No one ever complains about a CEO being paid too little
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.