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 year.
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 1960s.
“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 Trenton.
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 Rider.
“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 Pennsylvania.
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 pre-discharge lounge.
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, very un-institutional looking walls, which enclose bathrooms large enough to give those in Toll Brothers’ homes a run for their money.
Both Princeton Healthcare System and Capital Health System have announced that they are building new, amenity-filled medical facilities on large 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 a suburban sensibilities.
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.” That, she says, is “more than the total bottom line of the other three Mercer County hospitals — St. Francis, Princeton, and Hamilton.”
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 that 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 Trenton?”
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. “I have the January reports in front of me now,” he says. “I see the erosion. It’s happening.”
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.” Reasons for the decline include growth of managed care enrollment, reduction in federal Medicare reimbursement, changes in Medicaid reimbursement, and a large uninsured population.
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 that goal.
While the employees are working on their goals, the hospital is working to keep each and every one of them satisfied — and not just satisfied in general, but satisfied in many quantifiable ways. It keeps its finger on the pulse of employee satisfaction to the degree that 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 night.
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. And it appears that she does so. 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 requests.
The unintended result of the COO’s departure has been “a complete re-energizing of the senior team,” says Stephenson, while Grillo nods enthusiastic agreement. 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 explanation.
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 nursing.