2019 Top Doctors: The Hospital CEO Shuffle

Chris Gaitten, Dave Ghose and Kathy Lynn Gray
Nationwide Children's Hospital

Hospitals are the unstoppable machines of the Columbus economy. Over the past 20 years, they’ve proliferated, expanded, gained prestige, grown more profitable, spawned startups, conducted increasingly ambitious research and become drivers of community ambition. They have a $4.22 billion annual economic impact in Columbus, according to the Ohio Hospital Association, and that figure should continue to rise as the region’s medical construction boom continues unabated. Recent and current Central Ohio hospital expansion projects amount to more than $3 billion, according to Columbus 2020, the regional economic development agency.

Needless to say, the people in charge of Columbus’ four major hospital systems—OhioHealth, Mount Carmel Health System, Nationwide Children’s Hospital and Ohio State University Wexner Medical Center—play an increasingly critical role in the life of the city. Which makes the unprecedented hospital leadership transition that occurred this summer a big deal. New executives are running the show at three systems: Dr. Harold “Hal” Paz at Ohio State, Dr. Stephen Markovich at OhioHealth and Tim Robinson at Nationwide Children’s Hospital, all of whom started during a two-week period beginning in mid-June. What’s more, the fourth CEO, Ed Lamb of Mount Carmel, announced his July 25 resignation following the conclusion of an internal probe into a doctor accused of killing 25 patients. Such a substantial, simultaneous shift raises questions about what lies ahead for each system and for the local industry as a whole.

The turnover seems coincidental. Markovich and Robinson are insiders following in the footsteps of former bosses who retired after long, accomplished careers—David Blom, who led OhioHealth for 17 years, and Dr. Steve Allen, Nationwide Children’s CEO of 13 years. Paz, meanwhile, assumed a new position at Ohio State with wider responsibilities and influence than the role occupied by his predecessor, Dr. Sheldon Retchin, who resigned in 2017 following a faculty revolt. All are highly regarded, and Markovich and Robinson are proven commodities both within their institutions and in the greater Columbus community. But as with all leadership changes, an element of risk is being injected into the equation—except it’s multiplied by four in this case.

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What are those risks? OhioHealth and Nationwide Children’s have enjoyed great stability and success in recent years, and Markovich and Robinson are expected to carry on in that tradition. Yet in the ever-evolving field of health care, no one can afford to stand pat. “People coming from the inside tend to have less of a proclivity to challenge the status quo,” says Keirsten Moore, professor of management and leadership at Capital University. “And they may face greater resistance when they do that, especially if the prior CEO is very successful.” Paz, on the other hand, is expected to be a change agent who can finally get the many components of the sprawling OSU med center to work together for the greater good of the institution and the community. He doesn’t have to worry about following a beloved figure, but he still needs to navigate the bumpy terrain that knocked his predecessor from his perch. “Especially for an external CEO, the greatest missteps are often not understanding how their initiatives will be received from the culture and not understanding the political landmines, both with internal and external constituents,” Moore says.

Community leaders say the trio of new hospital CEOs are up to the task. “These are people who get it, that are national, international leaders in their fields,” says Kenny McDonald, CEO of Columbus 2020. “We feel great about the leadership that is coming into the institutions.” Good thing, too, because a lot is at stake. “The last decade or two have seen a real transformation in health care delivery in America,” says Columbus Partnership CEO Alex Fischer, the chairman of the Nationwide Children’s board of trustees. “The innovations we’ve seen in Columbus have kept health care delivery here competitive, high-quality and cost-effective. That’s been an ingredient for our overall economic development success.”

OhioHealth’s new CEO, Dr. Steve Markovich (Photo by Rob Hardin)

OhioHealth: Steady in a Sea of Change

On the grounds of OhioHealth’s new $90 million headquarters in north Columbus, you can find a sprawling cafeteria, a chapel, a Starbucks, a gym, a health clinic and a walk-in “tech bar” for malfunctioning phones and laptops. Just beyond the outdoor dining area on the rear terrace, the David P. Blom Administrative Campus even boasts a standalone conference room fashioned like a high-end wilderness retreat. The only thing missing from the bustling corporate hub is David P. Blom himself.

When he retired this summer, it ended the longest—and possibly the most accomplished—tenure of any local health care CEO. Blom was widely admired, and under his guidance, OhioHealth’s disparate system of medical centers was unified and expanded across the state. The company enjoyed exceptional growth and now claims $4.3 billion in annual revenue. It’s also among the city’s largest employers, with about 27,000 associates.

“It’s always hard to follow somebody that has been that influential,” says Stephen Markovich, who has the unenviable task of succeeding the uber-successful Blom.

Board member Tanny Crane says Blom began planning for this moment at least six years ago, rotating his leadership staff into different roles to give them opportunities to rise. Markovich proved his capabilities as the president of Riverside Methodist Hospital and then as senior vice president of all acute care operations, and he spent the last year under the CEO’s direct tutelage. Though Blom will continue in an advisory capacity for a few months, Markovich took the reins on July 1.

Markovich began his career with OhioHealth in 1993 as a primary care and emergency room physician, and he’s the first doctor to become company CEO. Board member Donna James likes his technical background but also praises his business acumen and his “internal social-political” skills—leading others, building trust and fostering teamwork. Last October, he retired from a 38-year military career as a major general, with stints as a combat fighter pilot and commander of the Ohio Air National Guard.

The job of health care CEO requires just that broad type of experience and skill. It has become a far more difficult role in the last decade, says Deborah Bowen, CEO of the American College of Healthcare Executives. “The economics are tough, the relationships are complex, and the expectations for people are getting higher and higher and higher.”

Though OhioHealth appears positioned for continued success, major issues in the industry at large could bring about instability or pitfalls: an approaching shortage of physicians, the escalating cost of high-tech medicine and health care reform. Markovich witnessed the need for reform firsthand in his practice. “Historically, we have a sick care system in this country, not a health care system,” he says.

To rectify that, there needs to be a more holistic, preventative approach—focusing on things like nutrition, fitness and vaccinations—rather than waiting to treat disease. Markovich says the tipping point will be when employers gain a better data-driven understanding of their health care expenses, and he sees additional opportunities for OhioHealth to partner with them to cut insurance costs by keeping employees healthier. The company also recently opened short-stay facilities in Westerville and Pickerington, and he intends to expand that network to provide places for observation and outpatient treatment that reduce expensive ER visits.

He emphasizes the importance of growth across the board, but perhaps the most telling measure of his success will be how he instills the company’s culture and values—the business’ “secret sauce” in his words.

“There’s a strong feeling, and it’s hard to deny it, that those values play an integral and instrumental role in who OhioHealth is,” Crane says.

Markovich largely credits Blom for those all-important cultural values, which are plastered on the walls of the campus that bears his name: integrity, service, excellence and compassion. But there’s a fifth tenet now as well—inclusion, which Markovich championed during his transitional year. OhioHealth has begun tying executive compensation to initiatives that promote companywide diversity, from suppliers to physicians to management.

To James, it shows Markovich’s ability to enhance the culture by shifting those long-held values. It also demonstrates his comfort with charting the course his way. “Steve will be his own person. He’s not trying to be Dave or fill Dave’s shoes, and he doesn’t need to,” James says. “The board was looking for someone who could not just continue the good work but build upon it as well.”

OSU’s new CEO, Dr. Hal Paz (Photo by Tim Johnson)

Ohio State: Integration at Last?

Forgive Hal Paz for the spartan surroundings. The OSU medical chief’s Meiling Hall office features a desk, a few chairs and not much else. It’s early July, a couple of weeks since he started at the university, and decorating his work space hasn’t been a top priority. “I’ve spent the majority of my time getting out of this office and meeting with employees, with faculty, staff members, getting out in the community,” Paz says.

And there are a lot of people to meet. Paz oversees a vast $3.7 billion medical network that includes seven hospitals, seven colleges and more than 20 research institutes. The med center comprises about half of the university’s total budget and is continuing to grow at a significant rate. In the works are outpatient complexes in Northeast Columbus, Dublin and on campus, as well as a new 840-bed medical tower that university officials expect to be the largest single facilities project ever undertaken at OSU.

That size is both the med center’s greatest strength and its weakness. To be sure, it’s been a high-performing institution in recent years, attracting more research dollars and becoming more profitable. But university leaders have huge ambitions for it—especially philanthropist Les Wexner, the med center’s namesake who also serves as its board chairman—and they’ve long believed it could achieve even greater things if all its components worked better together.

During the July interview, it doesn’t take long for Paz to start singing that familiar song of synergy. He sees collaborative opportunities not only in the health sciences but also across the university, including engineering, computer science and agriculture. “You have this enormous set of resources, and there’s a tremendous desire to see how we can leverage all those assets to come up with this model,” Paz says.

Attempting to bring more integration to the med center has upended his predecessors, including the last chief executive, Sheldon Retchin, who resigned from his leadership post in 2017 after more than 50 faculty members blasted him in a series of no-confidence letters. That dispute was about personalities and Retchin’s management style, but it was also about his effort to gain more control over the med center, particularly the university’s proudly independent cancer program. Though Retchin was forced to resign, OSU president Michael Drake and other university leaders remained committed to a more integrated future—a power struggle that led to the resignation of longtime James Cancer Hospital CEO Michael Caligiuri in November 2017.

University leaders decided they needed a new kind of executive in charge of the med center, a “chancellor for health affairs” with broader oversight of the med center’s many components, including the James. Interim James CEO William Farrar reports to Paz. When Caligiuri led the hospital, he reported directly to Drake. “What we need is to have someone who helps us align our special assets to make sure that we’re all moving in the same direction,” Drake says. “We’re all one university, so we don’t separate the health system out from the university. But within that one university, the health sciences have a series of special considerations and helping them all align in a more active and fulsome way is extremely important.”

Paz faces a tricky balancing act, but Drake says he’s the right person for the job. After looking at hundreds of candidates during the 14-month search, university leaders zeroed in on Paz, a board-certified physician in internal medicine and pulmonary medicine with broad leadership experience in both the private sector and academic medicine. He comes to Ohio State from Aetna, where he served as the managed health care company’s chief medical officer. Before that, he led Penn State University’s Milton S. Hershey Medical Center. “His great interest in doing this work is infectious,” Drake says. “He’s inspiring in that way.”

So far, he seems to be making a good impression. Dr. John Byrd, one of the med center’s most accomplished cancer researchers, who signed a no-confidence letter in 2017, says Paz “appears to be a visionary leader.” Byrd met with Paz in late June and came away impressed with his support for specialty care and moving health care out of the hospital and into the community. Byrd says the morale and atmosphere at the med center has improved greatly since 2017. “As somebody who’s been here 18-plus years now, it’s really nice seeing people working together across all different programs,” he says. “It’s setting Ohio State up to be a much better place.”

That’s Paz’s goal. He says he wants to create the country’s “next exemplar of academic health care.”

Nationwide Children's new CEO Tim Robinson (Photo by Tim Johnson)

Nationwide Children’s: Meeting a High Bar

You might expect the new CEO at Nationwide Children’s Hospital to be a bit stuffy, a bit stiff, a bit, well, boring. After all, he’s spent his career juggling numbers and tossing around terms like currency hedging strategies, lines of credit, cash flow and bond ratings.

Yet Tim Robinson, who became Nationwide Children’s new leader on July 1, is chatty and gregarious and just as comfortable talking about healthy kid initiatives as he is opining on the hospital’s healthy financial picture. “He’s exceedingly versatile and knowledgeable across the expanse of what a children’s hospital administrator needs to be,” says Dr. John Barnard, president of the hospital’s Abigail Wexner Research Institute. “He gets the big picture, as well as the broad mission, of Nationwide Children’s.”

Alex Fischer, chairman of the hospital’s board, headed the committee that searched for a new leader after CEO Steve Allen announced his plan last year to step down on June 30 after 13 years. Dozens of top executives nationwide with backgrounds in research, business and health care were interested in the job, so an executive-search firm whittled down the list. Fischer’s committee, made up of board members and hospital staff, reviewed both internal and external candidates and settled on Robinson.

“Dr. Allen has built an incredible team here, so it shouldn’t be a surprise to anyone that the top hospital had its next leader among its own ranks,” Fischer says. Robinson fit the committee’s three main criteria: someone committed to the collegial culture at Children’s, a health care innovator and a change manager.

“He’s someone who’s constantly pushing himself and others, not in a loud way but in a very effective way,” Fischer says.

Robinson came to Children’s in 1995 as an assistant treasurer after a 13-year stint in finance with national shoe retailer the Kobacker Co. Two years later, he became Children’s chief financial officer, and in 2007 he added the titles of executive vice president and chief administrative officer, making him responsible not just for financial affairs but also for information services, community relations and international affairs. “There’s not a bone of hubris in Tim’s body, and he’s a fierce, fierce advocate for children,” says Barnard.

One innovative program Robinson is especially proud of is Partners for Kids, a nationally known partnership between the hospital and more than 1,000 doctors to provide 330,000 Ohio children on Medicaid with high-quality medical care and interventions to improve health. Another is the financial stewardship he’s brought to the hospital, which has allowed it to “grow and invest in people and in world-class programs,” Robinson says.

As CFO, Robinson worked closely with Allen to transform Nationwide Children’s from a regional hospital to an international facility. The expansion has included a new main hospital, additional research buildings, an outpatient care center, an energy plant, a data center and a forthcoming behavioral health facility. Research funding has grown from $41.7 million to $105.9 million, and the hospital has invested millions to improve the surrounding neighborhood.

Many challenges remain, Robinson says. “In some ways the fact that we’ve had this great success means that the bar’s a little higher, because we’re better positioned than perhaps anyone in the country to affect the health status of children,” he says. “As we grow and become more cutting edge, we have to translate that to better care at the bedside and better access to care.”

He’s excited about the potential to improve children’s health through the hospital’s research arm, which is making strides in areas such as genomic medicine, tissue engineering and gene therapy. And he’s anxious to help the estimated 20 percent of children across the country who have some kind of behavioral health problem. One step will be the hospital’s specialized 48-bed facility, which opens next year.

“It’s a real blessing to be affiliated with this community,” he says. “I feel thankful to have this opportunity.” 


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Murder charges, Legionnaires’ disease and a CEO resignation

It wasn’t exactly a shock when Mount Carmel CEO Ed Lamb announced his resignation in mid-July. For the previous seven months, he was caught in a perfect storm of horrific publicity that made his continued leadership of the Columbus hospital system more and more untenable. “I know that new leadership has the ability to facilitate healing and help restore trust in the organization,” Lamb said in a July 11 video statement announcing his resignation, which was effective July 25.

In a year that was supposed to be primarily about the opening of a $361 million new hospital in Grove City and the redevelopment of the closed Mount Carmel West Hospital in Franklinton, Lamb instead was forced to focus on two major crises. First, a now-fired Mount Carmel physician, Dr. William Husel, was charged with 25 counts of murder in connection to the deaths of critically ill patients who were given excessive doses of pain medication under his care. Then, a Legionnaires’ disease outbreak occurred in Mount Carmel’s Grove City hospital just a month after it opened in the spring, resulting in the death of one patient.

The crises posed a leadership challenge seemingly unlike any other that a Columbus CEO has faced in recent years. “There’s not that many comparable situations,” says Keirsten Moore, professor of management and leadership at Capital University. “We usually say things like, ‘It’s not a life-or-death situation.’ But in this situation, it is life or death.”

Crisis management experts advise leaders to tighten policies and controls, and remain a visible presence when leading through difficult times. “I think people can underestimate how important that visible presence can be in the face of a conflict or a crisis like this,” Moore says. And Lamb, in many ways, followed that playbook. He announced the suspicious deaths in January in a video statement, labeling the situation a “tragedy” and apologizing to the families. He then followed up by granting interviews with The Columbus Dispatch, discussing the hospital system’s response to the Husel case during a speech before the Columbus Chamber of Commerce in February, tightening pain medication protocols and reporting 48 nurses and pharmacists to their governing professional boards.

But when Mount Carmel concluded its review of the Husel case in mid-July, Lamb, Mount Carmel’s CEO since November 2016, decided he needed to go, too. He also announced that Dr. Richard Streck, chief clinical operations officer, would retire at the end of September and that Mount Carmel had fired 23 employees (including five members of the physician, nursing and pharmacy management teams), placed one employee on administrative leave and ordered 11 others to complete additional training and education. “All of us at Mount Carmel understand it will take time to restore our patients’ and community’s trust,” Lamb said.

The Mount Carmel Mess