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Healthcare Hardball: CEO Christy Stephenson leads RWJ
Hamilton into the 21st Century
by Kathleen McGinn Spring
Female healthcare CEOs may be more free to be themselves. While their
counterparts in other industries operate in male-dominated executive
suites, often overseeing operations with a long history of macho
culture, healthcare CEOs know that a good 80 percent of their
employees are women. Healthcare is a women-friendly culture at most
levels – but not necessarily at the top. Of the 120 hospitals in New
Jersey, only 21 are headed by women.
One of them is Christy Stephenson, CEO of Robert Wood Johnson
University Hospital at Hamilton. She leads 1,750 workers and oversees
600 doctors. She is responsible for a 67-acre medical campus, eight
child care centers, a new 86,000 square-foot fitness center, an
ambitious building program, and care given to hundreds of thousands of
patients every year. She has implemented a comprehensive quality
control program that last year culminated in her institution becoming
one of only four hospitals in the country ever to earn the Malcolm
Baldrige National Quality Award.
Yet Stephenson starts a interview not by talking about awards,
expansion plans, or market share, but rather about an upcoming trip to
Seattle to see her baby grandson – whose smiling portrait she fetches
from her desk. She works from an office where a cranberry throw
artfully accents a floral couch, talks about the log cabin,
Amish-style quilt on her wall, and divulges that she lets nothing
interfere with her monthly book club meetings.
Dressed in a smart black suit with a pencil skirt that ends in a
five-inch pleat, Stephenson is a warm, confident woman who is at ease
with her femininity. The lanyard that holds her hospital ID around her
neck is made of multi-colored beads. Her black heels are more chic
than sensible. Her voice is soft, and there is an undeniable aura of
calm in her executive offices.
But Stephenson, who has led RWJ Hamilton since 1998, can be tough, as
she is when she tears into one of her hospital’s competitors, whom she
thinks is diverting dollars from its primary mission in a push to move
into the suburbs – her territory. She is also disciplined, and driven.
Yes, she made the quilt, but her packed schedule meant that the
hand-stitching on its pumpkin seed and feather patterns took her a
She walks every morning at 5:30 a.m. with a friend, but, in a
concession to her work schedule, says "we’ve cut back to 30 minutes."
She sets her alarm to go off between 4:30 and 5 a.m. most mornings.
Then, after her walk, she checks E-mail, which her staff typically
starts sending at around 6 a.m.
Her pre-commute routine also includes a go at the day’s Suduko puzzle.
Hooked on the craze, which requires the placement of the numbers 1 to
9 in 9 compartments on a page, she complains – ever so mildly – that
the Trentonian Sudukos are too easy. She likes USA Today’s Sudukos
better, because they vary in difficulty and each puzzle’s fiendishness
is rated in stars below it. But mostly she takes her Sudukos from
books. "I’m a black belt," she says, with no trace of modesty.
While she prefers pencil to keyboard when it comes to Sudukos, she
reveals another personality trait when she says that she does like two
features of online puzzles – "You can be timed, and rated," she says.
"Yes, I am very competitive."
Suduko conquered, Stephenson leaves her Pennington home in time to be
at her desk by 7:30 a.m. Once there, her routine revolves around
meetings, the first of which takes place at 8 a.m. There are medical
staff meetings, senior leadership meetings, community meetings, task
force meetings, department meetings, employee committee meetings,
board meetings, and building project meetings. In-between meetings she
makes time to walk the floors, taking her hospital’s temperature by
talking informally with staff and patients. She generally is ready to
head home sometime between 8 and 10 p.m. on weekdays, and is back at
her desk on Saturday for relatively uninterrupted catch-up time.
Stephenson’s compensation for this schedule in 2004 was approximately
$314,800 in salary and $384,847 in a benefit plan, deferred
compensation, and a two-year long-term incentive payout. These figures
were obtained from the 990 forms that non-profits file each year with
the IRS. Each non-profit calculates CEO pay in a different way, and,
according to Ron Czajkowski, vice president of communications for the
New Jersey Hospital Association, it can include everything from
signing bonuses and incentives to pay for work done for hospital
enterprises in the for-profit sector. So it is difficult to make an
exact comparison, but, while executive women still make less than
their male counterparts in many industries, the IRS filings seem to
indicate that Stephenson’s earnings are on a par with those of male
healthcare CEOs in central New Jersey.
Barry Rabner, CEO of Princeton Healthcare System, parent corporation
of the University Medical Center at Princeton, earned $574,525 in
salary and $16,734 in benefit plan contributions and deferred
compensation in 2004. Al Maghazehe, CEO of Capital Health Systems in
Trenton, earned $892,118 in salary and performance incentives and
$48,477 in benefit plan contributions, but the annual revenue for the
hospitals he oversees is more than double that of RJW Hamilton, where
revenue is in the same range as that of Princeton Healthcare System.
Stephenson’s healthcare career has taken her to the top of her
profession, but it began not with the careful plotting that an
ambitious 21st century woman might employ, but rather with the
relatively simple career choices that so many young women made in the
"My dad’s sister was a nurse, and I admired my Aunt Maxine
tremendously, so I went to nursing school," she says. She earned a
three year R.N. in 1971. The school was near her home in Holland,
Michigan. A photo of a red lighthouse in Holland sits just to the
right of her office door. Surrounded by little whitecaps and soaring
gulls, it looks idyllic, and that is how she remembers her childhood.
"It was a nice little town in central Michigan," she says. "I knitted,
crocheted, sewed. It was part of my growing up." The family, which
included a sister and two brothers, spent lots of time playing cards
and Scrabble. Her mother, Myrl, was the school librarian, but she took
time out from work to raise her four children, returning to the
workplace at age 50. Her father, Howard, owned a construction company.
The family remains close. "My parents travel with a laptop," she says.
Every Sunday, after her grandson, Samuel, has awakened from his nap,
and her parents have returned from church, the family holds a video
conference. "We use Sitespeed.com," she says. "It’s something like $50
a year." There they each appear in their own on-line squares and have
the 2006 version of a nice Sunday get-together.
Halfway across the country from her childhood home, Stephenson has
retained the thread of her youthful career choice. After earning her
R.N., she worked as a nurse in Michigan, upstate New York, Florida,
and Kansas, following her then-husband’s career. The pair, along with
their children, landed in New Jersey when he was offered a teaching
job at Rider.
Stephenson has two sons. Nathan, the father of her grandchild, lives
with his wife, Alison, in Seattle. He is an emergency medicine doctor.
"He’s interviewing for a job closer to home," says the doting
grandmother with unconcealed delight. Jordan, an IT professional who
lives in Lawrenceville, is an interface specialist at RWJ New
Brunswick. Stephenson’s first marriage ended in divorce, and she is
now married to James Lytle, who works for the U.S. Postal Service in
Before coming to New Jersey, Stephenson lived and worked in Kansas for
four years, the longest time she had stayed in one place since
becoming a nurse. "During that time I started a hospice along with a
doctor I had met there," she recounts. "I had to incorporate it as a
business, and everything that took tickled something inside me." Her
next career move could have been coursework toward a B.S. to go along
with her R.N., which would have taken her to higher positions in
first-line patient care, or a business degree that would lead to
management of all elements of a healthcare institution. After some
thought, she chose the latter, and began moving toward the business
side of healthcare by taking courses at the University of Kansas. When
she moved to New Jersey, she continued her studies at Temple, earning
an MBA in healthcare administration. She also took business courses at
"The business side doesn’t have to be all hard," she says. It’s a
telling remark. It meshes perfectly with her personal style – with the
huge garden-scene watercolor behind her desk, for example – and with
her administrative style. Again and again, whether talking about the
Baldrige award or about her healthcare center’s rapid growth, she says
"it’s all about the people." Told about a recent study in which female
healthcare CEOs ranked people as more important than technology to the
future of their organizations, she agreed. But somewhat reluctantly,
because she does love technology, too.
Running to her desk, she grabs her brand new Treo. She had been in
love with her Blackberry, "my crackberry," she jokes, referring to the
highly addictive nature of the devices. But her Treo, she boasts,
offers even more. It is a full computer, with a Microsoft operating
system built in. "It’s a camera, too," she says. She is expert at
typing out text messages with its tiny, tiny keyboard, and obviously
enjoys fingering its sleek, beautiful face.
Technology powers her healthcare center now, and will do so even more
in the future, she says, thanks to a close collaboration with RWJ New
Brunswick’s IT team, which is busy digitizing dozens of types of
interactions between patients and healthcare providers. But people
power still rules, particularly in a field where outsourcing to
consultants or overseas workers is rarely an option.
Stephenson began to learn about how technology and people come
together to form healthcare, the industry, when she took her first
administrative jobs. After earning her MBA, she began working at RWJ
Hamilton. She was director of planning and of ambulatory care before
becoming COO. She left the hospital in 1995 and went to work in the
for-profit side of healthcare for Happauge, New York-based Curative
Health Services. The company partners with hospitals on wound care
centers. Her territory was New York, New Jersey, Delaware, and
The experience was like "a survey," she says. She worked closely with
18 hospitals, and saw first-hand how each was run. "It was a great
experience professionally," she says. "I saw that it’s not about the
structure. It’s about the people." What she saw was that it didn’t
matter whom she was working with, whether the person was a
highly-educated upper administrator or a relatively uneducated
technician. It wasn’t the position, or the level of education, it was
the character, work ethic, and personality of the person that made the
project go smoothly – or not.
Three years after she left RWJ Hamilton, the hospital’s CEO departed,
and she was asked to return to take over that position. She readily
agreed. That was eight years ago. The institution was already
beginning a growth spurt, and it has only accelerated since she took
over the top spot.
In fewer than 10 years, RWJ Hamilton has added an outpatient building,
a new ICU, a maternity unit, and an extensive, free-standing cancer
center. The eighth member of its Lakeview chain of childcare centers
recently opened in Ewing.
In its Baldrige award write-up, the federal quality gurus found that
"over the past five years, RJW Hamilton has been New Jersey’s fastest
growing hospital." Measures of this growth include not only buildings,
but market share. It found that the healthcare center’s market share
in cardiology had grown from 20 percent in 1999 to 30 percent in 2003;
its market share in surgery from 17 percent to 30 percent in the same
period; and its market share in oncology from 13 percent to above 30
percent in those four years.
"Did you hear that ’emergency bed management meeting’ announcement?"
she asks. It had come over the hospital PA within the half hour. The
hospital is running at an average of 102 percent of capacity, and
finding room for everyone is a challenge. The announcement, Stephenson
says, is not uncommon, and means that there must be a scramble – STAT
– to find room. Discharge paperwork may have to be speeded up for
patients ready to leave, and some patients may have to be moved to the
This is a most unusual situation, and not the worst problem to have in
New Jersey, where average occupancy for all hospitals tends to range
between just under 50 percent to just over 65 percent.
Poised to ease the crunch at RWJ Hamilton is a new three-story patient
care building. It will contain 96 new private rooms, and is set to
open in one year.
Walking around a scale model, Stephenson shows how the wedge-shaped
building will fit into the existing patient wings, and points out that
every room will have a view of gardens or lake. She has had a
prototype room built near her office. She says that few hospitals do
this, but in her view it is far better to have extensive input before
construction. Doctors, nurses, orderlies, housekeepers,
administrators, and patients will give the room the once-over.
Everything from carpet color to placement of outlets for oxygen and
other gases will be scrutinized.
The room is huge, and its amenities provide insight into the fight for
customers – patients – that New Jersey hospitals are waging. For
several years hospitals have been using luxe maternity suites to lure
patients, and now it appears that the treatment will be available to
everyone who needs to stay overnight at a hospital. RWJ Hamilton’s
rooms are to have flat screen TVs, enormous windows, sofa beds for
loved ones who want to keep the patient company, and curving walls
that enclose bathrooms large enough to give Toll Brothers a run for
Both Princeton Healthcare System and Capital Health System have
announced that they are building new, amenity-filled medical
facilities on suburban campuses. The appeal is to health concerns –
private rooms can help stop the spread of infection, and spacious
campuses can accommodate the latest imaging technology – but also to
In one case, Stephenson states her strong opposition.
Capital Health System, with two Trenton hospitals, Fuld and Mercer,
pulls in tens of millions of dollars in government subsidies to serve
its urban population, she says. It is wrong, in her opinion, that this
money be used to set up shop in the suburbs. Fuld alone, she says, has
a bottom line of $29 million, "more than the total bottom line of the
other three Mercer County hospitals – St. Francis, Princeton, and
The money comes in the form of subsidies for trauma care, charity
care, unreimbursed care, and other needs. "Most comes from the tax
bucket," she says. It is to be used, she says, for the poor of
Trenton. Among the many needs she sees in Trenton are programs to
battle childhood obesity, to provide early pre-natal care, and to
start smoking cessation programs. In the city, "the money could make a
huge difference," she says, but "in some cases these dollars are being
used to fund care outside of the area."
She says Capital Health System’s contention that it must provide
services in the suburbs to ensure economic survival is not backed up
by the facts. "It rattles my sense of justice," she says. "Charity
financing was put in place for needy populations."
Asked to comment on Stephenson’s contentions, Dennis Dooley, vice
president for planning and development at Capital Health Systems,
points out that RWJ Hamilton has its roots in Trenton, and moved to
the suburbs in 1971. "When both hospitals were founded, two-thirds of
the population of Mercer County was in Trenton," he says. That is no
longer the case, and he takes umbrage at the idea that Hamilton
Hospital, now RWJ Hamilton, sees no problem with expanding to serve a
burgeoning suburban population while, at the same time, suggesting
that Capital Health System should not expand into the suburbs.
As for the tax money, he says that Capital Health System receives $20
million a year in charity care reimbursement from the state and $7
million in "disproportionate care" funds from the federal government
to compensate it for the high number of uninsured people it serves.
This money also is meant to cover some of the costs the medical center
incurs in caring for people with certain diseases, including AIDS,
which are very expense to treat.
None of this money is being used on any suburban programs, says
Dooley. What’s more, he says, "it does not even cover our costs. We
spends millions more." Yes, Capital Health System does receive more
tax money for caring for indigent people than its suburban
competitors, he freely admits. This is so because so many people in
its population are uninsured, he says, while nearly everyone in the
surrounding suburbs does have health insurance.
If there is money to be made in pulling in charity tax dollars, he
asks, "why wouldn’t Hamilton or the others establish a site in
His medical center takes its mission of serving the poor of Trenton
very seriously, he says, pointing to $37 million it has just put into
its Fuld campus for an expanded ER, new ICU and CCU units, an
emergency psychiatric unit, and other improvements. Another new
Capital Health Care System initiative is a newly-opened family care
center, which tripled the hospital’s capacity to serve patients. "It’s
as pretty as anything you’ll find in the suburbs," says Dooley. But it
will not make any money for Capital Health System. "We spent $2.5
million to triple our capacity to lose money," he says.
Capital Health System has done well financially during the past few
years, says Dooley, but it is his contention that will not be the case
moving forward. He sees accelerating erosion in his institution’s
population base and, at the same time, rising costs.
If his healthcare institution is to survive, he says, it has to expand
into the suburbs, "where the paying customers are." Only by doing so,
he says, can it obtain the financial stability to continue to serve
the poor of Trenton.
Regardless of whether one hospital’s strategy is or is not "right," it
is undeniable that healthcare is a fiercely competitive industry –
particularly in New Jersey. A report by the Advisory Commission on
Hospitals found that "there has been a significant decline in the
financial condition of New Jersey’s not-for-profit acute care
hospitals since 1995."
Asked about the biggest challenges facing all hospital CEOs,
Stephenson puts the regulatory environment in general, and
reimbursement in particular, high on the list. "We get a fair number
of denials," she says.
In addition to frustration over non-payment or inadequate
reimbursement, problems common to all hospitals, New Jersey’s 84
hospitals, operating in close proximity to one another in one of the
smallest states in the country, also have to go head to head with
world-class medical centers in Manhattan and Philadelphia.
There isn’t much that hospitals can do to change managed care and
government reimbursement policies, but each hospital can – and must –
compete for its fair share of paying customers. Each must find a way
to shine. Every year New Jersey hospitals that could not distinguish
themselves enough to operate at least slightly in the black close.
Approximately 12 have been forced out of business in just the past few
years. Stephenson’s strategy in keeping her hospital ahead of the pack
centers on the principles of the Baldrige National Quality Program.
The Baldrige award program, begun in 1987, operates under the auspices
of a federal agency, the National Institute for Standards and
Technology. It recognizes quality across every industry and in
companies of all sizes. This quality is documented through the
achievement of measurable results. In healthcare this could mean
reduction in waiting time in an emergency room, improved patient
satisfaction, greater market share in specific services, or employee
retention. The organization sets the goals, works toward them, and
uses objective standards to quantify results.
In naming RWJ Hamilton a winner, the Baldrige committee gave credit
for quality results in a number of areas, including an increase in
registered nurse retention from 94 to 99 percent, an increase in
employee training hours from 38 to 58, a Gallup-measured customer
loyalty greater than that for any of its competitors, a downward trend
in hospital-acquired infections, a downward trend in mortality rates,
and a guarantee that no one will spend more than 30 minutes in the
emergency room before being seen by a doctor.
Goals are big at every level of the hospital, and across all
departments and functions, says Stephenson. Each department has
concrete goals, and every employee in that department knows what they
are. In addition, each employee has his own top goal – and wears it
every day, printed on the ID tag around his neck. Once a month, each
employee sits down with his supervisor to talk about progress toward
While employees are working on their goals, the hospital keeps its
finger on the pulse of employee satisfaction. It knows exactly what
percentage of its workers are happy with benefits, leadership,
participation in decisions, and the recognition they receive.
Employees meet with their supervisors and with Stephenson on a regular
basis to air any problems. Recently, she gives as an example, the
problem was dirty shoes.
"Employees told us that the parking lot was uneven, and puddles
gathered when it rained," she recounts. "Then they would get to the
sidewalk, and, because it was too narrow, they would step off to the
side and get their shoes in the mud." Taking the problem seriously,
the hospital repaved the parking lot and widened the sidewalk.
Another recent concern involved night shift workers. "They felt they
were getting short shrift in the cafeteria," says Stephenson. "By the
time they got there, the only thing left was vending machine food."
The hospital wasn’t able to offer a full service cafeteria around the
clock, but did arrange for the chefs to prepare a big pot of soup each
Stephenson says that her hospital "doesn’t have unlimited dollars to
pay at the top of the range or to offer the richest benefits
packages." It does offer flexible hours when possible, and has even
instituted work-at-home arrangements with some employees. There is
also on-site day-care, and massage therapists give back rubs
throughout the hospital. Perhaps most important, every employee is
given the benefit of being heard and having his concerns given real
attention. Good work is recognized "both formally and informally."
Third party polling the hospital has commissioned confirms that this
is enough to vastly increase employee satisfaction.
Satisfied, engaged employees – especially at the highest levels – may
be a good part of the reason that Stephenson appears completely
relaxed and unruffled during an interview on the 11th hour of what
will grow into a 15-hour work day. She says that she is able to
delegate to her senior staff with complete confidence. Asked about how
involved she is in the construction of the new three-story building,
she says "not very." She is given regular reports, but has little to
do with day-to-day decisions.
Stephenson nurtures senior management with a leadership development
plan that features rotating responsibilities, which allows her inner
circle "to grow as a team." She says that it provides the depth that
is right for the organization. "It’s better to have more people in the
know," she says.
She also has a detailed succession plan. "People move on," she
acknowledges. While she has always known this, Stephenson got a sharp
reminder last year. She was riding the train down to Washington, D.C.,
for a Baldrige presentation with her COO, when the COO announced that
she was moving to Florida. "I had known her the whole time I’ve been
here," she says. "I felt like I had been hit by a brick."
She met with her whole senior team to try to figure out what to do. As
the discussion evolved, she asked each team member if there was a part
of the COO’s responsibilities that he or she would like to take on.
Diane Grillo, director of communications, says that she raised her
hand and offered to take a role in physician relations, an area that
had long interested her. Other people quickly put forth their own
The unintended result of the COO’s departure has been "a complete
re-energizing of the senior team," says Stephenson. New niches were
created, and everyone was given the shot of adrenalin that comes with
a new job – without having to go out and get a new job.
As for new jobs, since the Baldrige award was announced Stephenson
says that she has received lots of job offers. But she is not tempted
to follow up. "I don’t have that restlessness anymore," is her
But she has been accepting many offers to speak about the award, and
is genuinely amazed by them. "I never, absolutely never, not in my
wildest dreams, thought that anyone would pay me to speak," says
Stephenson. As she talks about her speaking engagements, the
sophisticated New Jersey CEO becomes, just for a minute, the girl from
tiny Holland, Michigan, who just wanted to follow her Aunt Maxine into
Everyone knows that hospitals are full of doctors and nurses and
white-coated technicians who operate complex diagnostic equipment, but
few see into the executive suite. Just as in any industry, there are
dozens of high-ranking executives in every hospital. They oversee
everything from public relations to purchasing to the operation of
discrete hospital operations – perhaps a cancer center or a chain of
Unlike many industries, however, healthcare centers often provide
avenues through which employees can move laterally to gain more
experience and then vertically into positions of increasing
responsibility. Many smart, ambitious women have used this structure
to climb into executive jobs.
Deborah Baehser, pictured in the print edition, is one such woman. She
started her career by earning a nursing degree from Bucks County
Community College, and is now making approximately $200,000 a year,
including benefit contributions and deferred compensation, as vice
president for clinical services at RWJ Hamilton.
She joined the hospital in 1999 and was appointed vice president for
patient care and chief nursing officer in 2003. She is credited with
leading development of a new emergency, critical care, and telemetry
nursing departments as well as a neonatal intensive care unit level II
nursery and maternity department. In December, 2005, Baehser, who also
has a master’s in health care administration, was appointed senior
vice president for clinical services.
Here are four other executive women at RWJ Hamilton.
Diane Grillo, met CEO Christy Stephenson when they worked together at
Curative Services. Stephenson brought her to RWJ Hamilton as division
director for health promotion at 1998. In December, 2005, Grillo, who
holds a bachelor’s degree in organizational development from Eastern
University in Radnor, PA, was promoted to vice president for health
promotion. She has 20 years experience in managing community education
and outreach programs.
Jennifer Hunara accepted the position of executive director of
surgical services at RWJ Hamilton in January. She came to the hospital
from Lehigh Valley Hospital in Allentown, Pennsylvania, where she had
served as the perioperative services business manager and as an
administrative resident and consultant working in surgical and cardiac
services and administration.
She holds a bachelor’s degree and a master’s degree in health
administration and an MBA, all from the University of Scranton.
Lisa Breza, has worked for RWJ Hamilton for 20 years. She began her
career as a medical-surgical nurse, and worked her way up through the
ranks. She was named executive director of the Cancer Institute of New
Jersey Hamilton in November, 2005.
She has held a number of positions at the hospital, and was director
of the emergency department during the anthrax attacks in 2001. Breza
received her bachelor’s in nursing from the College of New Jersey.
Shashi Madhok, was named vice president for quality at RWJ Hamilton in
December, 2005. She is responsible for quality initiatives related to
staff credentialing, patient safety, discharge management, medical
research, and compliance standards. She is in charge of programs
related to organization performance, Six Sigma quality methodology,
and the Malcolm Baldrige National Quality Award.
Madhok earned a bachelor’s degree in nursing from the University of
New Delhi, India, and a master’s in public administration, with a
focus on hospital administration, from Rutgers. She is a board member
of Quality New Jersey.
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