Issue link: https://beckershealthcare.uberflip.com/i/1518468
22 22 HEALTHCARE NEWS 'Collaboration will reduce the cost': Penn Medicine CEO talks mergers, margin improvements By Madeline Ashley F rom maintaining a positive ratings outlook to hav- ing an engaged workforce, Kevin Mahoney, CEO of the University of Pennsylvania Health System, part of Philadelphia-based Penn Medicine said overall, 2023 was great for the health system, and for 2024, it's about contin- ued margin improvement. "We remain focused but positive," Mr. Mahoney told Becker's. "Our margin is about two and a half percent right now. For Penn Medicine to work, the health system needs to generate about 4% or higher because of the number of transfers we make over to the university to support research and education." Most recently, the University of Pennsylvania Health System, a six-hospital system part of Penn Medicine, signed a nonbinding letter of intent to merge with Doylestown (Pa.) Health. "They'd be our seventh hospital. We have about a dozen criteria we go through: market, reputation, quality, financial stability, geographic representation. So that's an area of Philadelphia that we've not had as many assets, so we'll push forward on that this year," Mr. Mahoney said. Mr. Mahoney said Penn Medicine and Doylestown have been affiliated for decades, and while its board had initially wanted to stay independent, Penn Medicine maintained an open-door policy for the nonprofit health system. "We always said if you get to a point where you don't think you can stay independent, the door's open. Yesterday, they walked through. We've known each other for a long, long time. The due diligence and everything will go very smoothly," Mr. Mahoney said. Mr. Mahoney told Becker's that, along with the proposed merger, Penn Medicine has upcoming plans to break ground on a large ambulatory center and a $400 million cancer center. "Keep moving. I don't think this is a time in healthcare to tuck tail," he said. Like many hospitals and health systems, Penn Medicine has faced recent challenges with overwhelmed emergency rooms. "That is something that we are sharply focused on, how we can handle those volumes in an efficient, high-quality way," Mr. Mahoney said. Moving forward, Mr. Mahoney urges other healthcare leaders to take a step back and focus on collaboration. "We compete on everything. One person puts up a billboard, everybody puts up a billboard. We need to take a step back. What are the items we need to compete on and what are the items that we should collaborate on, because collaboration will reduce the cost." n active listening. I was fortunate to join an organization that was not in trouble, allowing me the opportunity to gather insights from the community, our medical staff, and our caregivers. is approach enabled me to gain a deeper understanding of the environment and culture, dispelling many of my initial assumptions. It also helped me to focus on initiatives and strategies that will have a longer-term impact. Nathan Staggs. CEO of WhidbeyHealth (Coupeville, Wash.): I've been doing small turnaround hospitals for about 20 years now. So it's kind of an overarching theme. But one of the things that one of my board members told me when I came here that has led to the most change was, "Nothing's untouchable. Don't be afraid to change anything necessary and look at every area, and do what we need to do to survive and continue to be successful." And knowing that and having that limit removed made it a lot easier to make the changes we need to make. I've been some places that were a little bit the opposite. "Oh, we're not touching that. And no, we're not changing that. And no, that's the way we've always done it." But I think when I came here, the board was understanding that they needed a lot of changes and were willing to let me make those changes as necessary. Bradley Talbert. President and CEO of Memorial Health (Savannah, Ga.): Entering a new CEO role, it is typically commonplace to feel the urge to immediately address opportunities with speed to gather a few "quick wins" and gain the trust and confidence of others in your leadership, while rapidly making an impact. However, this is not always the best approach. Take the time to assess people, process and structure when you arrive. Ask why things are done the way they are. Learn why certain people are in the roles that they are. Understand the organization top to bottom, and bottom to top. Reach out to staff in all areas of the organization, listen to their thoughts. Listen to community stakeholders, physicians, board members, volunteers. Soak it all in. I have heard the saying, "Be curious, not judgmental." It is certainly applicable and is incredibly important when entering a new CEO role. ere will be plenty of time to make changes that you identify in people, structure, and process. But take the time to learn the organization before beginning to make those changes. As I reflect on my nine months as CEO, we have made significant change across the organization. However, nothing was sudden or immediate. It was deliberate, aer a methodical assessment of people, process and structure. n