Fred Rankin

Fred M. Rankin, III joined Mary Washington Healthcare (MWH MediCorp) as President of Mary Washington Hospital in 1992. He then served as President and CEO of Mary Washington Healthcare from 1995 until his retirement in 2014. Prior to joining Mary Washington Healthcare, he was a senior vice president at Allegheny General Hospital in Pittsburgh, Pennsylvania. He is Fellow in the American College of Healthcare Executives (FACHE). He received a bachelor’s of science from Dartmouth College and a master’s of public health (MPH) from the University of Pittsburgh.

Fred Rankin was interviewed by Jess Rigelhaupt eight times between April 24, 2013, and January 21, 2015.

Discursive Table of Contents

Interview 1 – April 24, 2013
First day as President of Mary Washington Hospital, October 5, 1992 — Decision to accept the position — Board, administration, and medical staff relations in 1992 — Working to improve internal morale — Building trust with physicians — Building trust with nurses and physicians in the emergency department — Resolving contractual disputes with physicians — Working with and being tested by the board — Viewing physicians as part of solutions — The importance of a brand new hospital (1993) — Developing strategic plans and business plans for new clinical programs — Cardiac surgery business plan and the process of starting the program — Ideas for new programs should come from the community — Financial risks — Financing the new hospital — History of hospital financing in the United States — 1990s was a period of explosive growth for Mary Washington Hospital and MWH MediCorp

Interview 2 – June 26, 2013
Primary reasons the new hospital was built — Deciding on a location for the new hospital — Working with local government officials and community leaders during hospital construction — Bonds issued through the Fredericksburg Economic Development Authority — There was some, but limited, medical staff opposition to the new hospital — Mary Washington Hospital’s transition to become a regional medical center — Strategic planning during a period of growth in the 1990s — Tensions with the medical staff in the 1990s and in the context of starting new programs, such as neurosurgery — Working to make transparency a core part of the organizational culture — Making hard decisions as CEO — Transition from President of Mary Washington Hospital to President and CEO of MWH MediCorp in 1995

Interview 3 – July 18, 2013
Origin of the Community Benefit Fund (first called the Community Service Fund) in the mid-1990s — Fundraising for the Community Benefit Fund — Core competency of Mary Washington Healthcare is the link to the community — Discussion of unreimbursed care, charity care, and grants to the community from the Community Benefit Fund — Community benefit is part of the organizational value system — Discussions and controversy concerning the possibility of locating the Thurman Brisben Center, a homeless shelter, on the hospital campus — Decision to the build a new facility for the Lloyd F. Moss Free Clinic on the hospital campus — Mary Washington Healthcare’s support for primary care and public health — Master’s in Public Health (University of Pittsburgh, 1978) — The mission drives support for primary care and public health — The Patient Protection and Affordable Care Act (Affordable Care Act (ACA) or Obamacare) of 2010 — Payment system for health care in the United States — History of the Lloyd F. Moss Free Clinic and its links with Mary Washington Healthcare — Public health programs in the region — Clinical integration — Partnerships for community benefit and safety net care: Mary Washington Healthcare can provide infrastructure and resources and physicians provided their expertise — Interactions with external forces, such as bond markets, CMS, and insurance companies — Decision to expand mental health care facilities and close Snowden Academy, a school at Snowden of Fredericksburg, a psychiatric care facility; the decision led to new funding for the Oberle School to support the students who had attended Snowden Academy and increased space and resources for mental health care in the community — Mary Washington Healthcare’s decision to sell Chancellor’s Village (an independent-living and assisted-living community) and Carriage Hill (a rehabilitation and nursing center)

Interview 4 – January 27, 2014
Mary Washington Healthcare Board of Trustees — Working with the Board of Trustees on strategy, the mission, and challenging decisions — The CEO’s and senior administrators’ role in educating the board — The Governance Institute — Physician board members — The character of the board is defined in times of crisis — Regulatory and quality issues at a nursing home owned by Mary Washington Healthcare — Stafford Hospital — Board discussions of quality, safety, and financial metrics — Transition from a volume-based system to a value-based system in health care — Important specialties and subspecialties that have been created and advanced at Mary Washington Hospital, such as cardiac surgery, neurosurgery, trauma, and radiology — Challenges in creating and building new programs — Financial questions with new programs — Working with physicians who are hospital employees and physicians who are in private practice — Mary Washington Health Alliance is a physician-led integrated provider network founded in 2013 and jointly owned by Mary Washington Healthcare and physicians — The importance of trust between Mary Washington Healthcare and physicians — Building and maintaining trust and transparency during an era of exponential growth — Creating chiefs of service, such as surgery, medicine, and ob/gyn, who are part of management — Mary Washington Healthcare’s contributions to public health in the region

Interview 5 – March 4, 2014
The nursing program at Mary Washington Hospital in the 1990s — Inextricable links between the nursing program at Mary Washington Hospital and nursing education at Germanna Community College — Working to improve morale in the nursing program and support nurses — First nurse on the board and the value of having a nursing perspective to the board — The importance of having nursing leadership at senior levels — Evolution of the working relationship between nurses and physicians since starting at Mary Washington Hospital in 1992 — Development of teamwork in new specialties and subspecialties — Mission and values drive challenging decisions — The importance of building consensus on the board — The process of making the decision not to donate land to the Thurman Brisben Center — Decision to close Snowden Academy — Changing the structure of the board in the 1990s and working toward being a community board — Board leadership — Dynamics between the board and senior administrators — Decision to sell Carriage Hill and Chancellor’s Village — Physician disciplinary action is difficult, but an obligation of the board — Nursing has become more advanced and technical — Nurse leaders in Mary Washington Healthcare — Achievement of Magnet designation (2009) — Three emotional moments in his career: Magnet designation, the new hospital opening, and the Certificate of Public Need (COPN) approval to build Stafford Hospital

Interview 6 – June 2, 2014
Challenges faced when starting as President of Mary Washington Hospital in 1992 — Focused on day-to-day operations at the start of his career at Mary Washington Hospital — The job changed after accepting the position of President and CEO of Mary Washington Healthcare (MWH MediCorp) in 1995: there was more focus on strategic policy — Growth and running at capacity — Hurricane Isabel (2003) and the hospital was overloaded with patients — Rebuilding the leadership team in 2003-2004 — Stafford Hospital — Effects of the recession that started in 2007 — The evolution of his position as President and CEO of Mary Washington Healthcare — Effort to stay connected with day-to-day operations — Love of hospital operations — Effects of managed care and HMOs in the 1990s — Managing the cost the health care — Affordable Care Act — The creation of DRGs and the effects of TEFRA (Tax Equity and Fiscal Responsibility Act) — HMOs — Changes in health care reimbursement — Fellow in the American College of Healthcare Executives (ACHE) — Serving as preceptor in VCU’s health administration program and the joy from teaching and mentoring students — Memories of his mentors — Maintaining the focus on the mission of the organization — Transformational moments at Mary Washington Healthcare: the new hospital, open-heart surgery, Stafford Hospital, Mary Washington Health Alliance — Failure can be a tremendous teacher; examples are when Carriage Hill lost Medicare certification (2007) and the cardiac surgery cardioplegia event (2004-2005) — Mary Washington Healthcare’s decisions and actions after these events

Interview 7 – December 3, 2014
Discussion about the foundation that was established during the era of growth in the 1990s — New programs and subspecialties affected the organization — Creation of new positions, Chief Operating Officer and Chief Medical Officer — Origins of the Healthcare Assembly — The role of marketing in health care — Historical discussions of patients and/or customers — Viewing physicians as partners — Building relationships with physicians — Involving physicians and nurses in marketing — Mary Washington Healthcare’s relationship with the local press — Discussion of and ideas about the margin or profit, revenue above expenses, in not-for-profit hospitals and health care organizations — Measure of success is affordability and cost structure — Having conversations about the cost of health care — Questions of cost in working with physicians and creating the Mary Washington Health Alliance — The effects of public policy and politics in health care — The importance of transparency as a foundation for creating and building the Mary Washington Health Alliance

Interview 8 – January 21, 2015
Significant events for Mary Washington Healthcare in the last five years: the Affordable Care Act, the opening a competitor (Spotsylvania Regional Medical Center), confronting the challenge of affordability and the cost of health care, consolidation in the health care industry — Opening Stafford Hospital during a recession — Mary Washington Healthcare lost money in 2012 and 2013 — Strategic planning for Mary Washington Healthcare to remain independent — Building the Mary Washington Health Alliance with the dominant model in Fredericksburg: physicians are in private practice — Physicians can participate in the network and buy a share of the network — Rewarding moments and turning points in his work with the medical staff during his career — Mary Washington Health Alliance’s board structure: seventy-five percent of the seats are held by physicians — Rewarding experiences working with nurses — Rewarding experiences and significant moments in his work with the board — Health disparities — Health care system in the United States — Growth in the number of women physicians and questions of gender on the medical staff — Summary reflection about being a CEO and senior administrator in health care — Reflections on his retirement at the end of the 2014 — Gratitude for his career at Mary Washington Healthcare

Transcript

Interview 1 – April 24, 2013
01-00:00:00
Rigelhaupt:
Okay, it’s April 24, 2013. I’m doing an oral history with Mr. Fred Rankin, III, who’s the CEO of Mary Washington Healthcare. And if I could begin by asking you to go back to 1992. And if you could describe your first day starting here.

01-00:00:23
Rankin:
I started in October. I believe the day was October 5, 1992. It was my first job as a CEO. I had never been a CEO of an organization before so there was a bit of uncertainty. There was a bit of anxiety and excitement kind of all rolled together. My office was in this building that we’re sitting in today, what we now know today as the 2300 Fall Hill Building. It was the hospital in 1992. The Mary Washington Hospital of today was under construction. This was the building that was the hospital. After the initial walking in, I can’t remember whether there was a board meeting that day. There may very well have been a board meeting that day. After the introductions, it was a typical first day on the job. I spent the day unpacking and trying to get organized. Really the first couple of weeks, I was trying to get organized, trying to meet with people, and trying to figure out the lay of the land, so to speak.

01-00:01:56
Rigelhaupt:
Could you talk a little bit about why you chose to accept the position here?

01-00:02:02
Rankin:
Yes. I’ve thought a lot about that. I’ve been asked that question. I’ve been asked that question a lot. I had reached a point in my career at Allegheny General in Pittsburgh where I had essentially accomplished all that I could accomplish. I enjoyed working at Allegheny. I had lived in Pittsburgh for a long time. Pittsburgh was my home. Yet I knew I was ready for a new challenge. It was interesting how I found this particular opportunity. I started to talk to my colleagues and the people that I worked with at Allegheny in the summer of 1992 about that I was going to start to look for some other opportunities. The then chairman of medicine of Allegheny really encouraged me to apply for the chief executive officer position at a large academic medical center hospital that was currently unfilled in Pittsburgh. [03:00] I really didn’t think I was ready for that big a leap at that stage or point of my career, and I did not do that for a long time. Yet this particular gentleman kept encouraging me, and kept encouraging me, and kept encouraging me to go out and apply for this particular job at West Penn Hospital. So I did. I threw my hat in the ring knowing full well it was a long shot. I submitted my résumé and I did hear from the search consultant. The search consultant politely confirmed what I expected all along; that I really wasn’t a viable candidate. They were very far along in the search, they had identified finalists, and they were in the finalist phase of interviewing at that stage of the game. At the same time, that search consultant said, “However, we are just beginning work on another opportunity at a hospital in Fredericksburg, Virginia and the name of that hospital is Mary Washington Hospital.” That’s how I learned about the position, through applying for another job. That search firm did submit my name as a candidate for the job. I came down here in July for my first interview, in July of 1992. We can talk a little bit about that search process. What I saw during the interview process was essentially three things. I can boil it down to three things. One, I saw a community that was alive and vital. There was a pride in Fredericksburg. There was a vitality that you could feel. No matter whom I interviewed in the community and no matter where I went in the community during the couple of times that I was here, there was a community pride of being. The second thing I saw was a stable organization, an organization that had roots in the community dating all the way back to 1899. [06:00] It was a stable company. It was a company that had a vision for its future, a board that was investing in the future, and that was clearly evidenced by the commitment to build a brand new modern facility, which was under construction at the time. And the third was the overwhelming quality of the medical community here, which to this day is still true. This was a medical community in a relatively small town that rivaled any large urban academic medical center. It was a medical community that was committed to the organization, committed to the community at large, and the breadth and depth and scope of the medical community was pretty profound. It was those three things that attracted me to this place. I will tell you even twenty-one years later those three things still exist. It was the combination of those and it was not one overwhelming thing. It was the combination of the three: a vital alive community, a stable organization with a vision for the future, and a very high quality medical staff or a medical community. Those were the three things that attracted me here.

01-00:07:48
Rigelhaupt:
So could you talk a little bit about how you found the integration between the board, the medical community, and the administration at Mary Washington Hospital when you first got here?

01-00:07:59
Rankin:
I’ve thought a lot about what did I find. When I arrived, the search committee made it clear to me in the final phases of the interview that there were essentially three things that they wanted me to accomplish. There were three big buckets of things they wanted me to accomplish. The first thing they wanted me to do was to enhance the clinical profile of the hospital. As I said, they were making a huge investment, kind of betting the farm on a brand new modern state of the art physical plant, and they wanted to make sure that there was investment in the clinical programming. My first challenge was to work on increasing the clinical profile of Mary Washington Hospital. [09:00] There were some very specific things that I was given to do that. I was to develop a cardiac surgery program. I was to develop a neurosurgery program. And I was to develop a neonatal intensive care program. There could be others, but those three specific things were in the strategic plan. That was the first thing I was asked to do. The second thing I was asked to do was improve and build relationships with the community at large. I was make sure that Mary Washington Hospital—the parent corporation was then called MWH MediCorp back in 1992—started to improve relations with the community and build bridges with the community at large. The third major bucket was to improve and develop strong linkages and relationships with the medical staff. Now, to your specific question: I share with you those three charges from the Board to answer your question of what did I find. What I found here was an organization that kind of was isolated from the community. It was kind of the proverbial hospital on the hill, but it did not have good strong community linkages. I can give you one example of how that evidenced itself. It was the United Way, our participation in the United Way campaign. I came in the fall. United Way campaigns typically begin in the fall. I had been actively involved in Pittsburgh’s United Way campaign. Being part of the United Way was part of what I did. I was familiar with this and I was comfortable with it. I quickly discovered that we did not have a strong United Way campaign here at all. We were participating in a very cursory way. That’s one example of how you connect and build linkages with the community. I invited the then executive director of the United Way to come to a managers meeting and that had never been done before. I discovered that. I was a little surprised. [12:00] There were other places. It’s not that we were at war with each other; it’s just that the relationships were just not there. The second thing I discovered was that the relationships with the medical community were not good. That there had been some very difficult and strained relationships between the board and the administration and the medical community that preceded my arrival. And, by the way, that’s not unusual. The relationship between a medical staff and a community hospital in many, many communities has its own dynamics. It is not unusual at all to have strained relationships between the hospital and the medical staff. I had to begin in a very systematic way to build relationships with the medical community. And the third thing I found, and I didn’t anticipate this because there had not been a lot of commitments—not the right word. There had not been a lot of work done on nurturing the community relationships and nurturing the physician relationships. There was this tension, both between the community and the medical staff that I began to sense. Not overall war, but tension. There had been a series of bad, negative PR spats in the community. What I discovered was that there was a morale issue in the hospital, and the morale issue was around an identity issue. They kind of believed their own press. The staff felt that it was mediocre and that played on how the staff viewed itself. I didn’t anticipate that. I realized I had to rebuild the internal pride of the organization. As an outsider looking in I saw this incredible potential in this community hospital and this community medical staff that quite frankly does not exist in many communities around this country. [15:00] Yet it wasn’t recognized by the people who worked here and it really wasn’t even recognized by the community. I realized the first place I had to start was to rebuild the internal morale of the organization. I didn’t anticipate that. I kind of anticipated the other because it had been talked about during the interview process—the relationships with the community and the relationships with the medical community. What I didn’t anticipate and was not able to tease out during the interview process was the internal malaise that existed in 1992.

01-00:15:53
Rigelhaupt:
So what were some of the first steps you took to rebuild the internal morale?

01-00:15:59
Rankin:
It was a series. I began to do a few things. One, I began to tap into the excitement of the new hospital. That in and of itself was an opportunity to reframe who we were. There was this tremendous excitement and anticipation about a brand new building. I was able to tap into that excitement. I started with my own leadership team. I started with building a leadership team. That’s where I started. I can remember very well my first meeting with my leadership team. And, by the way, I didn’t have much of a leadership team. Over that summer a lot of the leaders had left. There was a pretty significant void. I had a few people here that kind of hung together and stuck it out, but there were a lot of vacancies. I walked in in that October morning with not a lot of people here. I had some holes I had to fill pretty quick, but I also had some people. It quickly became apparent to me that these people were good people and they wanted desperately leadership and guidance, and they wanted to be the best they could be. They were just looking for that spark. As I said, I started with the leadership team and I remember my first leadership meeting. Of course, there’s tension—tension’s not the right word. Anxiety. Anxiety is a better word. I’m a little anxious because I’m going in to meet for the very first time as a group with my team. [18:00] There is anxiety on their part. I’m the new boss. I’m the new guy in town. The position had been vacant for a while and I’m an unknown quantity. I’m anxious, but so are they. There was some tension in the room and I figured, “I got to break this tension. How am I going to break the ice?” My first meeting with this leadership team is going to define to a certain degree the rest of our relationship. Instead of going through the normal meeting—they had prepared their agenda—I put it all aside. I said, “We’re going to spend the next hour and a half and we’re going to get to know each other.” I was using some tricks and some advice that my advisors had given me. I asked everybody to go around the room, to introduce themselves to me, and to share with me one fact or one tidbit of information about themselves that the rest of the group didn’t know about them or would find surprising. I started. It was easy for me because they did not know me at all. It was easy. They knew nothing about me. I started and I introduced myself. I talked about my background. I talked about my family. I talked about what was important to me and how I got here. Then I went around systematically. There were probably ten or twelve people in the room at the time and I systematically went around the room and every person introduced themselves to me. They told me about their background and then shared the one thing that would come as a surprise to the others. I have got to tell you, it was a remarkable hour and a half because people learned things about each other that they didn’t know. And you could tell. As that process unfolded, the anxiety began to dissipate. We spent the entire first meeting on introductions and we didn’t do any of the work on the agenda. [21:00] We spent the entire first hour and a half together just getting to know each other. That’s kind of how I began to crack the ice. There was another sentinel event that I did. There were two sentinel decisions, maybe three sentinel decisions, I had to make that fall that I think began to build on this. One, I remember it distinctly, was an event that occurred in the emergency room. Our emergency room back then did not have a good reputation and it was all around wait time. It was never about care, but it was always about wait. The wait times were long and much longer than they should have been at that time. Yet our marketing department at the time had just initiated an ad campaign around wait times in the emergency room. We probably could find those old ad campaigns. It was a lightning rod for our staff because in the eyes of the emergency room physicians and in the eyes of the nurses in the emergency room the ads had essentially set them up for failure. There had been no work done and there had been no process work done to improve the wait times. Here we are guaranteeing wait times with no process change at all. The staff really felt ambushed. I met with the emergency room staff because it was an area of great turmoil at that time. I met with the emergency room staff, heard what they had to say, listened, and after that I pulled the ads. I pulled them from the newspaper. That’s what they wanted me to do and I did it. I will tell you, the marketing team was not very happy with me, but that single act earned the trust of the emergency room nurses because I supported them by taking them out of this community turmoil. Pulling those ads was, I think, an important decision I made. I think what it signaled to the nurses is that I was someone who they could trust. I had two other physician issues that I had to deal with that year and they were contractual issues. [24:00] First, it was a set of issues with the cardiologist in town. There had been a long ongoing contractual dispute on what the hospital was going to pay the cardiologist to read EKGs. An EKG (electrocardiogram) is a very simple test that has to be read by a cardiologist. The irony is that before I arrived here I had just finished negotiating a contract with the cardiologists in Pittsburgh. The process was kind of fresh in my mind. When I arrived here, this particular contractual dispute with the medical community had been deadlocked and had been going on for six months. Part of the problem was the federal government: as it is prone to do, it had changed its process about how it was going to reimburse for EKG readings. Basically, I broke the logjam. I reversed the decision because it is a basic test that needs to be compensated. Basically I said, “We will compensate and we will compensate at the rate that we get paid. I can’t pay you any more than we get paid, but I can pay you.” I said, “Whatever we get paid for that service, I will compensate.” That broke the logjam and I was able to resolve that longstanding deadlock. The other thing, I was able to resolve a contractual dispute with the emergency room physicians and it was all around reimbursement. It was all around a clause in the contract. There was a clause in the contract that basically said we had the right to force the emergency room doctors to take a particular insurance company. If they were going to practice in our emergency room, then they had to participate. That was a sticking point for the emergency room doctors because there are times when they are bad contracts. If it’s a bad contract and it’s not good for them, it’s really not good for us either. I proposed a compromise. The compromise language that I proposed was to say that, “If you don’t believe this is a fair contract, you share that information with us. If we in our analysis agree that this is not market rate and that it really is an unfair contract for you, we will not force that. We will not force that clause.” [27:00] That compromise was good enough for the emergency room physicians. It ended up playing out ten years later when our emergency room physicians did go non-par with Anthem, Blue Cross—and I publicly supported them in that debate. I think that by me being able to break some logjams of longstanding contractual disputes it signaled to the medical staff that I was fair. The other thing I had to do was with my board. I think the board actually tested me on a decision. It was on the construction and it had to do with something as simple as the handling of TVs in the patient rooms. Now, I got to take you back in history a little bit. In the ‘70s and the ‘80s the standard practice of how hospitals handled television in hospitals was the patient had to pay an extra fee to have the television set turned on. It was a revenue stream for hospitals. Basically there were vendors and hospitals would contract with a vendor. It was pre-cable days. Cable was just in its infancy and broadband didn’t exist. As cable came into existence, that model became an old outdated model. There wasn’t a hospital in Pittsburgh that still had that model for TVs. You wired the place for TVs and TVs were part of the basic package. The building committee of the board was going through the television contract. Everybody turned to me, and there was this great debate: “Should we charge for TVs or should we not charge for TVs?” I think there were lots of other things you should be talking about, but it actually was a pretty significant source of revenue for the hospital. It was a couple hundred thousand dollar source of revenue for the hospital at the time. Everybody turned to me and said, “Well, Fred, what do you think about this issue?” I knew it was a test. I knew instantly it was kind of a board test. My answer was pretty simple. I said, “When’s the last time you’ve gone to a hotel and had to pay extra to turn on the TV?” [30:00] There was this kind of silence in the room. The truth of the matter was nobody could remember the last time they went to a hotel and had to pay extra for TV. I remember that as a five year old, going to a hotel and you had to put a quarter in the box to watch TV. I asked, “When’s the last time you’ve been to any hotel, anybody in this room, been to a hotel that they had to pay extra to turn on the TV?” Of course, the answer was they couldn’t remember the last time they had been to a hotel and had to pay extra. I said, “Why would we as a hospital expect our patients to pay extra to watch TV with the amount of money they’re paying to be in the hospital?” That ended the conversation. There was no Board debate. During that fall and during that thirteen month period, I was visible a lot. I was making rounds a lot. Later that fall, around Christmas time, I held employee meetings where we talked about visioning. I think it was a combination of visibility and actions and I made some decisions that signaled to the organization that I cared about them as employees and as doctors. I began to rebuild a trust, if you will. It was a combination of some key decisions that were made that were real at the time. Plus it was a lot of visibility and a lot of conversation layered with a growing excitement about a brand new modern state of the art hospital, which was easy to get people jazzed about. There was this growing anticipation that just crescendoed until the place opened in September of 1993. I had this kind of eleven-month period to build momentum.

01-00:32:33
Rigelhaupt:
So a two-part question. One’s pretty straightforward. The contracts you described with the cardiologist and the emergency room physicians. Were they relatively standard compared to your previous experience in Pittsburgh? And if you could walk through if they were typical of physician contracts with the hospital here and in general?

01-00:32:53
Rankin:
That’s a tough question on its surface. [33:00] Really, we need to spend a lot of time talking about dynamics of medical staffs. The EKG was pretty typical and it is reflective of anytime the federal government makes a change in practice it has an impact. It impacts the hospital and the doctors. The federal government did make a change, and a pretty dramatic change, in regulation of how hospitals could bill for these EKG services. That had to be managed through. Now, as I said, luckily I had just gone through it. I had just gone through it that summer in my previous hospital. I had some knowledge and I had some ideas on how to break the logjam that had really never been put on the table here. It was recognizing that the doctors in the emergency room had a legitimate fear and I had to take away that legitimate fear. I had to find a way to take away that legitimate fear. I had to find a compromise. It goes back to what I said earlier. The relationship between the administration and the medical staff when I arrived was not a good one. It was a distrusting relationship. The administration didn’t trust the doctors and the doctors didn’t trust the administration. I had to find a way to bridge that gap. I did it through listening to what their concerns were and then trying to be creative and innovative to try to find a way to meet their concerns. It wasn’t that it was a unique set of circumstances. It wasn’t that we were any different. The relationship between a community hospital and its medical community is one of tension anyway because the system for the last twenty-five or thirty years has been setup in a way that our incentives are contraindicated. What is good for the doctor isn’t always good for the hospital and what is good for the hospital isn’t always good for the doctor. We had this thirty-year-old system, now almost fifty years old, that has been setup to fail. [36:00] You have got to understand that the basic kind of health care system we have in America, our incentives have never been aligned. The system has built in the tension. I think one of the reasons I was hired was because I did have a skill set in dealing with physicians. The first thing you have to recognize is that doctors are trained to be independent. That is their very nature. Doctors are trained to make independent decisions. That’s what you want doctors to do. When that doctor is in the operating room operating on you, you want that doctor to be enormously confident in her or his ability and to make those quick decisions. Doctors don’t have time to call a team meeting. They are trained to depend on themselves. That is in their DNA. We as MBAs or businesspeople, we’re trained to work in teams. We’re trained to be collaborative. We’re trained to work in teams. MBAs have been trained since the early ‘70s to work in teams. Those are very different skill sets. Doctors aren’t trained to work in teams and we as businesspeople are trained to work in teams. You have got to understand that there is an anthropological difference of how we view the world. One of the things that I’ve tried to do throughout my whole career is view the world—I’ll never be able to do it a hundred percent because I’m not a doctor. I have honed a skill set over the years so that I am able to try to view the world through their eyes and to at least understand what it is they are worried about, what their concerns are, and what it is they are trying to accomplish. I think I had the ability, and I still do to a certain degree, to suspend my own judgment and to try to put myself in the position of the physician or the nurse or the patient and try to view the world through their eyes. Now, the truth of the matter is I’ve had my battles with the medical staff and they’ve been knockdown, drag out. [39:00] We will never agree on everything. Never, ever, ever. There was a mindset when I arrived here that the doctors were part of the problem. I view the world in such a way that the doctors are part of the solution and I had to change that philosophy. I’ll be honest with you. In the early years there was turnover. There were people I had to ask to leave the company or chose to leave the company because my view of the world is that the doctors are part of the solution; they are not part of the problem. I had to change that mindset. I had to work real hard. There were hard decisions that had to be made. I had to let people go who could not buy into that mentality. It was a series of small independent actions. It was small decisions that signaled to the medical community, signaled to the nurses, and signaled to the staff that I had their back and I was going to protect them. I was going to work with them. What I still saw was this tremendous potential: the more I was here the more I saw it. There were good people that worked here. There were committed people that worked here and cared deeply about this community, cared deeply about this hospital, and cared deeply about their profession. I had to get them to rediscover that they are good people. They had to heal themselves and believe in themselves before I could do anything else. I had to get them to believe in themselves again and I spent the first thirteen months working to get them to believe in themselves. Now, again, I can’t stress enough how much help I had with a brand new building as the backdrop of that. Excitement and the electricity were in that building. I will give you one example from right after the hospital opened. There was a physician who stood up at a medical staff meeting about six or nine months after the hospital had opened. I’ll never forget it because it showed the character of the man, in my opinion. This physician stood up at a medical staff meeting and fundamentally said this. He said, “I want to make a statement. I want to make a personal statement. I was opposed to the building of this hospital. I fought it. I didn’t think we needed it. [42:00] I thought it was a mistake. Bad use of money. I’m here to tell you I was wrong. Building this hospital was the best decision this board and this community has ever done.” This building [2300 Fall Hill] was just old and it didn’t have the infrastructure that a modern building needed to have. He made a testimony in front of the entire medical staff. It was a remarkable moment in my opinion. I’ll never forget it as long as I live.

01-00:42:57
Rigelhaupt:
You mentioned enhancing the clinical profile and program. Did you view the opportunities in terms of contracts and building trust? How did you try and put that into practice?

01-00:43:13
Rankin:
I had some very specific charges that we got to work on. We started putting together business plans and strategic plans. The formation of the neonatal intensive nursery was actually well on its way. There had been a lot of pre-work done. There had been a lot of pre-work done prior to my arrival. Actually, the nursery was just beginning to open and it did open in this hospital building, the old hospital building. That was pretty well already there. The OB doctors and the pediatricians were pretty jazzed about that. We already had a win that my predecessors had put in place. The first area I began to work on was cardiac surgery. I began a very deliberate process to begin to put a business plan together around how to bring cardiac surgery to this community. The first place I had to engage was the cardiologists. I just told you I had to solve a contract problem—that EKG contract was a distraction. I couldn’t get cardiology to the broader picture of planning for the future for cardiac surgery. I had to solve that. I had to put that behind us. I had to solve that problem quickly because I couldn’t get them to the table. I couldn’t get them to the table to talk about the future because of this barrier. [45:00] I viewed the contract as a barrier to beginning to develop a strategic plan for cardiac surgery. I had to get it behind us and I had to get it behind us quickly so that I could concentrate on cardiac surgery and, I will tell you, that we had moments of tension in it. At the time there were two very good, very powerful cardiology groups in town. Not only did they have their own issues with the organization, they had their own issues with each other. They were competitors to each other. I had this real dynamic, just kind of an interpersonal dynamic, because they didn’t necessarily agree with each other. We had issues, but they also had issues that were crossing. They had very different views on how the program should be organized. We systematically interviewed groups of cardiac surgeons around the Commonwealth. We interviewed three cardiovascular groups in Virginia. We interviewed a group out of Inova, who had a very strong cardiac surgery program. We interviewed a group out of VCU that also had a very strong cardiac surgery program. Then we interviewed an independent private practice group that was based in Richmond. All three of them had a little different take of the world and all three of them had their allies. I quickly realized this was going to be a problem because I wasn’t going to get them to agree on one model. At some point in time I was going to have to pick. It was clear to me that they were not going to come to a consensus themselves. Positions got pretty hardened about what direction they wanted and what partner they wanted to have in building the program. [48:00] We started down a path, to be honest with you, with VCU, or MCV at the time. There was a candidate who was very interested in the position. We had some private meetings and we started down a path of negotiating. We got pretty far down that path negotiating with this physician from VCU. Sometimes to break a logjam you got to have a little bit of luck and I had some luck. Out of the clear blue sky I was contacted by Dr. Armitage, who was in Pittsburgh at the time. He was at the University of Pittsburgh. He had learned about this opportunity from a colleague of his. He just cold called me and said, “I understand you’re looking for a cardiac surgeon. I might be interested in talking to you.” I didn’t have a COPN yet for that. I was in the midst of applying to the state for the Certificate of Public Need, which had gotten very public and very hot and heavy. I didn’t have a lot of community support for it and I didn’t have a lot of medical staff support. There were some members of the medical staff who were very much opposed to us having cardiac surgery here. They didn’t think we had the capability or the staff to do that. I had a lot of headwinds. Even in the community, there were people in the community who were very much opposed to us having our own cardiac surgery program here, which I never totally understood. To this day I don’t totally understand why the community opposed it. Now, there was a very strong element of the community that did support it. For the COPN purposes the cardiologists did rally together because they realized that they would benefit personally and their patients would benefit. We went through the whole COPN process. We ultimately prevailed, although it was not a slam dunk. We had people from the community go down to Richmond to speak in opposition. It was an interesting kind of time. The luck came because in the middle of all this Dr. Armitage just contacts me. [51:00] I basically tell him and I said, “Look, Dr. Armitage, I can’t do anything right now until I get a COPN. And then it will probably take me a year to actually stand up the program. So until I get the COPN, I can’t hire any physician. I can’t make a commitment to anybody.”
We’re planning for the opening of the new hospital. In the late fall of 1993, we actually did get approval from the state to implement a cardiac surgery program. I had done it through the support from VCU. I needed an academic medical center to back me up. I needed to have an academic medical center support it, and VCU gave me that support. They actually wrote a letter in support of our application and, as you know, they were in the mix to actually run the program. I also had this issue that was supported by one group and not supported by the other group. I had this dynamic swirling around. It was Dr. Armitage’s call that broke the logjam because I brought him in for an interview and he was acceptable to everybody. He actually was the compromise, if you will, the compromise candidate. He wasn’t the VCU guy and he also wasn’t the Inova guy. It was somebody who would be uniquely ours. His credentials were impeccable. He had a national reputation. He was young, dynamic, and had a great, great skill set. He became the unifier that could be acceptable to both cardiology groups. We hired Dr. Armitage in 1994. He came in early 1994 and spent his first six or nine months basically putting the building blocks on the cardiac surgery program. We did our first open heart surgery in the fall of 1994. Now, this had a little bit of fallout to it. VCU had given us a letter of support. They had given us a letter of support and we had gone in a different direction. Inova kind of felt that we had strung them along. It was not without some controversy. To me, it was more important to unify my own medical staff. [54:00] I had to deal with kind of the hurt feelings of VCU and Inova. Those were quickly overcome, if you will. To me, the important thing was unifying the cardiology community here because it would never have been totally successful without both cardiology groups supporting a new surgeon coming to town. We systematically built the program, and the rest is history. The story of Dr. Armitage has its own story, but I’ll give him great credit. He built the program and he is the reason we have a strong cardiac surgery program here today. It was not without its moments of having to make some hard decisions. It took probably longer than it should have because of negotiating with the two cardiology groups. Again, I had a little bit of luck along the way. I had a compromise candidate that was more than acceptable or everybody could rally behind.

01-00:55:30
Rigelhaupt:
So when you say hiring him, that sounds different than the kind of relationships you had with local physicians.

01-00:55:39
Rankin:
Yes, actually it was. I use the word hire and that probably is a misnomer because actually he was contracted with us. He started out as his own in the private practice. That is a dynamic of this medical community. There are many medical communities, especially in academic medical centers, where the employees actually are hired by the hospital. The classic examples being the Cleveland Clinics, the Mayo Clinics, and the Geisinger Clinics. In those, the physicians are hired. And in most academic medical schools, like the University of Virginia and VCU, the physicians are employed. This is not so in community hospitals. In most community hospitals the doctors are independent businessmen and women and have their own practices. They basically apply to the hospital for privileges, for clinical privileges, and for the right to practice medicine. So when I say I hired him, we actually signed a contract to be our cardiac surgeon and he set up a private practice. [57:00] Now, later on he actually became one of our first employees, which is a pretty standard model today. Most cardiac surgeons are employed by their hospitals today. But in the early years, Dr. Armitage set up his own private practice here in town.

01-00:57:20
Rigelhaupt:
How does the idea of a program like cardiology and cardiac surgery come about? And thinking about this time period, the early- to mid-1990s. Is that coming from the hospital? Are there physician groups—

01-00:57:35
Rankin:
It’s a great question. If it works properly, it should bubble up from the community. It should come based on the needs of the community. I will tell you, this organization had back then, and still does today, a very robust strategic planning process. It was very clear to the board before they hired me— and it was very clear to me when I got here—when you looked at the demographics, cardiac surgery and neurosurgery were two areas where a lot of patients were going out of town for their care. They were being transferred out of town to other hospitals, either in Richmond or in Northern Virginia. Ideally ideas for new programs bubble up based on demand of the community. If it also works right, it works in developing your medical community. The overall vision of the board was not to have these clinical programs for clinical programs sake. The overall vision back in the early ‘90s was that the people who lived in this region, in Fredericksburg, would be able to get the vast majority of their health care here locally. That was the board’s vision. Where we started was with cardiac surgery and then neurosurgery. Cardiac surgery was the first and the second was neurosurgery. Neurosurgery had a little different pathway. Programs like cardiac surgery and neurosurgery not only elevate the clinical care just because of the nature of the clinical care, but they also elevate pride. The medical community starts to develop its own pride and say, “You know what? We really are good. We really can do things here at Mary Washington Hospital. We really can take care of sick people, not just people who just need a couple days hospitalization. But we can take care of the sickest of the sick.” [01:00:00] There’s a medical staff pride that begins to develop. There’s also a community pride. There’s a community pride. It was, “I don’t have to leave Fredericksburg. I can get all the health care I need here.” It is kind of the rising tide that lifts all boats. Not only do you begin to get these programs in place, but also you begin to develop a mindset and a mentality among our staff: “You know what? We’re good. We can take care of sick people.” The mindset here in the late-‘80s when I arrived was: “Man, if you’re really sick, don’t go to Mary Washington Hospital. If you’re really sick, go someplace else.” I had to break that. That was not the reality, but that was the perception. I had to break that perception and I had to start internally because I had to get the nurses and the doctors to start believing in themselves. When they started believing in themselves, then they could transmit that confidence to the outside community. Programs like cardiac surgery and neurosurgery help; they are catalysts to help do that. That’s why those early programs were so important to the identity of the organization.

01-01:01:56
Rigelhaupt:
Are there risks in expanding like that?

01-01:01:58
Rankin:
Absolutely.

01-01:02:00
Rigelhaupt:
Could you describe the risks? Are they financial? Are they about perceptions? How—

01-01:02:04
Rankin:
First of all, there’s always the financial risk. These are expensive programs. These are expensive programs. The hospital has to invest a lot of upfront capital and a lot of upfront money to get them started. There is the financial risk before the programs start, to have a revenue stream to pay for themselves. Perhaps more important than the financial risk is the reputation risk. If you have a few bad outcomes at the beginning of a program and if the outcomes aren’t good at the beginning, then you begin to get a reputation: “Oh, my gosh, don’t go there. You’re going to get a complication. You might even die.” [01:03:00] It’s the reputational risk that is as important, if not more important, than the financial risk. You have got to make sure you got the right people in place. You have got to make sure that the program is well thought out and that every “I” is dotted and “T” is crossed. You pick your first patients carefully. You don’t take every single patient at the beginning that comes here. You take patients that are relatively low risk. You don’t start out with the high risk right away. You take the relatively lower risk patients so you build some confidence and you begin to develop an emotional bank account. The risk, in my opinion, was a reputational risk.

01-01:03:50
Rigelhaupt:
Would you describe the financial backing of a new program like this in terms of capital? Is that coming from the Board? Is it coming from cash in hand at the hospital?

01-01:04:04
Rankin:
Yes, for the most part. For the most part it’s coming from cash in hand. It’s the investment of capital. In cardiac surgery, the real risk—it’s not capital intensive. You have got to make sure you have ICU beds, all the modern equipment around, and that you have trained nurses. You have got to invest in the training and have highly qualified nurses that can take care of the patients. You got to have anesthesiologists that know how to anesthetize cardiac surgery patients. There’s this whole kind of broad expansion, and that comes from the board. Then you’ve got to be willing to fund the cash flow until the revenue stream catches up. In any new business venture there is a period of time that there has a negative cash flow because you’re investing. That comes from the hospital and the board has to make those decisions, but there is a well thought out business plan that’s behind the clinical plan. The business plan and the clinical plan have to marry up with each other. You’re transparent to the board. You’re transparent to the physicians. But really what you need to begin to do is build some success and some confidence, and then that builds on itself. Today, I’m not sure this community could imagine Mary Washington Hospital without a cardiac surgery program or without a strong neurosurgery program. It’s just assumed today. But it wasn’t in the early ‘90s. The capital risk, the real capital risk, was building the new hospital. The board’s decision to build that brand new Mary Washington Hospital in 1992 was an enormous risk because it was coming at a time of possible major changes in health care. [01:06:00] If you remember when Bill Clinton holding up the universal health care card, there was this belief that all reimbursements were going to be frozen at their current level and there would be no increase in Medicare. Again, I wasn’t here in the early ‘90s, but I understand there was a pretty steep recession in Fredericksburg in the late-1980s and early-1990s. Joe Wilson, Mr. Wilson, who was Chairman of the Board at the time, has told me more than once, “If the Board had delayed six months the decision to build the hospital they might not have built the hospital at all given kind of the recession that struck kind of in 1991, especially among commercial real estate in this region.” There was an enormous capital risk—that was hundreds of millions of dollars of taking out debt to build this new modern hospital. Turns out it was absolutely the right decision. Today, if that decision had not been made, Mary Washington Hospital would not exist today as an independent freestanding facility. Would there be a hospital in Fredericksburg? Yes. There would be a hospital in Fredericksburg, but it would be part of a larger company somewhere.

01-01:07:42
Rigelhaupt:
Where did the financing come from for the hospital in 1990? Obviously not the whole thing—

01-01:07:47
Rankin:
It was a combination of debt, taking out what’s called tax-exempt financing. Because we are a not for profit 501(c)(3) organization, we are eligible for tax-exempt debt. The vast majority of it came from debt and in the issuing of tax-exempt bonds. We went through the Fredericksburg Economic Development Authority to secure the bonds and used reserves, which was basically cash that was already in the company. It was a combination. The vast majority of it at the time was debt. I don’t know the exact percentages. I’m guessing it was probably eighty percent financed, just like a mortgage. Just think of it as a mortgage. Ten to twenty percent down, borrow eighty to ninety percent. It is the same concept. You go out and borrow money and you build the facility. Then you have to pay it off over a thirty or forty year period of time. We’re paying off on those bonds today and we will for years and years to come. [01:09:00] It’s long-term debt for the company.

01-01:09:07
Rigelhaupt:
Now, one of the things I’ve read about is that, if I’m remembering correctly, seems like in the 1980s and into the 1990s, that there is a transition of non-profit community hospitals moving away from the board and donations and to taking on more debt for something like—

01-01:09:29
Rankin:
That’s absolutely true. That started actually in the ‘70s. Paul Starr wrote a book that’s an old classic now. It was actually published in the early-1980s and called The Transformation of American Medicine. If you read the history of American medicine, it really began in the ‘70s. Most hospitals, up until the advent of Medicare in 1965, funded most of their growth through community donations. Now, that’s not totally true because even this building here, this 1951 building, was built with what’s called Hill-Burton money. That was a grant program that the federal government instituted in post-World War II to help communities build hospitals. The real change began to occur first in 1965 with the passage of the Medicare law. Medicare and Medicaid came into existence in 1965 with the Social Security amendments, Title XVIII and XIX. Once the federal government started paying people for care, then one of the great beneficiaries of the space program was health care. You all know that in the ‘60s President Kennedy challenged us to go to the moon and in 1969 we went to the moon. Well, all that technology that was developed to go to the moon found its way over time into the private sector. One of the huge beneficiaries of that technology was health care. We didn’t have CT scanners in the 1960s. The first CT scanner was I believe in the early 1970s. I think 1972 or around that period of time is when we began to first see CT scanners. Today, a CT scanner is like a stethoscope. [01:12:00] There are historians today that believe that the CT scanner is to modern American medicine what the stethoscope was to medicine back in the 1800s or even beyond. It was that transformational. The advent of the CT scanner was that transformational to the clinical care of medicine. When I was a college student I worked as an orderly at the Cleveland Clinic in the operating room. The most common operation was what was called an exploratory laparotomy. Basically, what the surgeon did was when they couldn’t figure out what was going on, is that they took the person to surgery, they opened up his belly and they explored what was inside to try to figure it out. That was in the late-‘60s, early-‘70s. That’s how medicine was practiced. Today you would be hard pressed to see this. There is no such thing anymore as an operation called an exploratory laparotomy. It’s all done by a CT scan or an MRI. The CT scan revolutionized care and treatment. And, of course, later on we had MRIs. But I have got to tell you, that technology was also enormously expensive. We’re talking one CT scanner being almost two million dollars or two and a half million dollars. You have this combination of forces. You have the government paying for the first time for health care with the advent of Medicare and Medicaid in 1965. You have the advent of the CT scanner, which was transformational in the early-1970s. By the late-‘70s and the early-‘80s, you have this virtual explosion in health care technology going on. But it’s expensive technology. It became virtually impossible for communities to raise the kind of money that was needed to invest in health care. 501(c)(3) hospitals started to turn to financing. They turned to outside sources to finance their growth and development. That transformation was going on and that was happening here in Fredericksburg. Our growth—and we probably don’t have time today to go into this. The 1990s was a period of explosive growth in Fredericksburg. We, as Mary Washington Health Hospital, spent the decade of the ‘90s doing nothing but catching up and trying to stay up with the explosive population growth that was going on in Fredericksburg at the time. [01:15:00]

01-01:15:06
Rigelhaupt:
In practice, what does that mean, trying to keep up? Is that recruiting physicians, adding nurses?

01-01:15:11
Rankin:
It’s everything. It is technology, it is staff, it is programs, and it is doctors. It is everything. Our bed count when Mary Washington Hospital opened in 1993—I’ll have to check to be accurate on this—we were basically a 250-bed hospital. Today Mary Washington Hospital is a 440-bed hospital. The growth in beds occurred mostly between 1993 and 2004. That growth occurred in that decade, in that ten to eleven year period. It was everything: it was infrastructure, it was doctors, and it was nurses. It was because this community was exploding. Not only was the community exploding, but we were beginning to explode in terms of programs and practice areas that we could offer here. When I look back on the decade of the 1990s, it really was doing everything humanly possible just to keep up with the growth and to make sure it didn’t overwhelm us. And at times it did overwhelm us, before the new addition opened I believe in January of 2004.

01-01:16:38
Rigelhaupt:
So everything you’ve just described in terms of expansion sounds very expensive.

01-01:16:44
Rankin:
It was expensive.

01-01:16:47
Rigelhaupt:
Did you have a sense as this was happening that there was going to be a revenue stream behind the investments that you’re describing?

01-01:16:55
Rankin:
The answer is yes. The period of the 1990s was also a very lucrative time for the health system. There were a whole variety of reasons that that was the case. First of all, these new programs actually are lucrative. They pay for themselves and they pay handsomely. Secondarily, as I look back on it, the reimbursements were healthy. The reimbursements were healthy. We fundamentally were getting paid. Our expenses were getting paid. Thirdly, we benefited greatly with us being the only hospital in the community. We had a designation from the federal government called sole community provider and sole community provider status gave us a bump in reimbursement. [01:18:00] It was those three things. And I will tell you, there were strong business plans. These weren’t just pie in the sky programs. What was behind all of this was a very deliberate, very focused business planning process to make sure we had the financial underpinnings to build this infrastructure. We weren’t just doing it out of the goodness of our heart—well, we were doing it out of the goodness of our heart. One of the things that is still the case today in this organization and what links this organization to the community so much is that this organization is very mission driven. At the end of the day, the mission is serving the citizens of this community and it is core to what we do. There is a very strong business board/business underpinning behind it.

01-01:19:06
Rigelhaupt:
We are a couple of minutes after 1:00, which is when—

01-01:19:08
Rankin:
Right.

01-01:19:10
Rigelhaupt:
But we’ll have multi-sessions.

01-01:19:12
Rankin:
Okay.
[End of Interview]

Interview 2 – June 26, 2013
02-00:00:00
Rigelhaupt:
It’s June 26, 2013. I’m in Fredericksburg, Virginia, doing a second interview with Fred Rankin, III. And to start today, I would like to begin by asking you about the primary reasons that the new hospital was built.

02-00:00:22
Rankin:
I’ll remind you that I wasn’t here at the beginning when the board undertook the conversation about why to build the new hospital. What I’ve been told, and what I believe to be true, is the board was faced with the reality in the late 1980s and the early 1990s and when the decision making process was being contemplated to build a new hospital. There were many factors that played into it. One being the age of what at the time was the current hospital or the Fall Hill building. That building had been constructed in 1951 and added on several times. By the time we were getting to the late-‘80s and the early-‘90s, that hospital was forty years old. It was really beginning to show its age, both from structure and from content, number one. Number two, there had been the beginnings of an explosion in technology. I think there were a lot of predictions of what was going to happen, especially around imaging, CT scanning, and MRI scanning. They really were in their infancy at that point in time, but they were beginning to be a major force in health care. The third was the strategic plan of the organization. The strategic plan of the organization really was to begin to transform the organization from a small, kind of sleepy little community hospital to a regional medical center. When you took the vision of where the board wanted to take the hospital and you layered that vision against the physical structure that already was forty years old, there were just practical problems that we came up against, or the board came up against. The board was going to be faced with having to make a significant capital investment one way or the other. [03:00] It was going to either have to invest and make major upgrades to the existing facility, both in space and electrical, air conditioning—kind of the whole utility—or look for a new, modern state-of-the-art structure that would allow the organization to grow well into the future and into the twenty-first century. Comparing the pros and cons of both those core decisions, the decision was made by the board to build the new modern structure. I think in retrospect, looking back on twenty years, it was absolutely the right decision. I can’t imagine trying to do what we do today at Mary Washington Hospital in this building. While it served its absolute purpose at its time, to do what we do today in this building would have been extremely limiting and difficult. I think that was underlying the decision. It was kind of practical considerations layered against vision for the future. The board did make its decision and built the facility. What is not always told about that decision was where to locate that facility. There was a real debate back then of whether to stay in the city of Fredericksburg or to go out into the suburbs, in this case, particularly Stafford County. Indeed, there was legitimate and serious conversation about moving the whole structure out onto Route 17, ironically, in the land where the Stafford Campus of the University of Mary Washington sits today. There was conversation about moving the hospital out of the city of Fredericksburg. What I’ve been told about those conversations was that the first conversation about the building was a much easier conversation than the second conversation about the location. It quickly became apparent, given the practicalities of infrastructure, that a new building was going to be needed and that decision was made first. Once that decision was made, then where became the decision. That was a much more difficult, animated discussion, I’ve been told. It really boiled down to: “Who are we? And what is our roots?” There was serious discussion at the time of going into Stafford County. My understanding is that the end of the day, the roots in Fredericksburg won out and won the day. [06:00] And the practicalities: when you began to look at many of our workers and employees at the time still lived in the city of Fredericksburg and many of the physicians at that time still had offices in the city of Fredericksburg. The final decision was made. I think it goes back to our roots and goes back to the final decision was made to stay in the city. Fredericksburg was the central point between Spotsylvania and Stafford. It was the center of this region and the final decision was made, “Yep. We’re going to stay right here in Fredericksburg.”

02-00:06:54
Rigelhaupt:
So, obviously the hospital was still under construction when you started. But do you remember learning about government officials that were strong advocates for either staying in Fredericksburg or potentially moving to Stafford County?

02-00:07:12
Rankin:
Yes. I mean, I certainly was told those stories. I had a mentor who helped me immensely when I first arrived in October of 1992, who introduced me to community leaders, and went out of his way. His name was Pete Hearn. He really founded our Foundation, the Mary Washington Hospital Foundation. A community leader in his own right, Pete made a point to introduce me over a six-month period to community leaders. I did have an opportunity to dialogue and meet with the Mayor and with members of City Council. I also had the opportunity to meet with Stafford officials, as well. Now, I will tell you, Stafford in the early 1990s was a very different county than it is today. I mean, the explosive growth of Stafford really happened in the ‘90s. It was a very different county. It was a very different county in 1992 than it is today. But yes, I had the opportunity to meet with government officials and I had the opportunity to meet with community leaders to really understand—and that’s where I began to really understand the linkage between the hospital organization and between the community. I can remember in the early ‘90s—kind of mid-‘90s, I guess—we actually looked at developing a fitness center because hospital-owned fitness centers around the country were kind of in vogue at that point in time. [09:00] We seriously considered building our own fitness center. Well, we went as far as developing a business plan. The business plan told us that it was feasible, although marginally feasible, and the key to its feasibility was that we would have to have memberships from other people in the community other than just hospital community. We would to have to sell memberships. At that point in time, the Y [YMCA]—there was just one Y and it was the Y that is now that we call the Massey Y on Butler Road—was also populated with a board of community leaders. I can remember having very serious conversations with the Y board about their concerns about us developing and going straight at the Y—if you will, competing with the Y. I really came to understand that these are two community resources. First of all, the business plan was a marginal business plan to begin with, but second, it really would not do us any good at that stage in the game to compete. We made the decision to cooperate and develop cooperative programs, rather than to compete with the YMCA. It began to instruct me about the relationship the hospital had with the community. It was those kinds of conversations.

02-00:10:53
Rigelhaupt:
Did you have conversations, or were you involved, in any of the questions around financing? Or was that largely in place?

02-00:11:02
Rankin:
That was in place. And really, in all honesty, the financing for not-for-profit health system expansion is pretty standard. There was a time when if a hospital wanted to build or expand the community raised those funds. The community raised the money through fundraising, in all honesty. By the time we got into the ‘70s, that really was beyond the capabilities of most communities because the construction of health care had become so expensive and the technology had become so expensive that it was virtually impossible for hospitals to raise those kinds of funds. [12:00] Hospitals started to turn to the external markets to borrow money. Most not-for-profit hospitals—us included—finance our projects, back then and these days, through the taking out of tax-exempt bonds or the selling of tax-exempt bonds. We went through the city to do that, we went through the Economic Development Authority of the city to do that. That really, in the not-for-profit world, is the standard way that expansion funds are raised. That was already in place when I arrived. It was standard financing back then and the financing was already in place. However, there was a fundraising campaign that was developed by the foundation, part and parcel. It was for the development of the Regional Cancer Center that opened about the same time out on Route 3. There was about $3 million raised in that fundraising campaign. Back then, that was a lot of money and that was a very successful fundraising campaign for the development of the Radiation Therapy Facility out on Route 3. The financing for the hospital really was in place when I arrived. We essentially borrowed money through tax-exempt bond financing.

02-00:13:36
Rigelhaupt:
Was there any work with Spotsylvania County, Stafford County? Were they involved with any of the bonds?

02-00:13:45
Rankin:
Not in an official way because you can only go through one Economic Development Authority. You don’t spread it out. You pick one. We chose Fredericksburg because the organization was housed in Fredericksburg. I’m not even sure there were even formal negotiations. I don’t really know the answer to that with either Stafford or Spotsylvania, but I don’t think we would have thought of it at the time. I’m not sure they would have expected us to finance it through anything other than the Fredericksburg Economic Development Authority. Now, that doesn’t mean that Fredericksburg is on the hook for these. We are the guarantors. Floating the bonds through the Fredericksburg Economic Development Authority is really only a vehicle. There is no legal obligation of Fredericksburg or the Fredericksburg EDA for any of our indebtedness. It’s really a vehicle. [15:00]

02-00:15:05
Rigelhaupt:
In our last interview, you mentioned that when you started part of your early work was to solve problems in some ways, to build better relationships for the administration positions.

02-00:15:16
Rankin:
Yes. That is still core to my job description today.

02-00:15:24
Rigelhaupt:
Were there any concerns that were still lingering? Obviously, the project was very far along, but in terms of the physicians about the new hospital, having the location, what it meant for their practices that you addressed?

02-00:15:39
Rankin:
Yes. The truth of the matter was that there were members of the medical staff who were opposed to the building of a new hospital. Not all, but there were pockets of opposition. And it mostly surrounded affordability. There was a minority group of physicians who believed that this building [2300 Fall Hill] was just fine and that the expense to build the new hospital was extravagant and not needed. It was, in their minds, not a good economic investment. I also think there was, in that whole milieu, a concern about the growth and development of the organization. You know, it’s funny. While we talk about liking new challenges, human beings really do sometimes have issues with change. I think there were pockets of that in the medical staff. I mean, I can’t say that it was a wide spread because there were members of the medical staff that were very supportive of the move as well. But I also think that there were members of the medical staff who were opposed to us expanding services. I think they felt that, “Hey, you know, it will divert resources from my program into another program. It will just make it harder for me to get what I need for my service.” There was a little bit of protectionism, but they mostly swirled around affordability. There were community leaders. There was a minority, a small group of community folks who believed Fredericksburg could not afford a brand new hospital and that we would be far better off just making due in this building. [18:00] I will tell you and it is my personal belief—I can’t prove this, obviously—but it is my personal belief that if the board had not made its decision to build the new hospital when it did, that today, that two things would have occurred. One, Mary Washington would not exist as an independent organization. We would not have been able to grow the organization the way we were able to grow it in the ‘90s. We would be part of another company today. I believe there still would be a hospital in Fredericksburg, but it would not be a community-owned hospital. I really believe that. And second, most assuredly, this organization would not have been the one to build Stafford Hospital. I think Stafford eventually was going to have a hospital one way or the other. Either we were going to do it or somebody else, like Inova or Sentara or somebody else like that, was going to do it. But ultimately, Stafford Hospital was going to have a hospital. Probably eventually, Spotsylvania as well, given the growth of this community, was going to have a hospital. So really, the board made a visionary and a courageous decision when it made the decision to build. But yet there was opposition. Now to put an exclamation point to the medical staff’s opposition, about nine months later, after the building had been opened, there was a physician, a retired orthopedic surgeon, who asked to speak at a medical staff meeting. He got up and said, “I have something I want to say.” He stood up and I’ll never forget this as long as I live. It’s one of those moments that is engrained in my memory and that I’ll never lose. He stood up in front of the medical staff and said words to this effect. He said, “I was one of the opponents of building this new hospital, and you all know that I was one of the opponents. I am here to tell you today that I was wrong, that building this hospital was absolutely the right decision for the medical staff and for this community.” Why it is burned in my memory was the humility of the individual and the character of the individual who acknowledges that he was a sharp critic, but standing up in front of his peers and acknowledging that it really had made him a better doctor, it made the medical staff a better medical staff, and health care in this community was actually going to be better because of the decision that was made. [21:00] To me, it was a remarkable moment when he stood up and made those statements. You know how you have memories in your life? And that is a memory that I’ll never forget.

02-00:21:27
Rigelhaupt:
So you mentioned that there were a number of reasons for building a new hospital. It’s becoming nearly impossible to renovate, as you said. Forty years old, the technology had—

02-00:21:40
Rankin:
Yes. Just infrastructure alone, electrical infrastructure, plumbing infrastructure, energy—and I meant just the whole infrastructure. It would have taken a massive undertaking. It was also space in operating rooms. The amount of equipment that goes into an operating room is enormous today and the operating rooms just weren’t big enough. The space requirements—we just didn’t have that kind of space in this building. It would have taken major renovation, almost gutting the building and starting over. The expense would have been enormous, almost rivaling the building of a brand new facility.

02-00:22:29
Rigelhaupt:
And yet you—Mary Washington Hospital and MediCorp—

02-00:22:35
Rankin:
It was MediCorp then.

02-00:22:40
Rigelhaupt:
Began to plan for a medical center, a regional medical center?

02-00:22:43
Rankin:
Yes. It was part of a vision. It was transformational. It was to transform a small, average community hospital into a regional medical center and it was a twenty-year play. It wasn’t going to happen overnight. It was a vision. It was a dream of possibility.

02-00:23:13
Rigelhaupt:
And what do you remember about seeing those plans for the regional medical center when you first came to interview? I mean, obviously that vision had been underway, the hospital. What do you remember about learning about the potential to become a regional medical center?

02-00:23:30
Rankin:
It goes back to the three basic decisions, or what I saw in this community when I interviewed. There were three things I saw in what was burned into me about this community. One was this community had a vitality to it. It was alive and it was proud of who it was. [24:00] When I talk about this community it was an alive community, it was a proud community that was steeped in tradition, and was poised to move into the twenty-first century. That’s the first thing I saw. The second thing I saw was really a well-managed organization. Someone who had managed their finances well over the years, that had grown carefully over the years, and actually was not in distress. I mean, it wasn’t rich like some organizations, but it was on a solid financial footing and could afford the expansion. And the third was the medical staff, and it was really the one in three to me that differentiated. There was an eagerness of the medical staff to be the best it could be. The average age of the medical staff was young. The average age was probably forty-two, forty-three years old and in the whole scheme of things is a very young medical staff. These people were all well trained and they came from all over the country. They came from Stanford, from Harvard, from University of Virginia, and from VCU. I mean, these were high-trained professionals who wanted to live and practice medicine in Fredericksburg and had an energy to be the best that they could be. I saw a community that was vibrant and I saw a medical community that was vibrant. There was energy and I knew when I interviewed if any community could pull it off, this community could. It had the natural resources: location, location, location; it had vibrancy, it had a community that had a vision for its future, and it had a medical staff that had a vision for its future. That’s what I remember. And I still believe that’s the case today. I don’t think that has changed.

02-00:26:48
Rigelhaupt:
So thinking about the first couple years, how did becoming a regional medical center alter strategic planning? Did it allow for ideas that you hadn’t thought of before? [27:00] What changed as it went from becoming a community hospital to a regional medical center?

02-00:27:09
Rankin:
What I remember about the first couple of years was the explosive growth. Between the doors opening in September of 1993 and 2003, in that ten-year period—what I remember about that ten-year period was the explosive growth. And yes, we were executing on bringing in the high-end services that we wanted to bring in. But what I remember most about that ten-year period was that volume exploded because population was exploding in the region. I don’t remember planning sessions about twenty-year plans. What I remember is literally having to run in place and run as fast as we could to keep up with the explosive growth in the demand. Then the more services we offered here, the more people came. It was almost insatiable at the time. The ‘90s were a good time from an economic view: the economy was robust, the economy was growing, and this community was exploding. I remember the summer that I started here, VRE started as well. It meant the first commuter train left Fredericksburg in the summer of 1992. As I said earlier, the growth and development at Mary Washington is so linked to the growth and development of Fredericksburg. What I remember about those first ten years is not a linear check-off-the-box Gant chart type of strategic growth. What I remember about it was that literally we were running at ninety miles an hour to just keep up with the growth. Every new program we offered was filled within a matter of months. Every doctor that came had full practices in a matter of months. It was so busy and the growth was just enormous. It felt a little bit like we were always behind, that we were never caught up, and that we were always chasing. [30:00] Within five years, we were planning an addition. In fact, all our advisors told the board back in the late-1980s was that hospital utilization was going to go down. We took fifty beds out of the system. That meant we had 300 beds at the old Mary Washington Hospital and we built the new Mary Washington Hospital with only 250 beds. We actually took into account the declining utilization by actually opening fifty less beds than the old hospital had. There were also some critics of that too at the time. Now what happened, what the strategic advisors of the late-1980s didn’t factor in was the explosive growth of the region. Two things happened in that ten-year period. One was the population, so just pure volume alone and just pure people-created demand. We were changing market share at the same time. What I mean by changing market share is that as we brought these new services online, people were able to stay here for their care, where historically they had to go. When we opened our open-heart surgery program in the fall of 1994, there were 150 or 200 people who regularly had to leave Fredericksburg to get their heart surgery and who now all of the sudden could stay here. You could multiply those conversations. So not only did you have organic growth, you had service growth going on at the same time. Now back in the 1990s, in that first ten-year period, the campus, it was really just Mary Washington Hospital surrounded by the rest of the campus. There were no buildings on the rest of the campus. I remember the discussion in the early part of 2000 around the building of the parking garage. We agonized over whether to build that parking garage or not for two reasons. One, it was going to be expensive, but we literally were running out of parking. We were almost out of parking almost on day one and as the organization expanded. We had to create more parking and we really talked about the parking deck. The irony was we were afraid we would be the first parking deck in Fredericksburg. Fredericksburg did not have a parking deck then. [33:00] We thought, “Oh my gosh. I wonder if this is going to be an issue?” We talked to city officials and we spent a lot of time on how is the community going to react? How are elected officials going to react to a parking deck in Fredericksburg? My gosh! Turns out that parking had become such an issue that it was a non-issue. People were just relieved we were doing something. We were very careful in building the parking deck that we built it in keeping with the décor and the design. Today, can you imagine our facility without the parking deck? But the truth was we were afraid of something that just didn’t exist in the community. People were ready for it and people understood the need, but we were afraid. We were ultra-cautious and a little fearful that we would have great community pushback about the creation of a parking deck. I can also remember that period of time because the economy and because people began to realize what was happening: every commercial developer in this region wanted to buy land from us. One of the unsung decisions that the board made that we don’t spend a lot of time thinking about it and stuck to our vision. We could have been seduced in those years to just sell of parcels of land to developers. It meant we were approached by probably every developer in this community about a plot of land for a bank, a gas station, or a 7-Eleven. I mean, you name it, we were approached about it. Our board said, “No, no, no, no, no. The long-range plan is to develop that campus into a medical campus.” When we did start parceling off the land, we started selling the land to physicians. As physicians wanted to expand their own practices they would develop. Today, what we have here is a vision of a medical campus that really started back in the 1980s.

02-00:35:19
Rigelhaupt:
So the story of explosive growth. Did that end up creating new challenges in the sense that you described early on working to ease potential tensions around the EKGs, around some of the things with cardiologists in town? Did the explosive growth affect the relationships between the administration, the board, and the medical community?

02-00:35:49
Rankin:
It created challenges, yes, but not tensions that were destructive. They were more creative tensions. [36:00] The board has been the rock in this whole growth. What anchored the board, and what continues to anchor the board to this day, is a fierce, fierce allegiance to what is in the best interest of this organization and this community. At the end of the day, every decision that was made and the question that was always the first question asked about a project, a program, or an activity, and the last question was, “What’s in the best interest of this community?” The board understood, and still does understand, that its first and foremost responsibility is to this community, and making sure that there is a vibrant health care provided to the citizens of this community. They take that responsibility. The mission is what drives everything. When we talk about our mission, it is not just a pretty, framed certificate on the wall. It is a living, breathing document that is engrained into every conversation, every decision, and every discussion that is had at the board level. So yes, even though the explosive growth created tensions, we were always able to go back to what’s in the best interest of the community. That question is asked at every board meeting, “Are the decisions we’re making the right decisions for this community?” It is asked with the medical staff, capital equipment, new equipment, and competitive issues. I can remember when we were making the decision to bring a neurosurgeon here. We didn’t have a neurosurgeon here and one of the things we needed to do was make sure that that neurosurgeon was successful. One of the things that neurosurgeons do in addition to operating on the brain is they also operate on the back. That was going to create some competition the orthopedic surgeons who also operated on the back. We had to have those fierce conversations with our orthopedic colleagues. [39:00] I can remember going to an orthopedic division meeting and talking about it and there were one or two people who were very much opposed to us bringing neurosurgery here. Or if we were going to bring neurosurgery here, they wanted me to guarantee that they wouldn’t do any backs and they would only operate on the brain. Well, it just doesn’t work that way. With the economics for a neurosurgeon you just couldn’t do that. I finally had to say to them, “No.” I was very transparent with them, I was very open with them, and I didn’t hide anything from them about that conversation. I can remember one orthopedic surgeon who stood up and pointed his finger at me and he said, “What you’re telling me is that having a neurosurgeon in this community is more important to the board than my personal practice?” And I paused for a minute because I had to answer it very carefully. I said, “What I’m saying to you is that we have no ill will for your practice at all. We are not making a decision to hurt your practice. We only want you to be successful. We want great things for you. What we’re saying is we also need neurosurgery in this community and what trumps the decision is this community needs neurosurgery. We will do what we need to do to make sure that neurosurgery is successful in this community.” I had to reframe the discussion to show that I’m not hurting any physicians practice. I remember going to another medical staff meeting in those early years where a physician stood up in front of 100 different physicians and over 100 people in the room. He said, “Can you guarantee us, Fred, that you will never make a decision that harms an individual physician.” And I said, “No, I can’t make that promise to you. And I won’t make that promise to you. I can promise you this: I will never make a decision that’s aimed as a deliberate move to harm you. That that will never be my motivation. I will never make a decision that, Dr. Smith, I’m going to make a decision to put you out of business. I will never, ever make that decision.” Yet all of the decisions I make are what’s in the best interest of taking care of people in this community. Those are the decisions I make. [42:00] Now if they have consequences—and some of them will and some of them did—while I feel bad about that, I’ll work to minimize them, but I can’t guarantee you. I didn’t make any promises I couldn’t keep and if I had to say no, I said no. One of the things I have always tried to do with whatever audience I was talking with, especially the medical staff, was lay all fifty-two cards on the table. I never held any cards back and I still don’t because our medical staff deserves to know the unvarnished truth. Those were the kind of conversations we had to have in those years. We had to have honest conversations. The other thing that happened in those years and especially as we got into the end of the decade, the volumes were so great. By the end of the decade, by the end of the ‘90s, we had already realized we have got to add on. We’ve got to add more beds to Mary Washington Hospital because we’re running out of space. As we grew operations became frayed. Again, this is what I mean when I talk about it just felt like all we were doing was running just to keep up. Operations—especially 2001, 2002, and 2003, before we opened the addition—to be honest with you, there were rough edges in terms of just day-to-day operations. Those created tensions with the medical staff as well. I love working with this medical community. This is one of the finest medical communities I have ever had the privilege of working with in my whole career. I dare say, there’s not a community like it anywhere in this country. It rivals academic medical centers. Yet it’s not a tiptoe through the tulips. There are economic issues involved, there are personalities involved, and there are behavioral issues involved. We are a little community in our own right and we’re not immune from any of the issues faced any other community. So yes, there were issues at the time, but it was always through the lens of open, honest discussion and open, honest debate, anchored always with what’s in the best interest of the community.

02-00:44:40
Rigelhaupt:
Staying with that theme, anchoring in the community, but you also just mentioned the importance of transparency. But also in reviewing our first interview, you talked quite a bit about coming in and bringing ideas around negotiation and compromise. [45:00] How do you implement that in an organization in the same way that you described? You know, running to keep up, scale that up so that that kind of emphasis around negotiation, compromise, transparency, scales up with the rest of the organization?

02-00:45:23
Rankin:
That’s a tough question. When you engage in transparency and you engage in compromise that takes time. The easiest way to make decisions is autocratic. You don’t always get the buy-in, but it is the fastest. I guess what I had to do was balance. There were times I had to make quick decisions and I made those quick decisions. There were times that I had to make sure that I took the time to make sure that the dialogue process was appropriate. And my track record is probably pretty good. I mean, it’s certainly well north of fifty percent. I made some mistakes. There were probably decisions I made quickly and autocratically that probably in retrospect deserved more conversations. On the converse, there were probably decisions that needed to be made quicker that I spent too much time in dialogue process. For the most part it has worked. You know, every decision you make as a leader has detractors. I don’t think I have ever made a decision where I’ve had absolute, unanimous support. There’s always been a group somewhere in the organization has been opposed. That just goes with leadership. At the end of the day, I guess what I learned—and I had to learn this the hard way—is that no decision is also a decision in its own right. By not making a decision, you are, in effect, making a decision. I guess I learned the hard way and I learned just from experience. [48:00] You’re better off with whatever decision you’re going to make, to make that decision, be transparent about it, make sure that the process is in place, and don’t hide behind “Well, we’ll study this” as a way of delay. I think that’s dangerous because then your medical community and then people in the community could distrust you—I mean and I think that is more dangerous than making a controversial decision. I guess what I’ve learned, and some of it I’ve learned the hard way, is that they pay me to make decisions. As the leader of the company, I have to make hard decisions. Most of the time, I’m not going to have unanimity. I’m going to have to make sure that I understand all the issues, that I give everybody an opportunity to have their say and to make sure that their opinions are heard, and at the end of the day a decision has to be made. I can remember, in my own management team, one of the more difficult decisions was around smoking. We went round and round for months of whether we should be a smoke-free campus. There were passions on both sides of that debate and there were cogent arguments on both sides of that debate. At the end of the day, I remember a colleague of mine at the management table saying, “Fred, nobody’s going to change their mind. We’ve been talking about this for six months. We know what people’s positions are. Fred, you’re going to have to make the decision for the organization. My pledge to you is whatever decision you make, I’ll personally support it. Whether I agree with it or not, I’ll personally support it.” You make the decisions based on the best available information you have and then you support it as a management team. I remember a board member, one of the finest board members, and I learned a lot from him about governance. At a board meeting, he would vocally state his position on a topic. Sometimes it was the majority and sometimes he was the minority. He had the courage and the presence to speak his mind, whatever it was. If he voted against a resolution, he would make sure that everybody knew he voted against that resolution. He wasn’t the least bit intimidated by being in the minority. At the end of the day, after the vote was taken, he’d be the first board member to support the decision the board had made. That’s governance. That’s leadership. Having your say and moving forward, but at the end of the day coming together. [51:00] That’s what makes this board the anchor and the rock: at the end of the day it is about what’s in the best interest of this community. They never, ever have lost sight of that. It has been the one anchor and the one constant in a sea of change.

02-00:51:27
Rigelhaupt:
For the record, would you be all right saying who that board member was?

02-00:51:31
Rankin:
Sure. It was Charles McDaniel. And he taught me a lot about what it means to be an effective board member.

02-00:51:48
Rigelhaupt:
You mentioned, or you were talking about, leading the company. Could you talk a little bit about the transition, about going from President of Mary Washington Hospital to President of MediCorp?

02-00:52:09
Rankin:
Yes. That was a pretty seamless transition. I don’t remember it being all that sudden and all that different. You know, when I came in I’m not sure I appreciated it at the time. When I came here I was the President of Mary Washington Hospital, but in reality, I was responsible just for Mary Washington Hospital. At the same time, at that point in time, Mary Washington Hospital was the flagship. Mary Washington Hospital really was running MediCorp—I mean, it was the organization. Everything else paled in comparison. But also, and I may have talked about this in my first interview, and I didn’t totally appreciate it, I also was brought in because of some relationship issues. I was to heal relationships with the medical staff and establish relationships with the community. I was given a lot of authority almost from day one and a lot of independence from day one by the board to really develop my own style and run Mary Washington Hospital in the way that I thought it should be run. Now mind you, I had never been a CEO before and I was learning too. I valued the fact that I had someone else who was running the rest of the company when Bill Jacobs was here. But Bill stayed out of my way. [54:00] Bill gave me broad parameters and then really let me be my own person and let me develop my own leadership style. He did not micromanage me at all, and I’m very grateful for him for that. I do remember when Bill resigned, and it became apparent that there was going to be a new CEO. There actually was a different plan other than me being the CEO. The plan was that Mr. Hearn was to be the CEO. He was sixty-four at the time. He had made it very clear he wanted to retire at age sixty-five. The plan was that Mr. Hearn would become the CEO, I would be his number two person, and Mr. Hearn would groom me and work me with the board. When Mr. Hearn retired I then would become the CEO. That was the plan that Mr. Jacobs wanted to put in place. The thought being I had only been here a year, year and a half, two years at the most. I really was just hitting my stride and I needed a couple more years to really get Mary Washington to where it needed to be. I think there was this recognition that I was the heir-apparent, but I wasn’t ready quite yet to be the heir-apparent or to be in the job. It was an awkward time for me, because there was part of me in my own self-searching to say, “You know what? I probably am not ready to be the CEO. I probably could use another year or two of seasoning, if you will. On the other hand, opportunities, only present themselves every so often. Opportunities in life don’t always go by your timeframe.” I’m kind of in this awkward position, but I was a loyal soldier. I bought into the model. I can’t tell you what happened behind closed doors because I wasn’t there. I’ve heard stories about what happened behind closed doors. I was asked into the board meeting at one point and I was asked to give my vision for the future and for the company. So I gave them my vision for the company. [57:00] I shared with them where I saw the company going and what I wanted to do because they asked me. Then they excused me and then a day or two later I was brought back to the board. I remember Mr. Williams at the time saying, “Fred, we have good news and bad news. The good news is we love your vision and we believe it is the right vision for the organization. The bad news is we reject your plan that Mr. Hearn should be CEO. We think you should be the CEO right now.” He kind of said it tongue-in-cheek. I was obviously very gratified. I was surprised and gratified. Let me be real clear about Pete Hearn in this. Pete Hearn died a year or two later. Pete Hearn instantaneously became my fiercest ally. Pete never ever harbored any ill will to me or to the board’s decision and I really do think that speaks to the character of the man. To the day he died, he did everything in his power to make sure I was successful. I never, never once, had to look behind my shoulder. Within a nanosecond of the board’s decision, he became my fiercest and most trusted ally to the day he died. There were dynamics. I was young and I had never been the CEO of a corporation before. It was April of 1995, I was forty-three years old, and I was becoming the CEO of a community health system. I had a big learning curve. I still am technically the President of Mary Washington Hospital. I still keep that title today. For a while, I actually ran Mary Washington. I came to understand that the job of being the CEO of MediCorp really was very different than being the CEO of Mary Washington. That’s when I began to build my leadership team. That’s when I brought Walt Kiwall in. Walt Kiwall was the first hire I made. Actually, I hired Walt as Vice President of Human Resources in the fall of 1992, when I arrived. [01:00:00] I promoted Walt in the summer of 1995 to Chief Operating Officer and that’s when he took responsibility for the day-to-day running of Mary Washington Hospital. I probably could today, but back then, I couldn’t give up the presidency of Mary Washington because the board still had unease about giving up the presidency to a different person. The medical staff wanted it to be one and the same person. The truth of the matter is, as I got into the late-‘90s, I had to give up because of my responsibilities for strategic planning for the whole corporation. I really had to allow Walt and his team to run the day-to-day. I had to start adjusting my own day-to-day activities. I wasn’t involved in every operation decision at Mary Washington. I had to give that part up. [End of Interview]

Interview 3 – July 18, 2013
03-00:00:00
Rigelhaupt:
Okay. It’s July 18, 2013. I’m doing interview number three with Fred Rankin the III and I would like to pick up where I had hoped we’d get to the last interview with what I wanted to talk about. And to begin, if you could talk about the origin of the Community Benefit Fund. And I believe it was probably called the Community Service Fund—

03-00:00:25
Rankin:
Fund then, yes.

03-00:00:26
Rigelhaupt
—when it first emerged.

03-00:00:28
Rankin:
Yes. It’s an interesting story and it’s tied in with the dynamics of the times. If you can press the rewind button and go back to the 1993-94 timeframe. I can’t remember exactly, but it was in the 1993 to 1994 timeframe. President Clinton was elected in 1992, in the fall of 1992, and he took office in January of 1993. Shortly thereafter, one of his signature platforms was to introduce some universal health insurance type of legislation. And if you remember, with great fanfare there was a speech to the country. I don’t remember whether it was a state of the union speech. He held up the now infamous green card. That his vision: everybody would have one of these. He appointed his wife, Hillary Clinton, to chair a kind of blue ribbon panel to really prepare a program, or identify, or craft a program. If you also remember, it was done kind of under the veil of secrecy. Many of those meetings were held in private. There was a lot of speculation in the press about what this program was going to look like. Because it was done in private, a lot of rumors prevailed. One of the rumors—one of the many which subsequently proved to be unfounded, but it was a rumor nonetheless—was that one of the options that the administration was considering was putting a price freeze on all health care costs, a la President Nixon of the 1970s. That caused us at Mary Washington some angst. [03:00] It caused some angst because we were just going into a new building and our long-range financial projection of that brand new facility, over a period of time, had some normal rate increases built into the assumption model. To create a freeze on hospital pricing had the potential, at the time, of creating some financial stress. The administration and the Board did something that up until time had never done before. It considered a midyear price increase. Normally our price increases were concomitant with our budget year or our fiscal year. Back then our fiscal year was a July 1/June 30 fiscal year. We were midyear into that process. The Board considered doing a midyear price increase, to be honest with you, to hedge our bets because no one really knew what was going to come out. The board was also concerned about public image of the new hospital opening. As I think we talked about before, there was some community controversy and there was some minority opposition to the building of the new hospital at that time. A lot of the opposition questioned, can Fredericksburg afford this brand new hospital? The fact that there would be a midyear price increase, from a public relations perspective, caused the board was some concern. Okay. I got that and I understand that. Basically what I proposed was that in fact this would be unbudgeted money and that the price increase was not in our original budget—I won’t say a windfall, but it will be money that is unplanned. What we did was we told the board that we would put that incremental increase aside. We would set aside that money into a fund and we would use that fund for community service or community benefit. We estimated that amount, and it was an estimate to be somewhere between 800,000 and a million dollars or somewhere in that range. [06:00] The thought being is that if the price freeze happens we have hedged our bet, but if it doesn’t happen then we will use that money for the benefit of the community. Now, that’s how it started. You got to put the context of the times into the origin and how the original funding occurred. It was my idea. It was something I always wanted to do. Mr. Wilson was the chairman of the board at the time and he was very much in favor of creating some sort of community service fund. What we ultimately did after that first year and every year thereafter is we basically took ten percent of our proceeds, 10 percent of our net income and we set aside into this fund. That is how the fund in the early years grew. At that time our profit margins were healthy. It was a really different time. We tithed, if you will. We used the concept of tithing. So we took ten percent of our net income every year thereafter and set it aside into a board designated Community Service Fund. So that’s the origin of the Community Service Fund. It began with an idea and I can remember the early years. We really didn’t have a process on how to distribute grants at that point in time. From time to time organizations would approach us for funding, and for things like that. In the early years it was the board of directors of Mary Washington Hospital that actually managed that fund. If requests came in, we kind of did them almost on a first come/first served type of basis. About five years into that process a couple of things happened. Fast forward to the 1998, 1999 timeframe. The campaign for the building of the new hospital, the cancer center campaign, and all the campaigns were ending— basically those five-year pledge periods were ending. The Mary Washington Foundation was looking for, what is the next project? [09:00] In fundraising you’re always looking for the next project. Or in philanthropy you’re always looking for the next fundraising project. We had a board meeting of the foundation to discuss what the next campaign ought to be. I can remember we were asked as a management team to bring ideas and to bring ideas forward. We had ideas. Some of it was bricks and mortar and some of it was programs. I can remember what we ultimately agreed on. I can remember one board member; it was actually Mr. Fick at the time who was on the foundation board at the time. He was not on the Mary Washington board. He was on the foundation board. Mr. Fick got up and said, “You know, we really at this stage of the game, we’ve just completed a major hospital expansion. Now is not really the time to invest in bricks and mortar for the organization.” So instead what we did do is say, “You know what? We’ve got this Community Service Fund. It’s five years old. It’s probably got three or four million dollars. Why don’t we expand? Why don’t we go out on a fundraising campaign to build this community service fund?” We took what I consider to be a bold, unorthodox, and clearly groundbreaking at the time for a not-for-profit hospital’s initiative to say, “We’re going to formalize this fund. We’re going to create this Community Service Fund. We’re going to go out and we’re going to raise community money to augment this Community Services Fund.” That posed a challenge because up until this point it was all internal funds. It was designation of money that was in the hospital’s treasury, if you will, and put it into a board-designated fund. Once we go out and seek external donations for a fund like that, we had to make sure that it met all the proper tax requirements. If somebody donated, they could get the proper tax credit and charitable deduction. In realizing we had to do that, we moved the fund from the hospital to the foundation and set up a formal fund in the foundation, which was set up to provide and manage external donations and philanthropy monies. [12:00] By then we had gotten enough experience under our belt that we actually created an actual grants committee. The evolution started with the seed and the idea of we need to put our money where our mouth is. We need to put our money in. So it started with a threat, an external threat of the potential of a price freeze, or a nationwide price freeze on all hospital and health care pricing. Then the board’s commitment to say, “If this doesn’t come to pass, we will use this kind of excess money for the benefit of the community.” From that point forward the board’s decision to tithe, to grow the money, evolve into a community fund—and today that fund now sits somewhere in the twenty million dollars, the principal of that fund. Probably given how the money grows from a growth perspective, anywhere from 750,000 to a million dollars a year is given away in grants back to the community as a way to link the core mission of the organization and the core competency of the organization. That’s how it started. Now it’s part of the fabric of who we are. We are so linked to the community that part of being a good corporate neighbor is investing in the community in tangible ways. It kind of starts with an event or an external threat, but grows. It’s the seed of an idea that had been percolating for a while. That’s kind of how it started. I know Mr. Wilson talks about the windfall. In many respects it was a Medicare windfall. But it was a calculated windfall because of a threat that the organization saw. That’s kind of how it started. To this day, it still is one of the things I’m the most proud of. We haven’t talked a lot about Baldrige in these interviews, but our management philosophy that we use is built upon the Malcolm Baldrige Quality Criteria. [15:00] It is a universal set of criteria that we have adopted as a management philosophy. One of the things Baldrige asks all organizations to do is identify your organization core competency or competencies. Baldrige defines core competency as what is it in your organization that differentiates you from all other competitors and that it is your core grounding. That would be very hard for competitors to duplicate. It’s kind of the core competency that you have as an organization that you’re willing to go to the mat for and no matter all else that stays. It is kind of your true north, if you will. It’s your core competitive advantage in that your competitors would have a very hard replicating—not impossible, but would have a very hard time coming at you. Every organization has a core competency or competencies. In our Baldrige journey we were asked to identify what we thought our core competency was. For us, our core competency is our link to the community and the benefit we provide to the community. Now, we talk about that in the moniker of “Here For You, Always.” That’s the phrase we use. But when we talk about community benefit, we talk about how community benefit means many things. It means the Community Service Fund and our ability to support the community. It means the breadth and depth of our services: we have such a breadth and depth of services that we offer the community, that that would be hard to duplicate. It means location. The footprint of our organization now is broad. It is not just the Snowden campus. It’s the Stafford campus. It’s the Lee’s Hill campus. It’s our primary care clinics. It’s our physician offices. They are spread out all across this community. For us our core competency is, in fact, our community benefit. [18:00] Community benefit includes the Community Service Fund, or now what we call the Community Benefit Fund. It includes the charity care policies and the financial assistance policy. It includes the scope of services we offer. It includes the footprint. We exist to serve this community first, last, and always. We believe that is our core competency and we believe that is core to who we are. It drives every decision we make. We think it’s a competitive advantage, in all honesty. Now, you could take those questions and go in 30,000 different directions.

03-00:18:48
Rigelhaupt:
Indeed. Let me try and piece this together. There’s a way in which you’re right, that this is a differentiation. That hospitals, particularly non-profit community hospitals, have a long history of community—

03-00:19:06
Rankin:
Yes, they do.

03-00:19:07
Rigelhaupt:
—charity, care.

03-00:19:08
Rankin:
Yes, they do.

03-00:19:09
Rigelhaupt:
That’s been core for the twentieth century.

03-00:19:11
Rankin:
Yes.

03-00:19:12
Rigelhaupt:
And yet this is something different. This is not we’re going to reinvest net proceeds in terms of charity care, in terms of unreimbursed Medicare and Medicaid costs that don’t come back. This is about granting to the community in terms—

03-00:19:31
Rankin:
Yes, it is. That is unique. We believe it was groundbreaking at the time. We still believe it is groundbreaking, although there are other examples out there now that other not-for-profit hospitals are in fact doing it. And, in fact, a variation of the model has actually been adopted by the for-profit industry when they purchase not-for-profit hospitals. Many times, when a for-profit acquires a not-for-profit they will take whatever the acquisition cost or the proceeds of that and they will set it aside into a community foundation to allow that community foundation to use those monies in any way that they see fit. But you’re right. When this was formed in the mid- to late-1990s it really was groundbreaking. There was no model. There was nowhere we could turn to look for a model. We were the model at that time. We were making it up as we went along because there was no other example that we could find at the time from a not-for-profit organization or tax-exempt hospital. [21:00] I think not-for-profit hospitals and the relationships they have with their communities’ borders on a sacred relationship. If you look across this country, if you look across Virginia, or if you look across other cities in the country, every successful community and every successful town or city has at least one not-for-profit hospital as part of its fabric. The linkage, of community linkage, between the not-for-profit hospital and the communities they serve is long and storied. But you’re right: this is taking it a step further and reinvesting tangible assets back into the community. Now, I will tell you it is not without controversy. There have been people—thoughtful people, respected people in this community—who have said to me, “Well, instead of granting or giving money back, why don’t you just lower your charges? Why don’t you just not do that and take that money and lower your charges?” It’s a legitimate argument. It’s a legitimate view of the world. I choose to believe that that’s a narrow way to look at our mission. That just providing the lowest cost—while low cost health care needs to be done, to be sure—just having that as a singular mission is too narrow. I believe, and I believe the board believes, that the ability to invest and to leverage other agencies who also are working to improve the health of the community actually has a multiplier effect. I can’t prove that. It’s a belief. It’s a belief and a value system. I must admit that the Community Service Fund, then and even today, is not without detractors who really do believe that we would be better off—because we are a charitable organization in our own right—not being a grantor organization and that we would be better off just running the organization at the lowest possible cost. [24:00] Enough said about that. It’s a different view of the world. We believe that our investment back in the community—first of all, it is community funds. In many respects, it’s giving back in a different way. But we think it’s leveraging. We think it’s leveraging and creates a multiplier effect in terms of community health and community benefit. That’s why we do it. We do it with grateful hearts. I guess what got us thinking along this line was Mr. Wilson and I had an opportunity to hear a nationally known speaker at a health care conference back in the early ‘90s. We heard a man by the name of Leland Kaiser. He advocated this type of community involvement between hospitals and their communities. He very much was one of the pioneers of community reinvestment or reinvestment of health care dollars back in the community. Both Mr. Wilson and I heard him at a conference and I guess we both drank his Kool-Aid, so to speak. We both believed in it. We had an opportunity to bring Mr. Kaiser to our region. Culpepper Hospital brought him in and we shared the expense of bringing him to this region. One of the things he talked about when he talked to our collective boards, both at Culpepper and here, was kind of you can tell where the real values of your organization or of any organization are by opening their checkbook and understanding where they invest their money or how they invest their money. That’s probably true for individuals, too. By looking at one’s checkbook you can find what’s the value system of the individual. [27:00] For Kaiser, he said what’s the value system of your company? Really, it was the concept of that that laid the seeds of what is today a very robust community benefit strategy for the company. Now, I’m really proud of our community benefit strategy that has matured over that fifteen-year period to the point that today it’s a role model. It is formalized. Community benefit for us is a very formalized process. It’s a role model. We have organizations from all over the country and hospitals from all over the country, that come to us to look to see how we’ve organized our community benefit. Now, I think one has to be careful. One can go overboard. One has to stay true to the mission. As an example, and I’ll give you a very concrete example of an issue the board had to grapple with in the late-1990s and early-2000s around community benefit. I’ll give an absurd example. There was a hospital in a northwest Pennsylvania town years ago that invested in a yacht club as a way to rehabilitate the downtown area. That probably is getting pretty far afoot from the core mission of health care. Maybe it was a very appropriate project. Maybe it was, but it’s starting to get pretty far away from improving the health of the community. We are very careful. We don’t fund projects that we can’t either see a tangible tie of some sort of community health benefit. I’ll give you a very concrete example that our board grappled with. You may remember—and I don’t remember the exact timeframe, it’s at least ten years ago—when the Thurman Brisben Homeless Shelter was looking for a home. It had to move because of some development that was going on on its original site. The mayor at the time, who was Mayor Beck, came to the hospital and asked the hospital to consider housing the Thurman Brisben Homeless Shelter. The hospital was asked about donating land to house the Thurman Brisben Homeless Shelter. When the mayor asks you to do something, you don’t dismiss it outright. [30:00] Our board has always strived to have cooperative relationships with the city government in all the local municipalities that we serve, but especially Fredericksburg because we are housed right here in Fredericksburg. Our board took that as a serious request and didn’t dismiss it outright. The board appointed a committee to evaluate the pros and cons of, should we donate a parcel of land on the hospital campus to house the homeless shelter? That took about six months to evaluate and at the end of the day the board made a decision not do that. The decision at the time was that the homeless shelter, while an important community issue, did not match with the core purpose of Mary Washington Healthcare of improving the health of the people who live in our community. We rejected the city’s request to place the homeless shelter on our campus and at the same time said what our mission is: to provide health care services to the homeless. So what birthed from that conversation was the commitment to donating land to the Moss Clinic and to work with the Moss Clinic board to build a permanent free clinic that would be housed on our campus. We didn’t just say no. We said no to the immediate request, yet we said what our mission is is health care. From that conversation birthed the idea of building a freestanding free clinic for this community that is housed on our campus. That was not without controversy, as well. These are not linear conversations. These are difficult conversations. That decision at the board was not a unanimous decision. [33:00] It was by far a thoughtful decision, but there were a few people on the board who really did believe that we should build the Moss Free Clinic on the campus. And I think it was their influence that helped the board say, “Okay, what is our mission then?” We identified that it is taking care of the health care needs of the homeless and we thought the best way to be able to do that was to find a permanent home and to make sure that the Moss Free Clinic had a permanent home, which we did. Out of that and after we donated land, came the next capital campaign to raise money for the Moss Free Clinic. One of the other very unique things when you talk about the Community Benefit Fund being unique—and I believe it is unique—is that we went through two capital campaigns in this community that benefited the community and not bricks and mortar at Mary Washington Healthcare. That is highly unusual in health care fundraising and I’m also very proud of that. When you look at what this community has today because of the vision of the board and it’s total and complete commitment to this community, we have a community service fund that helps other organizations leverage health care services. We also have an endowment fund for a free clinic so that we can guarantee in perpetuity that no matter what happens to Mary Washington Hospital or no matter what happens to the economics of health care, there is an endowment fund. There is a $10 million endowment fund that sits in the foundation that first of all funded the building of the building and second of all is an operating endowment fund to help defray the expenses of the running of the Moss Clinic. That is unique and it’s something that I’m enormously proud of and this community should be enormously proud of. From an idea, the germ of an idea, it has really blossomed into a very formal program today.

03-00:35:35
Rigelhaupt:
I think that leads well into what will be a long question, which I try not to ask. But it’s a big—

03-00:35:43
Rankin:
Well, I’m wordy, too.

03-00:35:45
Rigelhaupt:
It’s a big picture question. I was going to get to the Moss Clinic and I think—

03-00:35:52
Rankin:
And we can come back and revisit the Moss Clinic if you want because that is a show of how we worked with the medical community to make a difference in this community. [36:00]

03-00:36:04
Rigelhaupt:
And that’s part of what I definitely want to document. So in a big picture, as acute care centers, hospitals, generally speaking, have not made public health a top priority.

03-00:36:17
Rankin:
That is correct.

03-00:36:18
Rigelhaupt:
In addition, I think hospitals, highly advanced, highly technical, as acute care centers, have not been the ideal place to treat chronic conditions. In terms of obesity, diabetes, cardiovascular disease, tobacco, substance abuse, it’s not that treating the symptoms of those hospitals aren’t exceptionally skilled at but they’re an expensive place to treat chronic conditions. And the Community Benefit Fund runs contrary to these long-term trends of hospitals not prioritizing public health and primary care and treating chronic conditions. And I’m wondering if you can talk about the ways in which conversations, people you worked with—were you constantly aware of the fact that you were going against long-term trends?

03-00:37:12
Rankin:
That’s a fair observation and you’re right. The answer is complex and multi-varied. You’re right. Hospitals traditionally have not focused on what I’ll kind of umbrella say chronic care issues or preventative care issues. They are expensive because they are high tech centers, as is Mary Washington Hospital. There are many reasons for that. Underpinning much of the reason, unfortunately, is the economic incentive and the way we pay for health care in this country. Like it or not, all organizations, no matter how—what’s the word—values driven they are and no matter how motivated they are to serve the greater good, still have to operate in the external economic climate. Unfortunately, health care, for whatever reason—and there are a thousand reasons—grew up to not reward chronic care or not reward preventative/primary care. [39:00] The rewards are tiered or they are geared—skewed, that’s the word I’m looking for—skewed toward the high tech acute care world. There’s no incentive, there’s no economic incentive to invest. Nobody pays. Even today nobody pays, or very few people pay for preventative care. Very few people pay for chronic care. The economic incentives are not in place. In order to survive as an economic entity, hospitals have had to become the acute care sick care centers. That’s not to say that hospital administrators don’t understand the importance and don’t value the importance of primary care. You have to understand the milieu of the economic incentives that are in place and how health care is reimbursed in this country. It’s a huge societal problem that we still haven’t seriously tackled and had a conversation about in this country yet. We give lip service to it, but we truly haven’t. One key factor is the economic incentive environment, which all hospitals live in. The other for me is kind of my personal values. When I made the decision to go into health care, I made a conscious decision to get a public health advanced degree. I did not get an MBA. I did not get an MHA degree, a master of hospital administration or a master of business administration. I got a master’s of public health. That was a conscious decision on my part. I got into MHA programs. I chose a master’s of public health because it was who I was I believed in the concept of public health. I took all the MBA courses and I took all the MHA courses. My program had them all and I had elective opportunities. If I had gone the other way, I would not have had the opportunity to get the training in public health that I got. I come to this table with a bias and it is the public health bias, which not everybody has. [42:00] That’s not to say that I’m different because other people that have MPH’s have the same bias. It is the bias that I come with. I had to be creative. I had to find a way to have a public health strategy while at the same time living in a world that rewarded acute care and sick care. I believe I’ve tried to do that and my board has tried to do that because they believe so strongly in the mission of Mary Washington Healthcare. We have had to be creative over the years in dealing with public health issues and creating public health opportunities in an external environment that doesn’t provide economic rewards. I will say to you that over the years our investment in public health has probably hurt us financially. Our profit margins have never been what they could have been. They’ve been healthy. Up until the last year or two we have always been a successful organization. We have sacrificed deliberately and we have sacrificed some percentage of profit to invest in public health because we believed it was the right thing to do. Another story I’ll tell you. I don’t mean to make myself a holier than thou, but it does drive my decision-making. It really comes from my days when I was on the church session of my church in Pittsburgh. There was an elderly gentleman who has since dead who basically said to me not-for-profit organizations, no matter what they are, whether they’re churches or hospitals, have to be willing—not that they’ll do it—but have to be willing to go out of business carrying out their mission. I got to think about that because that’s a pretty profound statement. For us, we don’t want to be silly and we have to be astute businessmen and women in this world. [45:00] The board, without being financially responsible, would be not doing its duty, but there is a mindset that community benefit is important. We have over the years been willing to take a percentage point or two less profit margin in the name of preventative health, public health, and community benefit. It is core to our fabric and I am so proud of this board. There has never been a time, even in the time of the last year or two when our financial situations have been far tighter than they were ten years ago. They have never taken off their eye off community benefit. The board has said, “We’re still going to invest in the Moss Clinic. We’re still going to invest in the Community Service Fund. We’re still going to leave that money alone.” The board could—it would be harder to do now because there’s community money in there—but the board could take the board designated funds back into operations if they wanted to. They choose not to. This whole link is part of our fabric. Once again, I believe it defines us who we are, who we’ve always been, and it is this link and tie to the community. Now, I think the whole health care industry is grappling with this very problem that you’ve described. While the Affordable Care Act, in my opinion, was an important step for this country to take, it really doesn’t address the issue of public health. It doesn’t address the issue of the care of chronic diseases. There are still an enormous number of unanswered issues that this country still has to debate if we’re really going to get our health care costs under control in a meaningful way. Even today, with all the changes that are going on: accountable care organizations, clinically integrated networks, and all the things we’re doing to gear up for designing our health care system of the future in partnership with our medical community. Even today there’s still no incentive for chronic care or preventative care. [48:00] The payment system, still today, rewards acute care. It is a huge problem for us, but it’s one that our board talks about a lot. Over my career, I’ve been blessed to meet many, many hospital administrators across this country and every single one of them, to varying degrees, care very deeply about community benefits. Some implement it in different ways, but every single one of them understands this tension that exists. I don’t know whether I really answered your question or not. But it’s an issue. It’s one that we deliberately made a decision to at least invest some money into public health issues. One of the big grants that we gave out of the community service fund several years ago was for the community health organization in the health department to put a dental clinic together, a dental clinic for the uninsured. Dental care for the uninsured is non-existent. It’s why when you go over to the Moss Clinic today you see a dental clinic there. We do understand the need and it is part of our fabric.

03-00:49:36
Rigelhaupt:
So is the Moss Free Clinic then an example of the culture that’s fostered by the Community Benefit Fund and the commitment to community benefit?

03-00:49:49
Rankin:
Yes. It may be the poster child. The beginning of the Moss Clinic is an interesting story in its own right. The Moss Free Clinic started as a joint venture between the medical staff and the hospital. Now, I have to rewind you again because everything is a product of the times. If you remember from some of our earlier conversations, I told you when I came here in the early-1990s the relationship between the hospital and the medical community was not the greatest in the world. There were independent meetings going on with the medical community about how to stand up a free clinic at the time. I will tell you, in those early years, we were not part of those conversations. It really was pretty independent. [51:00] We did offer to provide some resources to the medical staff, the organizing group of men and women who were trying to stand up a free clinic at the time. Those resources were taken and were gratefully received. I believe the opportunity for the hospital in those early years to work in a collaborative way with the medical staff helped build those early bridges of trust and cooperation that, in many respects, were part of the healing process. I never really thought about that until just now, but I really do believe it helped because it was a project that we could work on together, it was apolitical, and everybody could agree on that there was a need. However, there still was distrust. There still was this modicum of distrust of the health system. From the get-go, the medical community was very clear that they did not want the free clinic to be operated by the hospital or to be owned and operated by the hospital. They wanted it to stand alone as an independent clinic. We were okay with that. Sometimes you have to make yourself vulnerable to move things forward. Even to this day, the organizational structure of the Moss Clinic is such that it is an independent organization. It has no legal linkages to Mary Washington Healthcare today. Although twenty years later now, or fifteen years later, with the Moss Clinic clearly there is a symbiotic relationship. I’m not sure that the Moss Clinic could survive without the support of Mary Washington Healthcare, or at least it would be much more difficult because we are the major funder and we do that with grateful hearts. We do that. In the early years it was a way for the medical community and the health care organization to work on a project together. I think it helped tie some seeds of trust with the medical staff and it changed, I believe, some of the die-hard critics. When Dr. Moss started out, he was the head of the organizing committee; Jeppy Moss was the head of the organizing committee at that time. [54:00] He was honored later on with the naming of the clinic after him because he really was the driving force in the medical community for getting a free clinic started here. I know his view of Mary Washington Healthcare changed in the time period that we worked together on this project. He started out as being very critical of the health system. He ended up being a significant supporter of the health system and I believe that cooperative relationship of working together for a community benefit helped thaw those preconceived ideas about Mary Washington. I believe that there were parts of the medical staff and parts of the community who believed that MediCorp, the parent company, really was just a money making venture or only in the business to maximize profits. That is patently untrue, but I believe there was a perception that was held by more than a few people in the community. I think if you go back and look at the actions that the old MediCorp took and now Mary Washington Healthcare takes, you can find that the decisions that were made were done either in the benefit of the company to make sure that the company could carry out its mission and in the benefit of the community in general. Then later on, it was getting involved in what can be done in terms of improving the health. I believe even things like the Moss Clinic get stale. About a year ago we funded on behalf of the Moss Clinic—it was time to refresh the strategic plan for the Moss Clinic because the delivery model of free clinics had changed over a twenty-year period and we had to come up to speed. The board of the Moss Clinic today is reinventing itself and reinventing its delivery model today to be more mindful of the modern preventative practice of medicine. Now, we also have other examples of preventative care that the Community Service Fund has supported over the years. We have the Fredericksburg Christian Clinic that an individual physician founded. We have the Community Health Center that’s in this community now, which the Community Health Benefit Fund helped found. [57:00] I do believe now we have a safety network that the Community Benefit Fund has helped create. Micah Ministries serves the homeless. They have a respite house. They made the case two years ago. They did an analysis of people who were being admitted to the hospital and then being discharged from the hospital. If you were discharged back on the street then your rate of readmission to the hospital was higher than if they could go someplace else for a couple of days or a couple of weeks to continue the convalescence. They made that case to the Community Service Fund and so we invested a considerable amount of money in Micah’s respite house. We can prove that we’ve lowered the readmission rate for that population of people. Out of the Moss Clinic have come other programs, such as the Christian Clinic, the Community Health Center, and the Micah’s Respite Center, The Harbor House. That’s a hospice house and houses the HIV/AIDS community. All of those had their beginnings through a grant or a series of grants from the Community Service Fund. Today what you see in Fredericksburg is a safety net that has been built up with support from the Moss Clinic. From a business perspective, we at Mary Washington are not economically responsible for it. I believe we’ve proven we can leverage the monies that have been invested, which the critics do argue are health care monies and they are. Those have been leveraged to help the community at large from a public health initiative. There is more to do, much more to do. Has the problem been solved? Absolutely not. But I do believe what we’ve created over that fifteen-year period, or we’ve helped be the catalyst to create, is now a pretty robust safety net that didn’t exist in this community before. I’m pretty proud of that.

03-00:59:53
Rigelhaupt:
And I wonder if the Moss Free Clinic is also an example of more than a safety net. [01:00:00] You mentioned accountable care organizations and the way those are being pushed, clinically integrated medicine and the way those have been pushed. Was the connection between a free clinic on the campus, once that was built, an example of a very twenty-first century forward looking model of clinically integrated medicine? That you would have the connections between an acute care center and the technology at a hospital and a primary care center?

03-01:00:38
Rankin:
Yes. I think if you look at it through that lens, the answer to that question is yes, that is indeed true. That what we’ve created is truly an integrated system. Did we think about that at the time? I would like to say yes, but I don’t think we did. I don’t think we were that visionary to understand that’s what we were doing. Although I have always felt, and I still feel to this day, that if any community had the natural resources to build a truly integrated clinical network of care that spanned the full horizon of health care from preventative care to primary care to specialty care to acute care to post-acute care, it is this community. Why is that? I believe that the natural resources are in place. The first natural resource is a large successful healthy health system. As I said before, it’s anchored by a health system that’s a dominant health system. It also has a medical community. Going back to some of my earlier comments, it has a homogenous medical community. Now, I don’t mean homogenous in the sense that we all look alike and we all behave the same, but homogenous in the sense that we don’t have splitting in the medical community. Our medical community grew up such that the vast majority of physicians chose Fredericksburg as a place to live and chose Fredericksburg as a place to primarily practice medicine. So many small communities like Fredericksburg don’t have that luxury. [01:03:00] They have many doctors who their primary office in the big city, whether it be Richmond or Washington, and they have a satellite office where they’re here one or two days a week in Fredericksburg. That is not the case in this medical community. This medical community has grown up to the point where the physicians in this medical community call the Fredericksburg region their home and the Fredericksburg region is where they practice their trade and they don’t practice their trade anyplace else. You have got the ingredients to truly put a clinically integrated network together and that’s the future in my opinion of where Mary Washington is going—and the subject of what is the future is probably for another day. I’ve always felt and I saw it when I came in 1992 and I have never doubted the ability of this community if it wants to and has the will and the courage and the desire, this community has the ability to put a truly integrated program together that encompasses the whole gamut. I never really thought of it before. The safety net is part of that. What we have built over a twenty-year period is the safety net portion of it. You’ve got the safety net. You’ve got the acute care setting. You’ve got the physicians. Now the challenge will be to put all the pieces together. I believe this community has the ability and the wherewithal to pull that off and that excites me. If we could do that and if we could actually accomplish that, we would achieve the mission of caring for the health of the people in this community. Now, would we solve every single need? Would there still be access problems? Absolutely. But we would have a system and a network to do that and I believe we are very, very close to actually accomplishing that task. It is exciting. It’s why, in my opinion, health care needs to be controlled and decision making around health care needs to be controlled locally. The people in the community, at the end of the day, know best on how to organize their resources. [01:06:00] It is about organizing the resources. The period of the 1990s and the first decade of the twenty-first century was a period where we had a lot of resources. We don’t have the same kind of resources today. When I say we, we as a country don’t have the same kind of resources today. Medicare is a huge problem for the federal government. Medicaid is a huge problem for the state government. Our individual commercial insurance is a huge problem for businesses. The increase in co-pays and deductibles and what individuals pay is straining individual people’s wallets. We don’t have the kind of open checkbook that we had twenty-five and thirty years ago in terms of health care. I used to apologize for talking about cost control. I don’t apologize for talking about cost control anymore because I do believe it’s a national imperative and we have to find a way. I believe the pathway of finding it is integrating the various and disparate parts that we have, which you alluded to earlier. A hospital is an expensive place to get primary care. Not everybody needs to come to the hospital for everything. But we got to have a network where people can go and get plugged in and get cared for at the right level of care. I do believe the Moss Clinic helped with that and it spawned other services. While the Moss Clinic may be the poster child, it’s not the only one that exists today.

03-01:08:03
Rigelhaupt:
So the culture, it seems to me, built around the Community Benefit Fund has been able to shift attention to questions of public health, primary care, treating chronic conditions. And I’m wondering if you can think of examples in which that has influenced in some way physician practices and the medical community that are not Mary Washington Healthcare employees, that have their own practices and their own economic incentives. Because even for physicians’ practices, the economic incentives for treating chronic conditions, for really dealing with issues of public health are not always lined up for them as well. And I’m wondering if you can think of examples where you’ve seen or had a conversation with a physician that said, “I saw this and I tried this.” Or if you’ve been able to think of a connection?

03-01:08:57
Rankin:
That’s a provocative question and I have to think about that. [01:09:00] On the one hand, I can answer it kind of at a couple of different levels. At one level, I think the mere fact that our medical community still to this day is actively engaged in the Moss Clinic is an example of that. The fact that the vast majority of our medical staff, even new people who don’t know the history of the Moss Clinic, they quickly get involved at the Moss Clinic. On the one hand, the mere fact that we have doctors who volunteer their time, even if it’s one night a month. We have doctors that volunteer their time to see patients at the Moss Clinic is at one level an example of that. I think at another level, and I’ve alluded to it before, is that it spawned other physicians to form their own networks. Dr. Tim Powell is a great example with his formation of the Fredericksburg Christian Clinic. Now, I think he had a value system in his own right of how he wanted to practice medicine and what he wanted to do with his life. But I think knowing that the Community Benefit Fund was available to help him gave him the ability to take the lead. Dr. Trematozzi, a pediatrician, has formed a similar type of private practice to help those that can’t. I believe Andy Reese, Dr. Reese, had the opportunity to develop a jail practice. He has a prison ministry, if you will. It’s a practice where he provides primary care to the incarcerated. I think you can point to very concrete examples where individual physicians—I believe that every specialist in this community, whether it’s the radiologist or the pathologist or the urologist or the general surgeons, take cases from the Moss Clinic. If the doctor at the Moss Clinic sees somebody who has a kidney stone, our urologist takes that case and treats that referral from the Moss Clinic. I do believe that behavior has changed as a result of the community benefit and the safety net. [01:12:00] I think it also goes back to the docs were involved in the planning of it. I think if the hospital had done it alone and done independently, I’m not sure it would have had the same power as the partnership. I think the uniqueness of the Moss Clinic was the partnership it created between the medical community and the hospital. I’m not sure if Mary Washington had done it unilaterally, all on its own, it would have had the same power. I think the power came from the partnership. Does that make any sense?

03-01:12:53
Rigelhaupt:
Absolutely.

03-01:12:55
Rankin:
And I think that’s what makes it so unique: we provided infrastructure and resources and the docs provided expertise and they were at the table. They were at the decision making table from the get-go. I think that model is what to me has been kind of the sweet sauce that allowed it to be so successful.

03-01:13:35
Rigelhaupt:
We pushed time a little bit but can I do one more big question?

03-01:13:39
Rankin:
Absolutely, absolutely.

03-01:13:40
Rigelhaupt:
So I think this will be probably not the best big question to ask at the tail end, but I think a kind of wrap-up for the discussion of today.

03-01:13:48
Rankin:
Okay.

03-01:13:49
Rigelhaupt:
So, both in terms of what I’ve heard today and in other interviews, what’s clear is that Mary Washington Healthcare is a community center.

03-01:13:58
Rankin:
Yes.

03-01:13:58
Rigelhaupt:
There’s absolutely no missing that. It’s evident in the way people have talked about the organization’s culture, day to day practices. And yet since the 1970s and increasingly since the 1990s, Mary Washington Healthcare, and hospitals in general, particularly community based not-for-profit hospitals, interact with incredibly powerful external forces.

03-01:14:21
Rankin:
Absolutely.

03-01:14:22
Rigelhaupt:
Financial and bond markets, Center for Medicare and Medicaid Studies, insurance companies and other payers, market forces and competition, technology and rising cost. Again, I’m sorry for the long question. How, when you as an organization, have to deal with all of those powerful external forces, maintain the focus on the community and stay attuned to community needs when negotiating with such powerful actors?

03-01:14:57
Rankin:
Wow. That is a very profound question. [01:15:00] First of all, it’s a very difficult question to answer and it probably has a thousand different ways that it could be answered, but I think it always goes back to the board and it goes back to mission. The mission transcends everything. You are a hundred percent right. The pressures, the external pressures, are enormous and they are going to continue to increase. The declining reimbursement rates that everybody receives, the pressure to reduce cost, the pressure to improve quality, and the need to improve service. The CMS, as you say. The bond markets. I will tell you some of the most uncomfortable sessions for me are when I have to be interviewed by the rating agencies. They have a job to do and their job is to protect the investors who purchase the bonds. They really, at the end of the day, only care about one thing and that’s the financial performance of the organization. They quite frankly don’t care about community benefit. That’s an over dramatization, but I think you get my point. The pressures are enormous. The demands are enormous. It’s a really good question that I really never have thought of. Why can we stay focused? I guess we understand where our north star is. We have a north star. We have a true north and that true north is our mission and our core competency of “Here For You, Always.” We are the organization. There are competitors here now where twenty years ago there were no competitors. I think the competitors actually have made us better. They’ve made us sharper. They’ve forced us to up our game in ways. At the end of the day what differentiates us is our total and complete commitment to our mission of improving the health. [01:18:00] I think we stay grounded all the time and I’m proud of that. I’m proud that I’ve been able to do that. I’m proud that our board has been able to do that. We have board leaders who believe so strongly in the mission of the company. I believe it has anchored our core values. We are a values driven company. It’s our core values and our core beliefs and we don’t vary from that. We have to change our strategies. We have to adapt our tactics. We’d be foolish if we didn’t. But I think what allows us to stay focused is that we know what true north is and it’s our core competency of, “Here For You Always.” I believe at the end of the day the community believes that. I believe that despite the competition, the community turns to us in times of crisis and still does today. Today our census at Mary Washington Hospital is 353 patients. Our midnight census was 353. For July that’s an enormous number. Our board also has not shied away from making difficult decisions. We’re the dominant health care player in the community and the decisions we make are public decisions and are subject to criticism. If we choose to close down a program, that gets reported. That gets reviewed, whether it be in blogs or on Facebook or on social media or letters to the editor. In the early years it was letters to the editor. I remember every morning the first thing I would do is look at the letters to the editor. Not so much with letters to the editor anymore. Today it’s Facebook pages, the social media pages, and the blogs. We check those all the time. I’ll give you a very concrete example of a hard decision the board had to make and still was community grounded. It involved Snowden at Fredericksburg. We for many years ran a school at Snowden at Fredericksburg. The name of the school was Snowden Academy. The goal of Snowden Academy was to provide an educational opportunity for children with mental health issues that were not able to be in the mainstream classroom. In all honest that was a successful program for ten years and served a valuable purpose. [01:21:00] But let’s face it, it wasn’t health care. The requirements for schools given No Child Left Behind and SOLs got to a point that they were so onerous. For us to be certified as a school, and we had to be to run a licensed school, was getting to a point that we were going to have to invest several hundreds of thousands of dollars in resources to bring us up so that we could be certified as a school. At the same time, because of the closing of psychiatric hospitals around the state, the demands for inpatient and outpatient psychiatric care was growing. The year before we closed Snowden Academy we actually had to turn down over a hundred requests for admission to Snowden at Fredericksburg because we didn’t have any beds. The board made the difficult decision to get out of the school business and to take the money that we were going to have to invest in the school and to reconfigure the space to add mental health care facilities at Snowden at Fredericksburg. Now, that decision was a very hard decision to make and it was a controversial decision. For the families that depended on Snowden Academy, and in all honestly for the teachers who worked at Snowden Academy, that was a negative decision and it was a highly criticized decision. But we took it a step further. We went and we talked to people in the community that were also in alternative schools. We talked to the Oberle School. We talked to all three, to the City of Fredericksburg, the county of Stafford, and the County of Spotsylvania school superintendents. We talked about them and said, “Look, this is what we’re going to do. Is there any way we can help you?” Well, I will tell you, Joan McLaughlin at the Oberle School said, “You know what? I’ll step up to the plate. This is the opportunity I’ve been looking for. I think we can take your kids. Or we can take the vast majority of your kids into our program. But we need to renovate some space.” Our Community Service Fund gave the Oberle School $150,000 grant to renovate their space. [01:24:00] That’s their core business. We invested. We closed a program and reconfigured the space that the Academy housed in order to increase bed capacity at Snowden at Fredericksburg and we gave, from the Community Service Fund, a $150,000 grant to a program with a core business in alternative education. In my opinion, beyond a doubt, the community wins. We win because we close a program that’s not a core business and we redeploy those resources into psychiatric care and the community wins by us investing $150,000—peanuts in the whole scheme of things—that allows those children to still be cared for in a much more proper setting than we were doing. And to boot, most of the teachers who worked here got jobs over there. We were able to find or offer employment to every single person who was displaced. Some of them chose not to take those employment opportunities, but no one was laid off without an opportunity for another job somewhere in the system. That’s an example of trying to understand the hard decisions that have to be made in a hostile environment and still staying focused on what is true north. It was creative. I believe it was very creative to come up with that plan. We wouldn’t have come up with that opportunity had not we reached out to the community because we didn’t know that Oberle School was thinking of expanding. That gave Joan the opportunity to expand her program. We were able to help with the resources to do that. To me, that’s the linkage to the community. The community ended up winning. We ended up having to make a difficult decision and turning a difficult decision because we couldn’t make a go of it. We would have continued to lose money operating a school that really wasn’t in our core business. The decision to sell Chancellor’s Village [an independent-living and assisted-living retirement community] was different. [01:27:00] It’s not part of our core business. We built Chancellor’s Village and we ran Chancellor’s Village as an independent facility. We sold that facility. Now, the residents there weren’t real happy with us, but it wasn’t core to our business. One of the biggest failures we had as a company was when Carriage Hill [a rehabilitation and nursing center] got into some of the quality problems that it did. We fixed those problems and that’s a story for another day. We fixed those problems, but then we promptly decided, “You know what? We need to have a network of skilled nursing facilities.” What we discovered is that we didn’t have the breadth of skill set to effectively run a skilled nursing facility and we sold it to an organization that knows skilled nursing and that is their core business. We have a partnership with them. So you’re right. I’ve droned on in this answer, but I think the reason that we’ve been able to do it is that we have a board and we have a management team that knows where true north is. If we get lost, we always go back to where is that north star? Where is true north for us?
[End of Interview]

Interview 4 – January 27, 2014
04-00:00:00
Rigelhaupt:
It is January 27, 2014. I’m in Fredericksburg, Virginia doing, I think, the fourth interview with Fred Rankin.

04-00:00:17
Rankin:
I think so.

04-00:00:19
Rigelhaupt:
And I want to pick up partially where we left off in our last interview. You mentioned that the board has been the rock and I’m wondering if you could elaborate more on what you meant by that?

04-00:00:33
Rankin:
In any organization, and in this organization especially, the constant of a not-for-profit organization, in my opinion, is the board of trustees. The board of an organization, especially like Mary Washington Healthcare is the organization—I guess a better word is the entity—that makes sure that the organization stays pointed toward its true north. It outlives executives and it outlives leaders. It is the constant. It is the one constant through change and it really is up to the board to make sure that the rest of the organization has its eye on the ultimate goal or the ultimate North Star, if you will. As I’ve been part of this organization for twenty-one years, it has been the board that really is the representative of the community. In other for-profit public companies, the shareholders are the ultimate stakeholder. In a not-for-profit world, it really is the board representing the community or the appropriate stakeholder that becomes the anchor or becomes the rock of which the organization revolves around. I believe that has been the case here at Mary Washington. It has been an active, engaged, and committed board of trustees who have kept the organization focused on its strategy and on its mission.

04-00:02:48
Rigelhaupt:
And has the strategy and mission been consistent over the twenty-one years that you’ve been here?

04-00:02:54
Rankin:
For the most part I would say yes. The mission, definitely. [03:00] We are a community based health system and we exist to promote the health of the people who live in the communities that we serve. That mission, while it has been tweaked a little bit, fundamentally is unchangeable and has not changed in the twenty-one years that I’ve been here. We are, at the end of the day, a community based health system. We have a responsibility—a moral, ethical, business responsibility—to make sure that we have a health care system that the people of the Fredericksburg region can depend on and is here to meet their needs when and where they need to be met. Has the way health care delivered changed? Absolutely. It is a field that has evolved and it is quickly evolving. Technology has changed, methodologies have changed, and inputs have changed. But the fundamental goal of the dominant health care system being here for the citizens of this community has not changed. The board is always, at the end of the day, the anchor. It’s the guardian or the steward, if you will, of the mission.

04-00:04:36
Rigelhaupt:
Would you be able to give some examples of board members, either in meetings or in advocating for policies, that have really focused the attention on the mission?

04-00:04:50
Rankin:
It would be hard for me to pinpoint names individually, but I can certainly point to incidents or discussions. One that immediately comes to mind is the conversation around the Thurman Brisben Homeless Shelter. There was a time in Fredericksburg, and I don’t remember the exact time, when there was a community wide debate. The existing Thurman Brisben Homeless Shelter had to be moved to a different location because of some development issues. One of the parcels of land that was available was on the hospital campus and so the board was approached by the city. Would we consider housing the Thurman Brisben Homeless Shelter? When the city approaches you on anything of that magnitude, we always will take those requests seriously. [06:00] Our board did take that request seriously and setup a taskforce to look at the pros and cons of that request from the city. At the end of the day, the board chose not to do that. The board basically came to the conclusion that providing a homeless shelter was not in the core mission of the organization. At the same time that it’s not in the core mission, delivering health care to those citizens who are homeless was in the core mission of the organization. While the request to the city to house the homeless shelter on the campus was denied, out of that was born the idea to build the Moss Clinic in its current location. The Moss Clinic is in keeping with the mission of the organization. That’s one that really comes to mind of a thoughtful analytical debate of what does our mission mean and what doesn’t our mission mean. Another example, a more recent example that comes to mind, was the decision about Snowden Academy, which was just a couple of years ago. The board made the decision to close the Snowden Academy operation. Now, the Snowden Academy operation was a school and was a school for children who had behavioral health issues that couldn’t necessarily be in school in their existing home school or their neighborhood school. It served this organization and this community well for years but as time went on—and in all honestly, as regulations for schools got stiffer and stiffer—the board came to a very thoughtful conclusion that we’re not in the education business. We are in the health care business. So the very difficult decision to close Snowden Academy was made to make room for expansion of outpatient mental health services in the space that the Snowden Academy occupied. The board went one step further. They said, “You know what? We have an obligation to make sure that this transition is smooth and is seamless.” After a set of conversations and negotiations, basically we worked with another education organization in the city, the Oberle School, whose mission is to provide education for a special population group of children. [09:00] We provided a grant through the Community Service Fund to allow them to expand their program, thus creating a win-win for everybody. We closed a business that was not core to health care. We expanded a business that was core to health care. And we provided help through the Community Service Fund, through a one-time grant, to help an existing organization expand to take those children and to care for those children. Those are two examples where I believe the board, in its wisdom and as a rock, stayed focused on the mission of the organization. Those two come to mind.

04-00:10:11
Rigelhaupt:
As you said, health care has changed a lot in the twenty-one years you’ve been here.

04-00:10:17
Rankin:
Yes.

04-00:10:17
Rigelhaupt:
And one of the roles that you have talked about and Mr. Jacobs, your predecessor, discussed in the interview is the important role that senior executives, the administration plays in educating the board. And I’m wondering if you could talk a little bit about how that job has changed as health care has changed and Mary Washington Healthcare has expanded.

04-00:10:43
Rankin:
Okay. That’s an interesting question. The role that the CEO plays as a board member is a unique role. The CEO position is the only employee that the board has. Everybody else that works for the company actually works for the organization. The CEO actually works for the board of trustees. The board of trustees has only one employee and that is the CEO. In most organizations, Mary Washington included, the CEO actually is a voting, full-fledged member of the board of trustees. In this case I, as the CEO, have been for the last twenty-one years. I am a board member. I have a seat on the board of trustees and so consequently I am one of seventeen people who are charged with the responsibility of being the guardian of the mission and of setting strategic direction for the organization. [12:00] My job then as the CEO is to take the work and the decisions that the board makes and turn those decisions into actionable steps. I then am responsible for taking the decisions that the board makes, creating a management team, and creating an organizational structure to implement the strategy that the board has set. I also have an equivalent responsibility of informing the board about issues and activities that are going on, and that includes educating the board. It’s my job as the CEO to stay abreast of current events and emerging trends and topics in the field of health and health care and to make sure that I am providing the proper, if you will, communication back to the board to keep the board informed. I will tell you that as health care has evolved and changed in my twenty-one years, I’ve had to change and adapt on how we keep the board informed and educated. There was a time when that was the role of the CEO. Well, let me take a step back. We used to do that in board meetings. There would always be an educational session in board meetings. We found about five or six years ago, that that was becoming increasingly more difficult to do for a variety of reasons. One, the speed of change was ramping up; and number two, the complexity of our own issues in the organization was also ramping up. Consequently, education time got smaller and smaller and smaller at board meetings. We had to find an alternative. We experimented with difficult alternatives and we finally have landed on a combination of internal education and external education. Internally we have sessions about four to six times a year, depending on kind of situation and opportunities—we have special educational sessions that are, part and parcel, different from the board meeting. Our board meets in the morning and the educational sessions are in the evening. We will bring in either local speakers or outside speakers to address the board on topical issues. [15:00] They tend to be on one topic because you’ve got about an hour and a half and they tend to be topic specific. We do that about four to six times a year. In addition, we actually have created a situation where we joined an organization called the Governance Institute. The Governance Institute is a not-for-profit educational organization that focuses just on continuing education for board members, for health care board members. We joined this organization called the Governance Institute and twice a year we offer the opportunity for our board members to go to outside conferences at the Governance Institute. We ask each board member to commit to go to one conference a year, one external conference a year. We have found the combination of internal continuing education plus the external, attending a national conference, is a good model and a productive model. Usually there are three or four board members, maybe as many as five, that go to each one of these conferences. They then come back and summarize what they learned in a board meeting and will make a report to the rest of the board about the topics that were discussed at the conference. So yes, it is true that it is the job of the CEO to make sure that the board stays on top of current events and the most current thinking in health care administration. But I have got to tell you, it’s changing so fast and it’s so dynamic these days that doing it alone was not productive anymore. We had to change the way we did it.

04-00:17:17
Rigelhaupt:
Can you think of an instance in which a board member or a group of board members came back from one of these external educational sessions at the Governance Institute and made a presentation that the board immediately said, “Yes, this is something we want to do. We’re so glad you learned this.” That there was a real immediate implementation of some of the ideas?

04-00:17:46
Rankin:
I would be hard pressed to frame it in those terms. There hasn’t been any epiphany. There have been adjustments, however, that have been made. [18:00] Actually, I think the reason there hasn’t been any epiphany is a testimony to just how savvy and how current this board of trustees are and how devoted they are to staying abreast of current events. To be honest with you, when our board goes to these meetings we are the thought leaders. I say this with all degree of humility because it is the board members that are leading these. When we go into breakout sessions, other board members recognize that our board is far more educated than the average board of trustees and actually turn to our board for ideas. We become the experts at these meetings. Now that, in and of itself, is very affirming to our board members because they come back feeling reinforced: “My gosh, these speakers are talking about that and we’ve been doing that for three to five years now.” However, having said that, we never come back from a meeting without a gem or two of something to do. One of the big things that crosses my mind is the amount of time and how we handle the oversight of the clinical quality and the patient safety programs that are going on in the organization. This was probably five or six years ago. We heard a lecture—and I’m paraphrasing—saying that the board needed to spend as much time on the quality and the patient safety metrics of the organization as it spends on reviewing the financial metrics of the organization. Our board took that to heart five or six years ago and restructured their board meeting. It restructured their board meeting to spend as much time on the quality and patient safety metrics of the organization as they had previously done on the financial metrics of the company. The time spent in conversation at the board changed as a result of attending several of these conferences over a period of a year and a half. As an example, we introduced a patient safety moment where our chief medical officer at the beginning of every board meeting will tell a patient story. Sometimes that patient story is a good patient story and sometimes that patient story is a not so good patient story. [21:00] It is aimed at educating and keeping the focus of the board on what really matters: at the end of the day that is the care that we provide to the citizens of this community. When a mistake occurs, and mistakes and incidents do occur, those are discussed openly and honestly at the beginning of every single board meeting. That’s a change that we historically had not done. Now we open every board meeting with a patient story. It anchors us on the work that we do. That’s been a change. Up until about four years ago, our quality commission was chaired by a physician, a physician member of the board. We thought that was a good idea. We thought we were affirming the role of the physician community in doing that. That physician, Dr. Michael McDermott attended one of these conferences and he listened to a lecture by somebody that basically said, “Under no circumstances should a physician be the chairman of the quality committee. The physicians absolutely have to be on the quality committee, but you should never put a physician as chair.” Dr. McDermott came back jazzed and he said, “I’ve got to resign as chair of the Medical Affairs Committee. I need to step down.” We were actually a little incredulous about that and we didn’t want him to step down. He said, “No. This is what I heard and this is what I learned.” What we did is that we setup a conference call with chairman of the board, vice-chairman of the board, Dr. McDermott, who was the current chair of the quality committee, and I. We set up a conference call with this particular presenter. We said, “We want to explore this a little bit more. We want to test this. What is it? Why do you come so strongly with this recommendation?” We probably spent an extra forty-five minutes on a conference call debating the pros and cons. Truthfully, it’s a judgment call. At the end of the day, after listening to this gentleman and debating back with him and actually deferring to Dr. McDermott who said, “I really believe what this gentleman is saying and we, as a board, we should adopt this practice.” [24:00] Regretfully, we accepted his resignation as chairman. I do think there has been real and meaningful change by our board going to these. Have they been epiphanies? Widespread, changing the world type of changes? No. But have there been constant improvement and continuous improvement of being a better board of trustees? Absolutely. It happens every single meeting.

04-00:24:34
Rigelhaupt:
Let me turn that question around then and ask you what are some of the things that you’re most proud of as a board member and most proud of that you have seen this board do and share at these meetings with the broader board of trustees and health care community?

04-00:24:56
Rankin:
Okay. I think I understand the question. I will tell you that the true character of any board or of any individual occurs, in my opinion, in time of crisis. And we have had our share of crises over my twenty-one years here. The first one that really comes to mind is some of the difficulties we had four, five, six years ago with our nursing home. We got into some issues, some regulatory issues with our nursing home. The board was rightfully concerned and appropriately concerned and dismayed and created a pretty robust set of expectations around what management needed to do to rectify the situation. The board spent a lot of time on that. The one thing the board did instantly and immediately, and it didn’t take any conversation at all, was stand by our patients who were in that nursing home. The board made the decision very quickly, almost instantaneously, to stand by our patients: we would keep the facility open even though we weren’t getting reimbursement for certain classes of patients anymore. We would not charge those patients any additional money, nor would we ask them to leave. That is mission driven and that is values driven in my opinion. That was an instantaneous decision. [27:00] That comes to mind. In times of crisis, I think the true character of an organization and of the people who are part of the organization surface to the top. What decisions do you make at that time? I actually think the decision to build Stafford Hospital was a courageous decision. The safe decision would have been to add beds on top of Mary Washington Hospital. The risky decision and the courageous decision is to say we’ve got to distribute our resources out into the community. That meant building the facility at Stafford Hospital. Again, the board bought into it. They bought four-square into it and they made the risky decision. They made the risky decision. One of the anchors of any hospital’s quality program is the process through which you give clinical privileges to physicians who want to practice in your facilities. It starts with qualified people. Not just any doctor can come to any hospital and just start working. They have to be granted clinical privileges. The quality program starts with the credentialing process. That is a board driven process. We are one of the few hospitals in America where a board member actually is a seated voting member on the medical staff’s credentialing committee. We’ve been doing that for years. We actually have a board member that sits with the medical staff to review the qualifications of every single physician that applies for privileges here, both at Stafford Hospital and at Mary Washington Hospital. Those are but a few examples of what I call board leadership in action. What we have to remember about boards: an individual member of the board has zero power. So any man or woman individually who is a board member has zero power on the board. The only power the board has is when the board comes together and is making decisions as the collective body. [30:00]

04-00:30:16
Rigelhaupt:
Now, it sounds as though this decision to put a board member on the medical credentialing committee was a difference from when you started here.

04-00:30:26
Rankin:
No, actually, that’s not true. That actually was in place when I got here. That’s been a best practice we’ve done for many, many years.

04-00:30:32
Rigelhaupt:
Were you surprised to find that as part—

04-00:30:34
Rankin:
Actually, I was pleasantly surprised. When I came here that was not the case at the other hospitals that I had worked at. I was surprised and I came from a very respected hospital and health system in western Pennsylvania. I thought at the time that that hospital had a very robust, very mature quality program. I came to realize that this organization had as robust credentialing program and maybe even more robust credentialing program. I think it has made the difference between us. I think it has served us: the standard of care that is delivered at our two facilities is better than many places throughout the state because of the commitment of the board for quality medical care. We have had to turn physicians down from time to time. Those are not easy decisions to make and they get kind of emotional and they can actually get a little tense from time to time. But they’ve done it and they have not wavered from their core beliefs of the anchor of any quality and safety program in a hospital starts with the quality of the people who work in the hospital.

04-00:32:19
Rigelhaupt:
So you said that the board has changed and will spend more time talking about patient safety metrics as financial metrics. Are there instances in which you’ve seen those two things line up with one another rather than be two separate things?

04-00:32:38
Rankin:
Absolutely. I have very rarely seen a conflict between what is in the best interest financially of the organization and what’s in the best interests from a quality and patient care perspective. I have very rarely seen them conflict with each other. [33:00] I will tell you what has changed in my mind, and I believe the field has changed. Twenty years ago or fifteen years ago, the common belief was the value equation—when you think of what is value in health care, there are three big variables that make up the value of health care. It’s the quality of the care that’s provided. There’s the service aspect of the care that’s provided. And there’s the cost of the care. When you think of kind of a value equation, if you think of quality plus service as the numerator and cost as the denominator, you can picture in your mind an algebraic equation where you’ve got quality plus service over cost. In order to increase value you either have to improve the quality plus service or you have to lower the cost or both. That’s the way, V=Q+S/C. There was a common belief, which our board never bought into really. It was a common belief that you could only have two of the three; you couldn’t manage all three of them simultaneously. That only two of the three variables could be managed and it was not possible to manage all three. That theory has been debunked. We now know, without a doubt, that all three can be managed. I’ve seen that change in the industry. Today, every thought leader in health care believes that it is possible to manage all three variables simultaneously. We believe that, quite frankly, the most cost effective care is also the care that provides the best quality and the best service. Now, that doesn’t mean you do everything that everybody wants you to do. There has to be honest debate about medical practice and clinical practice that has to occur so that you are making those appropriate decisions. I’ll give you an example: infection rates. We know that if we can keep people from getting infections then it lowers costs. [36:00] We know that if somebody gets an infection while they are in the hospital, if they get their wound infected or they get an infection—first of all, that’s not very good quality and, second of all, the cost of that care is going to increase. We know that the best care, and at the end of the day, the most cost effective care is to keep that infection from occurring to begin with and make sure that we are giving the proper antibiotics and the proper techniques are being used to avoid the infection to begin with. We know that also is the most cost effective way to manage that care. We know that if somebody gets an infection while they’re in the hospital, the cost of that hospitalization goes up and goes up dramatically. That’s the change we’re in the midst of today. We are moving as an industry in this country from a volume based payment system to a value based payment system. Historically we have been paid and the whole industry has been paid on the more you do the more you get paid—volume. Where we’re now saying, “You know what? We are migrating. That it’s not all about the more you do. It’s really what’s in the best interest of that patient who is sick, and maybe even keeping that patient out of the hospital.” Today, which is a huge change from even two years ago, we get penalized if somebody comes back in the hospital within thirty days of being originally discharged from the hospital. Two or three years ago we got paid for that second hospitalization. Today you get penalized. That changes the way we think about things. It changes the way we treat the patient. It changes the way we view the world around health care. Our board has stayed current with that and has demanded that we now manage accordingly; we, as a health system, manage the quality of care that’s delivered. We have to manage the service, the manner in which the care is delivered, and the cost of that care. That has changed. The industry knows now that all three have to be managed and, in fact, can be managed. The great analogy is the car industry. Twenty years ago, the American automobile industry did not have a great reputation for building quality cars. Today, the American car industry has transformed itself. Today, American cars are as high valued cars as any in the world. But that change of attitude and belief had to change. [39:00] It is the same in health care.

04-00:39:04
Rigelhaupt:
So going back almost twenty years ago, in one of our previous interviews you talked about how the potential external threat of a Medicare freeze spawned the Community Service Fund.

04-00:39:16
Rankin:
Right.

04-00:39:17
Rigelhaupt:
Do you see that the potential for this external threat, that not being reimbursed for a second hospital visit and penalized in terms of Medicare reimbursement rates will be something that you build upon and becomes not a long-term threat but something that creates a new opportunity for the organization?

04-00:39:45
Rankin:
The freeze, the across the board freeze or the threat of the early ‘90s is very different than being held responsible for the value. The freeze, and I think most economists would tell you today, doesn’t really accomplish anything but short-term gain. Wage freezes, reimbursement freezes—those, in my opinion, from an economic perspective don’t encourage innovation and don’t encourage real change in programming. I think what the Affordable Care Act does, though, is different. It creates incentives and penalties for the organization to change the way it practices. That if you are caring for the patient the right way, the first time an organization can benefit from that and actually can thrive. I think the freeze doesn’t encourage the innovation. I actually think the change of moving from a volume-based system to a value-based system really will help us achieve innovation. Now, the problem is that middle game: the transition from volume to value. We are in the middle of that transition and we have a foot in both worlds today. We have one foot in a traditional volume world where we still at times get paid for volume and we’re moving to a value world to which many of our reimbursement systems haven’t changed yet. [42:00] It’s the transition. What is so uncertain in health care today is the transition from one world to the other. In my opinion, we would be far better off making that transition as fast as possible rather than a slow gradual transition because the rules are different. The rules of engagement are different. Quite frankly, the incentives are different. While on the one hand I have a contract that pays me for doing more, on the other hand I have a contract that penalizes me for doing more. It’s a very schizophrenic world, this middle world. We’re sending mixed messages to our employees and our doctors; as an industry we have got to move that transition sooner than later.

04-00:43:09
Rigelhaupt:
Let me come back to that in a moment because I have some questions about the potential changes with the Affordable Care Act. But I want to spend a little bit of time talking about the introduction of new subspecialties in particular. The last twenty years Mary Washington Hospital became a regional medical center. And from what other board members have told me, and it’s well documented, is nearly all medical cases except for transplants and burns can be treated here. And that wasn’t the case when you started.

04-00:43:44
Rankin:
That’s correct.

04-00:43:47
Rigelhaupt:
What specialties and subspecialties have you been most proud of seeing implemented and become part of the health system here?

04-00:43:54
Rankin:
There’s a couple of high profile ones that I’m proud of. The most high profile has been the cardiac surgery program. That kind of has its focus and it has kind of got a neat little box around it. It’s high profile. Obviously one has to turn and look at the introduction of open-heart surgery and cardiac surgery programs as a milestone for this organization. And actually, that happened twenty years ago. The fall of 1994 is when we performed our first open heart surgery. The fall of this year, 2014, we will celebrate twenty years of performing open-heart surgery. There are others that aren’t quite as high profile but of equal import. I think the advent of neurosurgery to this community also was incredibly important. The advent of neonatal intensive care and the ability to take care of preemies and infants who are sick when they are delivered was a profound change. [45:00] The introduction of spine surgery, of high-end spine surgery, no question, has made a difference in this community. All of that kind of combined together and allowed us to introduce trauma. We are designated as a Level II trauma center. None of that could have happened without the other higher end specialties being in place. I think that has a profound impact on the care and being able to stay. On the oncology front, the implementation of services like stereotactic radiosurgery is an example where people who have certain forms of cancer can actually get their treatment right here in Fredericksburg. Those are some of the many examples of high-end services. The cardiac surgery program allowed us to recruit a thoracic surgeon, someone who specializes in lung cancer or other diseases of the lung. Without an open-heart program we never would have attracted a thoracic surgeon to come to this community. It builds on itself. It starts with a couple anchor-type programs and those anchor programs then create the catalyst for other high-end programs. That’s what has happened. You start out with neurosurgery, with open-heart surgery, and you begin to expand out into other high-end services, as well. I’ve seen that happen. Today, you look around at the caliber of this medical staff and you see lots of high-end specialty services being offered. But there had to be a core nucleus of a couple high-end services that had to be here. I look at our imaging services here. Our radiology department and our entire imaging services are second to none. In this community, we have imaging services and radiologists that rival any academic medical center anywhere in the country. [48:00] That kind of backup service allows other specialties to look and say, “You know what? You’ve got a really good medical staff here and you’ve got a medical staff with the support systems in place that allow you to have things like wound care and interventional radiology care.” It just proliferates. So a seed begins to grow and it just continues to grow. Quality begets quality and quality physicians recruit other quality physicians and that is what has happened over the twenty-one years. It starts out with a seed of a couple of core programs that begin to mushroom into other programs.

04-00:48:51
Rigelhaupt:
What programs were the hardest to implement?

04-00:48:56
Rankin:
That’s a good question. There were different reasons for hardness, but obviously the cardiac surgery was one of the hardest. It was one of the hardest because of the high profile nature of it. It required a Certificate of Public Need and we had to convince the state that we had the infrastructure. In terms of regulatory hoops to jump through, probably the cardiac surgery was one of the hardest. But it also was an important anchor. It was an important anchor service to offer. We also had to convince the community that it was safe to have open-heart surgery here. We had to win the hearts and minds of the community. That’s one that was hard. The other that was hard that comes to mind was the trauma program. Not so much because trauma in and of itself is hard from a clinical specialty, but because trauma is incredibly complex because it is multifactorial. It has a general surgery component, it has an orthopedic component, and it has a thoracic component. Every kind of organ system you can imagine plays a role in creating a trauma network. That was hard because of the complexity of putting all the pieces to the puzzle together. That was hard, too, because it was a complex program that had to have multiple pieces that fit together. [51:00] That was a particularly hard program to bring up. The current challenge is a comprehensive oncology program. Today we have incredible medical oncologists, radiation oncologists, and surgical oncologists who work at Mary Washington Hospital. Yet, we probably still do have more people than we should leaving the area for cancer care. A comprehensive cancer program may be the most complex of all because cancer is not just one disease. Cancer is many diseases. Creating a comprehensive cancer program may be the most complex high-end clinical specialty of all and we’re in the midst of trying to do that now. Hard in terms of beginning, hard is kind of a relative term. I will tell you, recruiting doctors to this community is not hard. It’s not hard for a variety of reasons. First of all, this is a pleasant geography. Fredericksburg, Virginia is a nice place to live and work. It’s a vibrant town. It’s an alive town. The climate is a relatively temperate climate. We have a good health system. I talk about quality begets quality. Compared to some parts of the country, it’s relatively easy to recruit physicians to this community. We don’t have to sell the community. We may have to sell the program and the support, but we don’t have to sell the community.

04-00:53:18
Rigelhaupt:
Part of my reason in asking about what was hard was to ask you about what’s more challenging when starting a new program. Is it the technical, the clinical? And the reason I’m asking is in our first interview you described the importance of building trust with the physicians around the cardiac surgery program. That was a big and important thing that you did early in your career. And I’m wondering, is it the interpersonal or building trust with the physicians or the technical and clinical that can present more challenges? [54:00] And maybe comparing one to the other is not quite right but if you could talk about the interplay?

04-00:54:07
Rankin:
They both come into play. I guess in the long run, though, it’s always the interpersonal that’s the hardest. Sometimes the technical part is the easy part because you either are able to do it or you’re not able to do it. I will tell you what is beginning to enter into the equation is the cost of a new program. It’s beginning to enter into the equation because of the emphasis in this country on the cost of health care. Cost was always a factor, but it wasn’t always the dominant factor. Today cost is as important as the quality and the service. We find ourselves today asking the question in more serious ways than we used to, “Can we afford to do this program? What is the cost to the community? What is the cost?” We don’t have unlimited resources. If we invest in one program it may mean that there is not enough money for another program. It’s why we’re starting to make very careful judgments on just what services should we offer and what services should we not offer. We no longer have the luxury of being all things to all people. There will be programs that we either will choose not to do or there may be programs that we choose to do, but will require another program to have to come offline. We are reaching a point here in this community and in the country where economic tradeoffs have to be made in addition to clinical and quality tradeoffs. I’ll give you a good example and that is whether or not should we have a pediatric intensive care unit at Mary Washington Hospital. We do not have a pediatric intensive care unit today at Mary Washington Hospital. That’s a very expensive program to operate and to staff. [57:00] The question has to be asked, how many children would actually need the services of a pediatric intensive care unit? The answer to the question is not very many. Are there a few over the course of a year that need that kind of service? The answer is yes. But the question is how many. And part of the problem—this is where cost integrates with quality. We know that in staffing with nurses or physicians, if they are not using their skills their skills go rusty. If we are only going to see maybe ten or fifteen patients a year, first of all, that’s very expensive to stand up. It’s got a lot of infrastructure and it’s very expensive to staff. But more importantly, for the nurses that work there or the doctors that work there or the pharmacists that work there or the respiratory therapist that work in that unit, are they actually seeing enough patients that they can keep their skills up? It’s a cost economic issue and it’s also a quality issue and a service issue, as well. If that nurse is only seeing eight to ten or twelve patients a year, that nurse is probably going to get a little rusty eventually, despite all of his or her training and best intentions. If you’re not practicing your skills, you’re probably not going to be as good as someone who’s doing it all the time. We are starting to ask those questions about the economic tradeoffs of having certain specialties. It’s why we made the decision we did around education and Snowden Academy. While that was a mission decision, it was also, what is our core work here? What’s our core work here? We can’t be all things to all people anymore. We can’t afford it. The industry can’t afford it. Transplants. We don’t do transplants here because, quite frankly, we don’t see enough of them. We wouldn’t see enough of them and it’s very expensive. Patients are better serviced at a transplant center. We don’t have a burn unit here. Burn is an incredibly expensive service to offer. Patients are better served at places that see a lot of burns and work with burn patients. Tragically, if someone has to be in a burn center, they get transferred where they can get the best care in the most effective way. Does that help?

04-00:59:55
Rigelhaupt:
It actually leads into another question I was going to ask about in terms of process and business practices. [01:00:00] And not in terms of you talking specifically about financial, but more about process. Because certainly people in the interview process have alluded to the fact that if there’s no margin there is no mission.

04-01:00:16
Rankin:
Right.

04-01:00:17
Rigelhaupt:
That you have to be concerned about the financial.

04-01:00:19
Rankin:
Yes.

04-01:00:21
Rigelhaupt:
And so what are some of the ways that you as a board and senior administrators talk about which programs are going to get prioritized? Is it long-term, short-term? What are some of the ways that you make those decisions?

04-01:00:38
Rankin:
I think it’s a little bit of both long-term and short-term. It’s not one versus the other. In looking at programs, especially new programs that we are considering, there is no question anymore that in addition to the clinical capabilities of our organization—do we have the clinical infrastructure to support a program—one has to look at the economics. One has to say can it make money? Is it going to lose money? If it’s going to lose money, how much is it going to lose? Is it a break even operation? That’s an iterative process that we have to look at all the time. But we also have to look at existing programs because health care is a changing and ever dynamic industry. We have to look at existing programs that we’re doing. Do these programs still make sense? Do they still add value? When I talk about value again, are we adding quality value? Is it a reasonable cost or can it be done in another way? So it’s an iteration of both long-term and short-term. For most of the twenty-one years I’ve been here, the truth of the matter is we didn’t have to worry about the margin. We had very healthy margins, so we could afford to take some risk. We could afford to do some money losing because we always had strong margins. We don’t have the same strong margins today that we had twenty years ago or even ten years ago. Every new program we do has to be viewed in the eyes of the economics of the program, as well. It’s not to say that that is the only variable, because it’s not. Mission clearly plays a role in it. The quality impact that it has on an organization clearly has a role in it, but we can’t ignore the economics anymore. [01:03:00] There was a time that the economic part of the conversation was almost an afterthought. That is not the case anymore. It can’t be the case anymore.

04-01:03:13
Rigelhaupt:
Could you talk about any programs that have been implemented or expanded that are known to not—I don’t like the tone of it but are known not to generate a lot of revenue? For example, mental health care is one another person has said generally speaking does not generate a lot of revenue but has been a clear community need. Are there examples that you can think of that have grown despite the fact that—

04-01:03:48
Rankin:
In all honesty, trauma is one that one has to ask the question about. Being a Level II trauma center, what’s the cost? It’s a very expensive program. It is an extremely expensive program because of the infrastructure that has to be in place. The question has to be asked and answered: is the value that a trauma center provides worth the expense of being a trauma center? That is one example where we’re actually going through that analysis even as we speak to make that value judgment. It clearly has huge benefits, but it also has huge costs attendant to it. One has to ask the question from a cost benefit perspective, is the value one gets from being a Level II trauma center worth the cost? Our board is beginning to have that debate. Actually, to tell you the truth cardiac surgery in and of itself isn’t necessarily a moneymaker. What cardiac surgery does is open the door for so many other things that are beneficial. The board is constantly saying, “Well, if we don’t have cardiac surgery, what else would not be here if we didn’t or would not be here?” If you look at cardiac surgery just in its own little vacuum you would make one decision. But when you look at the impact of cardiac surgery and what it allows us to do in other areas, you make a very different conclusion. You can’t look at any program just on its own because it’s all intertwined. [01:06:00] It’s all intertwined and you have to look at its impact on the whole. When you look at its impact on the whole you realize, “Oh, my God. Cardiac surgery is the anchor for an enormous amount of other services we offer in the organization. If we didn’t have the cardiac surgery there would be other services we would not be able to do.” It becomes an easy no-brainer. Of course we’re going to keep cardiac surgery. Mental health is a good example. Historically mental health has not been, necessarily, a moneymaker. But it is a mission. If we didn’t do mental health there wouldn’t be mental health available in this community. Now, there’s a certain irony around the whole mental health practice. Over the last twenty-one years around the state there has been a systematic closure of mental health beds. We stuck with it. The irony is as we stuck with it we began to see our census increase. There does reach a point that actually, while we don’t make a lot of money on mental health today, it holds its own today. Because we stuck with it, and because some of the state changes that have happened in mental health reimbursement, we actually turned that program from a money loser—it’s not necessarily a moneymaker—and it holds its own at this stage of the game. Another program that was very difficult for us is geriatrics. Geriatric care in and of itself is a money loser to the organization. Yet, so many of our patients from other specialties are in the elderly population that geriatric care is an investment that one needs to provide services to other specialties. So you make a decision to stay with it and you keep it because it’s part of a whole. It’s part of a whole package that one looks at. Stroke and the decision to be a stroke center: we’re providing an enormous service to this community. It’s not necessarily a moneymaker in its own right, but it allows us to take care of other patients by having the stroke service here.

04-01:08:39
Rigelhaupt:
Has your ability as an organization to maintain some of the programs changed with the way in which there are more physicians who are hospital employees versus having the right to practice, but not necessarily employed?

04-01:09:00
Rankin:
In all honesty, I can’t say that it has. I believed, and I still believe, that if incentives are aligned properly, that physicians and health system will come together and make the right decisions collectively. I still believe that. The truth of the matter is that I haven’t seen a difference in decision-making between the employed physicians and the non-employed. Physicians are still physicians. They are highly educated. That they are highly educated people and they are motivated. Where their paycheck comes from doesn’t necessarily in and of itself motivate them one way or the other. What I’ve come to realize is the way you motivate physicians and the way you work with physicians is to be transparent with them and engage them in the decision-making process. That’s the same whether the physician is an employed physician or the physician is in the private practice. I used to believe that there would be a difference, that if you could line the economic incentives you could have a different conversation with the docs in a true collaborative way. The truth of the matter is it’s not the money and it’s not the paymaster that motivates. There are other things that motivate the physicians. It’s the care that’s provided. It’s being valued as someone in the planning process who has legitimate input. That’s what matters; that’s what matters most. I haven’t necessarily seen that there’s a difference between the employed physicians or the not. I used to think that, but I don’t think that’s the motivator. What is the motivator? What I’m convinced of, though, is that in this next generation of health care when cost is going to be such a factor, Mary Washington as an organization and health care as an industry will not be able to just cut expenses out forever. That is a recipe ultimately for disaster. What’s going to have to happen in the future is care is going to have to be reengineered. The only way that care can be reengineered is that the medical staff, the physicians have to be in true partnership with the health system. It doesn’t matter, in my opinion, whether those physicians are employed or not employed. [01:12:00] What matters is that we have a relationship built on trust and built on aligned incentives that will allow physicians to come to the table and work with the health system to really change the way care is delivered. That’s where the real cost savings is in the future. The next generator of cost is to coordinate the care. We, as an industry and Mary Washington as an organization, have to recognize that the only way we can do that is in true partnership with our medical community, and that’s what we’re working on now. That’s what Mary Washington of the future is going to look like. It’s going to look like a partnership, some sort of profound partnership relationship with the medical community and the health system. In fact, just this summer we stood up an organization, an organization that’s called the Mary Washington Health Alliance. I liken that today to an expansion football team. We’ve put an organization together. We have a team and we have a playbook, but in all honestly we haven’t really played a down on the field yet. I believe that five years from now or ten years from now, if you would come back and have a conversation what does health care look like, you will see that health care is being managed collectively by this alliance, which is a true partnership between the health system and the medical community. We will be thriving, we will be successful, and continuing toward true north: and that is taking care of the people in this community. We’re adapting. I believe we have the infrastructure in place to be successful in the future, but it is a different relationship with our medical community.

04-01:14:06
Rigelhaupt:
I was going to go here. In a previous interview you discussed the relationship between the hospital and health system when you first got here, and the medical community, it was not tip-top and was not unique.

04-01:14:23
Rankin:
No.

04-01:14:25
Rigelhaupt:
That that’s a dynamic that plays out in many places between community hospitals and the physician community. And you emphasized the importance of building trust and transparency. And where you are now, do you think it would be possible to have even gotten to an expansion football team without that process happening earlier?

04-01:14:51
Rankin:
I think the answer is no. I think this has been a journey. [01:15:00] It’s been a marathon, not a sprint. I’ve worked twenty-one years to build trust. Now, I will tell you, we’ve had our battles over the years. We have not always agreed. I have had to make decisions that have not always sat well with the medical community. Yet at the end of the day, we’ve moved forward kind of inch by inch. We are at a point where we were able to stand this alliance up, this expansion football team, if you will, this summer. Having said that, there still is skepticism among the medical staff: are we as an organization really serious about that? Despite twenty-one years of work and of relationship building, the fact of the matter is that even today there still is healthy skepticism. In some physician camps, aggressive skepticism that there’s an ulterior motive and that we really don’t have the best interest of the physicians at heart or we really are only in it for our own self-preservation. Even today there still is that skepticism. But I don’t believe we could have gotten to this point without the work we’ve done in the previous twenty-one years to build relationships that allowed us to get to this point. Having said that, the journey is not over by any stretch of the imagination. There still is tremendous work that needs to be done. There still is tremendous team building and trust building that needs to be done. I kind of view the journey as we’re at the halfway point. There’s still an awful long way to go, and in many respects we may never be at the finish line. What has kept me focused all these years, and I believe the board has helped keep focus, is at the end of the day it’s about the community. It’s about what’s in the best interest of the community and what’s in the best interest of patient care in the community. If you stay focused not on what is in the health system’s best interest or the doctor’s best interest—but if you stay focused on what is in the community’s best interest, at the end of the day, we will succeed. Now, I will tell you, over the years I’ve had to make some difficult decisions that have negatively impacted physicians. [01:18:00] Those negative impacts were not based on me sitting behind a desk thinking how can I mess up this group of physicians. It was what’s in the best interests overall for providing care to the citizens of this community. I’ve always stayed focused, and the organization has always stayed focused on what’s in the best interest of the overall provision of patient care for this community. I think that will be the mantra. If both the physician community and the health system community can stay focused on always keeping the patient in the center of the universe, we can continue on our journey of trust building.

04-01:19:03
Rigelhaupt:
And over these twenty-one years, there has remained a focus on building trust and there has been exponential growth in the organization.

04-01:19:17
Rankin:
Correct.

04-01:19:19
Rigelhaupt:
I think in an early interview Dr. Ryan talked about, you know, perhaps seventy physicians. He knew every one, their spouses, their kids. By the time he left, he might not know a physician on staff. What are some of the ways that the organization has tried to maintain transparency and continue to build trust with physicians when simply the growth makes that harder because there’s less personal relationships? That it’s a bigger organization.

04-01:19:53
Rankin:
That is really a difficult question to answer and it’s a really important question to ask. It is infinitesimally harder and it’s more complex and it’s complicated by the fact that many of our doctors today don’t even set foot in the hospital. Think of our primary care doctors. When I started here in the fall of ‘92, most of our primary care doctors actually took care of their own patients. Today, you can count on one hand the number of primary care doctors in this community that still take care of their own patients. They hand them off to our hospitalists. In 1992, the word hospitalist didn’t even exist. Today it’s a medical specialty in its own right. [01:21:00] It’s even more complex. Our primary care doctors don’t even come to the hospital anymore, but yet they are the source of most of our patients because most of us start out with a primary care doctor. That’s the rhetorical question. How do you engage a group, a large group of physicians, who don’t even come to the hospital anymore? That’s really hard to do. We used to communicate through what I call the old fashioned traditional way, and that was through meetings. Four times a year you’d have a quarterly medical staff meeting with most of the physicians. It was a dinner meeting and you’d have an agenda. Most of the physicians or two-thirds of the physicians would come to those meetings. Then there were monthly departmental meetings. First Friday of every month the department of surgery meets. Second Wednesday of every month the department of medicine meets. Third Thursday of every month the department of OB/GYN meets. You would go to those meetings and most of the docs actually attended those meetings. You had traditional vehicles where you could communicate. You would always communicate one-on-one. I have prided myself in trying to stay connected on a one-on-one basis with physicians. As the 1990s wore on and as we got into the first decade of the twenty-first century, the practice of medicine began to change and we had to change mechanisms. It grew; you’re absolutely right. We had to restructure the medical staff. We restructured the medical staff and we created chiefs of service. We had a chief of surgery, a chief of medicine, a chief of women’s, and a chief of diagnostics and support. We created these positions and we actually made them part of the management team. We invited them into the management team. They started planning with us and then they would go out and meet with their colleagues. We started to distribute the communication strategy. With the advent of the internet, we were an early adopter of using the internet for communication. Back in the late-1990s, we created what is called a physician dashboard. Our doctors can log into a secure network and there is a dashboard where they can get patient information and they also can get non-patient information. [01:24:00] We then found we had to adapt again and we created physician liaisons. These are men and women who are assigned a group of physicians. A particular liaison may have ten practices that they are primarily responsible for. Their job is to once a month meet with every single one of those practices and stay in contact with those physicians to make sure that we know what’s going on with, they know what’s going on with us, and if there are any problems that have to be resolved. We’ve had to expand and use different communication. We use a variety of communication vehicles to interact with our docs today. We still have meetings, although not nearly as many people come to the meetings as they used to. We still use meetings. We now have physicians in leadership roles, significant leadership. We have centers of excellence, which the physicians run. We have physicians in leadership roles throughout the organization. We have physicians at the leadership table and we invite physicians to come to committee meetings. We use the web. We use email. We use personal contacts. The complexity of communication has gotten greater because we have more physicians, as you say. We have probably between 250, 300, 400 doctors in this community, where Dr. Ryan tells you when he first got here there maybe were seventy docs. We have people that don’t come to the hospital anymore. We have doctors that split between the competitor and Mary Washington. The dynamic is very different. Unfortunately, what we’ve lost in this process is the socialization. We don’t socialize as much as we used to and we haven’t cracked that nut yet. I heard somebody say once, “You’ve got to break bread together occasionally.” Part of gaining trust is the breaking of bread together. What we’ve lost is the socialization. We try a couple of times a year in a variety of different venues to have socials with the medical community, but that has been lost and we need to find a way to regain the socialization. There are physicians in this community that don’t know each other. [01:27:00] It’s pretty amazing that there are some doctors who have never met other doctors in this community, where twenty years ago that wasn’t the case. That’s a challenge for us. We keep adding other communication vehicles. Some people want to communicate face-to-face. Some people want to communicate by email. Some people want to read it on the dashboard. Texting now is becoming common. People are using iPads, iPhones, and smartphones. We’re using text messaging. We’re using all the modern and traditional communication tools, as well. Even then we will hear, “I didn’t know about this or that or the other thing.” It’s a real challenge in our modern fast paced environment. I’ll be honest with you, they are putting in twelve-hour days, fourteen-hour days, and to ask them to come back to another meeting is tough. They don’t really want to come back to another meeting.

04-01:28:15
Rigelhaupt:
Am I right to presume that there’s a cost with some of these physician leaders, the chiefs of surgery?

04-01:28:20
Rankin:
Yes.

04-01:28:23
Rigelhaupt:
Okay. Going back to your equation, is there a way in which having these chiefs also tilts that equation by bringing new ideas in terms of quality and patient care and so it serves both?

04-01:28:41
Rankin:
I believe intuitively there is. It’s hard to quantify. It doesn’t lend itself to a strict ROI [Return On Investment] analysis. Yet I am absolutely convinced that the building of those relationships and inviting and paying for the medical leadership has returns. I know it. I’ve seen it. I felt it. It’s a way to keep the doctors engaged. The doctors are under intense economic pressure, as well as the health system. To the doctor, time is money. For a doctor especially in private practice, but even an employed doctor, if they’re not seeing patients they’re not generating income. If we’re asking them to do work for us, we have to compensate them for their time. I believe it’s a necessary and an essential expense for the health system to compensate. If we truly want doctors at the table, we have to compensate them for their time because the only thing a doctor has to sell is time. [01:30:00] If a doctor’s not in the office seeing patients, they are not generating revenue for themselves or for their own practice. Most of these doctors are running small businesses in their own right and the pressures of small businesses are the same as any pressure of running a small business. There is a cost. I believe that we get great value. It doesn’t always lend itself to a strict ROI analysis. Having said that, we can’t overpay. We actually have rules. The government has put very strict regulations in what hospitals can pay physicians and what hospitals cannot pay physicians. It is patently against the law to pay a doctor for referrals. You can go to jail for paying a doctor for his or her referrals to your organization. There are kickback statutes. That is patently against the law. One has to be very careful and very mindful that when you are contracting with a physician you are very clear and very specific about what it is you’re paying for and the rate you’re paying for it. It has to be market rate. You cannot pay a physician over market rate. We have lots of data out there today that says that the average general surgeon makes X or the average primary care doctor makes Y. You can take that data, translate that into an hourly rate, and you compensate that doctor based on their hourly rate. One has to be extremely careful in contracting with physicians that it passes the regulatory test because hospitals have gotten into lots of trouble around the country by having inappropriate contractual relationships with their medical community.

04-01:32:30
Rigelhaupt:
Well, I was going to switch topics. And we are at ninety minutes.

04-01:32:31
Rankin:
Right. Yeah, we’re probably going to have to wrap-up in the next ten or fifteen because I’ve got a meeting at four o’clock.

04-01:32:40
Rigelhaupt:
Okay. Public health. In our last interview you emphasized you chose to study public health. What are some of the ways you would describe Mary Washington’s contributions to public health in the region?

04-01:33:00
Rankin:
That’s an interesting question. Let me think about that and how to answer that. I think there are a couple things we’ve done and where we have had a contribution to the community, maybe not directly but certainly indirectly. I think our work in the mental health area: one can say we’ve made a difference from a public health perspective. Our relationship with the community service board and making sure that we are part of a total system of mental health care is one example. I actually think the work we’ve done in the Moss Clinic for providing care, safety net care. One can even argue that the Community Service Fund and helping other organizations do the work that they do is a form of public health initiative. I will tell you that this whole issue of public health is just beginning to surface in the mainstream in this country. As we move from a volume based system to a value based system, we are being asked to manage populations of patients—and that is how we will be reimbursed. I’ll just use an example of someone who is in congestive heart failure. If we’re getting paid to take care of that whole patient, it may be instead of just worrying about the hospitalization of that patient that has congestive heart failure—really what’s in the best interest of that patient is to keep that patient out of the hospital. Quite frankly, we may give a scale to every patient that’s discharged with a diagnosis of congestive heart failure. They can weigh themselves every day and can call in every day and tell us if there is fluid buildup happening before there is a crisis and they end up in the emergency room and back in the hospital. For somebody that has COPD, chronic obstructive pulmonary disease, it may be cheaper for us in the long run and more productive for us in the long run to buy an air conditioning unit for a patient and install that air conditioning unit in that patient’s house so that the patient has an easier time breathing. That’s public health in my opinion. [01:36:00] I think we are seeing a migration where the thinking about public health is coming into mainstream thinking, rather than just taking care of the episodic care of health. I think of programs where we offered our associates something as simple as Weight Watchers. We brought the Weight Watchers program into the organization and offered it to our associates who wanted help in losing weight. I think that’s a form of public health. Probably the best example of public health that has happened in my tenure—I can think of two examples. The way we handled the open-heart cardioplegia program: we partnered with the local health department and other epidemiologists and investigators to collectively find a contaminant that wasn’t obvious. I think, quite frankly, our infectious disease program on the care and treatment of patients with HIV is best in class. Today most of the people who have HIV in this community get a full continuum of care. Those are examples that come to mind. It’s more than just episodic care. I think some of the outreach things we’ve done. We did a collaborative—this goes back a while—on motor vehicle injuries in this community. We did it in collaboration with the Institute for Healthcare Improvement based out of Boston. We had a high incident of teen crashes. We began to drill down and we saw a couple of things. One, we needed to revamp the way driver’s education was done in this community and we also had to tackle teen drinking. We worked with the local driver training community and they took it on as an initiative, with us providing support, to revamp how driver’s ed was handled in the schools. [01:39:00] They totally redesigned their curriculum based upon what was learned from the collaboration. We advocated for teen advocacy to reduce teen drinking, especially at proms. We give to every high school, and still do, give every high school in our region a $500 donation every year to help support a drug free/alcohol free prom. That’s an example of public health. I think the work we did a couple of years ago around teen pregnancy in this community is part of public health and we worked with the health department. One of the public health initiatives that really didn’t get a lot of press because it never really came to fruition—thank goodness. We collaborated with the department of health about six or seven years ago on, if one remembers, the H1N1 or the swine flu scare. We thought we really faced the possibility of a pandemic. Turns out we didn’t and that’s the good news. But we embedded an educator in the department of health and we advocated community wide immunization. Those are examples. I think the work we are doing right now with the healthy community partnership, that even as we speak, is an example of public health initiatives.

04-01:40:38
Rigelhaupt:
In working with the health department, is it more typical that you approach them or they approach you? And could you describe that relationship?

04-01:40:49
Rankin:
It’s never been antagonistic. We’ve always had a cordial relationship with the health department. Health departments, by their very nature, are state agencies. We’re a private organization. They’re a state agency. There is a difference in how we operate. It’s kind of men are from Mars, women are from Venus. We have different ways we get things done. We have different pressures, and we have different policies and procedures. First of all, you got to set those aside and not let them be barriers. The other thing we’ve found is that it’s highly variable and it’s really variable based upon who the current director of health is. We’ve had many over the years and they’ve all been wonderful people, but they’ve all had their own interests, as well. We’re all human. They come in and each one has their own kind of agenda that they would like. It’s a combination of both. [01:42:00] There are times that we approach the department of health on issues and there are times where the department of health has approached us on issues. Either one is okay. They both have worked and we have both found ways. We can’t always do everything the department of health asks us to do. They can’t always do everything we would like them to do. The key, like in anything else, is keeping the trust relationship open and keeping the dialogue open and finding common ground on a project or projects of common interest. They are kind of political appointees and they do change from time to time. They move them around faster than we move management around. They’re subject to budget cuts depending on the governor or administration. Throughout it all we have found to continue to dialogue and cooperate.
[End of Interview]

Interview 5 – March 4, 2014
05-00:00:00
Rigelhaupt:
It is March 4, 2014. I’m in Fredericksburg, Virginia, doing another interview with Fred Rankin. Today, I wanted to start by talking a little bit about nursing. I’m wondering if you could go back to when you first started here in 1992, if you could talk about what you saw as the strengths of the nursing program.

05-00:00:34
Rankin:
First of all, I guess we have to put in context that nursing is the core job of any hospital. It’s why hospitals exist: at the end of the day they are for the nursing care that’s delivered at any hospital. The nursing aura and the nursing culture is so core to any hospital. I mean it is the hospital, if you will. In 1992 when I arrived, I came to realize that the nursing education program at Germanna Community College and the nursing service at the hospital were inextricably linked—and in many respects it still is and the legacy still exists. The culture of nursing at Mary Washington was tied to the school and, in fact, most of our recruits and most of our nursing personnel came from Germanna Community College. In many respects, it still is the dominant source of recruitment for nursing. I think we’ve always had good nursing at Mary Washington. What I discovered when I arrived was a culture that is hard to describe. The only way I can say it is that the nursing personnel were down on themselves. For whatever reason that I don’t totally understand, nursing at Mary Washington didn’t have a good feeling about itself. I don’t know exactly how to describe it any other way than that, and I don’t know why it was like that. [03:00] I don’t know what precipitated that, but there was a feeling that Mary Washington was a mediocre hospital. Not a bad hospital, but not a great hospital; a mediocre hospital. What I discovered is that especially the nursing staff at Mary Washington, kind of believed that about themselves. One of the first things that I had to do and that I came to understand that I had to do was to get the nursing personnel and the nursing, as a professional organization, to believe in itself because actually they were better than they believed themselves to be. We spent a lot of time in those early years working with nursing to get them to find their own self-confidence in themselves. That was a long-term play. That was not something that happened overnight. I will say that I think just like the medical staff saw themselves differently when we moved into the new hospital building in September of 1993, I think the new hospital building did volumes of cultural and psychological goodwill to the nursing personnel as well. Everybody’s game rose with the opening of the new Mary Washington Hospital.

05-00:05:12
Rigelhaupt:
Were there things that the senior administration had put into place, to try and improve the morale of the nursing staff before the move, or were there steps taken afterward?

05-00:05:27
Rankin:
Both. In all honesty, we didn’t have a strategy to boost the morale, but what we did do was understand that we had to find a way. We did it by supporting nursing. One of the things we had to do was change staffing ratios. [06:00] We had to rebuild the nursing leadership. When I came in 1992, there had been some changes in nursing leadership and one of the things we had to do was rebuild the nursing leadership structure. We brought in some folks who worked real hard to stabilize nursing leadership. We had a core cadre of people. It wasn’t that it was a deliberate strategy to improve morale, but it was more of a strategy to invite nursing as a profession, into the decision making, to be at the decision making table, and to view themselves as more than just hired help. One of the first things we did is we put a nurse on the board of trustees. There had never been a nurse on the board of trustees before. We actually went out of our way to make sure that one of my first board appointments was to put a nurse on the board of trustees. That in and of itself begins to convey a message. It’s a ceremonial statement, but it’s a real statement to say the organization values nursing as a profession and not just as a group of employees. Now, we also worked real hard. At that time, there was new nursing leadership at Germanna Community College. They had a new program director. Jane Ingalls had just been appointed, at about the same time, as the director of the nursing program. We were part of the nursing leadership committee at Germanna. We always had a good relationship. My predecessors always had a good relationship with Germanna. We worked hand in glove with the new nursing leadership at Germanna Community College to make sure that the instructors and the people who were planning the curricula understood what the expectations of the hospital community were in terms of nursing training. We committed ourselves and Germanna committed itself to modernize the curricula. We kind of were doing it together. There were lots of little moves we made to continue to build the reputation of nursing both within the hospital community and outside the hospital community. [09:00] We invested monetarily in Germanna Community College. We invested both time and talent—or treasure, time, and talent. During those years, we doubled the size of the nursing graduates that we supported through scholarships. We really invested in the education of nurses so that Germanna could begin to train the kind of nursing personnel that were needed for the late twentieth century and the early twenty-first century. It wasn’t a deliberate strategic plan. It was kind of a recognition that everybody needed to up their game. It’s hard to describe. I’m kind of at a loss for words. Nursing at Mary Washington needed to start believing in themselves. They had to rebuild their own self-worth, or maybe I should say collective self-worth and that we were good at what we did. We improved staffing ratios. We did lots of things, but really what we did more than anything else was allow nursing through good nursing leadership to really begin to understand and believe in themselves. They were good at what they did. It was a very deliberate kind of culture changing process, and it still goes on today. It really had its culmination—it was a long play. It was not just a year’s work. It was a marathon that probably culminated in 2009 when we got Magnet designation. But we had to have some failures along the way. We tried to go after Magnet designation before 2009 and did not succeed. It was a set of building blocks that we began to put together, starting way back with the opening of the new hospital in 1993. [12:00] We continued to build up, both by word and deed, the reputation of nursing. We were supporting again, with our time, our treasure, and our talent at Germanna, which was then, and in many respects still is, the primary source of new nurses for this organization.

05-00:12:27
Rigelhaupt:
Is this investment in nursing, both in terms of real financial resources, but also trying to have the nurses believe in themselves more, is this comparable to what you described in our last interview, with bringing physicians on as chiefs of their specialties, where you said it wouldn’t fit in a classic return on investment, that it would be hard to quantify or say, but you know that it improved the quality?

05-00:13:04
Rankin:
It’s a little probably easier to measure quantifiably with nursing than it is with the physicians, yet the intent was still the same. It really was raising the bar in terms of nursing, in terms of the practice of nursing. Again, we had great nursing leaders over the years who helped us do that and were in the right place at the right time. It really was this kind of march to not only raise the self-awareness of nursing, but to raise the competency. We adopted over those years—I’ve kind of lost track of time—a nursing practice model. Magnet helped us. There’s no question that the Magnet journey gave us a roadmap. I’m not sure that until we really got on the Magnet journey that we really had the roadmap. The Magnet journey gave us the roadmap we needed. By systematically executing on that Magnet roadmap, it really began to allow us to continue to build. Finally, it gave us the pathway. I’m not sure we had a pathway. I think we knew what we had to do and we know what we wanted to do, but we really didn’t have a pathway up until that point in time.

05-00:14:41
Rigelhaupt:
Who was the first nurse on the board?

05-00:14:45
Rankin:
The first nurse on the board was a woman by the name of Phyllis Bartley. Phyllis was a highly respected nurse who worked then at the Fredericksburg Ambulatory Surgery Center. [15:00] And you know what? She still may work at the Fredericksburg Ambulatory Surgery Center. She was on the board and she was a working nurse, which was kind of avant-garde. She was not retired. She had been a nurse at Mary Washington Hospital. When the Ambulatory Surgery Center opened, she transferred over and worked at Fredericksburg Ambulatory Surgery Center. She was already among the physicians and she was already a respected nurse in her own right. She was a very competent nurse in her own right, respected both by the physician community as well as by her peers. She was the first nurse and she was on the board, I would have to go back and check the record, maybe three, four, maybe five years. It really paved the way for the next nurse to be on the board. The next nurse that was on the board after Phyllis rotated off or elected to come off the board was Jane Ingalls. Jane has huge connections to Mary Washington and huge personal connections to Mary Washington Hospital. She had been promoted as the program director at Germanna Community College. After Phyllis stepped off the board, Jane came on and served a full nine years on the board. Again, she brought the nursing perspective to the board so that all board discussions had a nursing perspective. She also had the very real relationship with the major academic center in the community that was training the nurses. Right now today, we don’t have a nurse. We have not had a nurse on the board since Jane rotated off three or four years ago. It is actually on our list—we need to get another nurse back on the board. But at the same time that we were developing board competency, we were also developing leadership competency. I’ve had the privilege of working with four very, very competent chief nursing officers over the years. When I arrived, the woman who was the chief nursing officer was a woman by the name of Jean Benson. Her tenure here was not a long one. She was here probably three or four years. She was from Richmond and ultimately moved back to Richmond. [18:00] Then after that, we hired a chief nursing officer by the name of Shirley Tate Gibson. Shirley was here probably five, six years, or seven years. I don’t remember the exact timeframe. She left in the 2004 timeframe and then we turned to Barbara Kane. Barbara Kane was the chief nursing officer from 2004 to her retirement just last year. Most recently, our chief nursing officer is Marianna Bedway. We have been blessed with very strong and experienced nurse leaders. Over my twenty-one years, I worked with four different nurse leaders. All were the right people at the right time, bringing the right discipline to the organization.

05-00:19:05
Rigelhaupt:
Was the chief nursing officer also a senior vice president at the administration?

05-00:19:15
Rankin:
No. That was more recent. The chief nursing officer always was a senior level administrator for the organization, but it was only, I believe, with Barbara Kane that we created the senior vice president title. Really the official title, chief nursing officer, was created with Barbara Kane. Barbara Kane and Marianna are probably the two that have had those formal and considered “C-suite” executives.

05-00:20:00
Rigelhaupt:
Why did you create the positions and give them the official title?

05-00:20:05
Rankin:
Well, again, I think it was the evolving evolution of the value and the importance that nursing was to the organization. I think two things were happening simultaneously. One is we were evolving as an organization and as we evolved as an organization, we realized that the core job in our organization was the registered nurse. It was the anchor job. It was the largest single department in the organization and it was a recognition of how important the nursing service was to the success and future of the company. [21:00] At the same time, in the hospital industry in general, people were recognizing how important nursing service was. There was an evolution in the industry, in the health care industry, to recognize and elevate the role of the “head nurse” or the chief nurse, and to make sure that it had a seat at the executive table. I think those two things were happening in parallel. It wasn’t one or the other: it was that the industry was changing and we were evolving as the industry changed.

05-00:21:46
Rigelhaupt:
Can you remember an instance when you first had a senior vice president, a chief nursing officer at an executive senior level administration meeting, where you saw having a nurse in those meetings brought a different perspective to trying to solve a problem?

05-00:22:07
Rankin:
In all honesty, I have to say no to that question. I mean, I can’t say there was one “ah-ha moment.” I think it evolved to that point and it just seemed natural to have nursing leaders at the table that could bring the perspective, the clinical perspective, to the table. It wasn’t that it was one day it was not there and the next day it was there. I can’t say that. It was really an evolution. I will tell you, I’ve always had the nursing department report to me, even before coming to Mary Washington. I was fortunate, back in the late ‘70s in one of my first jobs, that I had nursing reporting to me.
I kind of grew up understanding the importance of having nursing leadership at the table because I’ve never known anything different. When I arrived here, even though the title of the chief nursing officer wasn’t a senior vice president, the director of nursing reported to me. I always had the ear of the chief nurse, whatever the title may be. I think the title, in many respects, was an external recognition of the importance of the individual. I think for me personally, there was always the recognition of how important the role of that individual was and how it was important to me to always seek the advice and consul of the person who held that position. [24:00] I actually think the titling in the formal recognition was more external than internal, but it was an important external milestone. It was incredibly important for the rank and file nurses to see that there was a nurse at the board table. It was incredibly important that the title of the chief nurse be a senior vice president or an executive vice president, and chief nursing officer. I think to the nursing community—it was enormously important to the rank-and-file nursing personnel to know that there was a nurse at the senior leadership table. I think it was as much a recognition. For me, from the time I was a young administrator, I have always engaged nursing. As I said, I was fortunate enough in one of my first jobs that the director of nursing reported to me. Now, back then, I was an assistant administrator. It tells you how things have changed. The director of nursing was reporting to an assistant administrator back in the late 1970s. But for me, I always had the ear of the nursing and I always understood intuitively the importance of having the ear and having the advice and consul of the chief nursing officer. I think the formalization of the title was a recognition to the rest of the nursing community as a whole that nursing is important to the organization. We really made that formalized when we appointed Barbara Kane. I do remember making that announcement and I do remember the sense of pride by the rank-and-file nurses. It was almost as if to say, “It’s about time. This is long overdue.” And in many respects they were right. It was about time and it was long overdue because it really was a formalization of saying how important nursing is to our organization and how important nursing service is to any health care organization.

05-00:26:33
Rigelhaupt:
It sounds as though, when you started here as president, it was a new decision to have the director of nursing report directly to the president.

05-00:26:46
Rankin:
I think so, but in all honesty, I don’t know what the reporting relationship was prior to my arrival here. I really don’t know and I don’t remember. [27:00] There always were directors of nurses here, and some very, very good director of nurses. There are some wonderful stories of some people who were here prior to my arrival and who did enormous and important work around nursing service. I don’t want to give you the impression at all, that this was all my doing. I think this evolution was going on long before I arrived. There were some very, very competent nurse leaders here before I arrived. I think if I did anything, I formalized the process. The chief nurse, the head nurse, the director of nursing, or whatever the title was at the time, always was an important, key administrative function at this facility. I think it’s been that way for a long time. Our history of nursing is so intertwined. The nursing school that we had and just kind of the role that nurses played in standing this organization up, back 115 years ago. Nursing has always played a critical role. I like to think that the role I played, when I look back on my twenty-one years, was twofold. One was, and I mentioned this earlier, helping nursing discover their value. Again, I was taken aback that the organization didn’t believe in itself. I don’t understand why. I like to think I helped the organization and nursing find its own voice. It was always there, but I like to think I played a part in that. If anything else, I played a role in formalizing the importance of nursing leadership at the highest levels of the organization. I like to think that I had a role, but I’ve got to say there have always been good nursing leaders here. Before my time and during my time, and I know that there will be good nursing leaders after my time. Nursing finds a way to get the work done that needs to get done. The nursing profession, in many respects, defines the core culture of an organization.

05-00:29:47
Rigelhaupt:
How would you describe the working relationships between the physicians and the nurses, when you started here?

05-00:29:54
I think that has evolved over time. [30:00] First of all, I think they have always been decent and good. There certainly has not been a time when nursing and physicians were antagonistic toward each other. There always has been a mutual respect between the physician community and the nursing community. Quite frankly, doctors would be crazy not to have mutual respect of the nursing staff. I do believe, and I think this is a sign of changing culture and changing times, that Mary Washington was no different than any hospital of that time period when I arrived. I think there was more of a supervisor/subordinate relationship where the doctor told the nurses what to do and the nurses did it. That’s an oversimplification and that’s an overgeneralization, but I think in general, that was probably the dominant theme of the relationship. I think it was built on respect and built on common understanding of what the roles were. The doctor role and the nursing role had a kind of a clear delineation. I think what I’ve seen over the last twenty-one years—and I honestly believe this is healthy and care is better because of it—is an evolution to less superior/subordinate and more collaboration. The nursing professionals and the physicians are working in collaboration with each other, rather than in just a superior/subordinate role. I think that’s a function of changing values and changing mores. It’s also a function of the increased value of nursing in the eyes of the doctor. With increased competency and the training of nursing, I think it is a much more collaborative relationship today than it was twenty-one years ago. But I don’t think we were any different than any other hospital in America. We were not unique in that regard. I think the 1980s and the 1990s were a period of transformation in terms of nursing/physician relationships. Not only was it going on here, it was going on all over the country. [33:00] In all honesty, it’s much healthier: I think the collaborative mode and the team model is a much healthier model and I think the beneficiary of that is in fact the patient. The patient care is better because of that, but I think that was an evolution that was happening anyway. It was a combination of all the things we’ve talked about up until this point: a combination of increased value and worth, an increased skill set, and it was recognition that the nurse is a professional. This is going to sound weird and I recognize that it could be misconstrued. But if I’ve seen anything in the evolution of nursing, what I’ve seen at Mary Washington is an evolution from a work ethic where the nurse was hired help to professional independence and professional judgment. That’s a way oversimplification of a gradual cultural shift that I think has happened in nursing at Mary Washington Healthcare over a twenty-one year period. I think the rank-and-file nursing of twenty-one years ago viewed themselves—and not everyone—as an hourly worker. Now it has shifted to I am a professional. I want to be valued as a professional and I have opinions, judgments, and skills that can help in the care delivery process. Does that make any sense at all?

05-00:35:04
Rigelhaupt:
I wonder if this is perhaps one of those benefits that might have been hard to see at the time, of bringing in subspecialties, like cardiac care, neurosurgery, that those require teams and that it would have been hard for a physician to single handedly run those.

05-00:35:26
Rankin:
I think that’s absolutely true. I think when we started those new programs, they were teams we were putting together and it would have been virtually impossible without nurses. The irony is that any doctor will tell you, even doctors who have been around or are at the end of their careers, the smart doctors always understood—the smart doctors and the really successful doctors always understood how important it was to make sure that they had good relationships and good collegial relationships with the nurses on the units who were taking care of their patients. [36:00] Doctors have always understood that. But I think you’re right. I think what happened was as we began to put teams together they were the precursor because you had to rely on everybody on the team to get the job done. I think what we have seen is a transformation: as younger physicians have also come to Fredericksburg and to Mary Washington, they have grown up in a culture where the nurse was part of the team. Now I will tell you, for some people, and it was the rare exception, those transformations were hard and there were moments. I paint you a picture in retrospect that this was kind of a seamless transition. It was a gradual transition, but it was not seamless. There were rough patches and there were times where there was conflict. When there is stress and when there is conflict, people go back into their silos and people go back into where they are comfortable. There were some physicians who resisted the idea of a nurse being a collaborator and part of the team. In all honesty, there were some nurses that resisted the idea that they were going to be held accountable for their professionalism. Those were by far the exceptions, not the rule. There were rough patches along the way as we transformed our self from what I would call kind of an average community hospital to a regional medical center. It was not a smooth, linear transition that occurred. The relationship had rough patches and there were potholes that had to be traversed. There were issues that had to be addressed. In all honesty, nursing is still predominantly a woman’s profession, and in all honesty, up until recently in medicine, physicians have been predominantly male. The evolution of nursing is in many respects tied into women’s issues. Those shoals had to be navigated and they were mostly successfully navigated. There were times where there were some shipwrecks that had to be dealt with. [39:00]

05-00:39:05
Rigelhaupt:
Perhaps you don’t want to talk about specific shipwrecks, but could you talk about what you and other senior administrators would have done or how you would have addressed one of those rough spots?

05-00:39:18
Rankin:
I don’t want to talk about specifics because it wouldn’t serve a purpose, but I will say this: when there were rough patches that had to be addressed, at the end of the day, what always prevailed is what was right and what decisions would reasonable people make under similar circumstances. At the end of the day our values kicked in. We’ve always been a values-driven organization. Now, sometimes those values, and the words of those values have changed, but we were always a values-driven organization. When there were difficulties and there were conflicts, at the end of the day, if decisions had to be made or positions had to be taken, we were always able to go back to our values. The decisions that were made and some of them were hard decisions. They were always based on: “Now wait a minute here folks. What would a prudent person say? What decision would a reasonable person make given a set of facts and given a set of circumstances?” I really do believe that our core values always prevailed. Sometimes it was slower, perhaps slower than it should have been, but at the end of the day, our values prevailed. Quite frankly, it was almost always the physician leadership that stepped up to the plate. It was the physician leaders that at the end of the day said, “No. This situation is not right. Or yes, we need to make a policy change.” So, at the end of the day, it was always leaders that stepped up to the plate and did what was right and just followed our ethical values.

05-00:41:45
Rigelhaupt:
Did you see instances early on, when you had the first nurse on the board, that some of the values and perspectives that nurses would have brought or shaped some of the discussions in the board meetings? [42:00]

05-00:42:08
Rankin:
Yes, I did, but they were subtle. They weren’t dramatic. It changed the tone of the conversation. If an issue was being discussed, a topical issue, what was different before and after was the nursing perspective was in the mix. I can’t say that it was dramatic, but it was subtle. I’m not sure the decisions changed necessarily because of it, but the richness of the discussion did. It was just a different discussion and the decisions that were made had the benefit of the richness of the perspective of nursing. In the same way that inviting physicians into those discussions brought the richness of the physician leaders. It was the richness of having different viewpoints and any decision is a better decision when we have diversity of opinion and diversity of viewpoints at the table. I can’t think of more than two or three in my twenty-one years, of more than two or three decisions that were what I would call split decisions. The vast majority of the decisions and the lion’s share that the board has made over my twenty-one years have been consensus decisions. Issues have been discussed and debated and resolved. I bet there’s only three to five times in my entire twenty-one years here that a vote had to be counted. It’s not like a political body where you only have to get a four-to-three vote. It never has been like that at the board table at Mary Washington. There’s always been a consensus of what needs to be done or what should not be done. The value that both physician leadership and nursing leadership brought to the table was the richness of the conversation. What makes a hospital board different than a political board is that we’re not looking for just one vote. [45:00] We’re not looking for the nine-to-eight vote to carry the day. Quite frankly, a nine-to-eight vote just wouldn’t happen at Mary Washington Healthcare because we don’t have the right decision if it is that close. What we would do is keep talking, keep dialoguing, and keep looking for ways. Now, that’s not to say that every decision is a unanimous decision. There may be times that one or two people will not be in favor. At a political body, a one-vote margin suffices. That would not happen and that has never happened at Mary Washington Healthcare.

05-00:45:47
Rigelhaupt:
For the record, would you be able to talk about a couple of the instances where you can think of, where there were split decisions?

05-00:45:54
I can think of one and I think it was, in all honesty, one of the proudest—I think the board was at its finest. I don’t know whether we’ve talked about this before, but it was the decision to not donate land to the city to build the homeless shelter. I don’t know whether we’ve had that conversation before or not, but if we have to remind you: the mayor of the city approached us when the Thurman Brisben Homeless Shelter had to be relocated. The mayor approached the hospital and said, “Would you consider donating a parcel of land?” When the city asks you to do something you take it seriously. You don’t just dismiss it outright, but you take it seriously. We formed a board level committee and we studied the pros and cons of that request. At the end of the day, the board voted, in a split decision not to donate the land to build the homeless shelter on our campus because it was not core to our mission. It was probably the closest vote I’ve ever seen at the board in my twenty-one years here. At the same time, the board made its decision to build a free clinic on the campus because that was core to our mission. That was a split decision, but the board acted thoughtfully, acted diligently, and said, “This is not what we do. What we do is deliver health care.” We made a commitment at that same meeting to build a new building for the Moss Free Clinic and to raise the necessary funds to do so. That is one that comes to mind. [48:00] The other decision that was a difficult decision, but also turned out to be the right decision for the organization, and we believe for the community—a little more recent decision—was the decision to close Snowden Academy. I think we talked about that at one point in time. For a whole variety of reasons, we decided that being a school was not in our core business. Yet we also understood that people depended on us and a patient population depended on us. We had to find a way and we had to make sure that they got the services they needed. We ended up donating and supporting the Gladys Oberle School and expanding their program, thus creating a win for us and a win for the community. That’s the nature of the dialogue. I believe many times those split decisions and out of those split decisions come creative ideas that weren’t necessarily on the screen until that dialogue occurred. That is what having diversity on the board allows to have happen; that is what having nursing on the board allowed. It changed the dynamics of the conversation and it allowed nursing to have a say. Not that it necessarily changed, but its decisions become richer and the opinions of the nursing professionals are heard. I think that is what changed by adding a nurse on the board. By creating a senior nurse leader, so that now, today, that senior nurse leader reports to me directly, so I am engaged constantly. While we don’t have a nurse sitting on the board, that senior nursing leader comes to board meetings. Even though she is not a voting member of the board, she still is attending board meetings. When opinions are needed, her opinion is asked for and she gives her opinion.

05-00:50:20
Rigelhaupt:
Could you have imagined, and this is really a hypothetical question, when you started here twenty-one years ago and you were also on the board then.

05-00:50:37
Rankin:
Yes.

05-00:50:38
Rigelhaupt:
Twenty-one years later, there would only be a handful of decisions, maybe on a single hand, that would have been split decisions.

05-00:50:47
Rankin:
You know, that’s a good question. I guess, no. I’m not surprised because my experience before coming here was a collaborative board. [51:00] I guess I never would have thought it would be any other way. In retrospect, it’s kind of an amazing accomplishment, but I’m not sure at the time I knew any different. I’m not sure I expected acrimony at the board. With boards conflict is not, in of itself, a bad thing. In fact, conflict is necessary for high performing teams. Patrick Lencioni, in his book, The Five Dysfunctions of a Team, one of the five dysfunctions that he describes is absence of conflict. When a team does not have conflict that is probably not healthy for the organization. Conflict is not the problem. It’s how we manage the conflict and what we do with the conflict. I’ve seen disagreements, regular disagreements at the board. I’ve seen people that have had differences of opinion at the board on a variety of issues. I’ve also seen that the board has been able to talk its way through it. The ultimate decisions that are made are good decisions that the full board, at the end of the day, can support because everybody has had a chance to have their say. I think there’s a big, big difference with split decisions. I think the political world doesn’t work that way. Maybe the political world should work that way, but I think the political world is a different animal because politicians are representing constituencies. One of the things we did when we reorganized the board back in 1996 is we got rid of constituencies. We used to have seats on the board that were reserved for this organization or that organization or the other organization. We had probably four or five seats on the board that were earmarked that way. We got rid of all of that in 1996. We said, “No. We’ve got one board. If you serve on the board, you serve on the board and there is one board. Good governance suggests that when you come to a board meeting, you suspend your personal agenda at the door and you make decisions that are based in the best interest of the organization.” [54:00] Back in the mid-1990s we got rid of representation on our board and you’re either a board member or you’re not a board member. Looking back, that was the single most important decision we made because it got rid of representation. People came to the board with the clear understanding that they are not here representing a constituency: they are here representing Mary Washington and they’ve got to make decisions on what’s the best for the organization and the community at large. Political boards, by their very nature, are designed for representation. You are elected by a group of people and you come to the supervisor table representing that group of people. There’s a fundamental difference between a governmental or a political, elected board and an appointed board that is there to represent the interest of the organization. I believe there is a fundamental difference. Those elected officials have no choice. They are obligated and they are morally obligated to vote the will of their constituency. That’s what a representative form of government does. We are not a representative form of a board. We are a community board that comes together to represent, with one voice, lots of views, but with one voice. I believe that’s why we don’t see split votes.

05-00:55:55
Rigelhaupt:
Now here clearly, there was a foundation of consensus and collaboration.

05-00:56:01
Rankin:
Yes.

05-00:56:01
Rankin:
And that’s continued.

05-00:56:02
Rankin:
That doesn’t mean there’s not dissent. There is conflict, but the board chairman has historically been able to manage that conflict.

05-00:56:15
Rigelhaupt:
And in terms of managing it and sustaining consensus and collaboration, it also strikes me, the organization, in the twenty-one years you’ve been here, has gone through quite a transformation.

05-00:56:29
Rankin:
It has.

05-00:56:30
Rankin:
From a community hospital to a regional medical center. You’ve reorganized the board.

05-00:56:35
Rankin:
We have.

05-00:56:37
Rigelhaupt:
At least two times. All of those moments could have been potential moments where some of the consensus and some of the collaboration could have been lost. Those were big changes. What are some of the things that the board did, senior administrators may have done, to continue that tradition?

05-00:57:00
Rankin:
First of all, I think it all boils down to board leadership. What I said before, I believe: conflict, in and of itself, is not the culprit. How one manages conflict is the difference. I think at the end of the day, in my twenty-one years, I’ve had the privilege of working with three board chairmen. Those three gentlemen have been masterful at managing the conflict and not allowing the conflict to become personal. Those three individuals are Tom Williams, Joe Wilson, and John Fick. They have allowed every member of the board to have their say, and sometimes at great length, so that all views get fairly and equitably aired at the board meeting. For senior leaders, our job was to bring a position to the board and I had to learn that. I remember early in my career, and I don’t even remember the issue. I remember what happened, but I don’t remember the issue. We were talking about a potentially contentious topic—and as I said I can’t even remember the issue any more. There was not one absolute way to solve the problem that we were talking about. I remember early in my career, I did not bring a recommendation to the board. I basically laid out, here are the options: here’s option A, here’s option B, and here’s option C. I gave pros and cons to all three options and then I turned to the board and I said, “All right board, you decide.” That was a mistake. That was a learning moment for me as a CEO. My board immediately responded and there was a board member who said, “What does management recommend?” I wasn’t prepared for that. I learned a valuable lesson through that interaction. One of the things that I always did after that experience—I believe management always needs to bring a recommendation to the board, even when there are multiple options. I always, at the end of the day, bring a recommendation. There is always a management recommendation that is brought to the board. I’ve come, serving on boards myself, to realize the wisdom in that. [01:00:00] Quite frankly, volunteer board members or part-time board members are really not equipped and don’t have all the detail necessary to know what the right decision is. What I do now is I will always bring a recommendation. I will be as transparent as humanly possible and say that there are other options that were considered and this is why management is making the decision. I’ve discovered that allows a kickoff place for the board to start the debate. There are many times that the board—more often than not—the board will accept management’s decision or recommendation. More often than not, there are some adjustments made and there may be a tweak here and a tweak there. It’s almost hardly ever accepted carte blanche. The debate gets centered around improving the caliber of the decision. Very rarely, but it does happen: the board rejects management’s decision. When that occurs, you table the discussion and you go back to the drawing board, but at least you have the benefit of the conversation from the board. I learned, early in my career, that management must—it has a moral and ethical and actually fiduciary responsibility—bring a recommendation on whatever the topic may be to the board. I learned that the hard way. Management always brings a recommendation to the board now, on whatever topic is being considered. Then that allows the board to have the rich conversation. The board doesn’t always have to agree with the recommendation, but management has an obligation to bring a recommendation. The relationship between the board and the CEO and senior leadership is a very dynamic relationship. The CEO and the senior leaders have to trust the board and know that the board has their back. On the other hand, the board has to trust the CEO and the senior leaders, that all fifty-two cards are being placed on the table. I always, to the best of my ability—when I bring a controversial decision and when I make a recommendation, I do my best to make sure I’m also putting the minority view out there as well. [01:03:00] If it’s really a controversial decision that has to be made, I sometimes will have someone who has a minority opinion actually make their case directly. That doesn’t happen very often, but on occasion I’ve allowed that to occur.

05-01:03:14
Rigelhaupt:
Would you be able to describe one of the more controversial moments?

05-01:03:22
Rankin:
They almost always have to do with clinical programs. That’s what we do anyway. They usually have to do with are we going to continue to operate a program or are we going to close a program down. Getting out of the senior care business was one of those moments. That was a hard decision to make and it had many facets to it. There were people who were very much opposed to us getting out of the senior care business. The decision to sell Carriage Hill or to sell Chancellor’s Village, those were difficult. Those are examples of when there were other opinions and whether we needed to be in that business or not be in that business. Those are examples of some of the more difficult decisions that we have had to make as a board. Now, the good news is—and I guess I’m going to get this quote wrong because he’s been quoted as saying everything—Peter Drucker has been quoted as saying, “Any program in any organization always has a champion.” Otherwise, the program would not have succeeded up until that point. Really those decisions, most of the time, are decisions to close programs down. Those are the most gut-wrenching ones because you know when you are making the decision to close a program down you are affecting somebody. It could be as simple as affecting somebody’s job, but you know that there are patients out there that are going to be affected by it. Those are hard; those are the hardest ones. The decisions to not get into a new program are a little easier. Sometimes they can be controversial too, but they don’t always necessarily affect real live patients. Decisions to close programs affect real live patients and those always are emotionally, very, very difficult. I’ll be honest with you, physician disciplinary action can become quite controversial. [01:06:00] One of the obligations of boards is to take disciplinary action. While we have a wonderful medical staff, from time to time, just like in any population of people, there are bad actors. There have been a few times when a physician had to be disciplined. Those are always difficult and they are always controversial. Most of the time they are contested, sometimes legally, sometimes not. Litigation issues can become contentious. Given the field that we’re in and given that we live in an America that is allowed to sue, people sue us; litigation can become contentious. But in all circumstances, what I have found from this board, is that at the end of the day, the decisions are made by what the board members believe, the majority of the board believe, is in the best interest of the company, which is their fiduciary responsibility to do. Now, the other thing we have to teach board members, especially people who are not used to governance, is that individual members of the board have no power whatsoever, none at all. The only power that the board has is when it is in session as a body and it is deliberating as a body. An individual board member has absolutely no power to affect any change whatsoever in the organization and should not use their position to make changes. A good board member understands the difference between management and governance. Billy Beale, a former board member, told me once that, “The difference between the board and management is that a good board member understands the difference. A good board member keeps their nose in the business and their fingers out of the business.” It’s a great quote, which I’ve used many, many times.

05-01:08:23
Rigelhaupt:
A couple more questions on nursing, to go back.

05-01:08:34
Rankin:
Sure.

05-01:08:35
Rigelhaupt:
Nursing has, in the last twenty years, become increasingly more technical.

05-01:08:41
Rankin:
Yes, it has.

05-01:08:41
Rigelhaupt:
The technology.

05-1:08:42
Rankin:
Yes, it has.

05-01:08:43
Rigelhaupt:
And as you described, the training of nurses is certainly, their skill as health care providers has increased. Part of the way, I think the shorthand is the transition from LPNs to RNs.

05-01:08:56
Rankin:
Yes.

05-01:08:57
Rigelhaupt:
How would you describe that transition affecting Mary Washington Healthcare? [01:09:00]

05-01:09:02
Rankin:
It’s a good question and it’s still evolving. The end story has not been written on that question yet, but I’ll say a couple things. One, going back, one of the most common—I won’t say complaints—but common comments that physicians made to me about nursing when I arrived in the early 1990s was nurses needed to think more critically. Rather than just be able to do rote and kind of parrot back book learning, doctors wanted nursing to have better critical thinking skills. I shared those comments with Jane Ingalls, as she began to develop, re-modernize, and reinvest in the nursing program at Germanna. I shared those comments over and over again with her and Jane heard those comments. Jane began to systematically change the curriculum at Germanna and I think all nursing schools were doing the same thing: train nurses to think more critically. You mentioned the dynamic between RN versus LPN. There were many dynamics that fit into this critical thinking skill mindset, but it’s an all-around skill set. LPNs play a huge role, but LPN training and an RN training are very different. The licensing between an RN and an LPN are very different and there are very clear, bright lines of what an LPN can do and what an RN can do. Those bright lines, both from a legal perspective as well as an education perspective, are very bright. The harder line to manage has been the associate degree nurse and the bachelor nurse. That’s been the harder line to manage because at the end of the day they’re both nurses; they both take the same nursing certification exam and they’re both registered nurses. There’s no delineation between a registered nurse that’s a bachelor’s degree and a registered nurse that’s an associate degree. [01:12:01] Germanna has historically been an associate degree program. Where we have seen the change in the conflict, in all honesty, in the nursing skill set and in the critical thinking skill set over the years, has been the tension, the creative tension, between the associate trained level nurse and the bachelor’s level nurse. In the nursing profession, that has been a much more difficult debate and sometimes created sources of conflict for our organization. We rely so heavily on Germanna for recruitment, but it is a two-year program versus a four-year program. That has been a difficult kind of friction point to manage. I will tell you, nursing as a profession grapples with this as well. I believe the National League of Nursing or the Association for Nurse Credentialing—I don’t remember which organization—basically has gone on record saying that by the year 2020, that eighty percent of hospital nurses, in order to be accredited, need to be bachelor level nurses. That is a tall order because right now, nationwide, the ratio of bachelor level nurses, bachelor and above versus associate, probably that ratio is more like fifty-fifty. And at Mary Washington, it’s probably more of a forty/sixty split, with sixty percent associates, forty percent bachelor’s RNs. We have found that we have gradually had to shift our ratio and in all honesty there are friction points in doing that. To me, the LPN, CNA, RN, is easier. Those ratios are easier because there are bright line regulatory requirements of what those various job titles can and cannot do. To me, the harder is this transformation between what’s the right ratio between bachelor level prepared nursing and associate prepared nursing. [01:15:00] Now I will tell you in recent years, and when I say the story isn’t fully written yet, there was a time that people believed we should go to an all RN workforce. There are people in the industry that still advocate for an all RN, with very few CNAs and very few LPNs. There are people in the industry that advocate for an all RN workforce. To be blunt, economics are going to factor into that equation. I’m not sure the industry can afford it given kind of the reimbursement and the nature of reimbursement for health care. I’m not sure one, that the industry can afford it. I don’t think Mary Washington can afford it. I’m not sure, at the end of the day, although the jury is still out on this, but my instincts tell me that care is not necessarily improved with an all RN workforce. I think, like anything else in life, the mix of workforce is right. I think for us, finding the right mix of RN, LPN and CNAs is going to be the challenge for us going forward at Mary Washington. I think the industry has to grapple with the ratio of bachelor’s to associates. Now, I will tell you, and I probably would get in a lot of trouble for saying this, probably, when I came in 1991 the ratio was too far skewed associate RNs to bachelor’s RNs. I think one of the things we have done over twenty-one years is shift that ratio. Believe me, Germanna does a wonderful job in training nurses and nothing that I say is meant to disparage the education that the Germanna nurses get because they are fine. Yet, just two more years of education makes a difference and I think it helps with nurses getting their critical thinking skills faster. I think associate nurses eventually get them, but they get them from on the job training. In 1991, we probably had too much associate-level RNs. What we’ve done, with the full concurrence of nursing leadership, is begin to move that ratio so it has a little higher percentage of bachelor’s prepared nurses versus associate prepared nurses. [01:18:00]

05-01:18:06
Rigelhaupt:
You mentioned a number of the chief nursing officers, going back to Jean Benson, but I’m wondering, before we kind of perhaps shift gears on nursing, if there’s other key leaders in the nursing program at Mary Washington.

05-01:18:34
Rankin:
Oh my gosh, sure there are. There have been some people, I mean those were the directors of nursing, if you will, but there were people before them. I’m only sharing with you, the ones that I had the privilege of working with, but there were people before them. Barbara Kane, if you’ve interviewed her, she could tell you some of the people who preceded those folks. There are numerous nursing managers who have had profound influence over nursing care. Irene Summers was one that comes to mind that has been here; she recently retired. There’s probably a dozen or more. Sue Hall is another one that comes to mind. Sue was so instrumental as a nursing leader. Irene Akers, I think that is her name now. Janet Bykoswki. I mean there are probably a dozen or more nursing managers. Elyse Donohue. If I could think about it, there’s probably a dozen or more nurse leaders. Kelly McDonough, Deb Marinari, Sharon Safferstone, Lana King. I mean you can just go down the list of nursing leaders we have had over the years and have had profound influence in nursing practices here. Dozens of them. That’s one of the things that any leader comes to understand. I’m a conductor of a big orchestra. I don’t play a note of music, but I’ve got lots of virtuoso players out there that just are magnificent in the work that they do. While I identified the four senior nursing leaders I have worked with, there are dozens of people under them that have had profound influence on the care that’s been delivered here over the years. [01:21:00]

05-01:21:08
Rigelhaupt:
If you were to think about a more recent advancement, with the achievement of the Magnet status in 2009, I’m sure there were countless hours of meetings.

05-01:21:21
Rankin:
There were. The two people that drove the Magnet designation more than anybody else was Barbara Kane, who was our chief nursing officer at the time, and Eileen Dohmann, who was our vice president of nursing at Mary Washington Hospital at the time. Eileen is still here. Eileen actually heads up our quality and safety program here now and is doing a magnificent job with that. They were the two drivers that drove the Magnet. I will tell you, in my twenty-one years here, there are at least three what I call emotional moments. Maybe a half a dozen, but there’s three that come to mind right away where I got very emotional and I realized this is a transformational moment for the organization. One of those three was when we were all in the lobby waiting for the telephone call for Magnet. That, to me, was a transformational moment of time that I’ll never forget as long as I live. I can think of three moments like that, which were to me, just affirmations that we are in a different place than we were yesterday. Obtaining Magnet status was one of those because it validated years of transformation: now we had a nursing program that was no longer just average. We had a nursing program that was considered one of the finest nursing programs, and it was validated by external sources. What is it, only ten percent of all hospitals nationwide get Magnet designation? It was an external affirmation of the quality of nursing care that was being delivered at Mary Washington Hospital.

05-01:23:48
Rigelhaupt:
While you were thinking about emotional moments, you said there were three.

05-01:23:53
Rankin:
Yes.

05-01:23:54
Rigelhaupt:
One was the Magnet call. What were the other two?

05-01:23:57
Rankin:
I remember them distinctly too because they were transformational. [01:24:00] The first one was the hospital opening on that Sunday in September 1993. I remember thinking to myself, “This organization will never be the same again. It was yesterday we were one organization and tomorrow we are another organization.” That Sunday when this organization came alive and was birthed was one of those. Nursing Magnet was one of those. You’re going to laugh at the third one. It wasn’t the opening of Stafford Hospital, although that was exciting and dramatic. To me, it was when we got the COPN approval to build Stafford Hospital. That for me, was a very emotional moment. When that telephone call came from Richmond and said, “Your application has been approved.” It was hard fought and it was not guaranteed by any stretch of the imagination. It was contested by HCA. When we got that announcement that it had been approved that was a transformation. Those were the three that I can remember, of being to me and saying we are a different organization because of that moment. This will impact our organization. The opening of Stafford was a culmination, but the emotion to me was actually getting permission to go forward with building it. Those were the three that I remember.

05-01:26:02
Rigelhaupt:
Let me jump back to the Magnet designation, because there’s a way, in a very clear and organic, and just cut and dry, if you’re in the top ten percent, you’re in the top ten percent.

05-01:26:18
Rankin:
Right. It was validation of years of work.

05-01:26:23
Rigelhaupt:
And if remember you saying earlier, that there had been an attempt that hadn’t gone through.

05-01:26:28
Rankin:
There had been a failed attempt prior, a couple years earlier, yes.

05-01:26:32
Rigelhaupt:
What were some of the things you did between that first attempt and winning the designation in 2009?

05-01:26:39
Rankin:
I think the big difference was, first of all, we learned from our failures. The first time we did it—and this is going to sound silly—our application on paper was a good application, but we didn’t have anything to back up the application on paper. [01:27:00] We didn’t have the systems in place to back up what was in the words. I think when the surveyors came—and I don’t really remember when it was, I want to say 2004 timeframe, something like that—we didn’t have the processes in place to defend the decision or to defend the application. What we did in the five years in between 2004 and 2009 was build the infrastructure underneath it. That’s what we did that was different: we actually built the infrastructure to support the application so that when the surveyors came they saw the real deal. When they came in 2009 they saw the real deal. The reason that day was so emotional was, if you were in the atrium that day—and actually there’s a video of that around and I would urge you to watch the video—you can’t help but feel the electricity in the atrium. The pride of the organization around that decision was palpable, real, and genuine. It was more than a nursing validation: it was an organizational validation that we deserve to be recognized. We are a top ten percent, top performing organization. Now, like any career, I’ve had my successes. I’ve had my moments of euphoria. I’ve also had my moments of failure. We’ve had our failures here too, but Magnet ranks as one of those great successes. I felt the same way in 1993 when the new hospital opened. There was a feeling of validation. That this is a new day and everybody associated with the opening of the hospital was proud and they knew it was a new day. The doctors knew it, the nurses knew it, the environmental service workers knew it, and everybody knew it. The board knew it and the community knew it.

05-01:29:49I
Rigelhaupt:
I think we’re probably right about time. If I could ask one more question just about one of these emotional moments. [01:30:00] Stafford and the COPN approval. My understanding was that it was also a surprise that HCA was approved at the same time.

05-01:30:12
Rankin:
It was a surprise. We always knew that was a possibility. I will tell you this though about our strategy. We had been advised by our legal advisors that the only way Stafford would get approved would be if both got approved. So for us, we kind of knew that was going to happen, and without going into a lot of the political, I think, given where the Department of Health was in 2005 and 2006—I think it was 2006 when the approval was given. There was a belief back then that no community should have a sole community provider and that every community in Virginia should have competition. You can argue that until the cows come home, but I think that was an operating opinion. We knew going in, that we were a long shot. We were very confident in the story we had around Stafford and very confident in the story that we were telling, but we also knew that from a political perspective it was a long shot. We had to make a case that the community could support both facilities. It was so hard fought. It was a very contentious COPN fight, as they are. They pit one organization versus another and it’s just the nature of the beast. We had worked so hard on our strategy and we knew it was a risk. We knew that venturing out off the campus of Mary Washington Hospital was a huge risk for us, but we also believed, and we still do believe, that it was absolutely the right decision for the community. It was the validation of that work that we spent a year and a half or two years working on, defending in public forums, and defending in administrative hearings. It was so dramatic and it was a long shot. [01:33:00] It was a long shot and that prevailing was incredibly emotionally satisfying: “We actually did this and we’re actually going to build this hospital.” That, for me, was incredibly emotional. Yes. Was the opening of Stafford as exciting as opening Mary Washington? Yeah, it was. Did we know it was a new day? Yeah, we did. But the victory of actually getting the approval to do it, for me, was emotional because I almost had kind of steeled myself to not get it, despite all the hard work. I gave it my best shot, but at the end of the day, because I had been advised it was a long shot, I kind of was emotionally ready for the letdown. When we got the word that both had been approved I was overwhelmed with emotion. There have been some great moments and they were transformational moments. The opening of Mary Washington, which we’ve talked about. Magnet status, after a long journey it validated the quality of nursing care. Then kind of spreading out our wings from Mary Washington into a second facility. Those were, in my opinion, the transformational moments and still rank as the highlights.
[End of Interview]

Interview 6 – June 2, 2014
06-00:00:05
Rigelhaupt:
It is June 2, 2014. I’m doing another interview with Fred Rankin, and to begin today, I would like to talk with you about how your position has changed as CEO and President of Mary Washington Healthcare, Mary Washington Hospital, and MediCorp in between. We’ve covered it in different moments in the interviews, but if you could begin by talking about and thinking back to some of the challenges you faced when you first started as president of Mary Washington Hospital?

06-00:00:40
Rankin:
The job has changed, to be sure. When I first started at Mary Washington, in the early 1990s, the job was very much of a day-to-day operations job. When I arrived here, fundamentally, I did not have a management team in place. There were certainly good people that were assigned certain tasks, yet the reality was there was not a cohesive management team in place. It really came to me that one of the first things I had to do was build a management team. I had to make sure that, if you will, the basic blocking and tackling that the organization ran on a day-to-day basis—kind of the train schedule—and make sure that the organization ran on time. The other thing that happened when I arrived in the fall of 1992, we were in the midst of the construction project to build the new hospital. There was an enormous amount of activity tied to the last year of construction of the new hospital building. There was a lot of planning underway about how to transfer operations from the 2300 building over to the hospital on Sam Perry Boulevard. The first year really was one spent building a management team, overseeing kind of the final decision-making around the building of the new hospital, and really starting to plan in a very comprehensive way how to run the new hospital on a day-to-day basis. [03:00] My job at the beginning of my career here really involved day-to-day management. It really was operations. It was making sure that nurse staffing schedules were appropriate, making sure that supply chain worked, and making sure that everything that we think about that it takes to run a hospital on a day-to-day basis was in place and intact. Really, that continued into when the new hospital opened in September of 1993 and for the next year-and-a-half. When I really look at how I spent my day, it was around day-to-day operations. It was putting a leadership team in place, starting to build a team, but it really involved running the hospital on a day-to-day basis. It stayed that way really until the spring of 1995 because it was in April 1995 that I was appointed the CEO of what was then MediCorp. But even then, I was still greatly involved in running the day-to-day hospital function. I began to realize, as spring of 1995 moved into summer of 1995, I began to realize that my job was changing. As the CEO of MediCorp, I really had to start turning my attention to the longer-term issues and more what I would call kind of strategic policy issues of the organization. It was then that I made the determination to hire a chief operating officer. I appointed Walt Kiwall, who actually, in many respects, was the first person I hired when I arrived in 1992. Walt was already here and Walt was the director of human resources. In 1992, the vice president of human resources had left in the summer before I arrived. That position was vacant. [06:00] In the fall of 1992, I realized that I really needed a vice president of human resources. That was really a very important function that I had to have. That was really my first hire, and it was Walt Kiwall. I promoted Walt into the position of vice president of human resources. I did have a vice president of nursing at the time. The CFO was in place for the system and then I had a smattering of other people. Bob Lively was on the management team at the time. Ray Pittman was on the management team at the time. At least I had the beginnings of a management team. Then, in 1995, I become the CEO of MediCorp—what was MediCorp at the time. I quickly begin to realize, I really do need a COO. My duties and my responsibilities are beginning to change to more policy and more long-term development. By the fall of 1995, I again promoted Walt into the chief operating officer job. It was around that time that Jean Benson, who was the director of nursing at the time, left the organization and took a job in Richmond. We had to hire a vice president or a chief nursing officer. With the promotion of Walt into the COO, we really needed a human resource officer and then we recruited a vice president for human resources. By the time kind of we’re in the mid-‘90s, the management team is beginning to form. It’s beginning to form as a cohesive management team. My job began to evolve to one of less operation and more strategic planning. That really took us into kind of the turn of the century, and out of the late-‘90s. We found the right balance. I still was involved in operations because my office was at Mary Washington Hospital. I never moved my office over to the corporate office. I kept my office at Mary Washington Hospital, but I still had my pulse and my fingers on kind of the day-to-day operation, but I wasn’t involved in every single decision. [09:00] About the latter part of the ‘90s, we went through one of the management or consulting crazes of the late-‘90s; there was kind of the whole reengineering movement. We went through some pretty significant processes to try to re-engineer. We tried to re-engineer nursing service. We tried to re-engineer supply chain. We tried to do some things to really begin to lean down the organization. Looking back on some of the changes we made at the time, some of it worked, others of it really were more faddish and didn’t work. But it was a time, in the late-‘90s, when the economy of Fredericksburg was on fire and the growth of this region was just torrid. At the same time, the growth of the hospital was torrid. We were seeing massive, massive growth in terms of volume and capabilities at the hospital. Much of our work was running as fast as we could to keep up with the volume. By the time we get into the turn of the century, around 1999-2000-2001 timeframe, we begin to realize that we’re out of capacity, or we were quickly going to be out of capacity. We had to start then a pretty significant planning process to add capacity to the organization. We went through a very deliberate strategic planning process during that period of time that resulted in the decision to build the additional tower at Mary Washington Hospital and to add additional beds. At that point of time, most of my work was around the planning and expansion of the tower. By that time, I would probably say seventy percent of my time or seventy-five percent of my time, was spent in more long-term development, with about twenty-five percent of my time spent on what I would call day-to-day operations. If I’m spending twenty percent of my time, it’s really on those high-profile operational issues. [12:00] Even then, I still tried to stay in tune with what was going on at a day-to-day basis. I attended medical staff meetings regularly. I was attending departmental meetings regularly. I was rounding regularly. I still kind of had my finger on the pulse of the flow of the company. By the 2002-2003 timeframe the construction was well underway, but our capacity had really reached its limit. The organization had a shimmy to it. It was like the engine was running so fast and so hot and heavy, that it meant you began to feel that occasionally a cylinder would miss here and there. We had a pretty significant event that occurred in 2003 that really was, in many respects, a seminal moment in the history of the organization. It really was kind of a seminal moment in Fredericksburg, too, because now we look back on it as kind of minor—there have been so many other natural disasters that have occurred in the last fifteen years that it seems almost minor. Hurricane Isabel coming straight up Interstate 95 and with Fredericksburg in a direct path of Hurricane Isabel, that created some huge challenges for the hospital because the construction wasn’t open yet. The new construction wasn’t open yet, and we got overwhelmed with patients during the three or four days of Hurricane Isabel. At the same time, we were moving so fast that my leadership team kind of began to show signs of—I’ll stop short of saying “dysfunction,” but we weren’t running as a well-oiled leadership team. By the end of 2003, beginning into 2004, I really turned my attention to rebuilding the leadership team. That’s when I got my first executive coach. [15:00] I spent the better part of 2004 kind of rebuilding the leadership team again, the second rebuild of the leadership team. I spent an enormous amount of time and energy in 2004 around leadership development. That’s kind of when I became really interested in and came to understand how important leadership was to a complex organization. By the time we get well into 2000, of course, we start building and in 2004 the addition opens. We immediately start planning for the next phase of expansion. We went through a very deliberate planning process and a very thoughtful planning process that really ended up with the decision to build Stafford Hospital. By the time we kind of get into the 2005-2006 timeframe, I’m probably spending ninety of my time on long-range planning, policy, strategic planning, and things like that and ten percent of my time on operations. Probably through last year, it stayed kind of at that level, where I really was out of operations for the most part—almost completely out of operations. I was spending a lot of time trying to figure out where was the puck going to next so that I could position the organization and I could position the organization to be ready for whatever was going to come down the pike. Obviously, Stafford Hospital was built. In the middle of the building of Stafford Hospital, what we now call the Great Recession hit. Nobody planned for the downturn in the economy. Nobody saw that coming—I certainly didn’t see it coming. That really caused us to all kind of pause because a lot of the assumptions we made around Stafford Hospital really never came to fruition. At the same time, though, and of course at that point in time, a new president was elected. I think we all began to understand that by the time 2008-2009 timeframe is that we are headed toward a dramatic change, of some sort of change in health care policy in America. I began to really educate myself and try to understand where were we headed and what kind of organizational structure did we need to have for the future? [18:00] I really kind of had to reinvent myself and had to reeducate myself around what we now call clinical integration. But back then, I certainly didn’t know what the term “clinical integration” meant. I had to start educating myself. At the same time, really, I turned the operations over completely to the chief operating officer and his team. Ironically, as we got into 2013 and 2014 with Walt’s decision to retire and my decision to not fill that position, I find myself actually going a little bit back into operations, again. Today, I would say that I’m deeper in operations than I have been for the last five, six, or seven years and probably more in the seventy-five/twenty-five range—seventy-five percent on strategic, long-term development and twenty-five percent operations. I guess if you would make a curve, where I start out in 1992, probably twenty-five percent operations, seventy-five percent strategy. Then kind of quickly moving to fifty percent operations, fifty percent strategy. By the time we get to the end of the ‘90s, it probably has shifted to seventy-five percent strategy, twenty-five percent operations. By the time we get to the 2010 timeframe, we’re probably ninety percent strategy, ten percent operations. But in the last couple of years, I probably have come back to more seventy-five percent strategy and twenty-five percent operations. That’s a long-winded answer. I think the job has evolved and continues to evolve. I mean, it’s not a static function.

06-00:20:16
Rigelhaupt:
So, one of the things I noticed you emphasized was keeping your pulse on the day-to-day operations, and that very much sounds like, from the way you were talking about it, a strategic decision. Why did you feel like it was very important along—over the course of your career—to stay in touch? Even if it was less time, but stay in touch with the day-to-day operations?

06-00:20:40
Rankin:
I think there’s not one answer. Like anything, there’s not one answer to that question. One, I think the CEO of a company, at the end of the day, has to have some feel of what goes on in the company. [21:00] If I were so far removed and so far out of touch with reality, that one risk making strategic decisions that the organization may not be ready, willing, and able to implement and I think one loses touch with the reality of what’s actually happening in the organization. For me, it was I always felt a need and felt it was important for my strategic decisions to know or to at least have some semblance of pulse of what was going on in the company. In truth, I think it was something that I needed to do, personally. I love hospital operations. I love interacting with patients, staff, or physicians. For me—I think part of it is me, personally—to not be able to be connected in some way or fashion would not have been, to be blunt, would not have been fun. That’s the fun part of the job: staying connected. It’s why we’re in this position to begin with. In all honesty, when I look back at the trajectory, I probably overshot it. I think when I was out of operations completely, I did lose touch with some of the dynamics that were going on. There was a period of time that I did lose touch of the reality of what was going on, on an everyday basis. I think as I moved to a ninety/ten that was an overreach. I think the seventy-five/twenty-five is, probably for me anyway, the better mix. If I start to go back down to fifty/fifty, then the CEO is not paying attention to the longer-term strategy. The board ultimately hires the CEO to be the chief strategist for the company, and I think the right balance for me was about the seventy-five/twenty-five. Some of it is the need to really understand so that you’re making good decisions, but I’ll be honest with you, some of it is how I’m hard-wired in my need to stay connected, my personal need to stay connected.

06-00:23:53
Rigelhaupt:
Another thing I noticed in your initial response was that a lot of what was happening organizationally [24:00] and with your position is being driven by internal dynamics—growth in the region—the things that were unique to the area and Mary Washington Hospital and MediCorp.

06-00:24:11
Rankin:
I think that’s a fair statement.

06-00:24:13
Rigelhaupt:
But where you got to towards the end was the Affordable Care Act, and changes were being forced by external forces. Were there other things that came up in the 1990s, in terms of managed care, the potential for health care change, with the Clinton Administration, that had anywhere near the effects that you describe with the Affordable Care Act?

06-00:24:39
Rankin:
I would articulate it as external forces have always driven changes and have always been there. I think external forces changed from time to time, but I think they are always there, whether it be the internal regional growth of the community, which is an external force in and of itself. To answer your question directly: yes, I think there were iterations of health policy that I’ve actually seen throughout my entire career. Bill Clinton was elected President in 1992. We all remember and it’s part of our history now that he tried to create a universal form of health insurance. I mean, we all remember his State of the Union Address where he held the card up and said, “By such and such a time”—this was his goal. We all remember that he appointed his wife, Hillary Clinton, to chair a panel, a very high-level panel, to design a program. That dynamic was going on in the mid-‘90s and at the same time that was going on we had the meteoric rise of managed care. Insurance companies were reinventing themselves. When I came to Mary Washington Hospital in 1992 Blue Cross wasn’t Anthem at the time; it was Trigon and Trigon was a not-for-profit health care system or insurance company. Somewhere in the 1990s, the insurance companies changed. Trigon was bought by Anthem and Anthem started to get bigger and it became a for-profit company. At the same time, we have this meteoric rise of managed care. [27:00] In the ‘90s, we began to see the need to change the health care system. History is a great teacher, but even before going there we responded accordingly. It was really in the ‘90s and it was as a reaction to the growth of managed care, the change of insurance companies, and how health care was paid for that we formed what is known today as Pinnacle Health. It really was a physician-hospital organization. It was really our first attempt at clinical integration. We didn’t call it clinical integration at the time. We created this thing called a physician hospital organization and it really was meant to be a vehicle through which hospitals and doctors could start to learn to interact together. We look back on it and it was quite quaint, at the time. We didn’t merge. Doctors stayed in their own private practice, but we did create a vehicle on how to interact. It became the vehicle of how we started to interact in a business sort of function. We developed some very basic contracts with insurance companies and it really served us well during that period of time. It served the doctors well and I believe it served the insurance companies because there was a vehicle. We experimented with a chamber product back then in trying to work with local brokers and work with Blue Cross/Blue Shield to put a product together for small businesses. It still was based on the private fee-for-service practice of medicine. We all know that by the time we get into the late-1990s, managed care as we know it kind of falls on hard times. We all remember—I can’t remember her name, but the Jack Nicholson movie, As Good As It Gets—when the statement is made about “those damn HMOs” or something like that and movie theatre audiences erupt in applause. We had gatekeeper models. [30:00] We did all this stuff and we experimented on how do we start to get our arms around the cost of health care? By the time we get into the late-1990s with managed care HMOs are there still, but they’re not as ubiquitous. They didn’t grow as fast as we thought they were going to grow. We know that President Clinton’s attempt to put together a universal health insurance failed. At that point in time, the late-1990s and the early part of the twenty-first century, the economy was on fire. The burning platform, the federal burning platform, was not as great as it was in the mid-‘90s. But HMOs never went away. HMOs stayed. Commercial companies continued to evolve. Pinnacle stayed. We kept Pinnacle, which was the name of our Physician-Hospital Organization (PHO). We formed Pinnacle in the mid- to late-1990s—it still exists today. It served the doctors well and it served Mary Washington well over the last fifteen years as a vehicle to interact with insurance companies. Again, by the time we get to the election of President Obama in 2008, and clearly one of his domestic agendas, once again, is a universal form of health care. Of course, we’ve got an economy that has tanked and we are in the midst of a recession. Really, one of the pieces of legislation that dramatically changed how health care was delivered was the first stimulus act. The ARRA, the American Recovery and Reinvestment Act, ARRA, I think that’s what it’s called, of 2009. That dramatically set the course of what was to come in health care in the next four or five or six years. It’s under ARRA that the whole value-based purchasing of medicine was first promulgated. It was under ARRA that the term “meaningful use” was first defined and the demand to move in a much faster rate of speed to electronic medical records. [33:00] It was under ARRA that people began to get real serious about a new phase of clinical integration. I remember Walt and I, around that period, we went to a two-day conference around clinical integration sponsored by the VHA in Chicago. We came back in that timeframe clearly recognizing that we had to put a strategy together to position Mary Washington Healthcare for what was happening with the delivery of health care and the payment mechanisms of delivery in health care. The other thing that changed dramatically from when I started my job, one almost apologized for managing the cost of health care. And I don’t mean that in a literal way, but more of a figurative way. I mean, we always wanted to manage the quality, we always knew we wanted to manage the service, and we always did manage the cost, but it was always in an apologetic sort of way. What has changed, and what changed dramatically in that period of time, is that I don’t apologize any more at all for managing the cost because the cost of health care has become such a federal issue. By the time we get in to the passage of the Affordable Care Act, or what we euphemistically call “Obamacare,” it is very, very clear to us that the cost of health care in America is a serious national issue. If we don’t bend the cost curve it impacts the federal economy, Medicaid was stressing state budgets in the country, commercial insurance was stressing businesses, and co-pays and the cost of individual health insurance were stressing individuals. The cost of health care no longer was an afterthought. I find myself now at a point that I no longer apologize for managing the cost of health care. I honestly believe that it’s a national imperative and a moral imperative to manage the cost of care. That doesn’t mean that managing the quality of the care is or managing the service not unimportant. They’re just as important, but equally important now is managing the cost of care. That is a dramatic change from when I started in 1992 versus a difference today. [36:00] Now, cost is on equal footing and I don’t apologize for it at all anymore.

06-00:36:10
Rigelhaupt:
Again, a dramatic change, as you describe, from the beginning of your career to the last, say, five years.

06-00:36:17
Rankin:
Yes.

06-00:36:20
Rigelhaupt:
If I could jump backward to your education and your graduate work in public health. A lot of what you describe in terms of policy changes, I’m presuming, you know, in a seminar setting, in an educational environment, you talk about these things because it’s part of your education and you have time, versus in a day-to-day, being a chief executive or a senior administrator, your time is pressed in a way that when you’re a student, it’s probably not. What were some of the things you learned in terms of your education and your graduate training that you found yourself applying perhaps even to your time before starting with Mary Washington Hospital, in MediCorp or Mary Washington Healthcare, but through your twenty-one years here.

06-00:37:09
Rankin:
That’s an interesting question and I have actually found myself reflecting on that. What has changed? I graduated from University of Pittsburgh School of Public Health in 1978. In 1978, the health care industry was still paid on a fee-for-service, kind of cost-base type of payment mechanisms. We didn’t even have DRGs. The term “DRG” didn’t exist in 1978 when I graduated and when I got my master’s of public health. The first big change that I saw was in 1983, and that’s when the passage of what we call TEFRA (Tax Equity and Fiscal Responsibility Act). That created DRGs. That created the payment mechanism that Medicare went to and that was the beginning of creating fixed payments. That was a big change for the industry and that occurred early on in my career. That occurred within five years of me graduating. [39:00] I will tell you, I think the 1990s was a big change with the advent of HMOs and the growth of HMOs. The irony is HMO legislation is not a new legislation. The HMO legislation actually was passed and was signed into law in 1973 by President Nixon. I remember the date exactly that that law was passed because it happened to be December 29, 1973, which just happens to be the date I got married. That’s why I can remember that date. HMOs have been around for a while. It wasn’t a new thing when we talked about them in the 1990s, but we talked about HMOs being this new thing. Actually, HMOs have been around for a long time and the ‘90s was a period of change. Then, as we get into 2009 and 2010, that was the other era of significant change. I will tell you, the changes that we are going through now are the most dramatic of all the changes I’ve seen in my career because it really is moving the industry and changing the fundamental way we get paid for what we do. In any economic model, the incentives drive the policy and the process. We, as an industry, are reacting. We are in the midst, in my opinion, of moving from a fee-for-service, paid for what we do mode, to really a population health and managing the population or the health of a total population. Now, specifically, you asked me kind of, has it changed? If I go back to graduate school and the courses I took in graduate school, in many respects, it is in my mind, yes. We talked about one of the first questions we were asked my first year of graduate school. In September of 1975, one of the first policy questions we were asked, and we had to write a paper on it: is health care a right or health care a privilege in America? This is back in 1975 and those questions were being debated back in the ‘70s. Health care reimbursement and the basics of health care: we talked a lot about the basics. We spent a lot of time talking about health care economics. [42:00] Caring for populations—because my degree is in public health, I was required to take an epidemiology course as a graduate student. Epidemiology talks about populations of people and talks about disease. For me, the evolution of where health care is now was a set of building blocks of basic concepts that I first became introduced to in my graduate years. I can’t say that there is nothing that I’m doing now, thinking about now, and planning to do now that is totally brand-new and totally didn’t exist. My father was a physician and my father told me once he went to medical school before DNA was discovered. He graduated from medical school before DNA. While I can’t say that there’s been that kind of discovery or that kind of what I would call monumental change in my career. If anything, what’s happening now is the biggest change. The passage of the Affordable Care Act and the implications of the Affordable Care Act, in my opinion, are the biggest change of health care policy since 1965, when Medicare was first signed into law. Medicare was a game-changer. The changing of pre-Medicare versus post-Medicare was a transformational game-changer. It’s my opinion that the Affordable Care Act that was passed in 2010 and the transformation and where we are now, is one of those transformational game-changers. It will require health care systems to seriously learn how to manage populations of people. For me, that was right up my educational alley and it’s an actualization of some of the things I start thinking about in the late 1970s.

06-00:44:55
Rigelhaupt:
Well, let’s continue with education and talk more about how you became involved and stayed involved with the American College of Healthcare Executives, and you’re a Fellow in the American College of Healthcare Executives. [45:00] When did you join, and maybe you could talk about your early involvement?

06-00:45:12
Rankin:
Sure. I am a fellow in the American College of Healthcare Executives. The ACHE is what we call it. It is the premier professional society for health care executives. I first joined the ACHE shortly after graduation from my master’s program. Their model has changed. The terms aren’t quite the same today as they were thirty years ago, but there were three levels. There was a membership level, which was kind of the basic, fill out the application, and join. There was a second level, and I don’t even remember what that level was anymore, and then there was the fellow. There was a progression. The first was you joined and then you had to take a written exam after joining within a period of time to become a full member. I think membership was actually to become a full member. That required passing a written and an oral exam. I probably became a member and passed that before I arrived here. It was when I was in Pittsburgh, so it had to be in the early-1980s. It had to be. It was within the first five years, sometime during the ‘80s. Sometime during the ‘80s, I took my qualifying exam. I actually didn’t become a fellow until about five years ago. Now, today, there are three levels. One is a student affiliate—and I don’t think they had student affiliates back in the ‘70s—and there is a diplomat and then a fellow. I think they still require a written exam today. There were multiple pathways to get to fellowship. One was the writing of a thesis. That was a way you could advance to fellowship. [48:00] Another was case studies: you could pick three case studies and write three case studies to advance. The third, which was introduced later on, was you could be a mentor and you could serve as a formal mentor of a student to become a fellow, in a formal way. There were multiple pathways that one could choose to apply for and become a fellow. About five years ago, the college changed all their criteria. They offered people who had not obtained fellow an opportunity. If they could demonstrate a variety criteria, such as they had been mentors in the field, that they were very active senior leaders, that they had been a senior leader for a period of time, and they were very active in professional societies, then you could apply to be a fellow. There was kind of this one-time period that people could apply to become a fellow when they totally rewrote their educational criteria. That is the pathway I used. Once I started to work and once I came here, in all honesty, I did not have the time to write a thesis or to write the three case studies. I was very much involved in mentoring because I got very involved as a preceptor at VCU’s health administration program. I have mentored over a dozen health care executives or health care students over the years. Because I was so active as a preceptor, that qualified me. It was one of the grandfathering criteria that qualified me. I made an application for grandfathering and was admitted as a fellow about five years ago. But why? One of the absolute obligations of my role as a CEO is I’m the one who has to stay on top of current events. The only way you can stay on top of current events is continuous education. [51:00] The board and I expected it—I demanded it of myself. The board expected it of me. I had to be the one to keep current on what was new and what was modern. I do that in a variety of ways. I am a regular attendee at the ACHE meetings. ACHE offers two forms of meetings. One is the annual convention and that’s an annual meeting, which occurs in March of every year. The other thing the ACHE does is offer an entire series of small seminars. Personally, my mode of continuing education was I did much better in the small seminars. At least once a year, sometimes even twice a year at different phases, I would attend an ACHE continuing education course. I also got involved in other organizations, outside organizations. When I moved down here, I became very involved in the Virginia Hospital and Healthcare Association (VHHA). They host two educational meetings every year. They host a spring educational meeting and a fall educational meeting. I became very involved in the VHHA. I’m a regular attendee of all their continuing education. I also became involved in an organization called the VHA. The VHA used to be called the Voluntary Hospitals of America. They truncated their name many years ago and now it is just VHA. The VHA is a nationwide consortia of not-for-profit hospitals. They have robust continuing education. I am regular attendee at their meetings, as well. Then, about five years ago one of the things we began doing with our board is sending our board to continuing education to make sure our board was fully apprised of current events. We joined an organization called the Governance Institute and we regularly send board members to continuing education at the Governance Institute. I host those and I host the board. I have continuously and I have made it a priority to make sure that I am aware and I am knowledgeable of what the latest kind of policy developments are and the latest kind of trends are in the industry. [54:00] Really, I had to educate myself on what clinical integration was. Again, I attended a VHA meeting in Chicago, probably in the 2009-2010 timeframe, where I learned. I spent two and a half days just immersed in clinical integration. I came back and really began to work with the medical staff in educating the medical staff on what clinical integration was and bringing the medical staff to a point where last year that they formed the alliance. The ACHE, while it’s a very, very important—and it is the professional society for health care executives—it is not the only place that I’ve received continuing education. It was the anchor and it was the beginning, but in all honesty, I probably found more continuing education as the years went by in other organizations in addition to ACHE.

06-00:55:07
Rigelhaupt:
Staying with education. It’s a two-way street—it also involves teaching. You described being a mentor. This question may not be directly applicable, and you’ll tell me if it doesn’t make sense, but if you were to try to, in one of the seminars, perhaps at a meeting with the VHA or the ACHE, if you had to teach your twenty years’ of time at Mary Washington Hospital, MediCorp, Mary Washington Healthcare, as a case study to young executives in a weekend, in your seminar, what would be some of the things you would emphasize about this organization’s history to young health care executives?

06-00-55:51
Rankin:
That’s a great question. I actually did give a speech and I first created a talk when I was asked by the University of Mary Washington, four or five years ago, to serve as their Executive-in-Residence. I had to give two lectures. I was required to give two lectures during that three-day event. I loved doing that, by the way. I mean, it was one of the really very humbling honors to be asked to be the Executive-in-Residence at the University of Mary Washington. One of the lectures was, “Lessons I’ve Learned.” The other was more of a technical kind of health policy and they were very different. I look at that and the irony is, the lessons I’ve learned about leadership are not necessarily the nuts and bolts of health care management. [57:00] They are more the leadership, the lasting leadership lessons I’ve learned about leadership in general, that I think can actually have impact beyond health care. Those would be the things I would concentrate on. I meant things like, at the end of the day it is really about other people. Those of us as leaders get nothing done by ourselves. We have to amass a team and we have to lead others. Things like that. Those were lasting and are what I tell young people about. I loved and continue to love being a preceptor. It is one of the greatest gifts, I think. It really is. The ability to interact with students at the beginning of their career is just an absolutely remarkable honor. It’s an interesting interaction because the students bring the latest didactic information. They are well versed and they have forced me to stay current. I have to stay current with them in order to be effective. They also ask the questions that normally I don’t get asked. It’s the, “Why did you do that? Why was this decision made? Why was this policy made?” It’s not that they don’t know any better, but it’s their inquisitive nature. The ability for them to ask tough questions of me has forced me and given me the opportunity to reflect on decisions that have been made. Why did we do it? That’s a good question. It is asking the questions that normally don’t get asked and that perhaps should get asked but don’t; it’s the innocent question, if you will. Why was this decision made? Or why was that policy made or not made? That dynamic plays into my growth. [01:00:00] And then, finally, I think I have the benefit of experience. I can share experience with them. It is a dynamic process. It works best for me if I develop a relationship with the resident where that repartee occurs, where there is question and answer and dialogue back and forth from the table. I would say with ninety percent of the residents I have had that relationship. There have been others, in all honesty, where it’s rote. It’s a rote reporting. There’s not that interest on the other side, and that’s okay, too. The real growth, I think, for me, has been the ability to engage in that open-ended conversation. I think the residents benefit from that because it allows them to process. I remember as a young executive, I used to try, especially in the early part of my career, I would observe my mentors and I would observe the people that I respected. I would try to guess—“guess” is not the right word, that’s a little too random—I would try to predict what would happen in a situation. In the early part of my career, the very early part of my career, I guessed wrong most of the time, but I would learn. I got better at it, at predicting human behavior. And by that process I learned about human behavior. I also learned about policy and the impact of policy. But for me, one of my greatest joys has been working with residents and mentoring residents. I believe it is part of a legacy that one leaves: you help the next generation of leaders. I’ve watched the next generation of leaders start to take leadership roles throughout the country, actually.

06-01:02:31
Rigelhaupt:
Who were your mentors?

06-01:02:36
Rankin:
I’ve had several in my life that have been meaningful to me. I discount my parents because I think parents are always mentors, but people other than your parents. The first very meaningful mentor of mine was my scoutmaster, Robert “Fergie” Ferguson. [01:03:00] He is the first person, I guess, that gave me a leadership position and I learned a tremendous amount. I am very grateful to him for giving me that leadership opportunity, first as a patrol leader, but really as the senior patrol leader of a very large Boy Scout troop in Akron, Ohio. In college, I had a mentor, an adult mentor, by the name of John Hennessey. I may have mentioned John Hennessey in one of my previous interviews. John Hennessey was the dean of the Tuck School of Business at Dartmouth College and John is responsible in many ways for me choosing health care as a profession. As a resident at the Forbes Health System in Pittsburgh, there was a woman who served as a confidante and a mentor to me, and her name was Rose Ferraro. She was a remarkable woman and health care executive who taught me a lot about human behavior and about making hard decisions and making difficult decisions. Rose Ferraro was a mentor of mine that has been meaningful. Those were in the early part of my career. I’ve had people come in and out of my life. I’ve not had one confidant, you know? I think people come in and out of your lives at opportune times. I’ve had pastors who have been remarkable, important role models and mentors to me at different times in my life. There was a gentleman who I became very, very good friends with, and still is a good friend, who was a professor of church history at Pittsburgh Theological Seminary. His name is Charles Partee. Charles was an important confidant for me at a point in my life. Here in Fredericksburg, Larry Hahn, the pastor at Fredericksburg Baptist Church, my current pastor, is an important mentor. I mean, clearly, in the last ten years, Greg Hiebert who has been my executive coach, has played an incredible role in helping me. [01:06:00] I’ve had people come in and out of my lives at different times. I’ve been blessed with that. I don’t think you have one mentor throughout a whole career. I think you have people that come in and out of your lives at different points of time.

06-01:06:23
Rigelhaupt:
So, thinking back, this is a question about memory, obviously you are looking back and you know—

06-01:06:32
Rankin:
I am, and I am thinking about the legacy, yes.

06-01:06:38
Rigelhaupt:
Were there things you saw in some of the people that you described or you saw at the moments they were occurring, that you had a sense that one day, I might look back and say, “Some of these people will be some of the people I know I’ve mentioned as mentors.” Are there things you saw in those moments and your interactions with these people?

06-01:07:05
Rankin:
That’s a hard question to answer. Probably not at the moment: I probably didn’t appreciate, at the moment, that they would be meaningful people in my lives. Another one that was a very important person was Dr. Bill Gibson, my first boss, Dr. William Gibson. He was my first boss, right out of graduate school. Just a remarkable man and he taught me an enormous amount about how to work with doctors. No, I can’t say that at the time, I appreciated it. I think I knew with every one of those that I mentioned, though. I think I quickly came to realize that these are people I’m a learning thing from those people. I’m learning valuable lessons. Where it started, though, it was kind of mutual respect and mutual friendship. They all started with some sort of relationship that I had with every single one of those individuals. There was some sort of interaction and personal connection I had with every single one of them that had an impact on me. I can’t say that I picked this, “I want you to mentor me.” Or, “I want you.” It wasn’t that. It was people who had meaningful influence, who came into my life at various times in my life and put them there for me. [01:09:00] I can’t say that I chose them to be a mentor. I think they were there and I think it was only the benefit of history, or the benefit of looking back, do I realize what an impact they had on me. I don’t think it was a very deliberate, “I’m going to pick you as a role model. I’m going to pick you as a mentor.” In fact, I tried to do that once. I went through a period of time, in my talk about my leadership journey—I also give another talk about my leadership journey and I talk about my wilderness years. I went through a period of time that was really around 2001-2002-2003 timeframe, where I was stale. I knew I was getting stale and I knew I had to reinvent myself as a leader. But I didn’t know exactly how to do that. I went in search of role models. That was probably the one time I went in search of role models. How I chose to do that was through the VHA. I kind of thought, kind of naively and kind of self-servingly, if I could talk to these health care executives who I respected as health care executives and maybe rub shoulders with them that by the process of osmosis I would learn something from them or something would transfer from their body to my body that I could use. The truth of the matter is, I’ve known wonderful people in health care, but I never found that one person. It was in the midst of that process that, in many respects, Greg Hiebert found me. It was at the same time that I learned about executive coaches. On that journey—I call it a wilderness journey—was when I learned about the concept of executive coaching. I came back and was talking to my folks here. I said, “I think I would really like to have an executive coach.” We actually put an RFP out and companies did apply. Companies came and interviewed and we were down to the finalists when somebody from the VHA said, “You know, you should meet this guy, Greg Hiebert. He has a company called Leadership Forward.” It really was an afterthought because we were well on our way down the road of me selecting a company to work with. We were weeks away. On the recommendation of another colleague, we contacted Greg Hiebert and asked him, “Would he be interested in submitting a proposal?” [01:12:00] I will tell you, he walked in the door for our first interview and within a half an hour, I knew that this was the guy that I wanted to work with. Once again, it was God putting Greg at a moment in time that I needed a coach. That was the one time I was probably seeking something, but I was headed in a different direction. The people that have been meaningful in my life are people that have walked in and out of my life at certain points in my life and in my development. Does that make any sense at all?

06-01:13:00
Rigelhaupt:
This question is kind of trying to tie in with some other oral histories. In researching the ACHE and possible administration, I reviewed some of the oral histories that are available for the history section at the AHA website. I reviewed the interview with Thomas Dolan, who was the president and CEO of ACHE.

06-01:13:19
Rankin:
At the time.

06-01:13:21
Rigelhaupt:
I mean, for a long time.

06-01:13:22
Rankin:
Yes, he was for a long time, yes.

06-01:13:24
Rigelhaupt:
He mentioned a number of things that you had mentioned. So did Gail Warden, who’s a former CEO of Group Health, in Seattle, and Board Health.

06-01:13:31
Rankin:
And some of those were the people that I wanted to get to know, some of those men that you’re identifying, yes.

06-01:13:39
Rigelhaupt:
He also had similar ideas. One of the things that they both emphasized in their interviews are ideas of ethics, doing the right thing. While you have used different words—and I’ve heard different words in the interviews I’ve conducted—there’s been an emphasis on the mission, to improve the health of the people in the communities we serve, from administrator positions to nurses to board members have come back to that mission across the interviews. I’m wondering, in your opinion, how do you think the organization has maintained that focus on the mission, and you have tried to maintain a focus on it with your leadership?

06-01:14:22
Rankin:
Wow. First of all, for me, I have tried and I have spent my whole career trying to stay focused on what I believe the mission of community hospitals are. That’s why I chose to get a public health degree as opposed to an MBA. By the way, there’s nothing wrong with an MBA and it’s a wonderful degree. I’m not panning that, but for me public health and the improvement of public health was an incredible driver and always has been. [01:15:00] I’ve tried to keep that focus over my career. It may have ebbed and flowed over time, but I still tried to keep that true north. The other thing was incredibly importance to me, and I first learned that, this lesson, from my church in Pittsburgh. I was blessed to go to a wonderful Presbyterian Church—Shady Side Presbyterian Church—and got involved as a young adult in the leadership of that church. Now, Shady Side Church is a very unique church. It would be described, I guess, as a very wealthy church compared to other churches in America. The founders of Shady Side Presbyterian are what you would call kind of the industrial icons of Pittsburgh during the late-1800s and early twentieth century—the founders of U.S. Steel, the founders of Gulf Oil, the founders of Alcoa. They left a legacy and they left a financial legacy to that church that most churches in America don’t have. It also has always been well known for its preachers. Because it was a wealthy church it also was able to attract the brightest and the best ministers. Most of the pastors of the church are considered also, in the Presbyterian Church, the up-and-comers of the Presbyterian Church. Neither here nor there. I was asked to serve on the session of that church a couple of years before I moved here and I got to know some of these elderly gentlemen who were leaders of industry. I was a young businessman at the time. I’m a young member of the church. I’m in my thirties. I get to know some of these people. I remember attending a board meeting, a trustee board meeting of the church, and the debate was—it’s kind of almost embarrassing to talk about it, but it’s real—how much of the income from the endowment should be spent on day-to-day operations versus the annual pledging? That interest was sizeable, in all honesty. There was this debate, how much do we use to fund mission work versus to let the endowment continue to grow? [01:18:00] There was an elderly gentleman, Robert Thompson was his name, who basically stood up after all this debate was over and he said, “The people who founded this church believed in Pittsburgh and believed in the mission of taking care of the people of Pittsburgh. They would expect that we spend it all in furthering the mission of the church.” That statement stunned me. It just stunned me and I have never forgotten it. Fundamentally, what he was saying, and fundamentally what I believe, is one of the things that makes not-for-profit health care different than for-profit health care. For-profit health care, they run good hospitals and they know how to run good hospitals. The difference is mission. I’m convinced the difference is mission. At the end of the day, the for-profit health system has their primary accountability to their shareholders. There’s nothing wrong with that, but at the end of the day their ultimate accountability is to their shareholders. I believe the fundamental difference for a not-for-profit, community-based health system is, at the end of the day, their true north is the community. I have done my best. I am an imperfect human being, but I have tried to keep this organization pointed to true north at the end of the day. It is about the community that we serve and it is about having a health care system that this community can rely on and depend on, both now and in the future. That has been my true north. I believe it is similar with what the other men and women said when you listened in your tapes. What I’ve been amazed by when I go to VHA meetings and I go to other ACHE meetings and things like that and when I meet these men and women one-on-one, what I see is that they are all driven, at the end of the day, to serve their particular communities in the best way possible. Health care administration is fraught with the human nature. We have good people and bad people, but when I look on balance at the men and women who are in health care there is an altruistic element of why we all stay in health care. It is about serving the communities we serve. I really do believe.

06-01:20:54
Rigelhaupt:
I’ve been trying to ask you to expand on that a little bit, and try to think about this. [01:21:00] You can tell me, again, if you don’t think this lines up, but I’m trying to think about it in kind of a two-decade span. Your first decade, senior leadership, as you described, a period of expansion and running to keep up. In that second decade, you also described becoming more and more focused on long-term planning. What are some of the strategic decisions, as you shifted from operations to long-term planning in strategic positions, that you would point to that fit with this mission, that fit with the focus, and have created a foundation that certainly, we can say we’re going another twenty years, at least. It’s hard to look at the future, but some of the things you can point to in your long-term plans?

06-01:21:44
Rankin:
I think there are two or three. Well, there’s many, but I think if you were to point out what I think are transformational moments for Mary Washington Healthcare, there are probably, in my career, in my twenty-two years, three, maybe four, three to five, something like that. One is the decision that was made prior to my coming to build the new hospital. We’ve talked a lot about that. That was a transformational decision, in my opinion, because it really set the board at that time saying, “We believe in Fredericksburg. We’re going to do this and we’re going to take the risk to do this.” That was a big one. The second one I think that turns out to be transformational—and we’ve talked about it—it was the decision to develop an open-heart program. Technically, the open-heart procedure is not the hardest procedure in the world. It’s a pretty standard surgical procedure, yet there is something about having an open-heart program that’s transformational. And by the way, the twenty-year anniversary of open-heart is this year and the first patient is still alive. I think that was a big transformational decision. That says, “We are more than just a community hospital. We’re now playing in the major leagues. We are a full-service hospital.” I think Stafford Hospital is a transformational decision because the truth of the matter is it was a risky decision, but it was a decision to move out into the community and expand the footprint of the community, rather than just staying on the hill. I think that will prove to be a wise decision, but it changed us because it moved us from a one-hospital system to a two-hospital system. The difference between one-hospital and two-hospital is enormous, in terms of the scope, in terms of process, and in terms of complexity. [01:24:00] That was an enormous, in my opinion, transformation decision. The one that’s playing out now, even as we speak, was the formation of the Alliance [Mary Washington Health Alliance (MWHA)]. That is a transformational moment, in my opinion, because it is the doctors of this community and it is the hospital in this community—not the only one anymore, but the dominant hospital system in the community—coming together in a profound way to say, “We’re going to control health care. We’re going to find a way to work together to continue to stay true north, and deliver health care, highly reliable health care.” That is still playing out. That chapter is not written yet. That chapter is still being written. I believe it is a transformational decision that we’re going to look back on and that people are going to look back on and say that was a transformational moment when that alliance was formed. Now, I think there are two others, and they, in many respects, have to do with failure. Failure can be a tremendous teacher. I think the difficulties we ran into with Carriage Hill when we lost the Medicare certification for Carriage Hill was, in my mind, my greatest professional failure as a health care executive. Out of that failure came two enormously important things. One was I have never been more proud of the values this organization exhibited in the midst of that failure because the easy thing to do would have been to close down Carriage Hill and transfer the patients to other nursing homes—close it down. Our board did not do that. Our board made a decision in a nanosecond and it was an easy decision: we’re going to stand behind those patients. We’re going to fix our problems, but we’re not going to abandon those patients. For about a six-month period of time, six-to-nine-month period of time, we ran Carriage Hill with out a penny of reimbursement coming into the organization. That is a value decision and that speaks to the core values of the organization. I have never been more proud of the organization in the midst of the failure because of the decision we made to stand by our patients. Out of that also came a modern enterprise risk management system to help us manage risk. Everything we do and every business decision we make has a risk attendant to it. Out of that came a modern, functioning enterprise risk management. [01:27:00] The second failure, which really was not one of our doing, but was the cardiac surgery cardioplegia event where we had some patients die. You know, the truth of the matter was we called that one ourselves. There was no external body breathing down our throat. Our people came to the table and said, “There is something wrong here.” We voluntarily shut down the cardiac program. We voluntarily reported it to the State, invited an epidemiologist and infection control people to come in, and said, “We got a problem here at Mary Washington. We’ve got to find out because people are getting injured and we don’t know why.” At the end of the day, we found it ourselves. We discovered a problem that ultimately ended up being a national problem years later in terms of drug compounding. I will tell you, now, I had some work to do and my leadership at that period of time was a critical moment. I walked into a meeting where people were sniping at each other, they were pointing fingers at each other, and the tensions were very, very high. I knew I had one chance to bring this team together. I don’t remember exactly what I said, but I do remember the concept of what I said was, “The enemy is not in this room. The enemy is not anybody that is sitting in this room. The enemy is disease. We have got to find out why these people are being injured. We cannot do it unless we come together as a team.” That calmed people down, and we accomplished, what in my opinion, it was one of our finest moments—a failure, but a fine moment. I think we also learned we have transformational events that ask ourselves who we are and how we behave in adversity also defines us. We need to find a place to stop because I’ve got to be at Stafford in a little bit.

06-01:29:21
Rigelhaupt:
I think that’s a good place to stop for today. Thank you.

06-01:29:22
Rankin:
Okay. Good.
[End of Interview]

Interview 7 – December 3, 2014
07-00:00:00
Rigelhaupt:
It is December 3, 2014. I’m in Fredericksburg, Virginia, at the 2300 Fall Hill Building doing an interview with Fred Rankin, III. So to begin, I want to go back to one of the things you said in one of our interviews, and I’m not sure exactly which one. But you described the first era of the new hospital as an era of running just to keep up.

07-00:00:29
Rankin:
Right.

07-00:00:30
Rigelhaupt:
And I’m wondering if you could talk about, in looking back, at what you had identified as the most important pillars or parts of the foundation that were built in that first decade that have created opportunities for the decade, eleven years since.

07-00:00:48
Rankin:
The growth of Mary Washington, and I think we’ve said this before, is so tied to Fredericksburg in general. When we talk about the decade of the 1990s we have to remember what was happening in Fredericksburg in the 1990s, too. We can’t divorce what was happening in Fredericksburg from what was happening in Mary Washington Hospital at that point in time. We need to remember that in the early-‘90s, in 1990-91, there was a bit of a recession that occurred. Although the recession was a relatively short-lived recession, it did kind of hit the commercial markets pretty hard and the real estate markets here in Fredericksburg. What was happening in Fredericksburg was the explosive growth of the region took off in the 1990s and that was fueled by Northern Virginia. It was fueled by the Washington economy and by the growth of the tech economy. Fredericksburg really became a part of the Northern Virginia kind of gestalt and that really had never happened before. The population explosion in and of itself in Fredericksburg was just enormous. It was mostly housing. It was housing of people who were moving here to work in Northern Virginia for the most part. The hospital had to adapt to that growing population and the health care demands of that growing population. One big anchor was the new hospital. Just the physical presence of the new hospital was such a change. It was modern and it was state-of-the-art. [03:00] It had all of the highest technology that the early ‘90s could offer. It was kind of the epitome of the growth. It was the physical epitome of what was happening in Fredericksburg. In September of 1993 the brand new Mary Washington Hospital opened. You can point to other huge milestones during that decade. Clearly the advent of the cardiac surgery program, which happened in the fall of 1994, changed Mary Washington. That was a defining moment. That changed Mary Washington because, both internally and externally, it signaled that this was more than just a community hospital: we could do anything here. The citizens of this community did not have to travel if they had anything other than kind of a bump and a lump and they could get health care in Fredericksburg. That was a big anchor. The other big anchor actually probably occurs toward the end of the decade, where we expand the emergency department and we expand and we build the addition and add a hundred additional beds to the facility. That obviously was the crowning achievement and kind of everything that happens in-between. If I look at pillars of that decade I see one side of the decade of the opening of the new Mary Washington Hospital and I see the ending part of the decade—it’s not a perfect analogy but the ending bookstand, if you will, of the decade—the addition of the hundred bed tower. Those were the two bookends, if you will, of the decade of the 1990s in terms of the growth and development. Then inside the bookends are the programs. You have cardiac surgery and then by the end of that decade and the end of that time, you have the trauma program. And there was lots of other stuff in the middle. But those are, in my mind, the bookends of the decade of the ‘90s, if you will. Not perfect because there probably is more, kind of ‘92ish to 2002ish, 2003—somewhere in that timeframe.

07-00:06:00
Rigelhaupt:
The pace of growth in the 1990s and the addition of some programs, the subspecialties you described. Did they precipitate a need to change business practices or organizational changes within the administration?

07-00:06:19
Rankin:
Yes, but it wasn’t obvious that we were changing. There was two parts to the growth that was happening in the ‘90s. There was an organic growth. What I mean by organic growth is just the population alone—just the demand. If we hadn’t had any programs at all, the mere population growth and the community growth would have meant growth at Mary Washington Hospital. There was also service growth and content growth that was going on at the same time and that was clinical services that were being offered. You had two very distinct different types of growth going on, but they weren’t just additive. They actually played on each other. Yes, you had the organic growth, but as you added services that created additional growth in and of itself and they played off and against each other. It created almost an exponential growth rather than just a population growth. We saw this tremendous growth of people who worked here. I don’t really know what the numbers are, but the number of employees probably expanded by 1,000 or 1,500. The growth of the medical staff was enormous. We went from a medical staff that probably had in the early-1990s maybe 150 or 175 medical staff to, by the end of that decade, close to 500 physicians. The sheer scope of the organization and the complexity of the organization demanded a different way of managing the organization. When I say really that first decade it was all we could do to keep up with that growth, it does feel to me a little bit that was a reality that happened.

07-00:08:45
Rigelhaupt:
What were some of the things you changed organizationally to support the growth and the change in management that you described needing?

07-00:08:52
Rankin:
There were probably two or three things that had to happen. [09:00] The first thing is that I had to have some help for me. I found that as the CEO and the COO together that I could not do it. I physically couldn’t do it. I couldn’t get the work done that needed to get done. I had to add staff to the executive team. Part of the adding of the staff was the creation of a chief operating officer position to help me do that. The other important change in the executive team was—it was in that decade, it was toward the end of the decade to be sure, but it was in that decade—we created the position of the Chief Medical Officer. We needed a doctor, a physician full-time on the senior management staff to help manage the clinical aspects. The other thing that we did, and we were an early adopter as far as community hospitals were concerned, is that we actually reorganized our medical staff structure and we created paid part-time physician leader positions. That was a huge change for a couple of reasons. Historically physician leadership had been volunteers. It was people who viewed themselves as having an interest in the organization and said, “It’s my turn to be the Chief of Medicine or Chairman of Medicine or Chairman of Surgery or Chairman of OB-GYN. I’m willing to do it.” What we found as the organization got more complex was that the volunteer demands on the doctor became overwhelming to the point where, to be honest with you, the doctor’s practice suffered: they were spending so much time on administrative stuff in the organization that they were spending less time seeing patients. So something had to give. We were one of the first community hospitals to do this and we actually recognized the importance of having physicians on the leadership team. One of the things we did was create paid part-time positions and created paid physician leadership. We took it a step farther. Not only did we create paid part-time physicians, we invested in their education and training. We gave them leadership skills and management skills to help them. [12:00] That move from voluntary physician leadership into paid positions, where the physician leaders were now part of the executive team, was a huge change and it really set the stage for future growth and development. Those were some of the big changes that we made administratively.

07-00:12:29
Rigelhaupt:
Do you mind telling me how the Healthcare Assembly started in 1994? Could you talk about the origins of the Healthcare Assembly and also is this one of the community-wide efforts that went along with this era of growth?

07-00:12:49
Rankin:
In order to answer that question I have to kind of press the rewind button and go back to the organizational structure of Mary Washington Hospital and its membership roots. You may recall the original organizational structure: it was membership and any member of the community could buy in and essentially become a member of the company by an annual dues of, I think it was like two dollars a year and then it went up to ten dollars a year. For lots of reasons that model became an anachronism. Yet at the same time what the membership did allow us to do was to make sure that we were hearing from our customers or our community at-large about what their expectations for health care were in this community. When I came here in 1992 the board gave me three things that they asked me to do. The first was to improve and develop relationships with the community. The second was to develop and improve relationships with the medical community. And the third was to raise the clinical profile of Mary Washington Hospital. We talked about all those in various parts of this interview process. In terms of community, if you just look at that aspect, one of the tools and techniques we tried was the creation of this Healthcare Assembly. It really was a way for us to reach out to the community in a formal way. It was a strategy, if you will, to reach out to the community in a formal way to learn as much as we can about what was on the minds of community. [15:00] Now, that’s hard to do because thirty people or forty people can’t represent 100,000 people, but it did serve the purpose of engaging a group, a new generation of community leaders who had an interest in Mary Washington Hospital and what was going on at Mary Washington. It allowed us to reach out deeper into the community. It was one of many strategies that we had at the time, but this was an organization that gave us feedback about the organization and at the same time we educated them about the organization. We were actually educating cheerleaders at the same time. It was a symbiotic relationship. It was part of a very detailed strategy to connect in deeper ways with the community at large.

07-00:16:15
Rigelhaupt:
Looking back at that now, do you see the connections to the Healthcare Assembly and things that have been mandated since, like a community health needs assessment, the community benefit oversight committee that is part of the board now, and even the IPN?

07-00:16:34
Rankin:
I think it all paved the way. You look back on it now and it’s pretty simple. It was pretty elementary and it began to pave an expectation and a culture. Culture is a better word than expectation. It created a culture of: “We are a part of the community and we always need to find ways to be in touch with the community. We can never lose our roots and our roots are anchored in this Fredericksburg community.” I think what it allowed us to do was start to lay down those roots.

07-00:17:21
Rigelhaupt:
Well, one of the things that you just mentioned a moment ago when I was going to ask about this idea of the customers, them reaching out to the community. And part of what I wanted to ask you about was the role of marketing in a non-profit community hospital, in the health care system. What do you remember about marketing? And maybe that’s not exactly the right word. The Healthcare Assembly sounds like it was part of it. I’m going to arbitrarily ask you to break it up into years because it’ll be easier to talk about. But say in those first five years.

07-00:17:54
Rankin:
I think our marketing strategy has changed dramatically over the twenty-two years I’ve been here. [18:00] In the early years marketing, in all honesty, was public relations. It was advertising. It was getting our name out, getting our message out, and it was really public relations. I think if you at where marketing is today it is much more sophisticated and much more strategic today. Marketing has become a tool to educate the community about the services that are offered at all the facilities of Mary Washington Healthcare and it is a strategy in and of itself to encourage the community to use the services, in a very strategic way, of Mary Washington Healthcare. We’re at a very different place today than we were twenty-two years ago. Twenty-two years ago we literally were the only game in town and the only emergency room was Mary Washington Hospital’s emergency room. The only outpatient facilities were Mary Washington’s. The only inpatient beds were Mary Washington beds. As we matured as a hospital and added cardiac surgery, we had to educate the community about cardiac surgery. When we added neurosurgery we had to educate the community about neurosurgery. Today, there are options in this community. First of all, we have two hospitals, Mary Washington and Stafford. Sentara has acquired Potomac Hospital. We have a brand new HCA facility in Spotsylvania. Fauquier Hospital has been acquired by the Duke LifePoint Company. Culpeper is now part of the University of Virginia. We have this alignment and the members of this community have lots of options today that they didn’t have twenty-two years ago. Part of our marketing strategy today is an education strategy about what services are offered here so that the customer can make a choice. [21:00] I use the word patient and customer kind of interchangeably. There’s an interesting evolution of that word, too, which I’ll talk about in a minute. It is all aimed at educating the consumer because we are in an era when the consumer has choices now. We hope we can create a story so that when they need health care the consumer can choose services of Mary Washington Healthcare. Now, let’s talk a little bit about the difference about the difference between a customer and a patient. This is an evolution. I feel like I’ve come full circle in this regard. When I came in 1992 I used the word customer in my vernacular because I strongly believed that patients connoted a passive relationship with the health care organization versus the word customer, which connoted an active relationship and a choice relationship versus a passive relationship. For better or for worse, that’s kind of where my head was back in the 1990s. I advocated strongly that we should think of our patients as customers. I got a lot of pushback from the organization and from some very thoughtful people in the organization—people I respect greatly gave me a lot of pushback about that philosophy. From an organizational ethics standpoint, part of the pushback I got in the early ‘90s was that patients are different from customers. Patients are coming to us. They are choosing and they are playing an active role, but they’re putting themselves into our hands in a very wholly trusting relationship that is different than a customer that goes to Wal-Mart or to Giant or to Food Lion. It’s a much different relationship. It’s a covenant that the patient has with the health care system to take care of that patient in ways that other economic models don’t have. I’ll be honest with you, they convinced me and that was a logical argument. So I dropped using the word customer from my vocabulary after a while and took up the word patient in its purest sense. [24:00] The irony is as we go into a population management world, which is where we’re headed today, the word customer is coming back with a vengeance and I feel like I’ve come full circle because the growth and the advent of consumerism in health care, which is for lots of reasons that didn’t exist in the early ‘90s. Patients or customers do have choice and we do need to treat them as consumers. The concept of a patient as a customer is now coming back into vogue. I found that I’ve come full circle in kind of my belief that we do have to treat our patients as consumers. Health insurance has changed, out-of-pocket expenses have changed, and the consumer is much more personally vested in the decisions that are being made for them. We have to treat them as customers again. So I find that I’ve come full circle in that thinking with the concept of customer. Now, the other debate that occurred in the ‘90s, and to a certain degree still exists today, is actually who is our customer? The debate that was raging in the ‘90s was, is the patient the ultimate consumer or the customer? Or is it the physician that is the customer because it is the physician that makes the decision to bring the patient to the health care system? First of all, organizations have lots of different customers. I always believed, and never wavered, that the primary customer of a health system is the ultimate consumer or the patient, the consumer of the services. The physician to me was a very important stakeholder, but I viewed the physician as a partner rather than a customer. There was a raging debate that went on in the industry and it raged here in Fredericksburg. There were lots of physicians, for good and valid reasons, who felt that they should be the customers, not the patient. I never bought into that. I bought in that the consumer of the service was ultimately the ultimate customer and the physician was a partner. [27:00] Partnership means relationship, not just hired help. I always viewed the physicians as trusted colleagues and equal partners in the delivery of health care. I don’t know whether that helps with this concept of customer versus patient and what we were trying to build here in the ‘90s.

07-00:27:45
Rigelhaupt:
Let me ask about that. In terms of telling the story of Mary Washington, what was up for debate about who the customer is? In the process of thinking about physicians as partners rather than customers, was there a way in which you had to change marketing in telling the story about Mary Washington to physicians?

07-00:28:15
Rankin:
Not marketing to the physicians. I don’t believe that I had to change marketing. What I had to do with physicians is earn their trust and you earn their trust every single day. And I never, ever, ever once took that trust for granted. Every single day I had to earn the trust of the physicians. I had to do two things. I had to win their hearts and minds every day. What do I mean by that? I had to have them know that, first of all, they were important partners to me and I valued what they had to say. I did that both with tangible things I did and intangible things I did. Tangible is changing the leadership structure so I now have physicians on the leadership team. The intangible way that you do it is that you listen to them. You create forums where you hear their concerns. You ask them their opinion on matters that affect their lives and you get back to them. When they have a concern you genuinely hear their concern and you genuinely address their concern. And if you can’t address them you’re transparent. I was always very transparent with the physician community. My cards were always on the table with the physicians. If they wanted me to do something and I could do it I would do it and I would tell them what I was going to do. [30:00] If I couldn’t do it, I would be equally honest with them. What I really had to do was to make them comfortable and know that their patients could get good care with a highly reliable organization and they could depend on the care that their patients were going to get. I was going to make their life easy because I can’t tell you how many doctors will tell you that the time they spent in the hospital is the most unproductive part of their day. I had to commit to them to make their life easy. To the surgeon: I had to make sure that if their case was going to start at 7:30, that the case started at 7:30. I had to minimize the turnaround time of an operating room. In order to get the second case in the room has to be cleaned and prepped. I had to make sure that that was as efficient as it could be. There were some physicians where, to make best use of their time, I would allow them to flip rooms. We call it flipping rooms, which means that if I’m an orthopedic surgeon and I have a full schedule, today’s my day to operate, I’ll give you two rooms. I start at 7:30 in room one and the minute I’m done in room one my second case is ready in room two. I go straight from room one and I can start my case in room two. Then when I’m done in room two, the third case is back in room one. It made sense. I had to win the hearts and minds. I had to first earn their trust and then I had to win the hearts or minds. And it wasn’t just once. It was every single day that I had to win their trust. I had to earn their trust and win their hearts and minds. I did that by delivering a product that they could depend on and rely on. That’s the message I tried to instill in my team. That’s the relationship I had with the docs. It wasn’t marketing. It was the relationship that was built with the physician community. What’s happening today with the Alliance and the integrated provider network is a manifestation of the groundwork that was laid twenty years ago. I don’t believe if we hadn’t laid the groundwork twenty years ago—and with some of the things we did in the interim—we could have gotten to where we are today. Last night was the first annual meeting of the Mary Washington Health Alliance. There were fifty physicians in the room and they heard an annual report of the first year accomplishments of the Mary Washington Health Alliance. [33:00] I didn’t say a single solitary word in the meeting. Not one of my staff said a word in that meeting last night. The entire meeting was run by physician leaders who were standing up in front of their own peers talking about how health care is delivered in this community. That is a manifestation of the relationship that had to be built in the ‘90s. I don’t believe we could have done last night’s meeting without the groundwork that was done in the ‘90s and the first decade of the twenty-first century.

07-00:33:37
Rigelhaupt:
In one of our first interviews you described winning the trust with the physicians around pulling advertisements around ER wait times.

07-00:33:47
Rankin:
Yes, yes.

07-00:33:49
Rigelhaupt:
Very early.

07-00:33:50
Rankin:
I think it was an act, in my opinion, that told the docs I was on their side.

07-00:34:00
Rigelhaupt:
So part of my question would be was that abnormal over the twenty years since?

07-00:34:09
Rankin:
Never did it again.

07-00:34:11
Rigelhaupt:
That answers the question.

07-00:34:12
Rankin:
Never had to do it again. However, I think in pulling that advertisement it created a culture of, first of all, we’re going to involve the physicians in our advertising. We do do advertising. We still do advertising. First of all, we involved the physicians so that they were signing off on the content. It began to set an expectation. But I only had to pull it once. I never, ever had to do it again.

07-00:34:48
Rigelhaupt:
Did that also win trust, and correct me if I’m using terms you wouldn’t necessarily use, with nurses and other medical providers?

07-00:34:57
Rankin:
Absolutely. It earned trust with the emergency department because, to be honest with you, that particular advertisement at that point in time was setting our emergency department up to fail and the nurses saw that. We were guaranteeing wait times in our advertising that we did not have systems in place to guarantee. We were setting our own team up to fail. By me pulling those advertising, it basically, I believe, set a culture that I would listen to them. It also set an expectation we will not advertise what we can’t deliver. We never used the term trauma center until we were a designated trauma center, until the state designated us a trauma center. Although if you look around the state and you look around other states, trauma center has become a generic term. [36:00] You see it a lot. And maybe this is my little thing. We never used the term trauma center, ever, until the state designated us as a Level II trauma center. Then and only then did we advertise ourselves as a trauma center. It’s why we made the change. This is subtle, and I recognize it’s subtle. We don’t call Stafford Hospital, Stafford Hospital Center. We made the decision that a hospital is a hospital. Our two hospitals are not called medical centers. Our two hospitals are called hospitals. It’s Mary Washington Hospital and it’s Stafford Hospital. Simple, straightforward, understandable.

07-00:36:53
Rigelhaupt:
What are the benefits in involving the physicians and nurses perhaps in, you mentioned, the culture of an organization, in developing marketing, developing advertising?

07-00:37:09
Rankin:
I think there are a couple benefits. One, I think you get a better product because you get accurate feedback and it’s kind of a built-in focus group. On one level, just the product at the end of the day is a better product. I think it does something more than that. To the nursing staff or to the physician community or to the people that are involved there’s a secondary benefit: “My opinion matters. There’s a relationship that you have with me that you’re willing to ask me my opinion.” The secondary benefit is that, again, it’s part of the relationship building because so much of what we do is about human relationships. As I said, with doctors especially, and even with nursing, it’s about winning their hearts and minds. The secondary benefit is they feel valued because they are valued, and I think they genuinely believe that. If they feel valued they feel better about their own work and they feel better about what they do. That’s just kind of organizational human dynamics. If I feel good about my organization or if I feel good about my boss or the people I’m working for, I’m more committed to that organization and willing to do things that perhaps I wouldn’t be willing to do if I didn’t have that kind of commitment. It’s all about building the relationship. [39:00]

07-00:39:10
Rigelhaupt:
How would you describe the organization’s relationship with the local press and the newspapers in terms of—part of marketing and advertising is probably about coverage.

07-00:39:28
Rankin:
That has changed over the years. I don’t think we ever had a bad relationship with the press. I think it was a matter of degree. The press has a job to do. In doing that job they need to report on the facts and the issues as they see fit. On the other hand, we have a job to do, too. I think our relationship with the press evolved over time. I think it probably started out more, if I had to characterize it, more adversarial and distrusting. I think we viewed the press in the early years as an annoyance and not necessarily an ally who could be trusted because of the reporting and what we perceived to be reporting bias. I will tell you that has evolved over time. We then came to realize, first of all, that is shortsighted. The press has a job to do. I think once we realized that the press has a job to do and that our job then is to strategically—I almost hate to say this but I’ll say it anyway—manage the press. It had to be part of our strategic and marketing culture. How can we manage the press, understanding and knowing that they have a job to do? So we began to create an environment of a better relationship. For many years we had a reporter from the Free Lance-Star that was assigned to this organization. That actually worked very well. While there are times that we didn’t like some of the articles that were written, if I’m really honest with myself, we had far more positive articles than we did negative articles. [42:00] My board didn’t believe so. I actually brought in a third party consultant, a marketing type person, company, to actually analyze over the course of a two-year period the type of coverage we received from the press and the data was almost overwhelming. By almost a two-to-one, maybe even a three-to-one margin, there was far more positive coverage. The ratio was far more tilted on positive articles than negative articles. I think we became more strategic about using the press as a strategic opportunity to tell our story. We also came to understand that even bad news had to be managed. If there was bad news that was going to have to surface, that it was in our best interests to work with the press to be able to paint as balanced a story, even if the story was bad news, as we could. I think over the years—it took a while, it took time—we evolved to a mutual respect. That took a while to do, but we evolved from what I would call a traditional adversarial role to one of a mutual respect, a mutual trust of the job that had to be done. It was an evolution. Actually, it’s a very interesting dynamic. Social media has changed the way news gets reported. Today, in 2014, the management of social media is a huge part of our marketing/communications strategy. Just a few years ago we didn’t have to do that at all. I can remember in the early years, it was the letters to the editor that had to be managed. It’s not the letters to the editor at all today, and, in fact, the letters to the editor are kind of boring. It’s the blogs and the posting on blogs that have to be managed. It’s a very different dynamic and we had to adapt. We now have as part of our strategic marketing team a webmaster. We have someone who is assigned to monitor blogs and to monitor social media posts to make sure that accurate information gets out. [45:00] I’ll give you a very real example. In the last six weeks, what’s been the topic on the news? It’s been Ebola. In early October or mid-October, when the United States was engulfed in Ebola hysteria, which, by the way, has quickly died down into a much more rational conversation—but there was an Ebola hysteria in this country. A post showed up on somebody’s blog that said Stafford Hospital has an Ebola patient and is closed. Where did it come from? I have no idea where it came from, but in this world those types of social media posts have an opportunity to go viral. We had to jump on that and within an hour had our own post that there is no Ebola and that everything is fine at Stafford Hospital. We’re open and all our facilities are open for business. The world or managing communication and managing the press is a very different world today than it was in the ‘90s or even the first decade of the twenty-first century. I hate to admit it, but print media has less of a place today than it did twenty years ago. That’s sad to me, but I grew up in a world of newspapers. I still read a daily newspaper. My kids get all their news off the Internet and with texts, with texts that come to their smartphones. My kids don’t read a newspaper really. They get their news from the Internet. I mean, to a certain degree, I do that a little bit myself now. One of the webpages that I check a couple of times a day is CNN news. I go to Fredericksburg.com a couple of times a day to see what’s new and what has been posted. Managing social media has become a very different and we’ve had to adopt our marketing tools and our communication tools to make maximum use of the technology that people use today. I still don’t get Twitter. I still don’t understand why people tweet, but I do it and I look at it. [48:00] It’s not the way I prefer to communicate. Even my kids don’t own a landline phone. None of my kids have a landline phone. They all have smartphones. So you have to adapt your communication strategy to use the communications and tools that you have. We have so many more communication and it’s instantaneous today. With a newspaper you had twenty-four hours to prepare, but today a blog can be posted right now about something.

07-00:48:52
Rigelhaupt:
I wonder if part of what’s challenging about telling the story of a health care organization and marketing is that it’s a different kind of organization. For most organizations profit and returns are a sign of success.

07-00:40:11
Rankin:
Yes. Well, the ultimate sign of success, if you will.

07-00:49:17
Rigelhaupt:
Certainly. I mean you would celebrate that at the end of the year.

07-00:49:19
Rankin:
Yes.

07-00:49:21
Rigelhaupt:
There’s a tension with that in a not-for-profit hospital.

07-00:49:23
Rankin:
Yes, sir. I think all not-for-profits have that tension. It’s the age-old question of margin versus mission. I think especially not-for-profit hospitals struggle with that every day. They always have and, in my personal opinion, always will. I will tell you, for us, the last two years have been a challenge to us because we found ourselves in 2012 and 2013 in very difficult financial straits. We historically have been a very profitable hospital. I think the rating agencies felt we never were as profitable as technically we could have been, but we invested back in this community. We invested millions and millions and millions of dollars back into this community. I don’t regret that at all. I don’t regret that at all. However, I also can’t create an organization that bleeds itself ultimately to death or that would be irresponsible for me. Repairing our financial health, if you will, became a priority over the last couple of years. I’m really proud about how we did that because we have repaired our financial health. We’re going to close 2014 back being profitable again and having a very strong year from a profitability perspective. [51:00] I’m proud of that because I think we did it smartly and we did not implement what so many organizations do in the slash and burn mentality. We still kept our core mission in front of us. We still kept the quality and safety and care of the patient as job number one. What changed my mind and what changed my mind about cost of care was when I began to realize that the cost of health care had become a national problem. I think we’ve talked about this before: when you look at our cost structure in this country health care takes up such—it’s 21 percent of our GDP or approaching 20 percent of our GDP. When we look at the struggles that all states have around Medicaid, we only have to point to the bitter, bitter debate that occurred in Richmond last winter around Medicaid expansion. When I look at companies, I see that the cost of commercial health care has the potential to bankrupt companies and then I look at people and I look at individual families who are bearing more and more of the burden. What convinced me that cost management had to become a moral imperative was the realization of what it was doing to all of our society. Then for me, once I got there in my head, it became easier for me to begin to start talking about cost management as a moral imperative rather than just a profit motive, if that makes any sense at all. It became a moral imperative to get our arms around cost management. I also believe that the tenets of the triple aim, which we talk a lot about in this country now and were first coined by Don Berwick probably ten years ago: the triple aim being highly reliable, quality, and safety of care, or a very good patient experience a la customer satisfaction at an affordable cost. That’s the triple aim. That’s America’s goal and I think every hospital and health care system in this country needs to adopt the triple aim as their motto or their kind of clarion call to action. [54:00] That’s what drove me in the last decade of my career and I came to understand that. I don’t talk about profit. I talk about cost. Profit is what it is. It is a metric but I don’t measure our success around profit margin. I measure our success based upon affordability and our cost structure and that it is as effective and efficient as it can be. That’s a tension. Margin versus mission is a tension all not-for-profit organizations have. Leland Kaiser used to say, “Look at one’s checkbook if you want to get a sense of their values.” How an organization spends their money is a reflection of the values. Yes, we need to be profitable. We need to have a margin. How much is the question. Is it a two percent margin or a three percent margin or a four percent margin? How much cash do you have to have in the bank? The credit agencies will tell you there is a minimum amount that you should have in order to be a strong organization and to be able to do what you need to do. But once you get beyond that point, how much cash is too much cash? Those are all moral issues that all not-for-profits have to grapple with, hospitals included. Right now we are below in terms of our cash in the bank. We’re not poor by any stretch of the imagination, but we’re not near where the credit agencies would like us to be. We’re still in a mode where we’re trying to put cash in the bank. We’re close. In another four or five years we’re going to be at that point of having enough cash where the credit markets are satisfied. After that, the boards of the future are going to have to answer and grapple with those questions. We’ve been blessed here at Mary Washington because we had been a strong financial hospital years ago. When we had two years of weak financial performance we were able to weather those storms. [57:00] We were also able to invest and make an enormous investment in this community with the building of Stafford Hospital. We spent a significant part of our cash on building Stafford Hospital. That’s an investment in this community and it ultimately pays back over the long haul. But margin versus mission is an issue that all not-for-profits have. You’ve got to have some margin because if you go years and years with no margin you ultimately will not be able to carry out your mission.

07-00:57:57
Rigelhaupt:
And that’s part of my reason for asking, is that the margin is important for a not-for-profit. And to try and connect it to the questions I was asking about marketing, of how you tell that story. What I also think is unique about hospitals is the kind of press coverage around cost. The Time magazine article last year and, I think it was by Brill and the $3 Tylenol pill.

07-00:58:25
Rankin:
Right. There are issues in America.

07-00:58:28
Rigelhaupt:
Part of my asking is even if you are strong financially, there are costs that customers, patients are facing, and you’re facing press coverage like that. Does ultimately a margin become a negative? Like, “Why are you charging this when you have this?” And you have insurance companies perhaps asking those questions.

07-00:58:53
Rankin:
I think the margin can become a negative. To be honest with you, in the Medicaid debate that occurred in Richmond, I think some of our elected officials tried to use that argument. I’m not sure it worked, but it’s an interesting question. I think today people still try to use profit margin as a sword. We’re a fickle society. There was a time when we had very strong profit margins and the press kind of excoriated us for our obscene profit margins. Yet two years ago they excoriated us for our losses. [01:00:00] Well, what’s the right number? I had a board member who you interviewed and would ask colleagues, “Well, how much is enough? What do you think the profit margin should be?” It’s a tough question. At the end of the day the profit margin you need is what you need to reinvest back in this community. For over 120 years we’ve been successful and able to reinvest back in this community and we’ve done that because we have had the cash to be able to do that. The way we managed our cash in 2012 and 2013 was to cut back on our capital expenditures. Now, can I do that for a year or two? Yes, I can because we’ve kept this organization well maintained over the years. But I can’t do that forever. I have to be able to reinvest back into the physical plant. We talk about the new Mary Washington Hospital. The truth of the matter is that building is a twenty-two year old building. It’s going to need some repair. It’s going to need a new roof someday. It’s going to need a new boiler. I’m being a little facetious, but we’ve got to be able to invest back in the physical plant to make sure that we stay relevant. We are taking to our board tomorrow the final leg of a journey to build a hybrid operating room for our cardiovascular surgery program. That is a very, very important next step in our cardiac program development. It’s where the new technology is going. That’s a five million dollar project. I have got to be able to have five million dollars to invest so that our cardiac program stays relevant as we go into the second half of the second decade of the twenty-first century. But those aren’t cheap. That’s a five million dollar budget commitment. The organization has invested tens of millions of dollars in building a health information system so that within another couple of years we can have a community health record for patients in this community. It doesn’t matter where they go to seek health care, whether their doctor’s office, whether it’s one of our competitor hospitals, whether it’s our own hospital, whether it’s an ambulatory facility, or whether you’re out of town. [01:03:00] Your doctor or your caregiver will be able to access your medical record rather than start over. I’ve invested tens of millions dollars of building that infrastructure and that’s all about improving the health of the community. We’ve got to have money to do that. If we don’t have the money, then we ultimately become a second-rate health care system.

07-01:03:45
Rigelhaupt:
Talking about the cost of health care. You said that your thoughts have changed in the last decade. And of what I am going to test is that I think you and hospital administrators have been thinking about that for much longer—the 1980s with DRGs, the Emergency Medical Treatment Act. That cost that you have to bear regardless of reimbursement. How have the conversations changed among hospital administrators in the last decade, as cost has become more of a national issue, as you described?

07-01:04:27
Rankin:
I can only speak for me, from my own personal experience. For me, I no longer apologize about having the conversation about cost. As a young administrator, I was almost apologetic about it. I always talked about quality, safety, and patient experience and those dominated the discussion. The cost conversation was almost an afterthought. It was, “Well, now, kind of we have to talk about this.” What changed for me was I don’t apologize for it anymore. I’m honest about it and I’m transparent about it. If somebody says to me, “Well, you’re only doing this for cost.” I’ll say, “Yep, that’s right.” I’m transparent about it and I’m open about it. I don’t hide it under a barrel anymore. I make it part of our total conversation. I think that has changed in terms of my conversations in other hospitals. What’s driven it together is a very interesting phenomenon. We’ve moved to getting paid for value versus volume. [01:06:00] As we move in that role of being paid more for value, our conversations have changed. It’s amazing when I go to a VHA meeting or a VHHA meeting of peers. We are talking just as much about the quality and safety and the patient experiences as we are about cost. We’ve come to understand that doing it right the first time is actually the most cost-effective way to do it. It’s changed in my staff meetings. I have a CFO who spends as much time talking about medical errors as he does talk about an income statement. My chief financial officer knows what our readmission rate is and my chief financial officer knows what our mortality rate is. Ten years ago my chief financial officer would have no more idea than the man on the moon what those words meant, let alone what the numbers were. What’s changed is that cost value, cost quality, and patient experience are all equal. Everybody on the team sees them as equal. That’s what has changed and that’s healthy in my opinion, because now we’re having an honest discussion about the topic.

07-01:07:39
Rigelhaupt:
Historically physicians have not liked the idea of cost effecting how we treat a patient and I think part of the debate about health care, certainly in the last decade, is the notion that someone would or wouldn’t get treatment based upon cost.

07-01:07:53
Rankin:
And that’s changing. That’s beginning to change.

07-01:07:56
Rigelhaupt:
And so part of what I was going to ask about then is I think in any administration you have longer thought process on this than perhaps physicians. How do you see that playing out in, say, the Health Alliance? How did that conversation change, perhaps even last night in talking about an integrated provider network and with physicians about this?

07-01:08:20
Rankin:
Here’s what I think has changed and it’s subtle, to be sure. It’s still a little theoretical. I think doctors have finally realized that the decisions they make impact their own income. The clinical decisions they make impact their own income. I’m convinced that the only way to truly bend the cost curve in this country is not to just keep reducing rates: it’s to change the way medicine is practiced. [01:09:00] To change the fundamental way medicine is practiced. To change the fundamental way medicine is practiced—the only way you can change the way medicine is practiced is to engage the doctors. Hospitals can’t do that alone. And actually, doctors can’t do it alone either. There has got to be a true partnership. What is gradually happening in Fredericksburg and in communities around the country is that there is this growing realization that we can no longer fight with each other. We can’t fight about dividing up the dollar anymore. If we truly value our independence, we have to come together in partnership ways that we’ve never come through before. The theory is shared savings as these new reimbursement systems and these new experiments begin to play out. If you are an early adopter in some of these experiments, like ACOs, Medicare ACOs—we’ve applied. The Alliance has applied to be a Medicare ACO. If we can lower the cost for the Medicare patient in this community, the doctors and the hospital actually have an opportunity to share in some of the savings. If we can reduce the cost of the Medicare patient through the Medicare shared savings plan, we actually can share in some of the savings as a community. The doctors get some of that money back and the hospital gets some of that money back. There’s no mistake that it’s still money that’s driving the conversation, but there is this realization that the government is serious about reducing the cost of health care. It doesn’t matter whether you’re a Republican or a Democrat or a Libertarian or an Independent. The cost of health care is going to be lowered one way or another in this country and I think slowly but surely, in communities around the country, and it’s happening in Fredericksburg, is there’s this realization that unless we want to get rolled over by a tsunami, we are far better off being proactive and learning how to do this together. It’s a learned skillset that we don’t know how to do in this country yet. [01:12:00] It’s not like turning the lights on and off. If the government changes the reimbursement system and if Medicare changes their reimbursement system overnight, you can’t change your practice regiment overnight. This is a grand experiment and it’s a learned behavior. We have to learn as physicians and hospitals together how to truly change medical practice. Let me give you an example what I mean by that. I have a friend who is in business for himself and he has to purchase an insurance product because he’s in business for himself. He purchases his own health insurance. He has what’s called a high deductible health plan, which means he’s personally responsible for the first $10,000 of care. That’s a lot. He fell off his bike last summer and injured his shoulder. He went to the doctor. The first thing the doctor said, “The treatment of choice would be to surgically repair your shoulder.” Because this friend of mine has a high deductible plan he says, “How much?” He went through the whole thing: “The hospital says, well, it’s going to be x-thousands of dollars.” When you add it all up it’s probably $30,000. That first $10,000 he has to pay out of his own pocket. So he says, “Doc, are there any other options? What if I elect not to have the surgery?” His doctor said, “You could do that and we could put you into rehab. We can give you a course of rehab, aggressive rehab.” This gentleman is in shape and he’s fit. He’s a young man. He’s in shape and he’s fit. He said, “What kind of range of motion will I lose?” His doctor said, “You’ll lose some. You may not be able to hit a golf ball 300 yards. You may hit a golf ball 250 yards.” My friend replied, “And how much is the rehab?” With the rehab, we’re talking about maybe $800 or $900 or maybe $1,000 at the most. I’m kind of making these numbers up, but it’s the magnitude that’s important. He elects not to have the surgery and to go through aggressive rehab. He’s fine today. Perfectly fine. Has he lost some range of motion in his shoulder? [01:15:00] Yeah, but to him that was a choice. When we get into consumer driven health care and we get into those kinds of discussions, doctors or hospitals aren’t used to that. Under the old model we got paid first dollar coverage and the doctor got paid first dollar under a model where the consumer is at risk. That’s going to change. We’ve got to be willing to say, “There are other ways.” My own employees here—we now have data for the first time that the employees who work at Mary Washington Hospital use the emergency room four times more than the public. Why? Because they know how and it’s easy, but somebody’s paying for that. I’m paying for that in terms of health insurance and maybe if I didn’t pay for it I could give raises. We are now actually creating incentives for our own associates not to come to the emergency room. If you have to, you have to. There are times you don’t have to and we have to give them other alternatives, such as urgent care centers. That’s the revolution that’s going on in health care. What’s happening is that the docs for the first time are at the table having this conversation that they’ve never had to have before. It’s uncomfortable and it’s new and it’s the future. It’s what will, in my opinion, be the ultimate—this is going to sound preachy. It will be the ultimate savior of Mary Washington as a locally controlled health care system and the individual physician as an independent doctor who still wants to be an independent and not capitulate and become part of a large big corporation. It’s scary because it’s unknown, but that’s where we’re headed. If we could jump on a time machine, if we could jump on a time machine and fast-forward thirty years or twenty-five years—so what’s today? Twenty fourteen. I was born in 1951 and now it’s 2051. I’m now a hundred years old. So fast forward another thirty years, thirty-plus years. What would health care look like? What’s health care in Fredericksburg? [01:18:00] I like to think that the dominant health care system will be the Health Alliance, with physicians and hospitals all working together and that we don’t talk about Mary Washington Hospital anymore. We talk about the Mary Washington Health Alliance.

07-01:18:26
Rigelhaupt:
Now, part of what you described is an intersection of the economics of health care and the cost and, as you mentioned many times, sort of alluding to Richmond, to accountable care organizations and the Affordable Care Act, the federal government, government and—

07-01:18:44
Rankin:
The relationship between government and health care. Yes, right.

07-01:18:48
Rigelhaupt:
All right. It’s possible in administration you’ve seen that—

07-01:18:53
Rankin:
I have.

07-01:18:53
Rigelhaupt:
—for thirty plus years.

07-01:18:54
Rankin:
I have.

07-01:18:54
Rigelhaupt:
This is now new.

07-01:18:56
Rankin:
It is now new.

07-01:18:58
Rigelhaupt:
And I think you could probably argue now that they’re inseparable. Right? The questions and the politics of health care and the costs of health care?

07-01:19:06
Rankin:
I think they are inseparable. That’s a good way to characterize it.

07-01:19:10
Rigelhaupt:
So what has this meant? Part of what I’m trying to ask about is it that it’s more transparent now? That it’s clearer to physicians? This isn’t new that you’ve been thinking about it. So what’s different in the last few years that you’ve described?

07-01:19:26
Rankin:
That’s a great question and it’s one I think about and ponder. I was kind of saying this in the 1990s. We talked about some of these issues in the 1990s. President Clinton waving the universal card: “Everybody’s going to have one of these cards.” We kicked the can. Something happened in the ‘90s and I think there were two things that happened. One is that the economy just exploded in the ‘90s. If you look at the decade of the ‘90s in America we had tremendous economic growth. It was really a time of very high prosperity. The stock market just was booming. America’s wealth really, really improved. The urgency of the health care cost debate became less urgent. What did we do? What is America good at? We kicked the can down the road twenty years. And now it’s 2014. It’s twenty-five years later or almost twenty-five years later, but the problem really never went away. It got masked because of enormous productivity gains and economic gains. [01:21:00] The problem is still there. It’s the boogeyman of the American economy. I think the recession of 2008 and ’09 laid bare the problem again, the debt structure of America and kind of the basic imbalance of America’s economy. Now, we’re not a Greece. We’re still an incredibly strong economy comparatively speaking. But there is going to come a time that fundamental changes have to be made in the structure and we’re better off, in my opinion, of doing it incrementally than waiting until a huge crisis that forces us to do something dramatic. That is really hard to do because in order to accomplish that people have to be willing. All people. Hospital people, doctor people, and community people have to be willing to change when the current system is working well for them today. That’s really hard for human beings to do. It’s really hard for human beings to adopt a different model that’s untested or undocumented when you’re doing okay under the old model. But that’s what we need to do. We need to change our model of health care while we can, incrementally, and learn how to live in a world where there isn’t going to be a lot of money—there’s still going to be a lot of money in health care, but not as much growth as there has been in the past. We have to put ourselves on a diet and we can either do it kind of the old-fashioned way and gradually shed off the pounds or we can get into trouble and have a health crisis and then be forced to shed the pounds. Does that make any sense at all? That’s where we are. As a society and as a community, we are at that point. [01:24:00] What I’m so excited about—and again, the energy of last night is there—is this at least willingness by the medical community and the hospital community to have this conversation. It’s a grand experiment. Five years from now we may decide it didn’t work. I’m convinced though it’s the only long-term way to grapple with the cost. If we don’t there is going to come a time and it may not be five years from now and it may not be ten. It may be twenty years still down the road. But there is going to come a time where the debt structure has to be dealt with in the same way Mary Washington had to deal in an uncomfortable way this year with its cost structure. The American economy is going to have to deal with that, too. What’s at the top of the list? Health care. Maybe secondarily social security. At the top of the list is a restructuring because the elephant in the room in terms of the growth is health care expenditure. We still have this debate. The debate of the Affordable Care Act is not over yet. We still have Supreme Court challenges. We still have states. We have twenty-six, twenty-seven states that have chosen not to participate in Medicaid expansion. We have twenty-six or twenty-seven states that chose not to do a state health exchange. The whole debate of affordable health care is not done yet. Although I will tell you, it scares the crap out of me to think about undoing the Affordable Care Act at this stage of the game. I just can’t imagine. How are we going to tell eight million people that have been able to get some form of insurance through the Affordable Care Act and all of a sudden they don’t have that insurance anymore? I worry about the social repercussions of that. For the life of me I don’t understand how you unwind. You just have to keep improving it rather than unwinding it. To me the answer is not to unwind it and not to repeal it. The answer is find ways to improve it because it’s a flawed law and needs change. [01:27:00]

07-01:27:03
Rigelhaupt:
One of the things that it certainly sounds like has—

07-01:27:06
Rankin:
Five minutes.

07-01:27:07
Rigelhaupt:
You got it. It has pushed is to do something like the Health Alliance and the IPN?

07-01:27:13
Rankin:
Yes. Yes. And that’s happening all over the country. Clinically integrated systems are popping up because communities like Mary Washington are finding that, first of all, there’s opportunity and it’s opportunity to take advantage of the new model. Hospitals and doctors all over the country are experimenting. Fredericksburg actually is a little late. There are parts of Virginia that have been doing it for a couple of years. Fredericksburg has an alliance now. Again, we made an application to be a Medicare-certified accountable care organization. If our application gets approved, we’ll be able to do that for Medicare in this community.

07-01:28:07
Rigelhaupt:
And so one of the things you said about the Health Alliance and have alluded to in terms of this is people being at the center, in terms of the hospital and the health care system and physicians and those relationships.

07-01:28:21
Rankin:
Right.

07-01:28:22
Rigelhaupt:
And you’ve also talked about over twenty years building that trust. What would you describe as the most important lessons, past collaborations in terms of building a culture between the health care organization and physicians that you would want to see the Healthcare Alliance continue?

07-01:28:42
Rankin:
To me, that’s a pretty easy. One is total and complete transparency. No hidden agendas. When Mr. Wilson first met with me twenty-two years ago, one of the things Mr. Wilson asked me to do was always show all fifty-two cards of the deck. Don’t show fifty-one. Don’t show fifty. Always show all fifty-two. I think the first thing is total and complete transparency all the time for everything. The second is, and boy it’s hard, is be willing to listen to other points of view and to listen for the hospital system, to listen for the docs, and for the docs to trust the hospital. It’s a two-way street. The docs have to believe. Quite frankly, if the docs believe, “We’ll just take it and stick it to the hospital.” [01:30:00] That’s not going to work either. There’s got to be this mutual respect of the role that each other plays. You do that by constant communication and constant dialogue. If you’ve got problems and you’ve got issues, get them out on the table and talk about them. Don’t hide them. Those would be the two things. I think if we can keep that conversation going and keep that transparency going, we will be able, when I’m a hundred years old, to come back and see that we’ve actually accomplished what we set out to accomplish.

07-01:30:42
Rigelhaupt:
Let’s stop there.

07-01:30:43
Rankin:
Yes, that’s a good place to stop because I do have a four o’clock meeting.
[End of Interview]

Interview 8 – January 21, 2015
08-00:00:06
Rigelhaupt:
It is January 21, 2015. I’m in Fredericksburg, Virginia, at the 2300 Fall Hill Building, doing, I believe, the eighth interview. And now I want to start out today by asking you to think about the last five years and how that fits with the larger history. Part of what I want to ask about is, in terms of the last five years, Mary Washington Healthcare has really solidified itself as a regional health care delivery system—two hospitals, freestanding emergency department, numerous outpatient facilities. You know, so you look at growth and becoming a regional health system—are there events or facilities or practices that have emerged in the last five years that you think would compare to the way you described the new Mary Washington Hospital in 1993 as a twenty-year play? Are there things that have happened that are going to have a significant influence going forward?

08-00:01:11
Rankin:
Yes and no. There were events, I believe, that happened, yet they weren’t the bricks and mortar or the big bang programs like the cardiac surgery program or the neonatal program. Yet at the same time I do believe that the last five years had some instrumental events that frame the future of Mary Washington Healthcare. I think they are tied up in events that occurred external to the organization. The last five years have been a tumultuous five years in terms of national health policy. The debate with the Affordable Care Act or a national health policy was so instrumental in that five-year period. It precedes the Affordable Care Act. Everybody thinks that the world kind of changed the moment that the Affordable Care Act was enacted. In reality, there were events that were happening and coalescing several years prior to the actual signing of the Affordable Care Act. [03:00] I think the debate, the American societal debate about what kind of health policy do we want in this country was enormous and continues to be enormous. I think locally the opening of a competitor facility in our region, the Spotsylvania Regional Medical Center, was a game-changer in terms of health politics in this community and the delivery of health care in this community. I know that Mary Washington Healthcare’s last strategic plan is now reaching five years old. You think about kind of the 2010-2011 time frame was really the creation of that version of the strategic plan and defining the future. I think that set the stage to define the future of Mary Washington Healthcare. There are five elements to that strategic plan. The first element is to continue to build the clinical profile of the organization. The second is the whole era of physician alignment. I know that it is a theme that is constant throughout the twenty-plus-year time frame that we’ve been talking about, but I think it takes on added significance. Physician alignment was a major strategic initiative for the organization. So we have improving the clinical profile and finding new ways to have the health system align with the physician community. The third big one is the whole affordability issue of health care. We came to realize that as the national debate raged about health care in America, we came to realize—I came to realize that you can no longer not talk in a very meaningful way about the cost of health care. The dynamics of the cost of health care in America had reached, by the time 2010, really kind of the 2008 or the first term of the Obama administration, epic proportion. [06:00] Medicare and Medicaid and the national health care expenditures threatened to destabilize the federal budget. The growth of Medicaid in every state of the union threatens to destabilize state budgets. Companies and businesses around the country were saying that it was threatening individual commercial insurance or threatening the profitability and the livelihood, if you will, of private companies, and then finally the public. The common person has seen astronomical growth of copays and deductibles and they threaten the individual economic livelihood of individual citizens. So all of this began to coalesce in 2010 and 2011. For us, it became very obvious that we had to get serious about the cost of health care. The third big strategic initiative of the 2010 strategic plan was the affordability of health care and the cost structure of health care. Then there were two other components. There was kind of winning the hearts and minds of the customers because the advent of consumerism and choice was very new to this community. With a competitor here, a very good competitor here, the consumer really did have choice and does have choice now. And then finally, last but certainly not least, winning the hearts and minds of our employee base and our associates. In all honesty, the employee base now has choices of where they can work. Those five components framed the discussion and the debate around the strategic plan kind of beginning in 2010 and really going to this day. The national events became kind of top and center. National events such as the stimulus package that was approved right after President Obama became president: the first stimulus package had enormous health care components and probably the most significant being a huge amount of stimulus money was set aside for the American health system to basically convert to an electronic medical record. [09:00] The conversion to an electronic medical record in many respects became a race. In the early years, there were incentives for hospitals and physicians to convert from paper records to electronic medical records, but in the later years and the later part of this decade—really beginning next year and beyond—there are penalties where Medicare reimbursement actually is taken away from physicians and hospitals who are lagging behind. You also saw the advent of what we now call value-based purchasing. Now for the very first time, our financial reimbursement, both from the public payers, Medicare and Medicaid and from the commercial payers, are absolutely tied to the quality of care that is provided in our facilities. You have this link between the quality of care and the quality of the service and the payment going on at the same time. All of that begins to coalesce. You have a changing health policy. You have a realization that the country cannot continue to spend in the way it’s spending for health care and there has to be a change. You have competition in our local community that we’ve never had here. I think those three things defined, in many respects, the last five years or the most recent five years of what has driven Mary Washington Healthcare. So much of the work that has been done over the last five years has not been big bricks and mortar and buildings and big fancy programs, but it’s really more of a consolidation of different types of programs. That has framed and positioned ourselves to be relevant and to still be able to serve the needs of the Fredericksburg community as we go forward. We’ve had to reinvent ourselves in a period of time when the industry has seen dramatic consolidation. [12:00] There are not very many independent hospitals left in Virginia anymore. We’ve seen Potomac Hospital merge with Sentara. We’ve seen Culpepper Hospital merge with the University of Virginia. We’ve seen Fauquier Hospital merge with Duke LifePoint. We’ve seen Prince William Hospital merge with Novant Health System. We’ve seen Rockingham Memorial Hospital merge with Sentara. We’ve seen Martha Jefferson Hospital in Charlottesville merge. We’ve got this enormous consolidation going on and in an industry that is being transformed around us. It has really been where we’ve spent the last five years.

08-00:13:12
Rigelhaupt:
So let me try and connect that to the growth and the decisions that were made in the years preceding it and see if you could compare it to some of what you’d said earlier about the opening of the hospital in 1993. You described it as very fortunate that it happened when it did, because the recession hit and the board might have thought differently about taking on—

08-00:13:34
Rankin:
Possible.

08-00:13:36
Rigelhaupt:
—and not going forward with the new hospital. Are there things that happened in the years leading up to, say, 2009, 2010, the decision to open Stafford, when you couldn’t have known what was going to happen in terms of consolidation or recession and the changes in health care law from the Stimulus and the Affordable Care Act. Are there things that you did that made weathering those external factors or forces—that allowed the strategic plan to be implemented more effectively?

08-00:14:14
Rankin:
Wow. That’s an interesting question. I think it’s the totality. I’m not sure I can think of or point to one event or two events that would say, “Because we did this, then we were able to do this.” I think it was the totality of the vision of what we were trying to create, the constancy of purpose around that vision and the true north of the organization, and staying focused on the vision and the mission of improving the status of health for the citizens of this community that helped us weather that storm. [15:00] Now, I’m going to freely admit that it’s also kind of—in real estate they say location, location, location. Our location helped us dramatically and that is not anything we did on our own. We happened to be in a community and to live in a community that was able to withstand the recession better than many communities because of our inherent natural resources. We are still a growth community. We are still a community where it is a pleasing place to be. It is a place where businesses still want to locate and it’s a community where we’re still growing. There are many communities in this country that don’t have kind of the natural location and the growth parameters that we had. If we had not been in a community that withstood the recession the way the Fredericksburg region was able to withstand it, then I’m not as sure that MWHC could have grown the way it did. It was hit to be sure, but we were better positioned as a community just because of our general demographics: we are between Richmond and Washington. There’s a little bit of luck that plays into this. I think it’s the totality of the decision-making that was made over the last twenty-five years that made us strong and made us able to withstand or buffet of the storm. Make no mistake about it: the last two years, 2012 and 2013, were very challenging years for Mary Washington Healthcare. We lost money in 2012 and 2013, and in two consecutive years—I can’t count back to when the last time that happened. Because of the strength of the organization and because of the fundamentals that had been put in place, we were able to weather the storm. That allowed us to transform or to build the transformation. [18:00] Now, in my opinion, there is a signature event that people are going to look back on and say ten years from now or five years from now or twenty years from now and say is like the building of Mary Washington Hospital in 1993 or the opening of the cardiac surgery program in 1994. I think they’re going to look back in the 2014 time frame, ’13/’14 time frame, and say there was an event. I firmly believe that that was the formation of the Mary Washington Health Alliance, which is the partnership that we worked so hard to create. The component of the strategic plan and the partnership that allowed the physician community to come together with the health care community so that we can deliver high-quality, affordable health care in the future to this community. Now, that organization is in its infancy. It is literally one year old. It became a reality in January of 2014. That organization today is one year old, but look what it has accomplished in that one-year period of time. It has brought the physicians together to talk about how health care is delivered in this community. We at Mary Washington have turned our employee population over in terms of managing the health care to Mary Washington Health Alliance. In December of this past year [2014], we were just awarded by CMS to be an official Medicare Shared Savings Accountable Care Organization (ACO). The creation of this organization, in my opinion, people will look back on, and say, “It was a signature milestone event.” I also believe that the other signature milestone event that people will look back on is the seriousness with which the organization realigned its cost structure this year. While it was painful and while it was difficult, it was necessary for the health and well-being of the organization. I do believe that people will look back and say that that had to be done to keep the organization healthy. It started out eighteen months prior at a board retreat. And if I get my timing straight, that was our board retreat in 2012 or 2013—2013, I believe. [21:00] We asked ourselves the question and we asked the honest question of our board: “Can we survive as an independent health care organization? Or is the best move to seek a partner?” We came out of that strategic planning retreat with the conclusion that there was a pathway to independence. It was a rather narrow pathway, but there was a pathway nonetheless. We had to execute on three things. The first was to repair our revenue cycle, which had collapsed because of some of the IT infrastructure changes we had made a year or so earlier that were necessary to make as we went through our journey of implementing an electronic medical record. We had to repair our revenue cycle. We had to execute on what I just described as the physician integration strategy, which resulted in the development of the Mary Washington Health Alliance. The third thing we had to do was realign our cost structure. Those three things had to happen. Back in the spring of 2013 we got serious about those three initiatives. By the end of 2014, we were well on our way in executing those strategic goals. It’s like everything in Mary Washington Healthcare: it is a work in progress. The story or the final chapter has not been written. I firmly believe that the decision to stand up the Alliance will be viewed in the same fashion that we talk about cardiac surgery today. It’s so new and it’s so fresh and it’s such in its infancy, we can’t see the full results yet. And another word about competition. Our world changed, just like when Stafford Hospital was opened and we became a two-hospital system. In 2010 we had another hospital, a competitor hospital, open: Spotsylvania Regional Medical Center, run by a highly capable, highly qualified health care company, Hospital Corporation of America (HCA). [24:00] The presence, in all honesty, has had some dynamics, but the presence of a competitor has made Mary Washington stronger. I really do believe that the opening of Spotsy [Spotsylvania Regional Medical Center] actually made Mary Washington Healthcare a stronger organization because we realized we couldn’t just rest on being the only game in town. We had to actually win the hearts and minds of our doctors, our associates, and our patients every single day.

08-00:24:48
Rigelhaupt:
Staying on the importance of the Health Alliance, I assume there are things that made it possible, and I would like to ask you to think about some experiences in your career and in the time that you’ve been here that helped make that possible. But not just that made it possible, but in the form that it has taken because hospitals have employee positions and I don’t think the health alliance has led to a dramatic difference in physician employment. It is not a closed model, like Kaiser. It is not a model of an academic medical center, where physicians work for a university. So what are some of the things that you would point to that made the health alliance possible, and possible in an organizational model that has fit with the history of the hospital and physician relationship in the area?

08-00:25:39
Rankin:
Good question. And it is the alliance among clinically integrated networks, which is the generic term that has risen up out of the health care jargon to define what the alliance is. It’s the generic “we are a clinically integrated network.” There actually is a legal definition of what a clinically integrated network is. That’s a little beside the point. I think the thing that allowed us to come together in this network was the groundwork we did in the preceding twenty-five years. It was the ability to find ways to work with physicians. It was the ability to develop some level of trust with the physician community. It was a continuation of the mindset that I believe we tried to implement in the ‘90s and the first decade of the twenty-first century: bringing physicians into the decision-making process. That part is a continuation of a philosophy that we tried to develop and have tried to implement here at Mary Washington Healthcare. [27:00] It is also equally true that perhaps the most common model that one sees hospitals doing around the country is the employment model. We employ physicians here. It’s not a lot. We employ somewhere between forty and fifty doctors, which is probably about ten percent of our physician population. It is a model that we have, but it’s not the dominant model. What the dominant model in Fredericksburg is still the private practice of medicine. That’s where health care really is local. They say that all politics is local—well, I actually really still believe that all health care is local. There are communities around America where the dominant form of employment for physicians is in fact employed by the health system. There is no question that there is a significant growth of physician employment around this country, but it is very specific by community. In this community, the dominant form of health care practice is still the private practice of medicine. We could talk about lots of demographic reasons or sociological reasons or anthropological reasons as to why that is the case, but it is still the dominant form. As we put our clinically integrated strategy together back in 2012 and 2013, we had to ask ourselves the question, “What will work for this community?” I mean, we can’t put an all employed model together if that’s not what the physician community wants or is demanding. So we have to be mindful of what the physicians want. I think most physicians wanted to be in the private practice of medicine in this community. Yet at the same time physicians began to understand that the separation between the health system and the physician community was a model that was doomed to fail. Because of the declining reimbursement base, there had to be a new model. [30:00] We had to be creative in finding a clinically-integrated model and we had to be willing to listen to the physician community in finding a clinically integration model that would work for the physicians in this community. So what did we do? And this actually goes back to our strategic planning retreat of 2012 where we brought physician leaders into the room with us. We asked them, “What do they want? What kind of model do they want to put in place?” Out of that strategic planning retreat of 2012, we put a steering committee. We brought in physicians on that steering committee. We had a group of six to ten physicians who spent eighteen months, basically from July of 2012 through the end of the year of 2013, building an infrastructure for how can an alliance work for this community? The unique aspect of our local model is the fact that it has an investment opportunity for physicians. I will tell you that that is rare around the country. Most models around the country either are employed models, like we just talked about, or that they are models where the private practice of medicine is still dominant, like us, but the clinically-integrated network is wholly funded and wholly owned by the health care system. The unique thing of the Mary Washington Health Alliance, and I believe at the end of the day will be its key to success, is that there is an investment opportunity and there is an ownership opportunity for physicians. This has been designed from the get-go as truly a fifty/fifty business venture or proposition, whereby physicians, if they want, have two ways they can participate in the alliance. They can participate either as a participant or they can participate as an owner. They can actually buy a share and actually own a piece of this new clinically integrated network. The remarkable thing is that we had 150 doctors roughly—I think it 139 is the exact number of doctors—who in year one made a decision to buy a share and invest their own money in the future of health care in this community. [33:00] That’s a remarkable feat because when you invest your time, your treasure, and your talent in something, you begin to believe in it and you begin to become active and make it work. Now, it is true today because of the ways of the shares of stocks and the capital that was required, Mary Washington still owns eighty-four percent of this company. The truth of the matter is physicians own sixteen percent of this company and Mary Washington’s long-term goal and the doctors’ long-term goal is to gradually get that company to where it is truly a fifty-fifty partnership. That’s the unique nature of this particular model and sets us apart from the rest of the country. There are very, very, very few models out there that have allowed the private physicians to actually invest in the enterprise. Now, it’s one year old. What I used to say last year when we stood the organization up is that we’re like an expansion football team. We’re a brand new team, we got great players, we got great coaches, and we got shiny new uniforms, but we haven’t played a down on the field yet. The real challenge will be—and I believe we can—can we continue to deliver the high-quality care that this community deserves and do it in an affordable way at the same time? That’s the question that we don’t know the answer to yet.

08-00:35:24
Rigelhaupt:
What has been the most rewarding part about working with the medical staff? And, you know, I don’t have a perfect way to break that down in terms of time, but to think about maybe early years when you got here, maybe a decade after, and perhaps how you would break it down in terms of turning points?

08-00:35:46
Rankin:
I think there’s two parts to that question. The rewarding aspect of working with the medical staff hasn’t changed and was constant throughout my entire twenty-three-plus year career. [36:00] That is, these women and men are genuinely in it for all the right reasons—the vast majority of physicians in this community are in this field for all the right reasons. They are dedicated professionals who are committed to improving the lives of people. These are bright, energetic, and compassionate men and women who are physicians and who have chosen to practice medicine in this community. The overall goodness, compassion, and the commitment for high-quality health care are just a joy. Physicians are human beings, just like administrators are human beings and faculty members are human beings. We have the whole gamut. We have good people; we have not so good people; we have nice people; we have mean people. Physicians are like that too. In general, when you look in totality and especially the leadership, these people are committed and are working hard to improve the quality of life for people in this community. The joy is being able to work shoulder to shoulder for a common cause. That hasn’t changed. That was true back in 1992 and it’s true today in 2015. You have a core group of people that have good values and are good people and are generally a joy to work with and want to do something bigger than just them. What has changed for doctors is not only has health care been transformed for health systems, but health care has been transformed for physicians too. Physicians’ worlds have changed in twenty-two years. In many respects the compact, the societal compact with physicians, has changed. Waxing a little anthropological here now, or a little philosophical here, for doctors who went to medical school in the ‘50s and the ‘60s and even the ‘70s a little bit, there was a societal compact. There was a societal compact that basically said, “I’m going to work really hard. I’m going to go to college for four years, I’m going to go to medical school for four years, and I’m going to do my residency my internship and my residency for another four years.” [39:00] Twelve years of their life is profound education. Then when they come out at the other end of that meat grinder that we call medical education, they will have a career that is rewarding not only emotionally, but also rewarding financially. And the public puts me on a pedestal, the doctor—you know, I am a pillar of society. Beginning in the ‘80s and the ‘90s, that compact began to change, because in all honesty, what the doctors had that John Q. Public really never did was access to knowledge. The advent of the Internet of the ‘90s leveled the playing field in terms of knowledge. A smart, savvy consumer had the ability to do medical research on their own. They didn’t have the training. With the rise of consumerism in this country, the public still held the physician on a pedestal and to a degree, but kind of the societal compact began to change. Beginning in the ‘90s and in the first decade of the twenty-first century, doctors started to be held accountable in ways they had never been held accountable. The advent of regulation to a private physician’s office is overwhelming. The bureaucracy and the paperwork of health care threatened to subsume the pleasure of practicing. If you talk to many doctors today, you hear that even the conversion to electronic medical records has slowed the doctor down. What you have is a generational divide. You have the typical bell curve of a generation of physicians. You have people who went to medical school in the ‘60s and the ‘70s who started their practice under one set of societal rules and you have the people who went to medical school in the ‘80s and the ‘90s who have a different set of rules. [42:00] And now you have people who are just graduating from medical school who actually have a third set of rules. Just like society in general, you have this continuum of physicians who have seen their world dramatically change. I will tell you, it’s hard to be a doctor today. Some of the doctors have not done well with the change. Others have adapted quite well. One of the things we wanted to do at Mary Washington was be the friend, be the one constant friend and ally that the doctors had in an increasingly hostile world for physicians. We wanted to position ourselves genuinely as being: “You can depend on us to be there for you and to help you make the transition that you have to make as an individual.” We can’t make it for you, but we can be a friend and an ally. First of all, the tilling of the earth we did in the ‘90s to build trust began to be helpful in 2013 and 2014 as we stood up this new clinically integrated network. There still is a little bit of a we/they/they’re, and there may always be. There was a doctor in this community who told me once in a public setting that there is always going to be creative tension between the individual physician and the health care system. Why is that? It’s because of how we’re trained. A doctor is trained and must, at the end of the day, treat each person one at a time. As the administrator and the CEO of the health system, I make decisions not based on one doctor at a time or one employee at a time or one patient at a time. I make decisions based on what’s in the best interest of the population. Sometimes the individual decision and the population decision aren’t always the same. There’s always going to be creative tension between the individual doctor community and the health system as an organization. The key is acknowledging it, recognizing it, finding common ground, and agreeing to disagree at times, but working on those things we can work together. But we can only do that if we have a culture of trust of each other. [45:00] That has to be worked on every single day.

08-00:45:05
Rigelhaupt:
The question of tension was one of the questions I had written down just below in terms of hospitals and physicians not always seeing eye to eye. Even in terms of organizations, from the AHA to the AMA.

08-00:45:17
Rankin:
Yes, absolutely.

08-00:45:18
Rigelhaupt:
Different viewpoints. And what you described, having to sometimes agree to disagree. My question is, can you think of an instance where the different viewpoints, the tension that you described, made a decision better? That having those disagreements actually proved beneficial, even if in the short term more challenging?

08-00:45:42
Rankin:
The obvious is the one I just described, is how we formed the Alliance. There was disagreement on the organizational structure of the Alliance. There was tension around the Alliance. Out of that came the decision—well, there were two changes that were made out of that creative tension. One was the decision to allow an investment opportunity. Originally the model was the hospital would own it all, 100 percent. The second was the composition of the board of directors of the alliance. We ended up, instead of having a fifty/fifty board, which was the original model for a sixteen-member board and there would be eight physicians and eight appointees from the health system, we went to a seventy-five/twenty-five percent model, where three-quarters of the board would be physicians, and one-quarter would be health system. That was a big move on the health system’s part and it also signaled to the physician community that we do trust you. We trust you so much that we’re willing to give you majority seat on the board. I think there’s an example where the creative tension made a difference and changed a model. I can’t right offhand think of other big examples, except that I do know that every program we’ve implemented, we’ve had physician disagreement, and we’ve had to kind of negotiate our way through a model that would be satisfactory. [48:00] We’ve made some mistakes. We’ve had some models where they haven’t worked, and we’ve had to unwind them over the years. I think the big one that comes to mind is how we organized the alliance, in terms of organizational structure.

08-00:48:30
Rigelhaupt:
Trust is something that you have spoken quite a bit about, as have other people that I have interviewed. There has been an emphasis on building trust with physicians from the health organization. But it also sounds like, from what you’ve just described, that trust is built the other way. That the organization was willing to have seventy-five percent of the board be physicians when the overwhelming investment is from the health organization. When do you think that happened? That you felt and the health care organization and your leadership team would have trusted the physician community, and how did that happen?

08-00:49:17
Rankin:
Wow. I think it was gradual. I don’t think there was one defining event. It was the building of a culture that basically said to the physicians, “We, as an organization, trust the physician community.” I will tell you, the jury is still out: there are people or there could be critics and consultants out there who say that we’ve given the candy store away. I don’t personally believe that. At the end of the day, you have to trust your instincts and you also have to take a risk. If you truly believe in the concept of the physicians are truly partners with us, there are times you have to take those risks. Now, you put in safeguards, and in fact there are safeguards built in. There are some reserve powers that are built into the bylaws of the alliance. I mean, these twelve people can’t sell the alliance. We have veto power and there are key, very important things—you do put in protections. [51:00] At the same time, sometimes you have to take a risk, and you have to say, “This is the right thing to do if we believe in it. We’re going to take that risk. We’re going to protect ourselves to the best that we can, but at the end of the day we’re going to take the risk and we’re going to do it.” There’s no foolproof protection and we can’t insulate ourselves from anything that could go wrong or could go bad. It’s why I think this will work: because we do have a culture of trust. I don’t want to paint for you that the relationship between the medical staff and the health system is we’re all sitting around holding hands singing Kumbaya, because that is not the case. We have differences of opinion. There is tension that results from time to time. This affordable health care initiative led to tension with the decisions that were being made. We’ve had to make some hard decisions. How you make those decisions, how you communicate those decisions, and the overall culture that you have helps you get through those difficult times or events. And you know what, we’ve both been disappointed. We’ve been disappointed from time to time on the behavior or the reactions of members of the medical community. In all honesty, the physician community has been disappointed in decisions that we’ve made. It’s like a marriage. You work at it every day. You come into it with a sense that it’s worth it and the union is worth the battle. Yet like a marriage, it has its ups and down. It has its moments of crises. It had its moments when both parties are angry at each other, but there’s a willingness to work through tension between the two organizations. It has to be managed. I worry about that in a society where is getting harder and harder to manage creative conflict. I worry—I mean, one only needs to look at our political structures to worry about it and to wonder, can we as organizations manage conflict and manage conflict?

08-00:53:45
Rigelhaupt:
What has been most rewarding about working with nurses, particularly in light of the fact that the hospital five years ago achieved Magnet recognition? [54:00] And all of the clinical programs that have been developed over the course of your career have required higher and higher levels of nursing care and expertise?

08-00:54:08
Rankin:
While we’ve spent so much time talking about physicians, and indeed physicians are our key partner, at the end of the day the key caregiver in any hospital system is the nurse. A hospital system is only as good as the quality of the nursing staff that works inside the organization. The nurse is our anchor employee and we have many wonderful nurses. I don’t want to denigrate any other health care worker, and that’s not what I’m doing, but at the end of the day it is the nurse who is at the bedside day in and day out, night in and night out, taking care of the daily needs of our patients who entrust us to their care. Watching the maturation of nursing at Mary Washington has been an incredible pleasure and an incredible honor. We could not have done anything—we could not have had an open-heart surgery program, we could not have had a neonatal intensive care unit program, we could not have had a neurosurgical program, and I daresay we can’t have a clinically integrated program—without dedicated nurses, educated nurses, committed nurses, and a nursing service that can implement what the clinically integrated network wants to do. Watching the maturation of our nursing service has been remarkable. When I say maturation, I mean it is the critical thinking skills of the nurse. I’ve watched our nurses mature from a task-oriented group of women—and it’s predominantly women, but not all, and it’s still a dominant women’s profession—to a profession and a group of women and men who are very confident in their critical thinking skills and can problem-solve independently. That’s what the Magnet journey is all about: the improvement of the critical thinking skills. [57:00] It is the recognition that nursing is so critical to the success of a health system. So yes, watching nursing mature has been a remarkable and we’ve invested over the years significantly in nursing. We go back a long way in our relationship with the nursing program at Germanna Community College. We were one of the first health care systems to support Germanna way back when they first started their nursing program. We’ve been their anchor and in many respects they’ve been our anchor. As the industry has moved more towards a BSN, a bachelor model, we see most recently our investment with the University of Mary Washington to bring a BSN program to Fredericksburg. We’ve been able to watch and participate in that maturation. The Magnet journey was one stop along the way of a totality of a culture of nursing and the importance of nursing.

08-00:58:16
Rigelhaupt:
What are a few things that you would point out as most rewarding about working with the board over the course of your career?

08-00:58:30
Rankin:
Wow. That’s a great question, and it’s one I’ve thought a lot about. Obviously, I’ve wrapped up my career and as I prepared to step aside at the end of this last year, I saw a couple constants of our board. One has been its total and complete dedication to this community and to this health system. Collectively, over the years—and there’s probably been fifty-plus people that have kind of come and gone and served on our boards over my twenty-plus-year career here—they have all committed themselves to making Fredericksburg region a better place to live and to make Mary Washington Healthcare the best health care system it can be. It is anchored in an absolute constancy of purpose and that is in every single one of board members and collectively the boards that I’ve had the privilege of working with. It has not been a rubber-stamp board by any stretch of the imagination. It has been an activist board. It has not been a ceremonial board. [01:00:00] It has been a hands-on board. It is a board that has held me and management and physicians accountable. It has been a board that has been willing, able, and in fact wanted to weigh in on the issues of the day and wanted to provide insight. It was a board that committed itself to educate itself in board best practices. They gave of their time, their talents, and their treasure to do that. They educate themselves and they give enormous amount of time. The reward has been a group of men and women who have cared deeply about the health system, who have had a singular purpose, and who have cared deeply for this community and for this organization. And this is the key: they’ve checked their personal agendas at the door. Never once, not once in my twenty-three years, did I have to work with a board member who had their own personal agenda or who put their own personal agenda ahead of the organization’s. And believe me, I have heard horror stories of some boards where that is not necessarily the case. I believe that the decisions we’ve made as a board were better because of the active involvement. I can think of two or three decisions that we’ve made over the years that the board made the decision better because of their involvement. I can think of several as a result of that. The reward has been is that we’ve been able to work together and I never once felt that I had to be looking over my shoulder—not once. I never once felt that I had to be dealing with someone who had a personal agenda rather than the best interest of the organization. These are smart, bright people and they have ideas. I think CEOs who don’t use their board in that way miss a rare opportunity. I also felt supported. We had some failures. We talked about failures in these interviews. [01:03:00] We had a couple big failures over the years. The board never once asked for retribution. It’s not quite the right word that I’m looking for; I mean they didn’t require a sacrificial lamb, if you will. What they wanted was an insightful, thoughtful analysis of what happened. They wanted a plan to correct the problem and they wanted to make sure that there were safeguards put in place so that the problem wouldn’t happen again. They demanded those things. They were at the same time demanding and supportive—demanding and supportive all at the same time. That was a pleasure to work with. There were people who were obviously being human beings and were invested at a higher level. I had one board member, Charles McDaniel, in particular in the early years who would call me after every single meeting and he would want to go through the meeting. He would want to go through the meeting and he would want to give me advice on things that I did well and gave me some criticism on things that he thought I could have done better as the CEO. I had others who just came from meeting to meeting. The reward is that I was able to work as a peer and I feel they made me a better executive and they supported me when I needed to be supported. That, at the end of the day, is the reward that I think about.

08-01:05:13
Rigelhaupt:
The decisions that you’ve mentioned, you said there were several, that in plans they got better because of board involvement and questions. Would you say what those were?

08-01:05:23
Rankin:
I can think of a couple that come to mind. The first big one, and it seems a little trite given the meaty issues we talked about, was when we made the decision to build the parking garage on the campus. Now, we can laugh about that today in 2015, but when we built that parking garage, there was no parking garage in the city of Fredericksburg. The parking garage that we proposed to build was the first parking garage in the city. There was not a parking garage that existed. [01:06:00] We were all sensitive to that. Our board members were sensitive because we thought, rightfully so, that it was kind of going to change the landscape of Fredericksburg. Yet we knew that the only way we were going to solve our growth and parking issues that we were having and that we projected we would have was the building of a parking garage. We did our homework dramatically. We were careful. Management was careful. We did our homework and we had our options. Parking garages are actually quite expensive to build. Parking decks are actually not cheap to build. Also trying to be good stewards of the money that was being spent, management proposed a smaller parking garage than we have today. It was the board that pushed management to say, “If you’re going to build the darn thing—and yes, we need to build it—then let’s build it the right size.” We actually added probably three to four hundred additional parking spaces to that garage. That was not management’s original recommendation. We ended up building the parking garage we have today because of direct board intervention. The other, what I believe is a milestone decision, was the location of Stafford Hospital. Just like the ‘80s, when the board was so involved in where to put and where to build the new Mary Washington Hospital, the question was where to build in 2005 and 2006. The question of where to build what was to become Stafford Hospital was an equal debate. There were various sites identified as potential opportunities. The site that Stafford Hospital sits on today was not management’s original recommendation. Management’s recommendation was a different site. The board rejected that site and said, “That is too close to Fredericksburg. It needs to be farther north.” The board basically gave us directions to continue to look. That turned out to be an important decision and a game-changer decision. It forced management to go back to the drawing boards and continue to look for land. A third that comes to mind was the decision to build the Moss Clinic. The background of that decision: the building of the building that became the Silver Health Center and to house the Moss Clinic in the Silver Health Center. The background story was we were approached by the mayor of the city of Fredericksburg at that time, and there was some concern that there was a need to relocate the Thurman Brisben homeless shelter. The city asked us to consider donating a plot of land on the campus to house the Thurman Brisben homeless shelter. When the mayor asks you to do something, you do it—I mean, you take the request seriously. We took that request seriously. We did our homework, we looked at what land we owned, we looked at the pros and cons, we interviewed people, and I will tell you that that may be the only decision where there was a split vote. It was not a unanimous vote. When it finally came to the board and it was debated at the board, the decision of the board was not to donate land for the Thurman Brisben homeless shelter. The decision was not because it wasn’t a good idea and not because they weren’t committed to end homelessness. It was that we are a health care system and that homelessness is not our issue, and in all due respect, it is the city’s issue. It is the community’s issue. It is not our issue to solve. Delivering health care to the homeless and to those that can’t get it is in fact our issue. The board at the same time commissioned management and staff to figure out a way to find a permanent location and housing for the Moss Clinic. We made a commitment to build the building. That’s the third example that comes to mind that I think that board leadership proved to be right and correct. All three of those, I think, are monumental kind of game-changer decisions that are made. Those are three examples that come to mind.

08-01:11:41
Rigelhaupt:
I want to ask a question about health disparities, and it’s certainly an important issue in U.S. health and in health care delivery. You have a degree in public health. I’m not sure, not knowing the history of how this was talked about when you were a student in public health, and if health disparities was the term used. [01:12:00] But I wonder if you can think about your career here, both in terms of your background in public health and as a CEO, what are the roles that an acute care hospital can play in trying to address health disparities? And obviously they exceed what any single organization could do, but what are some of the things that the organization can and has done?

08-01:12:30
Rankin:
Boy, we could spend hours on that topic alone. Yes, my degree is in public health, and I think as we’ve talked before, I made a conscious decision to get a degree in public health and not get an MBA or an MHA. Not that they are not important degrees and very highly desirable degrees, but for me, when I went to graduate school, the health of the communities at large and public health was important to me then when I went to graduate school and still remains important to me. I believe, in many respects, it continued to frame over the course of my career the decisions and the directions, if you will, the philosophies of health care administration. I went to graduate school between 1975 and 1978. It seems like an awful long time ago now. As a first-year graduate student, in the first week in September of 1975, the question of all incoming first-year public health candidate students, no matter what specialty track we were in—I happened to be in the health management track, but there was an epidemiology track, there was a biostatistics track, there was a fetal and maternal track, and there were multiple tracks at the School of Public Health in Pittsburgh. We were all asked the same question in 1975. And that question was, is health care a right or is health care a privilege? We were all asked to write an essay on that topic. There was obviously no right or wrong answer to that question. It is a debate that America is still debating today. Even though we passed the Affordable Care Act in 2012, we’re still debating it. It came up last night in the State of the Union message. We hear our GOP and some of our Tea Party candidates saying we need to repeal Obamacare [01:15:00] Depending on who you talk to, it’s either the best, single most important piece of legislation of the twenty-first century or it’s the worst legislation event. The debate hasn’t been answered yet. The question of health disparity is still real in America. I like to think, and I think the jury is still out, that the decisions I made and the direction I tried to lead the organization over twenty-three years, was to not lose sight of the fact that we had an obligation to improve health in Fredericksburg. Now, that is hard to do in America because our health care system really is a sick care system. It is one where the investment in health is not rewarded in the same way that caring for the sick is rewarded. The economic incentives of the American health care system are all aimed toward taking care of the sick. There is nothing wrong with that, but it is narrower than improving the health of the community. I would like to think that the development—and we’ve talked about this and other people have talked about it in your interviews. I like to think that what we did by creating the Community Service Fund, or now what we call the Community Benefit Fund is that we took some of our investment over the years and invested in some of these health disparity issues and some of these health issues. I like to think that we tried to recognize that health is more than just taking care of the sick. I’m trying to figure out a way to phrase that. There are some core community issues that have to be dealt with, whether it be nutrition, poverty, homelessness, or access to care. I mean, it’s why we invested and spent ten million dollars and invested in a Moss Clinic on our campus and continue to invest in the Moss Clinic today. It’s why we invested in Micah, to help Micah build a respite center to keep the homeless when they are discharged from the hospital. [01:18:00] It at least gives them another place to continue to convalesce so they don’t go right back to the street and then end up right back in the hospital. I would like to think that we’ve tried in some ways to understand and to recognize issues. It’s why our charity care policies are what they are. I would like to think that we’ve tried to recognize and put some programs in place to help deal with the health disparity issue. It’s a drop in the bucket, and it really is. I firmly believe, until America finally and totally answers the question that I was asked as a first-year graduate student—is health care a right or is health care a privilege—we’re really not going to tackle that problem. I think we’re still debating it today. You can make cogent arguments and passionate arguments and intellectually thoughtful arguments on either side. I obviously, from where I come from, I lean more on that it is a right—it is more of a right than a privilege. However, I have come to understand the importance of personal responsibility. You have to somehow factor in that discussion, in that dialogue, the role of personal responsibility. Is it the responsibility for this organization or of society to care for someone who chooses not to wear a helmet when they ride a motorcycle? Or chooses to smoke despite all the evidence of what smoking does to health? Or chooses to drink alcohol in excess? I don’t want to get into social debates here, but there is an important discussion of personal responsibility in this as well.

08-01:20:35
Rigelhaupt:
One of the things I wanted to ask about are questions of gender, in particular around the medical staff. The number of women who are practicing physicians has changed dramatically in the time that you have been in hospital administration. You know, I think the last statistics I looked at, in 2011, it’s to almost fifty/fifty in terms of the number of MDs issued between men and women. [01:21:00] Has that been something that the administration has been aware of, talked about, and how has that been experienced in terms of more and more women practicing as physicians in the hospital?

08-01:21:17
Rankin:
The truth of the matter is it has not been on our agenda. It is a reality, yet personally, I don’t believe our policies, our procedures, and our ways in which we approach relationship with the medical staff has changed because of that shift. That’s a dramatic societal shift—you’re absolutely right. When we look at the statistics and I have seen the same statistics that when you look at medical school graduation today it’s very close to a fifty/fifty—and why not? There are just as many bright, dedicated, science-minded, and like-minded women as men. I do think what it has done, though is it has changed the dynamic of the practice of medicine. Believe me, women physicians work just as hard as men physicians do. They work just as hard. They take just as many hours of call. They are in the office just as many hours. I do think it has forced an issue among the physician community at large of quality of life issues. I think both young men physicians and young women physicians want a quality life—they want a family life as well. I don’t believe, from a policy perspective, it changed anything at Mary Washington Healthcare. I think it is a societal change that personally I think is for the good. If we’ve made change, it has been gradual. I can’t remember one time that a gender decision factored into whether or not to give privileges to a physician or hire a physician. I firmly believe it’s always been about, at least at the executive level and at the board level, it’s been about skill and capability. [01:24:00] I can’t say that it’s changed policy. I think the change in culture was going to change anyway: the number of hours, the call hours, how we manage call, and how we manage nighttime coverage and things like that. I do think, however, women’s issues and employees are a real issue. If you look at the employment in American hospital, it is a dominated-by-female employee force. Not totally, but still employees in American hospitals, it’s a dominant women’s profession. If you look at nursing, it’s still a dominant women’s profession. We as an industry have not done a very good job of understanding women’s issues and the importance of managing and dealing with women’s issues as part of our workforce strategy. Single moms. Yes, there are single dads too, but I think the demographic data will tell you that in terms of single parents, it’s the mom far more than the single dads. Single parenting, single moms, is a real issue that I don’t think we as an industry have done as good a job in recognizing and dealing with. There was a time, in terms of the executive office, that we, the collective we, were accused of it being a good old boy club—that the people behind these doors were all male. I’m pretty proud of the diversity that we ended up with on the executive team. I can’t tell you what the percentage is, but boy, there are a lot of women and a lot of bright women that sit around the executive table today. I’m pretty proud of that. I think when we talk about disparities, I do worry about minority disparities. We don’t have very many minorities on the executive team. We have some, but not very many. [01:27:00] Part of our obligation and that I tried to make, but it never was a stated objective—I always had in the back of my mind that white men needed to make sure that all minorities, to the extent possible, were represented at the executive table. That doesn’t mean that I had quotas, but I was always mindful. I was always mindful of that in my hiring decisions.

08-01:27:43
Rigelhaupt:
And as we’re approaching time, I want to ask a question about your job and what you would most want the public to know about being a hospital and health care CEO or a senior administrator that might not be common knowledge.

08-01:28:04
Rankin:
That’s an interesting question. I used to be very defensive about hospital administration. If you look over my career, the course of my total career in the ‘70s, ‘80s, ‘90s, and the first decades of the twenty-first century, hospital administrators have been portrayed in one of two characterizations in general, in the press or in kind of our media. Hospital executives and health care executives have been portrayed one of two ways. One way has been we’re kind of bumbling idiots. We’re clueless, and we have no idea what’s going around and that we’re just kind of bumbling—the only word that comes to mind is bumbling idiots. That’s the one portrayal that sometimes the media portrays hospital administrators. The other, and in recent years the far more common, is the ruthless MBA type who is only interested in the bottom line. Those are kind of the two big ways health care executives are characterized. I get defensive of both of those characterizations over the years because that has not been my experience at all. [01:30:00] In my experience, the men and women and my peers that I’ve had the privilege of working with over the last thirty-seven years, men and women alike, are incredibly hardworking, highly educated, highly competent people who care deeply. For the most part, they care deeply about what they’re doing in their communities and went into this business as a calling in the same way that I believe I was called to this job and this profession. I know my colleagues feel the same way: I have rubbed shoulders with and talked to people and have met people who have given their hearts and souls and blood, sweat, and tears, to their communities and their health systems to make them better. I guess what I would want people to know about this is we are servants. We are caregivers, too. I consider myself a caregiver. I always have. I never had the privilege of laying a hand on a patient. That was not my calling. I am a caregiver. I believe that most health care executives see themselves as caregivers and that we are caring for the people who care for the patients, who lay hands on patients. If I wanted the public to know anything about health care administrators or hospital administrators, it is that we are not all ruthless people who care only about the bottom line. That, yes, we have a responsibility and we are one of the few people that do have a responsibility for the bottom line. We also have a responsibility for the patient experience. We have it all. We care deeply about what we do. We give our hearts and souls. We are caregivers and we are caring for the people who actually lay hands on the patients. That would be the one thing I would want people to know and I would love to find a way to change the image of the hospital administrator. And I get it, because we’re all well-compensated. I’ve been highly compensated and I’ve been well-compensated. I’ve been blessed and my peers are, too. Maybe it goes with the territory, but we don’t always care for the bottom line. [01:33:00] Many times we’re making decisions about what’s in the best interest of the health care. We are responsible for our organization. We are responsible for the totality of our organizations and that includes not only the bottom line, but it includes the quality of care and the patient experience that our customers have. That’s what I would want the public to know, if I could talk about what my career and what a hospital administrator does.

08-01:33:35
Rigelhaupt:
Let me pause right there. The way I like to end these interviews is to ask a last question that’s actually two questions. One, is there anything that I should have asked and I did not? And two, is there anything you would like to add?

08-01:34:05
Rankin:
To answer to the first question, I think after eight interviews, we have talked about the whole gamut of the last twenty-five years. We’ve even talked about the past and we’ve talked about the future. So I don’t think so. I can’t begin to think about something else that we haven’t talked about in the course of eight interviews. So the answer to the first question is no, I can’t think of anything. Is there anything I want to add? I guess the only thing I would close with because this last interview is being done at a time when I have now transitioned out of the role of CEO and I am beginning a new chapter of my life. I would like people to know is where I am in my career here at Mary Washington Healthcare and that is I feel a sense of gratitude. I feel gratitude to have had the opportunity to be part of an organization at a period of time where it really came into its own, to have been a part of that growth and development, and setting a culture and setting a direction for the future. [01:36:00] As I think about the end of my of career, what I’ve remembered, and what I will take away, for me personally, it has been this overall sense of gratitude, having made a difference, and having had the opportunity to make a difference. I think that’s it.

08-01:36:17
Rigelhaupt:
Thank you.

08-01:36:19
Rankin:
My pleasure. So we’re finally done?

[End of Interview]

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