It was 11 years ago this month that Thomas F. Zenty III took over as CEO of University Hospitals. Since then, he’s stemmed the bleeding from a row of financial losses and turned the operation around. While he’s quite proud of that achievement — for his team and himself — it’s not the only accomplishment that makes him beam with pride.

It has to do with people.

“From a leadership standpoint, one of the things I am proudest of is that many of the people who preceded me are still here today,” he says. “So many times you come into an organization, and there has to be wholesale, massive management changes. We didn’t do that here. In fact, virtually everyone who was here prior to my arrival is still here today.

“I didn’t think we really needed to focus on that, and I think history proves us right.”

But that’s not to say the health care industry hasn’t — and isn’t — going through major changes.

“We are going through some major transformational changes, but the work that we do hasn’t really changed: our focus on the patients, our mission, all the things that we need to do to make certain that people receive world-class care in our industry and in our organization.”

Just as the assembly line changed the automotive industry forever, the health care industry is at a crossroads. Change, in fact, may well be the health care industry’s middle name.

Zenty doesn’t fear change. He racked up experience prior to arriving at UH with leadership roles at health systems in California, Arizona, New Jersey and Connecticut.

While some CEOs can’t deal with the pain change brings, the reluctance to “get with the program” is often fueled by fear of the unknown. It’s the product of well-established habits and it’s a conviction that things will get back to old familiar ways — that the CEO will be seen as a sagacious knight in shining armor.

Ready to break those concepts, Zenty felt confident that the health care being delivered at University Hospitals was not the problem. Coming in the door he knew there were four things that he needed to identify as major areas to concentrate on. Not surprisingly, change had to occur in each area — quality, efficiency, transparency and focus.

“There were a lot of business elements that had to be addressed, but the mission, the vision and the clinical capabilities that we had were second to none,” Zenty says.

Here’s a look at how Zenty leads his team to be unthreatened by change at the $2.3 billion health system with more than 24,000 employees and physicians.

 

Assess who is delivering the quality

Getting a clear picture of any problem is the first step in finding out what changes need to be made.

The analysis doesn’t need a lengthy study, and while all CEOs obviously don’t have the same executive microscope to examine personnel, there are some universal techniques to use.

“I think there is a fair amount of instinct that goes along with leadership style, and whether or not there is a fit, both with the organization and with how leaders really should comport themselves,” Zenty says. “I look for content; I want to make sure people are content rich. I found a lot of very, very intellectually gifted people with a strong understanding of the industry — people very committed to the organization, and that was abundantly clear all along.”

The workforce assessment took Zenty 30 days, during which he had in-depth meetings with all the senior staff. He adopted the concept that UH needed to make certain its business acumen matched its clinical acumen and could deliver the quality for which it was known.

“We have an extraordinary team of people; we have an extraordinary organization in terms of our commitment to the communities that we serve.

“I knew we had the right people,” he says. “But it wasn’t so certain that we were properly cast in our roles.

“There will always be fabulous physicians, and outstanding nurses and other clinicians and caregivers. What we are really going to have to reorder is the way that we think about how we take care of patients.”

Zenty and his team began to draw up a comprehensive plan to address these and other issues.

 

Take quality and efficiency measures

The words quality and efficiency often appear in the same sentence when describing how to align people and systems to deliver a continuous stream of value to the customer and eliminate waste and inefficiencies at the same time. Sometimes that means transformational change.

The health care industry in general is undergoing such a change, away from a volume to a value equation, Zenty says. That viewpoint has been growing in acceptance, and UH in 2005 decided to launch a five-year plan called Vision 2010, made up of multiple components to affect the necessary changes.

“It’s no longer being paid for each thing that we do, but rather being rewarded for outcomes — not just for inputs,” Zenty says.

“Vision 2010 included a focus on quality; it included some new buildings, service-offering sites,” he says. “We now have about 21 ambulatory sites and a number of hospitals, depending upon how you count them. We have a broad distributed network now of physicians in an eight-county region. We have great relationships with about 2,000 private practice doctors, and on the main campus, we have about 900 faculty members.”

What it all translates to is that UH started with one concept of Vision 2010 as a major institutional construction project, but it resulted in having a whole new way of doing business.

“We thought, ‘What are the components that go along with making Vision 2010 a true, community-based project?’” Zenty says. “How are we going to engage community members as part of our overall decision-making process and engage them in meaningful ways that they have not been engaged before?”

To accomplish its Vision 2010 goals to make the local region economically better while growing the UH footprint, the organization turned to its commitment to community responsibility.

“Not only did we create Vision 2010 for the needs of the communities that we serve, but during the course of it, we focused on things like the quality of care that we provide,” Zenty says. “Quality was our No. 1 priority, like investing in the communities by doing a project labor agreement, evidenced by our commitment to local spend, female business spend, minority business spend — we set these goals out early in the process of Vision 2010, and we set them without the need to do so.

“At the time, they were sort of ceiling goals but now they are foundation goals. In addition, if you look at what we did with our project labor agreement, that has now become the foundation for other major projects that have taken place in Northeast Ohio.”

As a result, the community as a whole has become the most important stakeholder.

“Vision 2010 was a point-in-time issue, meaning that we knew we had to position our organization with a broader footprint, bigger geography, with several areas of focus. And we created our strategy. You stay with the four themes — quality, efficiency, transparency and focus — and we were rather relentless on how we approached what we needed to do in those regards,” Zenty says.

“Vision 2010 was the product of so many people that nothing pleases me more than when everyone took credit for making it happen. And that to me is what leadership is all about. It’s about shared ownership, shared responsibility, shared accomplishment — and shared recognition.”

 

Ensure transparency

No matter what kind of entity you manage, an integral component of your brand is trust. One of the most effective ways to build that trust is often through transparency. This is especially the case when your organization is facing a crossroads.

For UH, it realized some time ago that the hospital industry, in terms of the laws of supply and demand, was moving from an environment of supply-induced demand to demand-induced supply.

“These are the same words, rejiggered, but fundamentally changing the way we as an industry need to think about this,” Zenty says. “We have 5,500 hospitals in the United States all having to rethink how we are going to be delivering the best quality care we can in the future.”

This creates a priority in matters such as pricing. It is more important than ever for patients to be able to compare the cost of medical treatments.

“Transparency — transparency around co-pays, transparencies around deductibles, transparency around expected outcomes — things that we have all been focused upon here for the past seven or eight years will be expected and frankly demanded by the consumers,” he says.

Among those demands is the rate of “product recalls” — or in the health care industry, rates of readmission.

“At University Hospitals, we don’t have a problem with readmission rates because we do well in this particular category,” Zenty says.

“For example, we had a fairly large population of sickle cell anemia patients with high rates of readmission. We found ways to focus on activities that ameliorate that need to be readmitted; instead, being taken care of either in an ambulatory environment or better, at home.

“It’s like the old management dictum: What gets measured gets managed.”

Hospitals are all examining readmission rates as an industry in far more detail than before.

“We are finding many solutions to problems that have a relatively straightforward solution that we didn’t think about before because we automatically got paid for readmissions. But that is no longer the case.

“So when we think about the financial benefits where detriments that go along with health care today, things like wrong site surgeries, high readmission rates — we need to be focused on what we are doing with patients and their families as an industry, not what we are doing to patients and their families,” Zenty says. “We need to make sure that we are taking care of the entire needs of patients.”

 

Getting — and staying in — focus

If your goal is to deliver quality efficiently and transparently, many businesses find the fundamental solution is to become a values-driven organization.

“Values-driven leadership teams have enormous leverage opportunities that we need to make certain we continue to focus on in the future,” Zenty says. “For example, when we put Vision 2010 together, that wasn’t one person’s thought process. The idea of having a single individual who has all the right answers is an outmoded paradigm.”

UH espouses the values of excellence, diversity, integrity, compassion and teamwork.

“In each of those, we have shown extraordinary progress,” he says, noting the many awards the health system has achieved for excellence, a diverse workforce, ethical operation, compassionate care and teamwork at every level.

“When you are a values-driven organization, and you measure your performance in the values of quality, efficiency, transparency and focus, it makes an enormous difference in your success,” he says.

Strategic planning meetings on a regular basis can keep the organization on track.

“We have quarterly strategic planning meetings where we talk through what we think is going to be happening in health care in whatever defined period of time that we select,” Zenty says. “So for example, our strategic plan is a three-to-five year view. Then we create annual operating plans in which each of our entities has annual operating performance goals required.

“We involve a lot of people in our strategic planning process. It is very iterative. We do it internally; we don’t have outside experts who are preparing our strategic plan for us. We do it all through our strategic planning office.

“What matters is having an engaged group of people who are all pulling in the same direction. These are mission-driven people who believe in the organization that they work for — people who believe in what we are and what we do.” ●

How to reach: University Hospitals, (216) 844-8447 or www.uhhospitals.org

 

Takeaways:

Find out who can deliver quality.
Make transparency a priority.
Teams with a sharp focus will contribute to the success of the entire organization.

 

The Zenty File

Name: Thomas F. Zenty III
Title: CEO
Organization: University Hospitals 

Birthplace: Jermyn, Pa., “The Birthplace of First Aid in America.” I mean you’ve got to be known for something. 

Education: Bachelor of science in health planning and administration from Pennsylvania State University, a master’s degree in public administration from New York University, master’s degree in health administration from Xavier University and an honorary doctorate of laws degree. 

What was your first job and what did you learn from it?

I was a farmhand at the age of 14 on a dairy farm. You milked the cows twice a day whether you wanted to or not. But you learn a lot when you work in an environment like that. You learn about responsibility, you learn about commitment, you learn to be self-sufficient. You learn that you have to work your way out of problems because there aren’t many people around to ask for help. And you learn that you have to be very thoughtful about everything that you do in an environment like that because it is hazardous — it’s hard work. You also learn to figure out how to fix things, do things that you might not otherwise do. You grow up quickly. I was driving a truck when I was 14 years old, a tractor, and all those things. It forces you to become self-sufficient and to be your own mechanic. There was always something breaking on the farm, whether it was a baling machine, conveyor belts, milking machines, whatever it was. It was a good education. 

Who do you admire in business?

Two books that I read rather consistently transcend business, and they are focused more on leadership. One is called “The Art of War” by Sun Tzu, and it was written around 500 B.C. The other is “The Prince” by Machiavelli. I read each of those books from time to time to transcend the issue of business, but really, I read for the great discussions about leadership. So for example, one of Sun Tzu’s famous quotes is, “Imagine what I could do if I could do all that I can.” That’s very impressive when you think about it. He talks about the importance of taking care of people. He talks about when to advance and when not to advance, about the circumstance under which you make decisions and about the importance of business intelligence. “The Prince,” of course, was written in a different time and place, but nonetheless there are always some interesting lessons to be learned from reading it. In terms of business, Peter Drucker probably would be the singular person I would note because he is the father of modern American business, but I have admiration for so many other people as well who are successful in the business world.

 What is the best business advice you ever received?

My first mentor was someone in whom I had great admiration. This was right after I came out of graduate school. Her point was basically something that Sun Tzu said: “Strategy without tactics is the slowest route to victory. And tactics without strategy is the noise before defeat.” In effect, that is what she said to me. She said focus on the strategy, but don’t lose sight of the tactics. Be strategic in everything you do, but don’t overlook the details. That to me was terrific business advice. She also said to surround yourself with the best people that you can find, it’s the only way you are going to leverage yourself to success. 

What is your definition of business success?

Success in business to me arises when you are able to accomplish your mission and accomplish your vision in a values-driven environment in which people matter most. That’s my simplest definition. The good news is that our mission statement is very easy to remember and repeat: “To heal, to teach and to discover.” We work on this every day, and that’s why our values are so important to us. 

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University Hospitals – A decade of accomplishments

 

Beginning in 2003, under the leadership of new CEO Thomas F. Zenty III, University Hospitals dramatically improved its financial health and set upon a journey to expand its heath care offerings.

2004: UH experiences its first operational profit in more than a decade, due to a solid strategic plan, cost management initiatives and the closure or divestiture of unprofitable business lines and facilities — an important milestone that UH is now building upon as the system continues to strengthen its financial position. 

2005: UH launches Vision 2010, a five-year $1.2 billion strategic plan, which includes building a freestanding 120-bed cancer hospital, UH Seidman Cancer Center; Center for Emergency Medicine and Marcy R. Horvitz Pediatric Emergency Center at UH Case Medical Center; and Quentin & Elisabeth Alexander Neonatal Intensive Care Unit at UH Rainbow Babies & Children’s Hospital. The strategic plan also includes building UH Ahuja Medical Center, a 144-bed hospital and outpatient medical building in Beachwood, and several outpatient health centers throughout Northeast Ohio.

2006: The University Hospitals Health System name is shortened to University Hospitals as part of a broad strategy to build a strong UH brand. As part of this process, University Hospitals of Cleveland becomes University Hospitals Case Medical Center, reflecting the primary affiliation with Case Western Reserve University School of Medicine. The new UH name and bold red logo were designed to clearly and consistently communicate the system’s identity to patients, families and the communities UH serves. The logo reflects the UH brand promise of patient-centered care. 

December 2006: UH announces a $30 million gift from Monte and Usha Ahuja and family; in honor of the gift, UH names the proposed UH Ahuja Medical Center in their honor.

January 2008: The City of Cleveland, UH and the Cleveland Building & Construction Trades Council announces the signing of an historic project labor agreement for UH’s Vision 2010 construction projects. UH is awarded the Economic Impact Award from the Cleveland Commission on Economic Inclusion in recognition of the groundbreaking project labor agreement. 

Summer 2008: UH receives one of the largest financial gifts in its history — $22.6 million — to establish the UH Harrington Heart & Vascular Institute. The donation, believed to be among the largest in the country given to a cardiovascular institute, is unique in that it is earmarked for development of innovative technologies and clinical advancements for the early diagnosis and prevention of heart disease. 

Spring 2009: The Quentin & Elisabeth Alexander Neonatal Intensive Care Unit opens. 

June 2010: Case Western Reserve University and UH Case Medical Center establish the Philips Healthcare Global Advanced Imaging Innovation Center in partnership with Philips Healthcare. Through the nearly $40 million center, which has established Cleveland as a worldwide hub for imaging equipment, the latest Philips Healthcare imaging equipment is brought to UH Case Medical Center for development, validation of clinical efficacy and product release. 

2010: UH launches its first Accountable Care Organization. The UH ACO service line continues to grow and now includes three ACOs with more than 170,000 self-insured, commercially insured, Medicare and Medicaid members and beneficiaries in addition to UH employees and their dependents. UH’s ACO is among the nation’s largest, and one of the few providing coordinated care, disease management and case-management services to all populations, from infants to senior citizens. 

November 2010: UH announces the launch of Discover the Difference: The Campaign for University Hospitals, with a goal of $1 billion. The campaign’s public phase is launched with the announcement of a $42 million gift from Jane and Lee Seidman. In honor of the gift, UH renamed the Ireland Cancer Center to UH Seidman Cancer Center. 

2011: UH completes Vision 2010, which had more than $750 million in construction projects. Openings that year include UH Ahuja Medical Center, UH Seidman Cancer Center and Center for Emergency Medicine.

February 2012: The Harrington Discovery Institute at UH Case Medical Center is launched as part of a $250 million national model to accelerate the development of medical breakthroughs by physician-scientists into medicines that benefit patients. Included in the model is the independent Cleveland-based development company BioMotiv. The Harrington Discovery Institute is supported by a $50 million gift to UH — the largest donation in the health system’s history — from the Harrington family, recognized entrepreneurs and philanthropists in Cleveland. 

July 2012: UH Case Medical Center receives the American Hospital Association-McKesson Quest for Quality Prize as the nation’s top hospital for leadership and innovation in quality improvement and patient safety. 

December 2012: UH achieves its ambitious Discover the Difference campaign goal of $1 billion. This extraordinary result was made possible through the generosity of esteemed benefactor Rainbow Babies & Children’s Foundation, which committed $32.5 million in support of the campaign. As a result, the health system expands the fundraising campaign to $1.5 billion — the largest campaign in the history of Northeast Ohio and one of two major health systems in the nation engaged in a campaign of this magnitude. The campaign has drawn gifts from more than 65,000 donors. 

March 2013: UH opens the UH Rehabilitation Hospital, a joint venture with Centerre Healthcare. The UH Rehabilitation Hospital is a state-of-the-art freestanding acute inpatient rehabilitation hospital in Beachwood. 

April 2013: UH was ranked No. 1 on the Hospital Systems Specialty List of the 2013 DiversityInc “Top 50 Companies for Diversity.” 

July 2013: UH Case Medical Center is named one of only 18 hospitals on the U.S. News & World Report prestigious Honor Roll of America’s finest hospitals, and ranks among the nation’s 50 best in all 12 methodology-ranked specialties. 

Fall 2013: UH announces record investment in Community Benefit programs totaling $273 million in 2012, up more than $100 million since 2007. This significant contribution represents 12.41 percent of the health system’s total operating expenses in 2012, which is above the national average of 8.4 percent, according to the most recent data (2009) published by the American Hospital Association. 

December 2013 — Parma Community General Hospital and EMH Healthcare of Elyria join the UH health system. 

January 2014: UH announces letter of intent with Robinson Memorial Hospital of Ravenna. 

Vision 2010 projects 

Quentin & Elisabeth Alexander Neonatal Intensive Care Unit

University Hospitals Rainbow Babies & Children’s Hospital
11100 Euclid Ave., Cleveland
$27 million
Opened spring 2009 

Center for Emergency Medicine

UH Case Medical Center
11100 Euclid Ave., Cleveland
$41 million
Opened July 2011
Landscaping (includes Schneider Healing Garden and 1.5 acre urban park along Euclid Avenue) $7 million — opened July 2011 

UH Seidman Cancer Center

UH Case Medical Center
11100 Euclid Ave., Cleveland
$260 million
Opened June 2011 

Breen Breast Health Pavilion

UH Case Medical Center
11100 Euclid Ave., Cleveland
$6.5 million
Opened June 2011

UH Ahuja Medical Center

University Hospitals
3999 Richmond Road, Beachwood
$298 million
Opened March 2011 

Visitor parking garage

UH Case Medical Center
11100 Euclid Ave., Cleveland
$30 million
Opened fall 2010  

UH Medina Health Center

University Hospitals
Medina, Ohio
$10 million
Opened spring 2010 

UH Sharon Health Center

University Hospitals
5133 Ridge Road, Wadsworth
$3 million
Opened spring 2010

 UH Concord Health Center

University Hospitals
7500 Auburn Road, Concord Township
$29 million

Opened July 2009 

UH Geneva Health Center

University Hospitals
870 West Main St., Geneva
$3.6 million
Opened November 2008

UH Twinsburg Health Center

University Hospitals
8819 Commons Blvd., Twinsburg
$18 million (plus $2.4 million new ED opened spring 2011)
Opened fall 2007