August 6, 2025 • 21 mins
This episode recorded live at the Becker's Hospital Review 15th Annual Meeting features Dr. Cliff Megerian, Chief Executive Officer, University Hospitals. Dr. Megerian shares how UH is leading with a culture of compassion, advancing patient-centered hospitality, addressing financial pressures with strategic efficiency, and cultivating a resilient workforce through retention and internal career development.
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(00:00):
This is Alan Condon with the Becker's Healthcare
Podcast, and I'm thrilled to be joined today
by doctor Cliff McGarian,
CEO of University Hospitals.
That's a nonprofit health system with 21 hospitals,
more than 50 health centers and outpatient facilities,
and about 200 physician offices in Northern Ohio.
Cliff, pleasure to have you with us at
(00:21):
the Becker's annual meeting. We're also recording this
on-site.
For those who might be as well acquainted
with university hospitals and the work it is
that you do, do you mind giving us
a little bit more back in insight into
your background and your role at the health
system? Sure. Thank you, Alan. It's, first of
all, it's a pleasure to be here and
a pleasure to be invited, by Becker's.
I'm, myself, am a physician surgeon and have,
(00:43):
been,
going on my fifth year or maybe sixth
year as CEO of University Hospitals.
It's a wonderful place. We're gonna be celebrating
our hundred and sixtieth anniversary next year. So
we've been around quite some time.
Really, we started under the notion that the
needy are the most worthy, and we've grown,
as you mentioned, to be,
(01:04):
very far encompassing
with 21
hospitals, and we spread throughout close to 22
counties.
We've grown,
significantly over the last few years at a
clip around eight or 9% in terms of
volume and revenue.
And, we've reached about $6,400,000,000
in revenue. What we're really proud of, though,
is our growth in many, many things as
(01:26):
it relates to our care for our community,
the creation of Compassionate Care, where kindness and
compassion are really the hallmarks of our brand.
We really have,
really three particular,
missions, if you will, that are all embroiled
into one, and that is to heal, to
teach, and discover.
And, we,
(01:47):
are really working very hard to be moving
forward in all three as it relates to
our,
if you will, our teaching.
We are one of the largest,
residency and fellowship programs,
in The United States, close to 1,100,
residents and fellows at any given time. We're
a principal partner to Case Western Reserve University
(02:08):
School of Medicine.
But over the last few years, we really
expanded our relationships with other medical schools who
want their students to train, including,
Northeast Ohio,
College of Medicine,
as well as,
recently Oxford University in England. In fact, their
leadership will be here in about two weeks.
Taiwan National,
University College of Medicine is all also Technion,
(02:31):
Israel Institute of Technology.
On the research front, we've grown significantly,
by double digit percentiles in terms of our
work, not only in the NIH field, but
also in clinical trial work, particularly industry
sponsored clinical trials in cancer, heart, and many
other things. And that's grown to be about
a $214,000,000,
(02:52):
portfolio. I think I'll end with the two
things that we're exceedingly proud of that we've
been working very hard but now, achieve the
recognition
is,
one is our culture. And we've always seen,
very,
significant work around building culture
in the organization. We know that that helps
people heal better when there's a culture of
(03:12):
compassion.
And we've seen our scores in terms of
engagement alignment rise every year, but I think
we're most excited this year,
that Forbes dream employers, which was a recent
new categorization
of, workplace excellence
by Forbes Magazine
listed us as one of the top 10
employers of all types in The United States
(03:33):
Of America,
along with brands like Apple and Google.
We're the second largest employer in Northeast Ohio.
And as it relates to an academic medical
center,
the attributes and accoutrements
that are in embroiled in those sort of
things
has led UK Brand Finance, which is probably
(03:53):
one of the most sophisticated,
magazines
as it relates to,
measuring, if you will, the impact of an
academic medical center. And in their most recent
survey, we were number eighth,
ranked in The United States Of America, number
16,
in the world. So there's a lot that
we're proud of, and
we're juggling all these things at the same
time. Yeah. No. Fantastic. And I really appreciate.
(04:16):
So six years coming up on six years
in that CEO role,
around about a $6,400,000,000
revenue organization now.
The culture compassion is certainly something you're very
proud of, something that's something that a lot
of work been done there. Top 10 employers,
I believe you said, of all types according
to Forbes. Certainly no easy feat for health
system. Fantastic.
I'd be curious to hear you did say
(04:37):
your mantra was to heal, to teach, to
discover.
In the last twelve months or so, is
there a particular initiative you took on that
you're particularly proud of, whether it relates to
culture or maybe something else in the organization?
Alan, that's a great question.
We really wanna be true to our differentiation.
Our differentiation is really the way that that
(04:59):
people feel that they're treated.
And,
we've decided to supercharge, if you will, our
customer
patient experience initiative
in such a manner that we're kind of
trying to create the notion
that the best hospital is one that,
embodies hospitality
as one of its principal differentiators.
(05:21):
And so to do so,
we've, really
created the notion that our patients are really
considered a customer, a guest, a friend who's
lodging in our home.
We've rolled out a robust training program focused
on communication skills, emotional intelligence,
and service recovery in the event that we
really don't meet the mark.
(05:42):
And it is a
really important initiative. We have, as I may
or may not have mentioned, close to 33,000
full time employees and many more if you
consider part time and PRN.
Thus far, we've trained about 6,000 frontline caregivers
with a full system rollout coming later this
year, And we're already seeing significant impact. And
this affects, Alan, not only the bedside, but
(06:05):
when you call. If you're a sick patient,
you call the hospital for an appointment. Your
healing
actually begins then. How you're treated, how quickly
you can get in if the,
agent, if you will, is able to detect
anxiety in your voice, they will work even
extra hard to get to get you in.
We're seeing this impact in central scheduling departments
since implementing
(06:25):
and starting really in central scheduling. We've implemented
personalized greetings,
with more intentional listening. It's led to a
six percent point improvement just in this last
year in caller sentiment, and that's just in
a few months. We're making it easier for
patients to access care.
Something we know that they value deeply and
everyone talks about, But, you know, we can
(06:45):
measure it based on the adoption of the
version of MyChart. We've seen nearly a 70%
activation of folks, in our midst,
becoming members of the MyChart.
And we saw a 39%
year over year increase in appointments scheduled online.
So we're adding ease of scheduling
(07:06):
as well. We're seeing great momentum
in the point of service as well and
our point of service scheduling, meaning that when
you see a a doctor or nurse practitioner
and then you leave and you have to
have a second appointment,
we try to make sure that's done right
at the point of service so all of
your concerns are are are managed.
I know you're an avid book reader,
(07:27):
and something that spring to mind for me,
a recent book I read was Unreasonable Hospitality.
I believe Will Goodaire is a New York
Times bestseller. Yeah.
I'm curious.
Could you kind of share an insight maybe
in terms of hospitality or something that I
picked up from what you'd said there, but
how important that is in this day and
age as it relates to the patient slash
customer consumer experience.
(07:47):
You know
what? Today, a patient
has
tremendous choices available. The the notion of narrow
networks, which we used to have in the
eighties and nineties when I was training are
pretty much gone. A patient can go anywhere.
And more importantly, a patient wants to feel
that they're connected to their doctor or their
nurse practitioner or their hospital.
(08:08):
And
the the way that they feel
you know, there's this
old, Maya Angelou,
quote, which I think we talk about quite
a lot, is
people don't
remember necessarily what you said when they engage
with you or us at
but they remember how they feel.
(08:29):
And so we've adopted all sorts of
basically tried and true mechanisms
of, improving that engagement,
which then embodies trust. Simple things. We have
the, ten five rule now with Lisa Griffin
who's speaking here today,
has is our chief of, access and and
patient interaction. But, you know, if we if
(08:49):
you're 10 feet away from someone who's either
employee or a patient or a guest,
you engage them,
with their eyes. If they're five feet away,
you say, hello.
May may I help you? Those are little
tiny things that physicians are are encouraged to
sit down at the bedside or sit down
with the patient to engender the notion
(09:12):
of,
a caring,
welcoming,
environment.
And then what happens, we know from the
book Compassionomics,
which is really important,
is that that embodies trust and embodies actually
better patient outcomes because the patient feels trusted
by their caregiver, and,
they're more apt to be,
(09:33):
following, for example, prescription rules or diet changes
because they have that trust. And the outcomes
have been proven to be significantly
better when there's that level of trust and
engagement that's embodied with the entire health system.
And then finally, from a business standpoint,
you develop more stickiness,
with with
patient's family. In other words, if they have
a great personal experience, they'll tell a lot
(09:55):
of people and certainly they'll they'll they'll direct
their family members to come back. Mhmm. Yeah.
I mean, it's fascinating to kinda get your
perseverance and just how much that in that
culture is ingrained into the health system at
university hospital Sounds like from the bottom up,
from the top down.
To shift gears a little bit, we're we're
on-site at the Beckers annual meeting talking about
challenges, I'm sure, which are many, the health
systems hospitals are facing today.
(10:18):
It's hard to kinda pick out or pinpoint
one when there are so many. But in
your market, for your custom customer patient base,
what is kind of the biggest challenge top
of mind? How are you preparing to face
it? I'd love to kinda get your perspective
on what you're seeing in Cleveland to Cleveland
and Northern Ohio area.
You know, Cleveland is a is a fantastic,
city. Northeast Ohio is a beautiful,
(10:39):
place to live. If you look at our
demographics,
we have, in some sectors, an aging population.
So we have a growing,
amount of our patients who we welcome every
day, who are on Medicare, for example,
and not necessarily
as fast as growing in some sectors in
in the commercial market. So,
(10:59):
that means
that you have to adopt a financial strategy
that,
is able to,
react to the fact that you may have
a growing Medicare population in some sectors. And
and and the bottom line, Alan,
is that there's really two ways, to handle
it. As you know, as a hospital, we're
(11:19):
we're price takers, not price makers. Yeah. We
essentially even on the commercial frame, we can,
you know, negotiate,
but there's fairly standard increases every year. Medicare,
Medicaid, very little increase every year. So we
have to adopt
to react to that significant
attention
to efficiency,
(11:39):
throughput,
length of stay,
and looks very closely at our operations, both
administrative as well as clinical,
to see where we can remove costs, remove
redundancy, and remove unnecessary
activity. We're in the midst right now to
kind of react to this. So standing up,
we've already stood up
a, revenue and expense cabinets. These meet every
(12:00):
week. What they are
decided to do, certainly, on the revenue
side is figuring out how to be more,
attentive to,
increasing,
revenue by virtue of smart
activities. And then on the expense side,
looking at ways to lower expenses. And these
can be things like going from three vendors
(12:22):
down to one.
These can be things like optimizing
our our our billing, that maybe in the
past, we,
we were not as efficient as we were
before. Optimizing,
which is a big part of our special
sauce,
is optimizing
our value
equation. In other words,
there's many opportunities for hospital that's able to
(12:44):
demonstrate value based performance
where you can optimize, you know, the financial
health of your organization
by taking advantage
of showing that you provide significant value. And
it's not just saying value.
We we say value for a lot of
things. This is a great value. That's a
great value. But you know what value is.
Value is is quality divided by cost, and
it's measurable.
(13:05):
And so one of the best things we've
ever done, I think, is about six years
ago down
the path
fully, fully loaded
in terms of,
joining MSSP Medicare shared saving program, where we
voluntarily let, if you will, Medicare let us
know on the population of our Medicare patients,
how is our quality at the end of
every year, and what's our cost per member
(13:26):
per year.
So we've been able to drop our cost
per member per year from about $12,200
per member per year a number of years
ago down to $9,870
per member per year with a 95.6%
quality score. So why is that important from
a financial health standpoint?
Because
in MSSP,
(13:46):
you're rewarded if your risk base with being
able to get
credited with 75%
of those savings
compared to a baseline. Mhmm. On the, MA
side, we have programs where we have,
payments that come from our ability to do
the same thing in the Medicare Advantage side.
(14:07):
And we really believe that the future
of health care,
if you will, in this country is moving,
deliberately toward
some blend of the fee for service
model,
with a, if you will, an arbitrate,
a modulator
by virtue of a quality
(14:29):
quotient.
And so that is really what we are
working on, and it's paying significant dividends,
for us last year financially and this year
even more. So that's how we're kind of
trying to deal, if you will, with many
of the changes. And, of course, there's changes
that we all hear about that are
not yet defined,
that we are working exceedingly hard to have
(14:50):
a seat at the table
to tell our side of the story of
why some of the things that have been
bandied about,
in terms of cost savings in the federal
budget, and what would be the impact of
those two Americans. Mhmm. Yeah. To your point,
I imagine it's very hard to have such
a proactive strategy as a health system leader
at this point in time when so many
things are up in the air at the
(15:10):
moment. But seems like university hospitals are really
ahead of the trend of a lot of
hospitals' health systems in terms of your success
that you just outlined there, specifically in the
Medicare shared savings program.
I'd love
to kinda get your thoughts. Something that we've
we've had, pop up unsurprisingly on panel after
panel during this annual meeting is ongoing challenges
surrounding the workforce. Mhmm. I'd love to get
(15:32):
your perspective.
University hospitals,
how are you addressing workforce shortages, challenges within
your organization?
We know labor cost is still a really
big issue for a lot of health systems,
but still a lot of systems trying to
march down the premium cost of temporary labor
and whatnot. What is your biggest challenge? How
are you addressing it?
You know, I I we have some really
smart people who who work at university hospitals,
(15:54):
and the best thing, it's not my quote,
but,
the best way to build your labor force
is to keep the people that you have.
Mhmm. And,
we've been on a mission which is built
into, if you will, the compassion and the
culture
of creating a workforce where there's be highly
sensitive to the needs of our employees benefits,
(16:16):
pay. So that we've been very lucky in
being able to
build,
the amount of employees through recruiting.
Nurses, phlebotomists,
respiratory therapists, physicians.
And we've dropped our turnover rate,
significantly,
really in concert or in parallel
to the work we've been doing as it
(16:38):
relates to culture in the organization.
We have been really successful in,
significant,
if you will,
less reliance on agency
labor, by virtue of building and retaining.
The second thing we've done in the nursing
sphere, for example,
our chief nurse executive excellent, Michelle Hereford, has
(17:00):
built significant relationships with the myriad of nursing
school so that we become considered
a great place to train in a, externship
or clerkship
for, nursing students.
And that gives us sometimes first
pass
at some of the graduates
to recruit on to our portfolio. We have
a number of other programs. We're actually building,
(17:23):
programs,
for, you know, nurses of tomorrow with high
school students, and we have every year about
50 that we select. And we they have
many clerkships and those who identified the fact
they wanna become nurses. This has been going
on for for for years. We have Step
Up to which is a program that looks
at folks who maybe never attended college,
(17:43):
but we take them in. We train them.
They start in jobs like could be phlebotomy,
could be patient transportation,
but then we have, programs to further their
education
and have them walk up the ladder. The
amazing thing about the Step Up to program,
Alan, is that there's nearly an 80% retention
rate after three years, meaning that they do
start becoming the fabric of the organization. I
(18:04):
think it's a myriad
of all of these efforts,
to,
build the workforce,
recover from the challenges of COVID and the
post COVID exodus,
that we've seen.
And, and and and and and you can't
do it without out addressing the fundamental thing
that keeps people people won't
people
(18:25):
will will leave for
$2 more an hour, maybe, at certain sectors
of our workforce. Mhmm. But they won't leave
for $2 an hour if they feel they
love their workplace and they love their colleagues.
Mhmm. It goes right back to what we
talked about at the very start of the
conversation in terms of that culture that you've
worked so hard to implement at at U
university hospitals. And an 80% retention rate, I
(18:47):
believe you said, from step up to UA.
It's just fascinating to hear those results.
Cliff, if you wouldn't mind, we've got Kevin
O'Leary as our keynote speaker this afternoon at
the event. I plan to ask him a
leadership question, but I'd love to ask you
kind of the biggest leadership lesson that you've
learned,
during your time. I know you've been in
the c a CEO seat almost six years
(19:08):
now at university hospitals. Is it a recent
leadership lesson? Is it something before then? Love
to kinda get your take before we wrap
up.
Well,
I think that,
what
I've always tried to do, but I've gotten
much better in the role that I'm in
now,
is understanding that,
(19:28):
especially with
so much information flying around, so much changes
afoot,
that certainly agility is essential,
to a
leader.
But I think
the most important thing that those who are
following you as a leader wanna
see is that you don't necessarily
(19:49):
become overly,
react
reactionary,
to,
the day to day chaos and or looming
chaos.
You focus
on creating a team that has digested,
all the possible
turns in the road that may be coming
forward, and you calmly
create a
(20:11):
a leadership team and and a leadership mantra,
if you will, that we don't let our
hair get on fire. We when there is
something that is changing or we're worried about
something not working well, that we sit down,
we let the best
advice flow in a speak up culture
so that you are not necessarily, as a
(20:33):
CEO, the one who has to come up
with the answers,
that you create an environment where those who
work with you,
in many
sense of the word for you, certainly your
senior leadership
team, that there's the ability for people to
be creative.
And if you create that sort of environment,
then creativity,
especially with the very talented folks, is at
(20:54):
a 10.
Whereas if you are
reactionary to the point where you are not
allowing,
people to express their opinions,
then if you will, the ability is at
a much lower level for the organization to
pivot and come up with a good landing
place. Mhmm. Yeah. And I imagine to your
point, if if there are leaders out there
(21:15):
who are overly reactionary, it is very impossible
to very difficult to grow, to push forward.
But that creative environment, as you've mentioned, so
so key, and no man can do it
on his own, I imagine. So,
Cliff, doctor Magarian, really, really appreciate you taking
the time to to speak with us on
the Becker's Healthcare podcast today. Fascinating discussion,
which no doubt will be a big hit
with our hospital executive audience. Thank you so
(21:36):
much for taking the time. Thank you, Alan.
I really appreciate it.
This is Alan Condon with the Becker's Healthcare
Podcast, and I'm thrilled to be joined today
by doctor Cliff McGarian,
CEO of University Hospitals.
That's a nonprofit health system with 21 hospitals,
more than 50 health centers and outpatient facilities,
and about 200 physician offices in Northern Ohio.
Cliff, pleasure to have you with us at
(00:21):
the Becker's annual meeting. We're also recording this
on-site.
For those who might be as well acquainted
with university hospitals and the work it is
that you do, do you mind giving us
a little bit more back in insight into
your background and your role at the health
system? Sure. Thank you, Alan. It's, first of
all, it's a pleasure to be here and
a pleasure to be invited, by Becker's.
I'm, myself, am a physician surgeon and have,
(00:43):
been,
going on my fifth year or maybe sixth
year as CEO of University Hospitals.
It's a wonderful place. We're gonna be celebrating
our hundred and sixtieth anniversary next year. So
we've been around quite some time.
Really, we started under the notion that the
needy are the most worthy, and we've grown,
as you mentioned, to be,
(01:04):
very far encompassing
with 21
hospitals, and we spread throughout close to 22
counties.
We've grown,
significantly over the last few years at a
clip around eight or 9% in terms of
volume and revenue.
And, we've reached about $6,400,000,000
in revenue. What we're really proud of, though,
is our growth in many, many things as
(01:26):
it relates to our care for our community,
the creation of Compassionate Care, where kindness and
compassion are really the hallmarks of our brand.
We really have,
really three particular,
missions, if you will, that are all embroiled
into one, and that is to heal, to
teach, and discover.
And, we,
(01:47):
are really working very hard to be moving
forward in all three as it relates to
our,
if you will, our teaching.
We are one of the largest,
residency and fellowship programs,
in The United States, close to 1,100,
residents and fellows at any given time. We're
a principal partner to Case Western Reserve University
(02:08):
School of Medicine.
But over the last few years, we really
expanded our relationships with other medical schools who
want their students to train, including,
Northeast Ohio,
College of Medicine,
as well as,
recently Oxford University in England. In fact, their
leadership will be here in about two weeks.
Taiwan National,
University College of Medicine is all also Technion,
(02:31):
Israel Institute of Technology.
On the research front, we've grown significantly,
by double digit percentiles in terms of our
work, not only in the NIH field, but
also in clinical trial work, particularly industry
sponsored clinical trials in cancer, heart, and many
other things. And that's grown to be about
a $214,000,000,
(02:52):
portfolio. I think I'll end with the two
things that we're exceedingly proud of that we've
been working very hard but now, achieve the
recognition
is,
one is our culture. And we've always seen,
very,
significant work around building culture
in the organization. We know that that helps
people heal better when there's a culture of
(03:12):
compassion.
And we've seen our scores in terms of
engagement alignment rise every year, but I think
we're most excited this year,
that Forbes dream employers, which was a recent
new categorization
of, workplace excellence
by Forbes Magazine
listed us as one of the top 10
employers of all types in The United States
(03:33):
Of America,
along with brands like Apple and Google.
We're the second largest employer in Northeast Ohio.
And as it relates to an academic medical
center,
the attributes and accoutrements
that are in embroiled in those sort of
things
has led UK Brand Finance, which is probably
(03:53):
one of the most sophisticated,
magazines
as it relates to,
measuring, if you will, the impact of an
academic medical center. And in their most recent
survey, we were number eighth,
ranked in The United States Of America, number
16,
in the world. So there's a lot that
we're proud of, and
we're juggling all these things at the same
time. Yeah. No. Fantastic. And I really appreciate.
(04:16):
So six years coming up on six years
in that CEO role,
around about a $6,400,000,000
revenue organization now.
The culture compassion is certainly something you're very
proud of, something that's something that a lot
of work been done there. Top 10 employers,
I believe you said, of all types according
to Forbes. Certainly no easy feat for health
system. Fantastic.
I'd be curious to hear you did say
(04:37):
your mantra was to heal, to teach, to
discover.
In the last twelve months or so, is
there a particular initiative you took on that
you're particularly proud of, whether it relates to
culture or maybe something else in the organization?
Alan, that's a great question.
We really wanna be true to our differentiation.
Our differentiation is really the way that that
(04:59):
people feel that they're treated.
And,
we've decided to supercharge, if you will, our
customer
patient experience initiative
in such a manner that we're kind of
trying to create the notion
that the best hospital is one that,
embodies hospitality
as one of its principal differentiators.
(05:21):
And so to do so,
we've, really
created the notion that our patients are really
considered a customer, a guest, a friend who's
lodging in our home.
We've rolled out a robust training program focused
on communication skills, emotional intelligence,
and service recovery in the event that we
really don't meet the mark.
(05:42):
And it is a
really important initiative. We have, as I may
or may not have mentioned, close to 33,000
full time employees and many more if you
consider part time and PRN.
Thus far, we've trained about 6,000 frontline caregivers
with a full system rollout coming later this
year, And we're already seeing significant impact. And
this affects, Alan, not only the bedside, but
(06:05):
when you call. If you're a sick patient,
you call the hospital for an appointment. Your
healing
actually begins then. How you're treated, how quickly
you can get in if the,
agent, if you will, is able to detect
anxiety in your voice, they will work even
extra hard to get to get you in.
We're seeing this impact in central scheduling departments
since implementing
(06:25):
and starting really in central scheduling. We've implemented
personalized greetings,
with more intentional listening. It's led to a
six percent point improvement just in this last
year in caller sentiment, and that's just in
a few months. We're making it easier for
patients to access care.
Something we know that they value deeply and
everyone talks about, But, you know, we can
(06:45):
measure it based on the adoption of the
version of MyChart. We've seen nearly a 70%
activation of folks, in our midst,
becoming members of the MyChart.
And we saw a 39%
year over year increase in appointments scheduled online.
So we're adding ease of scheduling
(07:06):
as well. We're seeing great momentum
in the point of service as well and
our point of service scheduling, meaning that when
you see a a doctor or nurse practitioner
and then you leave and you have to
have a second appointment,
we try to make sure that's done right
at the point of service so all of
your concerns are are are managed.
I know you're an avid book reader,
(07:27):
and something that spring to mind for me,
a recent book I read was Unreasonable Hospitality.
I believe Will Goodaire is a New York
Times bestseller. Yeah.
I'm curious.
Could you kind of share an insight maybe
in terms of hospitality or something that I
picked up from what you'd said there, but
how important that is in this day and
age as it relates to the patient slash
customer consumer experience.
(07:47):
You know
what? Today, a patient
has
tremendous choices available. The the notion of narrow
networks, which we used to have in the
eighties and nineties when I was training are
pretty much gone. A patient can go anywhere.
And more importantly, a patient wants to feel
that they're connected to their doctor or their
nurse practitioner or their hospital.
(08:08):
And
the the way that they feel
you know, there's this
old, Maya Angelou,
quote, which I think we talk about quite
a lot, is
people don't
remember necessarily what you said when they engage
with you or us at
but they remember how they feel.
(08:29):
And so we've adopted all sorts of
basically tried and true mechanisms
of, improving that engagement,
which then embodies trust. Simple things. We have
the, ten five rule now with Lisa Griffin
who's speaking here today,
has is our chief of, access and and
patient interaction. But, you know, if we if
(08:49):
you're 10 feet away from someone who's either
employee or a patient or a guest,
you engage them,
with their eyes. If they're five feet away,
you say, hello.
May may I help you? Those are little
tiny things that physicians are are encouraged to
sit down at the bedside or sit down
with the patient to engender the notion
(09:12):
of,
a caring,
welcoming,
environment.
And then what happens, we know from the
book Compassionomics,
which is really important,
is that that embodies trust and embodies actually
better patient outcomes because the patient feels trusted
by their caregiver, and,
they're more apt to be,
(09:33):
following, for example, prescription rules or diet changes
because they have that trust. And the outcomes
have been proven to be significantly
better when there's that level of trust and
engagement that's embodied with the entire health system.
And then finally, from a business standpoint,
you develop more stickiness,
with with
patient's family. In other words, if they have
a great personal experience, they'll tell a lot
(09:55):
of people and certainly they'll they'll they'll direct
their family members to come back. Mhmm. Yeah.
I mean, it's fascinating to kinda get your
perseverance and just how much that in that
culture is ingrained into the health system at
university hospital Sounds like from the bottom up,
from the top down.
To shift gears a little bit, we're we're
on-site at the Beckers annual meeting talking about
challenges, I'm sure, which are many, the health
systems hospitals are facing today.
(10:18):
It's hard to kinda pick out or pinpoint
one when there are so many. But in
your market, for your custom customer patient base,
what is kind of the biggest challenge top
of mind? How are you preparing to face
it? I'd love to kinda get your perspective
on what you're seeing in Cleveland to Cleveland
and Northern Ohio area.
You know, Cleveland is a is a fantastic,
city. Northeast Ohio is a beautiful,
(10:39):
place to live. If you look at our
demographics,
we have, in some sectors, an aging population.
So we have a growing,
amount of our patients who we welcome every
day, who are on Medicare, for example,
and not necessarily
as fast as growing in some sectors in
in the commercial market. So,
(10:59):
that means
that you have to adopt a financial strategy
that,
is able to,
react to the fact that you may have
a growing Medicare population in some sectors. And
and and the bottom line, Alan,
is that there's really two ways, to handle
it. As you know, as a hospital, we're
(11:19):
we're price takers, not price makers. Yeah. We
essentially even on the commercial frame, we can,
you know, negotiate,
but there's fairly standard increases every year. Medicare,
Medicaid, very little increase every year. So we
have to adopt
to react to that significant
attention
to efficiency,
(11:39):
throughput,
length of stay,
and looks very closely at our operations, both
administrative as well as clinical,
to see where we can remove costs, remove
redundancy, and remove unnecessary
activity. We're in the midst right now to
kind of react to this. So standing up,
we've already stood up
a, revenue and expense cabinets. These meet every
(12:00):
week. What they are
decided to do, certainly, on the revenue
side is figuring out how to be more,
attentive to,
increasing,
revenue by virtue of smart
activities. And then on the expense side,
looking at ways to lower expenses. And these
can be things like going from three vendors
(12:22):
down to one.
These can be things like optimizing
our our our billing, that maybe in the
past, we,
we were not as efficient as we were
before. Optimizing,
which is a big part of our special
sauce,
is optimizing
our value
equation. In other words,
there's many opportunities for hospital that's able to
(12:44):
demonstrate value based performance
where you can optimize, you know, the financial
health of your organization
by taking advantage
of showing that you provide significant value. And
it's not just saying value.
We we say value for a lot of
things. This is a great value. That's a
great value. But you know what value is.
Value is is quality divided by cost, and
it's measurable.
(13:05):
And so one of the best things we've
ever done, I think, is about six years
ago down
the path
fully, fully loaded
in terms of,
joining MSSP Medicare shared saving program, where we
voluntarily let, if you will, Medicare let us
know on the population of our Medicare patients,
how is our quality at the end of
every year, and what's our cost per member
(13:26):
per year.
So we've been able to drop our cost
per member per year from about $12,200
per member per year a number of years
ago down to $9,870
per member per year with a 95.6%
quality score. So why is that important from
a financial health standpoint?
Because
in MSSP,
(13:46):
you're rewarded if your risk base with being
able to get
credited with 75%
of those savings
compared to a baseline. Mhmm. On the, MA
side, we have programs where we have,
payments that come from our ability to do
the same thing in the Medicare Advantage side.
(14:07):
And we really believe that the future
of health care,
if you will, in this country is moving,
deliberately toward
some blend of the fee for service
model,
with a, if you will, an arbitrate,
a modulator
by virtue of a quality
(14:29):
quotient.
And so that is really what we are
working on, and it's paying significant dividends,
for us last year financially and this year
even more. So that's how we're kind of
trying to deal, if you will, with many
of the changes. And, of course, there's changes
that we all hear about that are
not yet defined,
that we are working exceedingly hard to have
(14:50):
a seat at the table
to tell our side of the story of
why some of the things that have been
bandied about,
in terms of cost savings in the federal
budget, and what would be the impact of
those two Americans. Mhmm. Yeah. To your point,
I imagine it's very hard to have such
a proactive strategy as a health system leader
at this point in time when so many
things are up in the air at the
(15:10):
moment. But seems like university hospitals are really
ahead of the trend of a lot of
hospitals' health systems in terms of your success
that you just outlined there, specifically in the
Medicare shared savings program.
I'd love
to kinda get your thoughts. Something that we've
we've had, pop up unsurprisingly on panel after
panel during this annual meeting is ongoing challenges
surrounding the workforce. Mhmm. I'd love to get
(15:32):
your perspective.
University hospitals,
how are you addressing workforce shortages, challenges within
your organization?
We know labor cost is still a really
big issue for a lot of health systems,
but still a lot of systems trying to
march down the premium cost of temporary labor
and whatnot. What is your biggest challenge? How
are you addressing it?
You know, I I we have some really
smart people who who work at university hospitals,
(15:54):
and the best thing, it's not my quote,
but,
the best way to build your labor force
is to keep the people that you have.
Mhmm. And,
we've been on a mission which is built
into, if you will, the compassion and the
culture
of creating a workforce where there's be highly
sensitive to the needs of our employees benefits,
(16:16):
pay. So that we've been very lucky in
being able to
build,
the amount of employees through recruiting.
Nurses, phlebotomists,
respiratory therapists, physicians.
And we've dropped our turnover rate,
significantly,
really in concert or in parallel
to the work we've been doing as it
(16:38):
relates to culture in the organization.
We have been really successful in,
significant,
if you will,
less reliance on agency
labor, by virtue of building and retaining.
The second thing we've done in the nursing
sphere, for example,
our chief nurse executive excellent, Michelle Hereford, has
(17:00):
built significant relationships with the myriad of nursing
school so that we become considered
a great place to train in a, externship
or clerkship
for, nursing students.
And that gives us sometimes first
pass
at some of the graduates
to recruit on to our portfolio. We have
a number of other programs. We're actually building,
(17:23):
programs,
for, you know, nurses of tomorrow with high
school students, and we have every year about
50 that we select. And we they have
many clerkships and those who identified the fact
they wanna become nurses. This has been going
on for for for years. We have Step
Up to which is a program that looks
at folks who maybe never attended college,
(17:43):
but we take them in. We train them.
They start in jobs like could be phlebotomy,
could be patient transportation,
but then we have, programs to further their
education
and have them walk up the ladder. The
amazing thing about the Step Up to program,
Alan, is that there's nearly an 80% retention
rate after three years, meaning that they do
start becoming the fabric of the organization. I
(18:04):
think it's a myriad
of all of these efforts,
to,
build the workforce,
recover from the challenges of COVID and the
post COVID exodus,
that we've seen.
And, and and and and and you can't
do it without out addressing the fundamental thing
that keeps people people won't
people
(18:25):
will will leave for
$2 more an hour, maybe, at certain sectors
of our workforce. Mhmm. But they won't leave
for $2 an hour if they feel they
love their workplace and they love their colleagues.
Mhmm. It goes right back to what we
talked about at the very start of the
conversation in terms of that culture that you've
worked so hard to implement at at U
university hospitals. And an 80% retention rate, I
(18:47):
believe you said, from step up to UA.
It's just fascinating to hear those results.
Cliff, if you wouldn't mind, we've got Kevin
O'Leary as our keynote speaker this afternoon at
the event. I plan to ask him a
leadership question, but I'd love to ask you
kind of the biggest leadership lesson that you've
learned,
during your time. I know you've been in
the c a CEO seat almost six years
(19:08):
now at university hospitals. Is it a recent
leadership lesson? Is it something before then? Love
to kinda get your take before we wrap
up.
Well,
I think that,
what
I've always tried to do, but I've gotten
much better in the role that I'm in
now,
is understanding that,
(19:28):
especially with
so much information flying around, so much changes
afoot,
that certainly agility is essential,
to a
leader.
But I think
the most important thing that those who are
following you as a leader wanna
see is that you don't necessarily
(19:49):
become overly,
react
reactionary,
to,
the day to day chaos and or looming
chaos.
You focus
on creating a team that has digested,
all the possible
turns in the road that may be coming
forward, and you calmly
create a
(20:11):
a leadership team and and a leadership mantra,
if you will, that we don't let our
hair get on fire. We when there is
something that is changing or we're worried about
something not working well, that we sit down,
we let the best
advice flow in a speak up culture
so that you are not necessarily, as a
(20:33):
CEO, the one who has to come up
with the answers,
that you create an environment where those who
work with you,
in many
sense of the word for you, certainly your
senior leadership
team, that there's the ability for people to
be creative.
And if you create that sort of environment,
then creativity,
especially with the very talented folks, is at
(20:54):
a 10.
Whereas if you are
reactionary to the point where you are not
allowing,
people to express their opinions,
then if you will, the ability is at
a much lower level for the organization to
pivot and come up with a good landing
place. Mhmm. Yeah. And I imagine to your
point, if if there are leaders out there
(21:15):
who are overly reactionary, it is very impossible
to very difficult to grow, to push forward.
But that creative environment, as you've mentioned, so
so key, and no man can do it
on his own, I imagine. So,
Cliff, doctor Magarian, really, really appreciate you taking
the time to to speak with us on
the Becker's Healthcare podcast today. Fascinating discussion,
which no doubt will be a big hit
with our hospital executive audience. Thank you so
(21:36):
much for taking the time. Thank you, Alan.
I really appreciate it.
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