No one ever com­plains about a CEO be­ing paid too lit­tle

Modern Healthcare - - Q & A -

In 1977, Rich Rood­man, then 29, took the helm of a small com­mu­nity hos­pi­tal in Bartlesville, Okla. He was one of the youngest hos­pi­tal CEOs in the coun­try.

In 1983, he moved to the North­west to head 174-bed Val­ley Med­i­cal Cen­ter in Ren­ton, Wash., one of the old­est and largest tax-sup­ported, not-for-profit pub­lic dis­trict hos­pi­tals in that state. Rood­man, 66, is still CEO at Val­ley Med­i­cal, which un­der his lead­er­ship has ex­panded its fa­cil­i­ties and clin­i­cal ser­vices and been named mul­ti­ple times to Mod­ern Health­care’s Best Places to Work in Health­care list. Mod­ern Health­care re­porter Bob Her­man re­cently spoke with Rood­man about build­ing good staff morale among his 3,000 em­ploy­ees, his hos­pi­tal’s re­cent af­fil­i­a­tion with Univer­sity of Wash­ing­ton Medicine and the crit­i­cism of his $1.4 mil­lion com­pen­sa­tion pack­age last year. This is an edited tran­script.

Mod­ern Health­care: With more than 30 years of ex­pe­ri­ence as CEO of the same hos­pi­tal, you must have some ad­vice on lead­er­ship, right? Rich Rood­man: I re­al­ize that I may not be the bright­est bulb in the box, but some­how I’ve be­come one of the long­est-last­ing bulbs. Ev­ery­one has their fair share of good ideas and good vi­sions. The per­son who is suc­cess­ful in the long run is the per­son who can fig­ure out what to do when he or she makes a wrong decision. That same thing ap­plies to life and mar­riage. I also learned the value of tim­ing. A good idea at the wrong time, that’s called a bad idea be­cause it’s at the wrong time. So tim­ing is re­ally im­por­tant.

MH: Can you give an ex­am­ple of a good idea at the wrong time? Rood­man: I think it was a good decision to put in our elec­tronic health record in 2012-13. We did it wall-towall. But it cost an arm and a leg. We un­der­bud­geted that. And we changed ac­coun­tants in the process and re­al­ized we couldn’t cap­i­tal­ize some of the costs. We made the decision not to abort and not to short­change it, but ac­tu­ally add peo­ple from Epic Sys­tems at the el­bow to help so that the im­ple­men­ta­tion would be a good one and we would not have a cri­sis, which has hap­pened at many places across the coun­try. We mis­cal­cu­lated the bud­get, but we fig­ured out what to do. I think it was a good idea at the wrong time.

The same thing is true with af­fil­i­a­tions. We con­sid­ered af­fil­i­a­tions ev­ery year and thought we should be Switzer­land and work with ev­ery­one. But in 2010, we in­ter­viewed with 10 dif­fer­ent or­ga­ni­za­tions, and the tim­ing was right. And we felt we made the right decision and chose the right part­ner, and that was UW Medicine.

MH: Can you ex­plain more about Val­ley Med­i­cal’s af­fil­i­a­tion with the Univer­sity of Wash­ing­ton? Why did you pur­sue this? Rood­man: What got us into the al­liance was the Af­ford­able Care Act. In 2010, we talked with all of those dif­fer­ent or­ga­ni­za­tions. By the be­gin­ning of 2011, we had signed a non­bind­ing let­ter of in­tent with UW Medicine to be­come its eighth en­tity and re­main as a sys­tem within a sys­tem. We saw the op­por­tu­nity of two pub­lic en­ti­ties with a common cul­ture and common mis­sions to come to­gether for the greater good. We found and chased in­te­gra­tion on three dif­fer­ent lev­els— gov­er­nance, clin­i­cal and business. All of that al­lows us to fo­cus more and be suc­cess­ful with the triple aim of health­care.

MH: What do you be­lieve is most im­por­tant for a high­func­tion­ing hos­pi­tal or health­care or­ga­ni­za­tion, con­sid­er­ing all the changes go­ing on due to health­care re­form? Rood­man: In all the years I’ve been do­ing this, we’ve

“The noise, the head­lines, the cu­rios­ity about ex­ec­u­tive com­pen­sa­tion is some­thing that comes with the job.”

been able to de­velop fa­cil­i­ties and tech­nol­ogy and ser­vices and pro­grams, and they are all im­por­tant. But peo­ple are the most im­por­tant. Peo­ple will do things that will help pa­tients and other peo­ple if they’re happy. And peo­ple gen­er­ally feel happy when they are se­cure, when they trust their boss, when they feel com­pas­sion­ate and when they have hope for the fu­ture. From my per­spec­tive, it’s been about re­la­tion­ships that make a dif­fer­ence.

MH: How do you build and en­hance those types of re­la­tion­ships within your hos­pi­tal? Rood­man:

One of the goals we have is to be the em­ployer of choice in our area. We have a very low vol­un­tary turnover rate of 4%. Re­cruit­ment and re­ten­tion is a stated ob­jec­tive. I think it is all about the cul­ture and treat­ing peo­ple with re­spect. We do a lot of lit­tle things and a lot of big things. Ev­ery year when em­ploy­ees pass their an­niver­sary, they get a happy an­niver­sary card from me and a hand­writ­ten note from me. And it ties into some­thing per­sonal. It could be some­thing about a new grand­child or some­thing done at work. I think com­mu­ni­ca­tion is at the core of good em­ployee re­la­tions.

MH: Your salary and com­pen­sa­tion have gar­nered a lot of lo­cal and even na­tional at­ten­tion. In 2013, you made more than $1.4 mil­lion, which is above the na­tional av­er­age and above what most other pub­lic em­ploy­ees make. What is your re­sponse to the crit­i­cism of your pay and of the com­pen­sa­tion lev­els of hos­pi­tal ex­ec­u­tives across the coun­try? Rood­man: Over the course of be­ing in the business for 40 years, I’ve never heard of a crowd gath­er­ing or a re­porter writ­ing a story about any CEO who’s paid too low. The noise, the head­lines, the cu­rios­ity about ex­ec­u­tive com­pen­sa­tion is some­thing that comes with the job. With that said, be­fore I was a hos­pi­tal CEO, I was a per­son. I would hope folks get paid what they de­serve. I think that it will al­ways be— for my­self and for any­one— a sub­ject of con­ver­sa­tion be­cause that’s just the na­ture of the po­si­tion.

MH: How long do you ex­pect or want to keep work­ing? Rood­man: My mother worked un­til she was 80. She was a re­cep­tion­ist in a hat fac­tory. She en­joyed work. My fa­ther worked un­til about a week be­fore he passed away. I kind of have that in my DNA. I en­joy the rapid pace of change. And I think as long as I have my health and I’m good at what I do, at least a C+, and get along with the peo­ple I work with and for, I hope I con­tinue to have some role.

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