Grady CEO has simple game plan

I never thought it would happen — certainly not this fast.

But Grady Health System CEO Mike Young has been able to turn a profit at the perennial money loser in a little more than a year. I would have bet — and lost — a good bit of money that this would not have happened for many years to come.

Mike Young

Mike Young

What’s more, Young said the first quarter results indicate that the hospital is on pace to beat last year’s financial performance, when it earned $10 million more than it spent, excluding one-time cash infusions.

How did this happen? And what can other execs learn?

To my surprise, Young said his game plan for the nonprofit Grady would not be different if he was running a for-profit company in another industry.

“The approach is exactly the same,” Young, 54, said in a recent interview. “You have to do it a little faster because there’s no winter fat for a turnaround to live off of.”

To turn around Grady, which had not seen black ink in a decade, Young said he used the same strategy he employed during 21 years as CEO of hospitals in Lancaster, Pa., and Buffalo.

But isn’t this situation different? Isn’t it a lot more dire, given the critical role Grady plays in treating indigent patients?

Not really, he said.

“People are people. Caregivers are caregivers. Everybody wants to do well,” Young said. “If you keep doing the right thing over and over again, it starts becoming automatic.”

Sounds simple. What’s the right thing?

Actually, Young said there are five right things that he focused on: Customer satisfaction, quality service, economic performance, integrity and honesty.

“Because our house was on fire, it’s easy to prioritize,” he said. “It’s harder to do in a successful place.”

To be successful, he said, you have to hold people accountable in measurable ways. You also have to recognize the high achievers — publicly.

Young’s approach did not come without controversy or loads of outside help.

For example, a total of $325 million from private sources will be raised to cover capital expenses. That frees up Grady to spend its revenue on operating costs. And the private funds, including $200 million from the Woodruff Foundation, don’t include the money from state and county governments.

But the community’s stake in Grady also means that Young has come under fire for eliminating a kidney dialysis clinic that patients relied on, or when money has been spent to burnish the hospital’s image instead of on patient care.

Young said it goes with the territory. In fact, to keep the troops focused on the priorities, he said it’s important for the criticism to be directed at him.

“The CEO needs to answer the outside challenges. I need all other leadership to not be distracted by outside things,” he said.

But, he has been criticized for not being as inclusive as he should be when making key decisions.

“I haven’t been as inclusive because I haven’t had the time,” he said. “I’m working 80 hours a week.”

Are you rationalizing after the fact? Yes, he acknowledged.

Perhaps as his leadership team settles in and the financial situation improves, Young will make the time.

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5 comments Add your comment

Dave

May 25th, 2010
1:03 pm

A simple approach indeed – Grab as much money for personal pocket and jump ship.

TnGelding

May 25th, 2010
5:05 pm

Simple is usually better. Honesty and integrity? In America? What a novel concept! Our legislators should be flogged for neglecting the funding for Grady and MARTA.

Robert Ray

June 1st, 2010
10:34 am

As a patient of grady for 7 years,I will tell you exactly how he is making a profit.–example– I was laid off from my job..presented my lay off papers,showed proof of residence,Salvation Army,,$70.00 a week,.showed a print out of unemployment for $112.00 a week-for 4 weeks,,82.00 a week after that ended. The lady at finincial services said it does not matter now what your expenses vs. income are.. If you are making any money you are going to have to pay..What was once a hospital of charity and hope is now one of cash and hate..And did I mention the 3 hour wait just to pick up a porescription.

art

July 10th, 2010
3:10 pm

Grady should close. Period.

Grady Grunt

July 10th, 2010
5:54 pm

I would take a real close look at their accounting practices…those of us who work there just don’t see it. We all know there are ways to cook the books to make it look like you are making a profit. Employees are the backbone of this hospital and we are stunned that Young is getting such a huge bonus. Meanwhile some employees are getting a 15 cents an hour raise…after not getting any for two years. Very few are actually getting raises at all. Others are denied raises for things beyond their control, such as family illness, or being one minute late. Those of us who really like our jobs are not happy with upper level mgt. We stay on because we believe that it will all come out in the wash. And we would like Mr. Young to know that without all of us, there would be no Grady.