-19 Financial Recovery Plan, as you know being a Board member, I communicated that to our team members, told them that we were going to need to make these adjustment and then came back a week later and talked to them about the adjustments and how we were going to be making these. And I think being able to prepare the organization and deliver these very difficult messages with authenticity and with empathy, real empathy, not just the words but the practiced and behavior. We put in place, to demonstrate our commitment to our people, we put in place in March a team, they were refer to as our team member resource center, to support our team members first, in the early phases of this pandemic, to assist those team members that were impacted by reduced schedules, because guess what, we reduced our clinical volume by 50% and that impacted team members.
Mark Clement (43:17):
So we put in place salary continuation and other initiatives to keep our team members whole, but to support our team members ho might have been having daycare problems and other problems. And we quickly pivoted that team member resource center to help impacted team members whose positions were eliminated through this recovery point and the need to reduce our cost and re-align our costs with again, the new pandemic reality with volume and revenue. And we eliminated 450 of our more than 12,000 positions. But because we anticipated this, we didn’t fill positions that became vacant and really so as a result, only about 250 actual team members were impact. And we committed to work with everyone of those team members that were impacted, to work with them to find other opportunities within our system, in positions that weren’t eliminated that might be vacant through attrition, normal turnover.
Mark Clement (44:21):
And I’m happy to tell you, just eight weeks into this, we’ve played 60% of the impacted team members, who want to stay with TriHealth, we’ve played them into other opportunities within our system. And in many case, so new opportunities represent professional advancements and promotion. I said to our leadership team throughout this process, we’ll have to do some hard and difficult things to right the financial ship, but we’re going to do those hard and difficult things in the right way, because our team members understand what we have to do and why we have to do it, we’ve talked openly and transparently about the why, they understand it. What our team members are going to remember from this, and going to judge us by from this, is how we treated them through the process, and how they felt about the way in which they were supported and treated as we had to eliminate positions.
Mark Clement (45:30):
And I will tell you that eight weeks, post announcement and working with our team members, I think we’ve emerged from this pandemic, at least the initial phase of this pandemic a stronger, more aligned and more cohesive organization, in large part because every decision along the way was guided by our values and in large part because of the topic we’re talking about today, which is communication, and keeping people informed and feeling supported and valued.
Quint Studer (46:00):
Yeah Mark, being a Board member when I saw the… you sent us the package of what people that were going to be reduced got. And you helped them keep their benefits for a little longer than the norm.
Mark Clement (46:14):
Quint Studer (46:14):
The team resource center, which you gave almost an outplacement service…
Mark Clement (46:20):
Quint Studer (46:21):
… is that it was. The fact that you took…
Mark Clement (46:23):
Yeah, every team member that was impacted has a personal career coach to work with them and they meet weekly.
Quint Studer (46:30):
Yes. The other thing that just was amazing is you told them, for the next year, they would have first shot of any job that was open. When I read this thing, I get goosebumps today because if every organization did it like you did it, you are right, we have a chance today to either build are emotional bank account with our workforce or take withdrawls. In COVID-19, there natural tendencies for withdrawls, regardless what was happening like you said, even though it weren’t our fault. You can’t schedule people if they can’t do surgery, I mean that’s not their fault. But because there’s withdrawls we can’t control, we can control the deposits, the emotional deposits, and that’s what you’ve done. I mean, I get a first row seat by being on your Board, and I look at it, I’m just absolutely amazed. Today I got your stress kit, so you have a stress kit, I can get a count on a Fitbit, I can get, I mean it’s just absolutely incredible. You have a fitness channel I can watch, I mean you have truly created, I think, not healthcare today, but healthcare for tomorrow. And that’s really what you’ve been all about, and we can go into all the great things. I’d like to bring you back on population health, where you’ve been a leader.
Mark Clement (47:57):
I would love to.
Quint Studer (48:00):
I wanted to dig into communication because I don’t think… I learned from you all the time. I get your stuff and I say… when I got your last cascade I quick sent it Barbara Scott, who works for me, and said, “Hey, can I do something like this, Barbara?” So you’ve been role model for me since November of 1992, and you still are today, so I know the listeners are going to listen to this and gain an awful lot, and that’s what’s we’re all trying to do, we’re just trying to sharpen our saw. So Mark, thank you so much for being on this podcast. Blessed to know you.
Mark Clement (48:40):
Well Quint, thank you, you’ve been very kind in your remarks and it’s reciprocal, you’ve been a good friend and a mentor. Early on, I was probably presumptuous to think that I could be a mentor to you and maybe I helped you a little bit, I remember talking to you about at Holy Cross Hospital in November, but you’ve been a mentor to me so I think we’ve learned a lot from one another.
Quint Studer (49:06):
Yeah, one thing I think I’ve learned from people is the one thing we’ll never agree on is who can thank each other the most. So thank you very much Mark, appreciate it. Thank you.
Nicole Webb Bodie (49:21):
Thank you for listening to the Busy Leaders Podcast, a catalyst for inspired action, hosted by Quint Studer. Please subscribe, rate us, and write a review. For more information, visit thebusyleadershandbook.com.