Fred Sanfilippo's bold moves have made the OSU Medical Center a national force and a regional economic engine. Meanwhile, there's talk about a stealth power play tied to the abrupt departure of the CEO of Children's Hospital.
This story appeared in the December 2005 issue ofColumbus Monthly.
The news was puzzling: Tom Hansen, the CEO of Columbus Children's Hospital, wanted out. He had accepted a job in Seattle and planned to leave town in a few months. "It is with mixed emotions I leave Columbus Children's Hospital," he said in a July 29 press release.
Hansen said at the time he was craving a new challenge, but the announcement still raised a lot of questions. Over the past 10 years, he had transformed Children's from a regional player into one of the largest pediatric hospitals in the country, boasting both cutting-edge research and high-quality patient care. Hansen also had community support: Children's is perhaps Central Ohio's most powerful fundraising organization. It's popular and profitable, financially one of the best performing hospitals in the country.
So, why would Hansen leave all that behind? Why pull his teenage son out of high school and jump to Seattle Children's Hospital & Regional Medical Center-a lateral move at best?
Throughout the summer and fall, another possible explanation trickled out, dealing with Fred Sanfilippo, the hard-charging leader of the Ohio State University Medical Center. OSU and Children's have a long-standing affiliation; Children's doctors are faculty members at the university's College of Medicine. But Sanfilippo wanted a closer relationship and pressured Hansen for more control of Children's, according to several sources close to the situation. "It was a classic 'This town isn't big enough for the both of us,' " one source says. Then speculation began to build over whether Sanfilippo charged too hard this time.
Sanfilippo denies he forced Hansen's resignation (and Hansen isn't talking). But no one can question this: In just five years at Ohio State, Sanfilippo has emerged as an overpowering force in Central Ohio medicine.
As usual, Sanfilipposeems relaxed and confident, wearing a tie and dress shirt. Talking points are in front of him, a stack of notes that detail the stunning transformation of Ohio State's medical operation under his leadership-new buildings, recruitment coups, a bold private-sector venture called UMC Partners. For now, however, he ignores the list. Responding to a question, he leans back in his chair and reminisces about his family.
Sanfilippo grew up in Long Island and Queens and still speaks with a bit of a New York accent. His father was a radiologist, the first in his family to graduate from college. His grandfather was an immigrant from Sicily who supported his family through odd jobs. Sanfilippo says they both could be stubborn and perseverant-just like him. "Head of concrete," he says with a laugh, describing his grandfather.
The comment provides an opening, and the visitor on the other side of the conference table asks about Sanfilippo's own strongman image-a guy who pushes, prods and steps on toes. "I'd much rather dance around than step on toes," he clarifies. "But if it's the only way, if people are blocking success, then sometimes you have to. And I'm not afraid of doing it. It doesn't bother me."
Caroline Whitacre, a veteran College of Medicine administrator, chuckles when she recalls how she met Sanfilippo five years ago. "I was taken aback," she admits. "My first interaction was not particularly positive."
Eventually, like others in Columbus, Whitacre would come to admire Sanfilippo's determination, energy and leadership. But in the fall of 2000, he was a mystery, a renowned pathologist from the East Coast brought to Columbus to turn around the university's troubled medical operation.
On his first or second day on the job, Sanfilippo summoned Whitacre to his Meiling Hall office. For months, Whitacre and other members of an OSU search committee had been trying to fill a department chair opening. The panel had identified a top candidate, and Whitacre, the committee's leader, expected the new medical center chief would rubber-stamp the recommendation.
Wrong. Sanfilippo didn't want to hire someone yet; instead, he ordered a top-to-bottom external review of the department. Whitacre later would learn that move was standard procedure for Sanfilippo-and see the wisdom in it-but she couldn't understand the decision at the time. The committee had spent countless hours on the search. They found a great candidate, she believed, and now her boss was rejecting their choice. "I was shell-shocked," she says.
Sanfilippo is no longer a mystery, though the correct pronunciation of his last name-San-fi-lip-o or San-fi-leep-o-remains a source of debate. ("I answer to both," he says, flashing a smile.) These days, he's the bold and brash face of medicine at Ohio State, if not all of Central Ohio, a man of big ideas, big ambition and big accomplishments. What he wants is crystal clear: brilliant researchers, skilled surgeons, smarter students, a new medical campus (with shiny new hospitals and research facilities) and-you better believe it-power.
According to the Gospel of Fred, Ohio State can be a worldwide force in medicine and a regional economic engine. And people in high places have believed in him. The Columbus Partnership, a collection of the city's top CEOs and civic leaders, asked him to join last year and identified personalized medicine, one of Sanfilippo's pet projects, as a way to boost Central Ohio's slumping economy. In fact, with OSU leading the way, healthcare was one of the only sectors of the Columbus economy that grew faster than the national average during the past four years, outperforming such traditionally strong local industries as business and financial services and warehousing and distribution. "When I talk to people in Columbus, they often say it's time for bold action," says Bob Milbourne, president of the Partnership. "Fred Sanfilippo is one of those people willing to be bold."
Just ask Children's Hospital.
Ohio State and Children'shave an affiliation that dates to 1916, when OSU med students first trained at Children's. Some 30 years later, the hospital started to house the College of Medicine's pediatrics department. It's a fairly loose relationship. Children's is an independent institution with its own board of directors.
The arrangement is a bit odd from a management standpoint-in particular, for the people at the tops of Children's and the OSU Medical Center. Hansen and Sanfilippo were equals in one way, a pair of powerful Central Ohio hospital executives. But Sanfilippo was Hansen's boss in another. Hansen chaired the OSU Department of Pediatrics, part of Sanfilippo's empire. And Sanfilippo sits on the Children's board, to which Hansen answered.
Despite its eccentricities, the system worked fine in the past, but several people familiar with the OSU-Children's relationship say Sanfilippo-a new kind of OSU medical chief, with more power than his predecessors-changed the equation. Han-sen, who left Columbus in early October, didn't return messages for this story. And the leadership at Children's, interim CEO Keith Goodwin, board chairwoman Abigail Wexner and former chairman Bob Kidder, declined to discuss Sanfilippo and Hansen.
But five sources close to the situation say there was tension. "You could argue that that model, if everybody was happy and working together, would be fine," one source says. "You could also argue that under situations that people didn't agree, it made absolutely no sense. What evolved over the last few years was that it made no sense. Tom's job as CEO of the hospital was to make it as successful as it could be. And sometimes, that meant not being in lock step with the university."
Rumors started to spread months ago about a closer arrangement between Children's and the medical center. Details weren't clear, so speculation filled the void: Was this a power play by Sanfilippo to build his empire? In the spring, Sanfilippo, in an interview withColumbus Monthly, downplayed the rumors and described the talks between the two institutions as nothing out of the ordinary.
But the five sources describe a different scenario. One source says Sanfilippo sought more control over such things as fundraising, research and the practice plan (the corporation owned by Children's physicians), and that he lobbied fellow board members, "complaining about the way that Children's is doing this, that or the other."
Hansen, however, valued independence. Children's had done well as a separate entity, experiencing growth and gaining prestige. Would that continue if Ohio State and Sanfilippo took more control?
Then Seattle Children's called, with Melinda Gates, wife of Microsoft billionaire Bill Gates, leading the courtship. Hansen's exit stunned Children's. "Change like this is huge," the source says. "You're changing not only the department chair, but the CEO. And the dominoes could fall beyond that, depending on who gets the job." Says another source, a Children's employee: "We lost a very beloved leader. It was a real blow."
A month after Hansen's news, the OSU Medical Center's Comprehensive Cancer Center and Cincinnati's Children's Hospital Medical Center announced an "affiliation agreement" to collaborate on cancer research. Despite its relationship with Columbus Children's, OSU allied itself with its local partner's out-of-town rival-a hospital that competes with it for grants, staff and, in today's more mobile society, patients. The reaction at Columbus Children's? "I can only tell you mine," says the Children's employee. "It was disbelief and shock."
Sanfilippo says he's surprised by the claims of bad blood and adds that he worked well with Hansen. Yes, he'd like a closer relationship with Children's-along with every other Central Ohio hospital. But Sanfilippo vehemently denies trying to take more control over fundraising and research at Children's-and says he wouldn't know how to accomplish that even if he wanted to. "It's a private independent hospital," he says. Sanfilippo acknowledges lobbying for changes in the Children's practice plan, but he did the same thing throughout the medical center-an effort that led to the creation of OSU Physicians, a universitywide practice plan. "I think everybody was delighted with the way that worked out."
Sanfilippo suspects his motives are being misunderstood. He'd like to see the National Institutes of Health give Ohio State credit for grants that Children's researchers receive-something that could help OSU move up in the influential NIH rankings. But Sanfilippo says the counting change-an idea Children's leaders support, he says-wouldn't give him any more control over research. "The difference between counting and control may seem subtle to some people, but it is profound if you think about it," he says.
Still, Sanfilippo does want more collaboration in research, predicting, in particular, that Columbus Children's will join the OSU/Cincinnati Children's cancer consortium down the road. "I sit on the board of [Columbus] Children's, and I'm convinced that my colleagues on the board want to have that happen," Sanfilippo says.
Dan Slane remembersthe dark days. In 2000, the Ohio State Medical Center posted a $43 million loss and was expected to do just as badly the next year. "A culture of mediocrity" had taken hold, he says, and a leadership void loomed. At the time, Slane, who had been appointed to the OSU board of trustees in 1997, had a conversation with former Ohio State president Gordon Gee about what to do with the university's hospital system. "Gordon said, 'You can't fix it; get rid of it,' " Slane recalls.
Trustees didn't follow Gee's advice. Instead, they hired Sanfilippo, the chairman of the Department of Pathology at Johns Hopkins University in Baltimore, and gave him unprecedented power. Sanfilippo con-trols both the academic and business sides, holding several titles-the dean of the College of Medicine & Public Health, senior vice president and executive dean for health sciences and CEO for the OSU Medical Center. The additional responsibility also brought additional compensation: Sanfilippo will earn nearly $700,000 in the 2005-2006 academic year, making him the highest paid state employee in Ohio. (In fact, he earns nearly twice the base salary of his boss, OSU president Karen Holbrook.)
The choice was a gamble. Sanfilippo did impressive things with Johns Hopkins's pathology department, developing flagship programs, quadrupling funded research projects and doubling the number of faculty members. But he'd never headed a hospital or a med school before. And at Ohio State, he'd oversee 11,000 employees, 23 academic departments and five hos-pitals, among other things. It's a sprawling $1.6 billion operation that consumes nearly half the university's budget.
Sanfilippo knew he faced a huge challenge. "This was the most disorganized structure of any medical center in the U.S.," he says. But if someone could bring order to the chaos, a sleeping giant might awaken. "And that, to a large extent, has happened," Sanfilippo says.
Indeed, the medical center is a different place today. It is expected to post a profit in 2005 for the fourth consecutive year. The Richard M. Ross Heart Hospital opened last year, and construction will finish on the 10-story Biomedical Research Tower soon. Creativity and collaboration are flourishing, with research funding nearly tripling over the last five years.
What's most impressive, perhaps, is that Sanfilippo led the transformation in a time when many other academic medical centers were stagnating or in decline. "He is probably the best hire we have made in the last 10 years," says Slane, who now chairs the OSU board of trustees. "This guy is a change artist and a visionary."
Academics aren't known for embracing change; leading them is akin to herding cats. So how did Sanfilippo turn the med center into a smooth-running business? "He's sort of bilingual," says Joel Saltz, a pathologist and computer scientist who's worked with Sanfilippo at both Johns Hopkins and Ohio State.
What that means is he understands and appreciates both academia and business. Sanfilippo is a force of nature once he makes up his mind about something, but he's no hot-tempered tyrant. He's affable, charming and puts a high priority on communication. Throughout the summer, he conducted 28 "town hall" meetings-some in the middle of the night-to reach out to all med center employees and explain his vision for Ohio State.
That sensitivity, in large part, is why faculty members agreed to combine their 33 practice plans into a single organization, OSU Physicians, a huge cost-saving change that Sanfilippo's predecessors had failed to achieve. "It wasn't draw a line in the sand and say, 'This is the way it's going to be,' " says E. Christopher Ellison, chairman of the Department of Surgery and vice dean for clinical affairs. "It was build consensus, look at several different models and find what worked best for Ohio State. And that's what we did."
Meanwhile, Sanfilippo has given OSU credibility in the business world. He's recruited sharp private-sector minds (Peter Geier, former chief operating officer of Huntington Bancshares, and Jeff Wilkins, the founder of CompuServe); holds quarterly retreats to brainstorm and listen to outside speakers (ranging from an OSU marketing professor who studied the Mayo Clinic to OSU football coach Jim Tressel) and ordered his leadership team to attend six months of classes at the Fisher College of Business (sort of an informal MBA program).
He also leads by example. When Sanfilippo took the OSU job, he believed the state would pay for the Biomedical Research Tower. The post-Sept. 11 recession killed that plan, but instead of whining, Sanfilippo found a different way to fund the badly needed structure. Bonds and private donations would support the construction of the $151 million, 372,000-square-foot building (the largest research facility on campus), and then grant revenue would pay off the debt. The tower, which is expected to open next year, is projected to have a huge impact-a $3.7 billion boost to Ohio's economy and 17,000 new jobs over 10 years.
"This is a wide-open place and less conservative than it used to
be," says Bill Abraham, Ohio State's director of cardiovascular medicine. "We are inclined to take more risks and push the envelope."
Sanfilippo's latest brainchild illustrates that new entrepreneurial spirit. UMC Partners is an independent nonprofit corporation that aims to form new companies that can make money off Ohio State medical research. Sanfilippo enlisted a slew of heavy hitters to sit on the UMC Partners board-including Battelle CEO Carl Kohrt, Chemical Abstracts Service president Robert Massie and Limited Brands chief operating officer Leonard Schlesinger-and tapped technology pioneer Wilkins to spearhead the groundbreaking effort. "There have been similar things done in other places, but never anything quite like this," says Wilkins, UMC Partners CEO.
Though just a few months old, UMC Partners already is making waves. In September, it forged a partnership with the city of Dublin (which has pledged $25 million in infrastructure improvements) to build the 100-acre Ohio State University Health & Innovation Park. "This research park is going to generate thousands of jobs," says Slane, a nonvoting member of the UMC Partners board.
Two ventures are expected to anchor the park. The Institute for Personalized Health Care will house a data warehouse that physicians can use to personalize treatment. "You could go to this clinic, and they would map all of your genes, and they would be able to tell you, 'When you are 57 years old, you have a 93 percent chance of having colon cancer because you have this particular gene,' " Slane says. " 'Take this medicine and it will mutate the gene, and you'll be fine.' " Private sector partners are Siemens, IBM, Intel, Accenture and Battelle, Slane says.
Meanwhile, the other anchor is a particle-proton machine developed by Sie-mens, the German electronics giant. The Dublin park will have the only such machine in North America. "This machine irradiates inoperable cancer tumors," Slane says. "If you have a tumor on your brain or your spine or some other vital organ, the surgeon can't get it all out. Typically, you have six months to live. This particular machine that Siemens has developed will irradiate the entire tumor without damaging the healthy cells in front or back of the tumor. It's a revolutionary machine."
The can-do atmosphere is attracting big-time recruits. Since arriving at Ohio State in the summer, Vipul Patel, a world-renowned expert in robotic surgery, has had little time for rest. His day typically starts at 4 am and ends at 11 pm. In the evenings, he often finds himself entertaining out-of-town surgeons who've come to Columbus to learn from him. "This week, the surgeons were from Taiwan," says Patel, sitting at a desk in his Kenny Road clinic. "In the next few weeks, they are coming from Hong Kong and Venezuela. Last week, we had Sweden here."
Sanfilippo's vision and energy persuaded Patel, who was in private practice in Alabama, to relocate to Columbus. It also didn't hurt that Sanfilippo held a luncheon for him at the Athletic Club and invited a slew of community leaders-including Slane,Dispatchpublisher John F. Wolfe and OSU trustee and former Ohio House speaker Jo Ann Davidson-to sell Patel on Ohio State. "That was one of the key landmark moments when I turned to my wife and said, 'That's pretty impressive,' " Patel says.
Patel has transformed urology at Ohio State. Traditional prostate surgeries take three to four hours and require heavy narcotics and large incisions. Hospital stays are about three days, and recovery is six to 12 weeks. Patel's robotic-assisted method, however, is much different: Patients can go home the next day, recovery is about a week and Tylenol is usually all they need to relieve pain. The university is now the second busiest robotic prostate surgery center in the world.
As he often does,Sanfilippo uses an analogy from physics, his first love, when he talks about the medical center. He earned bachelor's and master's degrees from the University of Pennsylvania in the subject (his expertise was superconductivity) and studied under two Nobel laureates. "Now we are at the point of not changing, but accelerating where we go," he says. But resistance, as any physicist will tell you, is a powerful thing. It takes more than just one man to move a boulder or a billion-dollar academic enterprise.
Sanfilippo says OSU and Children's are on good terms, pointing out how they've worked together in recent months on the successful recruitment of highly regarded child psychiatrist John Campo and are coordinating to fill the Ohio State pediatrics chair and Children's CEO openings. (He says two people will take over Hansen's old responsibilities.) "If there is a lot of tension, you wouldn't see something like this going on," he says.
Still, a perception exists that Sanfilippo picked a fight with the head of Children's Hospital-a much more influential person than the folks he'd had difficulties with in the past, such as Rob Michler, the chief of cardiothoracic surgery at OSU who left earlier this year after having fallen out of favor. Children's is a beloved institution with supporters named Wexner and Wolfe. And if you want to make it in this town, you don't upset people with those last names, especially if you work at Ohio State, which the Wolfe family and Limited Brands CEO Les Wexner also have long and deep ties to.
Reading the tea leaves, a few civic insiders are speculating that Sanfilippo may be losing the support of Central Ohio's two most powerful families. In November, the OSU Medical Center launched a $500 million fundraising campaign. Lots of prominent Central Ohio citizens are co-chairing the effort, but no Wexners or Wolfes are among them. Meanwhile, in late October, John and Ann Wolfe and Abigail and Les Wexner hosted a fundraiser for a $740 million expansion at Children's.
But if Sanfilippo suspects the tide has turned against him, he doesn't show it. In his office this fall, he sits in his favorite chair, one that gives him a view of the Ross Heart Hospital just west of Meiling Hall. Four days earlier, the med center announced a massive expansion of its own-a $1 billion plan that includes adding two more floors to the Ross, which has been full since it opened at the end of last year. What will the medical center look like 10 years from now? "You won't recognize it," Sanfilippo predicts.
Dave Ghose is an associate editor forColumbus Monthly.