Reynold Jennings is no stranger to controversy. The pharmacist-turned-hospital executive has had to mop up after fraud investigations at two companies he worked for during his 43 years in health care.
Then a year ago, Jennings, 66, was called out of retirement in Kennesaw to become CEO of WellStar Health System after its chief executive was fired for allegedly having a “special relationship” with another executive. With 12,000 employees and $1.5 billion in net revenue, WellStar runs five metro area hospitals, six urgent care centers, two hospices and other outpatient facilities.
Jennings, a Dalton native and UGA pharmacy graduate, talks about what he learned from the financial scandals, WellStar’s challenges and his prescription for staying married to his high school sweetheart for 45 years.
Q: You worked for the hospital division of National Medical Enterprises in the 1990s when its psychiatric division was accused by the federal government of committing fraud by admitting thousands of patients who did not need hospitalization and then charging them inflated prices. Would you please discuss?
A: When the psychiatric division started reporting record revenues and earnings, the top executives were not asking, “How are we doing it when no one else is?” They were excited about it. At the end of the day, there were five NME managers out of about 8,000 nationally who caused that company to go through all the financial trauma it went through and ultimately pay millions of dollars in fines.
Up until then, all the management textbooks had focused on “negative exceptions” to the budget. That’s where you spend your time — looking at the negative. No one talked about what happens if you’re doing better than the others. The greatest lesson I learned was that if you are doing better than anyone else in the country, you better ask why.
The press reports at the time were bad for NME. The insurance companies wanted to cancel their contracts with us in all of our divisions, not just the psychiatric division. The doctors were up in arms, saying that if the insurance companies cancel their contracts, I can’t get paid for my services.
Q: You were part of a team charged with trying to turn around the situation. What did you do?
A: Repairing a brand like that, because you’re in the people business, means going to a meeting with hundreds of doctors and getting screamed at for about an hour. You sit there and listen, and you’re polite. You wait until everyone gets their feelings out on the table. Then you start, from a positive vantage point, saying, “I didn’t cause this problem. I’m here to work with you to help move things forward. If you trust me, you’ll find that I’m going to do what I tell you I’m going to do.”
I told the doctors that I would be meeting with the insurance companies and hoped to convince them we don’t have a major, company-wide problem. It took about 12 months of constant meetings with all the constituents, including elected officials. I didn’t start out being a turnaround specialist, but it was a sink or swim situation.
Q: You worked for Tenet Healthcare when it was accused by the federal government of doing unnecessary heart surgery and defrauding Medicare. Would you please discuss?
A: I’m sitting in Atlanta in 2002 running a regional hospital operation totaling 54 hospitals, and every time I go to operational headquarters in Dallas I’m asking how is the West Coast doing so well. How is this guy always beating budget when I’m struggling? I’ve already learned my lesson from NME.
At the end of the day, about a half-dozen people created the problem. What became apparent was a replication of the NME problem in that six hospitals in California out of over 100 nationally were involved.
Here I am again. They came to me and my peer in Texas to help straighten it out. I visited every insurance executive in the United States. I went through the same playbook as before, meeting with doctors on weekends all over the U.S. to hear their concerns and make a to-do list. Be seen, shake hands, tell people about my NME experience in the 1990s. “It will be OK. Hang with me.”
Also, we took the attitude with the stock market and the newspapers that if we do something wrong, we’re going to tell you about it. And we took the attitude with the federal government, given that Medicare rules are extremely complex, that we’re going to call the government and ask them to come look at something in the gray zone. We created trust with the federal government that this management team is open.
Q: What competitive challenges do you face at WellStar?
A: In the northwest Georgia quadrant, WellStar is the only integrated health care delivery system. Everyone else is a standalone hospital. We believe that these people are going to need a stronger corporate partner to help them with information technology, specialty technology, the training and education of doctors and nurses, and other issues. For example, we might partner with them for a free-standing surgery center.
But the landscape is going to get very competitive, particularly from Piedmont and Northside hospitals, which will become aggressive in coming up to our territory. In health care reform, size is becoming very important because we know that our payments are being cut by Medicare and Medicaid. The bigger you are and the more efficient you are, then the more competitive your pricing can be.
Q: What do you learn about sustaining a marriage for more than four decades?
A: You have to recognize that you’re both unique human beings. In marriages that go asunder, one person tried to remake the other one, instead of appreciating the uniqueness that drew them together in the first place.
Both parties need to take responsibility for compromising. When the children come along, I think the husband and wife have to talk with one another and have a unified mindset. You do not waver in front of them.
Another issue is money. My wife and I decided early on in our marriage that there are no secrets. So she and I discuss our family strategy and what we want to do with our money.
And the last thing comes from a verse in the Bible — remember the wife of thy youth. Age is not kind to all of us as we get older. My wife and I try to remember those fun things that attracted us to each other when we were young.
Each week, Sunday Business Editor Henry Unger has a candid conversation, called “5 Questions for the Boss,” with a top executive in Georgia. Some remarks are edited for length and style.