Applied Sciences

arvard Business School Senior Lecturer Frank V. Cespedes and Boston College Adjunct Professor of Management Heide Abelli prepared this case solely as a basis for class discussion and not as an endorsement, a source of primary data, or an illustration of effective or ineffective management. Although based on real events and despite occasional references to actual companies, this case is fictitious and any resemblance to actual persons or entities is coincidental. The authors wish to thank Victor E. Pricolo, chief of general surgery, SouthCoast Health System, for his contributions to the case. Copyright © 2013 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.

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Ron Ventura at Mitchell Memorial Hospital

Andy Prescott, chief of the Cardiovascular Center at Mitchell Memorial Hospital, pored over the performance-evaluation packet for the hospital’s star vascular surgeon, Ron Ventura. The evaluations, which were the result of a 360-degree performance review cycle the hospital had recently put in place, were far more critical than he had anticipated. (See Exhibit 1.) Prescott was aware that Ventura was having difficulty adjusting to Mitchell Memorial and working with other surgeons and hospital staff. Additionally, Prescott wondered whether Ventura’s actions violated Mitchell Memorial’s cultural norms.

Ventura had a national reputation as an accomplished vascular surgeon. He had improved the vascular surgery practice enormously in his short tenure at Mitchell Memorial and generated much new case flow for the hospital. Ventura was also——as the evaluation packet made clear——sharp- tongued, impatient, and abrasive. Prescott knew that the Cardiovascular Center needed team players but he also had a responsibility to improve the performance of the vascular surgery practice, and Ventura was critical to that effort. Now Ventura’s contract was up for renewal and Prescott was responsible for making the decision regarding Ventura’s contract. Although he had recruited Ventura and given him strong support, other surgeons were now considering leaving the hospital and Prescott was getting complaints from the nursing staff and from the residency programs: many pointed to Ventura’s behavior as the cause.

Mitchell Memorial Hospital

Mitchell Memorial Hospital, founded in 1932, was a 750-bed regional academic medical center in Ohio. The hospital offered clinical services including primary care and many medical and surgical sub-specialties. Revenues were concentrated in three designated centers of excellence: cancer, cardiovascular disease, and orthopedics. Mitchell was also in the midst of an organizational renewal. Under the leadership of Jane McAdams, MD, the hospital’s CEO since 2008, Mitchell had made tremendous strides in establishing a culture more focused on teamwork and collaboration among physicians and staff as part of its overall effort to increase emphasis on quality outcomes for patients.

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The hospital took very seriously the Joint Commission Standard L.D.03.01.011 which stated that ‘‘safety and quality thrive in an environment that supports teamwork and respect for other people, regardless of their position in the organization.’’ (See Exhibit 2.)

Prior to McAdams’s leadership, the hospital’s administration had not been particularly concerned about cultural issues, expectations regarding physician conduct, or the extent of collaboration among physicians, staff, and management. However, the hospital’s board of trustees recruited McAdams because she had a deep knowledge of the changing regulatory landscape in health care and, more importantly, had a clear vision for how Mitchell’s culture and care delivery strategy needed to be re- aligned to better position Mitchell in the increasingly complex, more regulated, and rapidly changing U.S. health-care environment.

McAdams refined the hospital’s mission statement to reflect her own vision:

Mitchell Memorial is a medical institution dedicated to providing the highest-quality patient care, with relentless attention to clinical excellence and patient safety. Mitchell Memorial’s people are the source of our ability to deliver on this promise. We will distinguish ourselves by creating an environment that fosters teamwork and innovation, by developing and utilizing the abilities of our physicians and staff to the fullest benefit of our patients and by treating each other and our patients with dignity and respect.

She also established a ‘‘Team Mitchell’’ physician compact that every physician was required to sign upon joining the hospital’s staff. This compact included a section on Team Collaboration. (See Exhibit 3.) Mitchell’s administration also swiftly put into place a code of conduct that defined the range of acceptable, disruptive, and inappropriate behaviors, for physicians practicing at the facility; instituted new HR policies; implemented compensation incentive plans that fostered collaboration; and recruited physicians for leadership roles who would help shape the culture and accelerate a move to Integrated Practice Units (IPUs.) In contrast to more traditional, siloed organizational approaches, IPUs sought to provide the full complement of care for a patient’s medical condition by utilizing dedicated, multidisciplinary teams. McAdams was a strong proponent of the Integrated Practice Unit model:

Patients interact with the hospital at many different points of intersection. It’s critical from a business perspective, as well as for patient outcomes, to provide a unified face to the patient and to effectively coordinate services to the patient across a disease category, but success requires teamwork and collaboration on a whole new scale.

Implementing the new vision was the responsibility of the hospital’s executive team and leaders in the clinical departments, including Prescott and his team in the Cardiovascular Center. (See organizational chart in Exhibit 4.)

The Cardiovascular Center at Mitchell Memorial Hospital

Cardiovascular disease was typically a major source of revenue for medical centers and Mitchell was no exception. Cardiovascular disease included abnormalities of the heart, its blood vessels

1 The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) is a United States-based nonprofit organization that accredits more than 19,000 health care organizations and programs in the United States. A majority of state governments recognize Joint Commission accreditation as a condition of licensure and that it is required for receipt of Medicaid reimbursement. The mission of JCAHO is to improve health care for the public by evaluating health-care organizations and inspiring them to excel in providing safe and effective care.

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(coronaries), and peripheral blood vessels. Common heart disease included coronary artery disease, valvular heart disease, heart failure, and cardiac rhythm abnormalities.

Andy Prescott was recruited to Mitchell to create a center of excellence in cardiovascular care. During his short tenure, he had successfully transformed the way cardiovascular care was delivered by creating an IPU in that area. (See Exhibit 5 for a diagram of the patient-centered IPU concept in the Cardio Center.) To this end, Prescott co-located procedure rooms and outpatient clinics for cardiology, cardiac surgery, vascular surgery, and vascular and interventional radiology. Physicians could more easily communicate because all providers in a common organizational unit and care delivery teams met formally and informally on a regular basis. Prescott believed that the IPU expedited patient care, built trust and a sense of community, and reduced internal competition among specialists in cardiovascular disease. Prescott had also established a diagnostic vascular lab in which cardiologists, cardiac surgeons, vascular surgeons, and radiologists jointly interpreted and reviewed non-invasive and more invasive diagnostic imaging tests.

Prescott had four division chiefs reporting to him: Cardiology, Cardiac Surgery, Vascular Surgery, and Vascular & Interventional Radiology. As Prescott put it, the move to an IPU was not easy. Although only vascular surgeons could perform certain procedures, there was competition among vascular surgeons, vascular and interventional radiologists, and interventional cardiologists in performing procedures such as angiograms, balloon-assisted dilatations, and stenting of arterial stenoses. Prescott elaborated:

Competition among cardiovascular specialists is intense. I’ve seen it firsthand at Mitchell over the years. Interventional radiology revolutionized vascular care and drew patients away from the surgeons. Interventional cardiologists, and then vascular surgeons, eventually realized that they needed to acquire similar vascular skills to reclaim patient access.

As chief of vascular surgery, Ventura had two vascular surgeons reporting to him. Vascular surgeons performed intricate and complex procedures on all blood vessels except coronaries. Peripheral bypass surgeries and carotid endarterectomies (surgery to clear blockages in the carotid artery) were historically the two most common surgeries performed by vascular surgeons. However, surgeons were increasingly using less invasive procedures such as angioplasties and endovascular stents to restore flow to narrowed arteries of the lower extremities. They were also doing more minimally invasive procedures to treat enlarged arteries by placing grafts within the artery rather than performing open repair procedures. This required interaction and coordination of care between vascular & interventional radiologists and vascular surgeons, and between cardiologists and cardiac surgeons regarding a patient’s situation. Depending on the disease condition, each patient had access to a team of physicians from each department in the Cardiovascular Center.

Vascular surgeons performed multiple procedures in the operating room in a single day and generally worked in teams comprised of OR surgical nurses, fellows, and residents. (See Exhibit 6 for a diagram of a typical operating team.) A teaching hospital, Mitchell trained general surgical residents and offered more advanced fellowship training in vascular surgery. The hospital also offered training programs in cardiology, interventional cardiology, radiology, and vascular and interventional radiology. The programs at Mitchell were considered outstanding by top-tier medical schools, and Mitchell could typically recruit highly accomplished medical school graduates into its training programs.

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913-572 | Ron Ventura at Mitchell Memorial Hospital

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Andy Prescott

Mitchell recruited Prescott, a highly regarded interventional cardiologist with eighteen years of experience at another top academic hospital, to head the Cardiovascular Center. Prescott quickly assumed a strong leadership role as director of the center.

Prescott described the context at Mitchell Memorial:

Most hospitals don’t attract business; individual physicians do. The ability to bring in new cases depends a lot on the entrepreneurial ability and reputation of the individual physician. Those hospitals sometimes turn a blind eye to certain behaviors because the pursuit of cases for the hospital and the survival of the physician in that hospital’s environment are more important. If you rock the boat internally to get in new patient cases or enhance the reputation of the hospital, nobody is going to raise a red flag and say we shouldn’t be tolerating that kind of behavior. At Mitchell, this is just not the case. Here the overall culture of the hospital and integrity of the process are incredibly important.

One of the areas where Mitchell historically had been weak was vascular surgery. Prescott had successfully built this capability in his previous position and he sought the right surgeon to build Mitchell’s reputation in that specialty.

Prescott recruited Ventura because the latter had a track record as an outstanding surgeon, strong experience in endovascular techniques that Mitchell’s surgeons lacked, and, in Prescott’s eyes, the type of energetic and entrepreneurial nature that Mitchell needed to create a stronger division:

I felt really lucky to get Ron. He trained the vascular surgeons in our group, and we started seeing the results immediately. His techniques are less invasive with fewer complications and more favorable patient outcomes. By all standard measures our performance in vascular surgery improved. Within a year we saw declines across the board in 30-day mortality rate, length of hospital stay, unplanned returns to the operating room, and other stats. Before Ron joined us, Mitchell experienced mortality rates from ruptured aneurysms at greater than 50%. That kept me up at night. Today, we no longer cross-clamp the aorta and we’ve seen the mortality rate for these patients drop to less than 40%. In our field that’s significant progress. With all the changes in health care regulation and reimbursement, outcome data like this is more critical than ever for hospitals. Ron’s leading the charge there. Any other hospital in the region, or in the U.S. for that matter, would want Ron as a vascular surgeon on staff. He’s had headhunters on his tail since the day he started here. Candidly, without Ron, we wouldn’t have a vascular surgery department worth mentioning.

Ron Ventura

Throughout his twelve years as a vascular surgeon, Ventura had established an exceptional technical reputation and was looking for the next challenge. When approached by Prescott to join Mitchell in the summer of 2011, he was initially skeptical:

I wasn’t sure I would fit into Mitchell Memorial. I’m not like the other surgeons here. They’re academic types. I don’t like the ‘‘academic surgeon’’ label. The physical challenge of being a surgeon is what really motivates me. I work hard and expect others to; and, for the patient’s sake, I’m not afraid of anyone or anything in the OR.

Ventura started college at Colorado State but dropped out after a year. He decided to go back to school at the University of Arizona. After completing his undergraduate degree in physics he went on to attend the University’s Medical School. On the advice of one of his professors he pursued a residency in surgery.

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My father was a truck driver and I was the first in my family to go to college. Growing up I never thought I would become a surgeon, but I realized early on in medical school that I might have what it took to be good at it. I liked the fact that not everyone was cut out for it. So many residents who started in the surgery program dropped out. There was a certain thrill of victory when I got through each year. It was like I was part of some elite military unit that had survived to fight the next major battle.

Upon finishing his residency, Ventura pursued a fellowship in vascular surgery at a renowned heart hospital in Texas.

That was tough. The guy I worked for had been a surgeon in the Army for 15 years and it was command and control in the OR. He ordered me around like I was a buck private, but he taught me everything he knew and was the best vascular surgeon anyone could hope to learn from. I think that he was the hardest on me because he thought I had the most potential. He’s the only person in my life I ever wanted to impress and sometimes in the OR I think about him and it makes me a better surgeon.

In the intervening years Ventura established himself at a large Midwestern hospital, but he grew frustrated because he knew the incumbent chief of vascular surgery was unlikely to retire for at least a decade. Despite his reservations about Mitchell’s culture, Ron left to join Prescott as chief of vascular.

There aren’t a lot of other doctors that I look at and say ‘‘that guy can hold his own.’’ But I have deep respect for Andy. He commands an audience and I thought that, in spite of any issues I might face at Mitchell, Andy would support me, because he can cut through the red tape and focus on what matters at the end of the day. I joined Mitchell Memorial with one goal in mind: to make vascular surgery the strongest division at the Cardiovascular Center. I expected everyone else to assume the same sense of urgency I had around building out the practice. I didn’t have time to engineer consensus on the changes I needed to make.

Ventura’s style and drive started to create problems almost immediately. Prescott learned of Ventura’s issues but initially tried to defend him. Prescott argued that the surgeon just needed time to adjust to Mitchell’s culture. However, when the problems continued, Prescott grew increasingly concerned. Still, he didn’t feel he could take a heavy-handed approach:

Ron would come to my office and ask ‘‘what’s the problem?’’ and I would say, ‘‘Go and talk to this cardiologist or that nurse and smooth things over.’’ I tried to be diplomatic and give advice in an understated way. I didn’t want to confront Ron head on. No one did. I also believe that sometimes conflict can be constructive when what is best for the patient is at the heart of the debate. It’s also a difficult environment that surgeons face today. Reimbursement is going down, which puts enormous financial pressures on surgeons. There are increasing regulatory requirements and surgeons have less autonomy than they used to. There’s a sense of loss of control and frustration at the growing complexity of the health-care system. On top of that, vascular surgery is technically challenging and requires meticulous attention to detail. I wanted to cut Ron some slack. I had made the decision to hire Ron and I needed it to work out.

However, the recent evaluations made it impossible to avoid the concerns about Ventura’s interpersonal style. One highly respected surgeon at the center described him as ‘‘arrogant, overbearing, insecure, and sometimes flippant.’’

Prescott commented:

It has taken time to build the teamwork that is now a source of pride for the hospital’s staff. I won’t sacrifice the integrity and transparency of our processes for the sake of building our reputation. As the leader of this center of excellence, I want to send the right signals to the other physicians. If I tell

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913-572 | Ron Ventura at Mitchell Memorial Hospital

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everyone that Ron just has a ‘‘surgical personality’’ or that he expects everyone else to adopt his high standards, am I in effect telling everyone that behavior doesn’t count——and that we put caseload, ability to generate revenue for the hospital, and prestige ahead of how we treat each other?

Ventura suggested that Mitchell was focusing on the wrong things.

In the operating room, form doesn’t matter. Substance does. There’s no time for ‘‘please’’ or ‘‘thank you.’’ It’s life or death. I and others need to be 100% focused all the time on the job at hand. Would the hospital rather have the surgeon who always says the ‘‘right’’ thing to everyone using exactly the ‘‘right’’ tone or someone who might be rough around the edges but gets the job done efficiently, every time, with a good outcome for the patient and the hospital and his colleagues’ careers and reputations?

The Cardiovascular Center was second only to the Cancer Center at Mitchell in terms of revenue generation; and, in spite of decreasing reimbursement for cardiovascular procedures, the Cardiovascular Center’s revenue had grown an impressive 22% per year since Ventura had come on board. Each patient case had associated physician and hospital charges, which resulted in revenue for the Cardio Center. Ventura generated $3.2 million annually in revenue for the hospital by virtue of the sheer number of patient cases he personally handled. For example, Ventura had seen 1,122 outpatients in a single year, the greatest number of any surgeon at the center, and his volume of high- reimbursement inpatient vascular procedures was the largest. Beyond that, the cases Ron brought in had a positive halo effect on business in other medical divisions throughout the hospital, including urology, endocrinology, neurology, and others.2 Ventura tackled the toughest vascular surgical cases and physicians throughout the region increasingly referred cases involving any vascular work to the Cardiovascular Center at Mitchell because of Ventura. Some 54% of new vascular patients were now referred by non-Mitchell physicians, up from 26% just the year prior. This data showcased the power of Ventura’s reputation among referring physicians and his ability to bring wholly new patient populations into the hospital, generating new and growing revenue streams for the hospital. Ventura was a ‘‘producer.’’

Surgeon Performance Evaluation at Mitchell Memorial

Like most top-tier hospitals, Mitchell conducted peer review (when necessary) of cases involving patient complications, complaints, reported concerns, litigation risks, or evidence of failure to follow protocols and guidelines. The formal, 360-degree performance evaluation process of physicians was new to the hospital. McAdams had introduced the 360-degree process with much staff fanfare. Prescott was a strong advocate of the 360-degree review, and this was the year he had made the program mandatory across all specialties in the Cardiovascular Center.

The performance evaluation process was intended to provide developmental feedback so that physicians could continue to improve skills in teamwork, communication, and contribution to the ‘‘unified culture.’’ Evaluators were asked to comment at length on an individual’s strengths and weaknesses, providing detailed and specific answers, and submit responses using a software program the hospital had selected to aid in the management of the review process. However, there was some uncertainty among physicians regarding how output from the qualitative review process would be directly linked to change in behavior/execution on the job. One physician commented:

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