CHEF Leadership Spotlight – Richard D. Cordova, FACHE

Leadership Spotlight: ?Richard D. Cordova, FACHE,?Past Chairman of ACHE?s Board of Governors
An Interview by Taylor Hilderbrand, Northwestern Memorial Hospital and Committee Member, Education & Networking Committee?

Richard D. Cordova, FACHE, is President Emeritus of Children?s Hospital Los Angeles, as well as the Immediate Past Chairman of the American College of Healthcare Executives? (ACHE) Board of Governors.

Mr. Cordova joined Children?s Hospital Los Angeles as President and COO in 2005 and became President and CEO and a member of the Board of Trustees in 2006. He retired from Children?s Hospital Los Angeles as of August 2015. Prior to that, he was President of the Southern California Region of the Kaiser Permanente Health Plan and Hospitals from 2002 to 2004 and served as COO for Southern California at Kaiser from 1999 to 2002.

He has served on a number of community boards and organizations, including chairing the board of the California Children?s Hospital Association, serving as a member of the Board of Trustees and Executive Committee of the California Hospital Association, and serving as a board member of the National Association of Children?s Hospitals and Related Institutions, now the Children?s Hospital Association. He also is a founding member and first chair of the National Forum for Latino Healthcare Executives.

Mr. Cordova was selected one of America?s ?Top 100 Most Influential Hispanics? by?Hispanic Business?magazine in October 2005; he was named one of ?The Most 100 Most Powerful People in Healthcare? by?Modern Healthcare?magazine in August 2006; and he was selected one of the ?Top 25 Minority Executives in Healthcare? by?Modern Healthcare?magazine in April 2008, 2010 and 2014. Mr. Cordova also was selected ?CEO of the Year? by the?Los Angeles Business Journal in April 2011.

More recently, Mr. Cordova visited Chicago to provide updates about ACHE and its future and served as a panelist for the July 2016 CHEF Leadership Education Series event: Resilience Strategies for Reducing Physician Burnout. Given his demonstrated leadership skills and impressive career in the healthcare industry, the CHEF Education & Networking Committee conducted a follow-up interview with Mr. Cordova to gain his unique perspective and insights into serving as an effective leader in today?s healthcare environment.

Taylor Hilderbrand: What was the most critical phase of your development as a leader, and how did ACHE play a part in your leadership development??

Richard Cordova: As you go through your career, you start off doing a lot of technical work. You are constructing the reports, gathering the data, and analyzing. As you get into a management role, you are managing people, you are hiring and firing, and doing all the associated administrative work. As you climb your career ladder, you begin doing less technical work and more management work. And then suddenly, rather than looking down at your organization and saying, ?How am I going to operate this,? you get to that point where you start looking beyond your organization. In other words, you start developing your strategic thinking. And that?s where ACHE provided me with the resources to develop my strategic thinking. I took some strategy courses, and suddenly, my eyes opened. I thought, if I?m going to get in the C-Suite, I?m not just going to be an operations manager. I must think strategically about my institution. I call that connecting the dots. And when you can connect the dots, you are then able to paint your own picture about what the future looks like for your organization. And when you have that ?aha moment?, you realize you are ready to be the CEO.

That critical phase of development, from managing operations to thinking strategically, is a critical part, and a lot of individuals do not make that jump; they become CEO?s and they are still Chief Operating Officers. You can see how some people are so focused internally, they do not see the bigger picture. ACHE was a big part of my development in this area. I think the College is doing a great job at developing the educational materials for each phase of your career, whether you are a student, an early-careerist, a mid-careerist, or you are entering the C-Suite.

Taylor Hilderbrand: In an interview with Dr. Grazier, which was published just over 10 years ago in ACHE?s Journal of Healthcare Management, the interviewer touched on your vast amounts of volunteerism throughout your career. Which volunteer effort or position has served to be the most rewarding??

Richard Cordova: When I was at Kaiser, I joined the Board of the Institute for Diversity. I felt that being a Latino executive with Kaiser, one of the few in that organization, I wanted to contribute back to my community. This led me to join the board, and then I became Chairman of the Board for a few years. As an offshoot of that, I noticed the African-Americans had an organization called the National Association of Health Services Executives (NAHSE). There was nothing for Latino and Asian executives, and I wasn?t even thinking LGBT back then ? that came later. I was able to get a grant from Tom Dolan (former President and CEO of ACHE) and Dick Davidson (former President of the American Hospital Association), to hold a retreat where we paid for everyone to attend. We had about 15 CEO/Vice President-level Latino executives with Tom Dolan also attending. This is when we formed the National Forum for Latino Healthcare Executives, and I became the Chairman for a couple of years.

My other volunteer work is with ACHE. When you think of ACHE and what you are doing right now, this is voluntary work for you. Because of my involvement with the Institute for Diversity, I was fortunate to meet Tom Dolan. After doing all this work together, Tom encouraged me to nominate myself to become a Governor and interview for the position. I am now a Past-Chairman, and I go off the Board this coming spring. When I look back at the time I?ve spent with ACHE becoming Chair is the pinnacle of my career. Becoming Chairman of the Institute for Diversity opened all those doors for me. It just goes to show you that if you participate in your profession, the network and the friends that you develop will open doors for you.

Taylor Hilderbrand: Your extensive healthcare experience includes working with faculty, resident programs, major research programs, various strategic and performance improvement initiatives, unique healthcare models (Kaiser) – just to name a few. Can you speak to the importance of having a well-rounded knowledge base when leading a healthcare organization??

Richard Cordova: I use this example when I am mentoring: you can stay with an organization for a long period and receive promotions. But I caution individuals ? if I were to look at two r?sum?s and each person has twenty years of experience, their experiences may be entirely different. One person may have twenty years of progressive experience and has moved organization-to-organization with a variety of different experiences, and even geographic relocations. And the other person has had a one-year experience, twenty times. It is very important to have a variety of different experiences.

For example, I grew up in the Public sector, I worked in an academic medical center, I worked in the Kaiser-model, I worked at a Children?s Hospital, but you know which model I never worked in? The for-profit sector. I know it?s different, but I also know who I am. And I tell folks to know who you are so you can put yourself in an organization that compliments your values so you fit in the organization culturally. I wish I could have had that for-profit experience to at least see what it was like.

I think part of one?s development is to experience different types of organizations so that when you ultimately decide you want into that C-Suite, you know what type of organization you want to run. It is knowing who you are to make sure that when you end up as the CEO, it reflects what your values are, and I think that is a very important part in maturing in this business.

Taylor Hilderbrand: Prior to your appointment as President and CEO at Children?s Hospital Los Angeles, you served as President of the Southern California Region of the Kaiser Permanente Health Plan and Hospitals. Having experience with both a fee-for-service system and prepaid arrangements, which model do you think is most effective for reducing health care costs and bending the cost curve??

Richard Cordova: Wow, that?s an easy one. Fee-for-service medicine promotes higher utilization – the more labs and x-rays you do, the more money you make. The Kaiser System, is a pre-paid system and just the opposite. The last thing you want is for a member to be in the hospital. Hospitals are essentially huge cost centers and the most expensive part of the system. It changes your whole perspective.

The culture is truly what makes the Kaiser-model work. Kaiser is a closed system, so it was almost the beginning of the narrow network approach. Because of this narrower network, management always thought that the rates charged by Kaiser should be less than all the rates charged by our local health plan competitors. Because of this, our rates were always 5-10% less. This is until we discovered that the quality of the Kaiser Permanente program was equal to or better than these other hospitals. This led us to start setting premiums at market.

Capitation is an effective model for reducing cost growth and bending the cost curve, while also promoting prevention and wellness.

Taylor Hilderbrand: As an organization?s reimbursement becomes increasingly tied to their ability to foster an optimal patient experience, what all needs to happen for this to occur?

Richard Cordova: A lot depends on the type of reimbursement you?re getting and what the incentives are that are built into it. Clearly, organizations are going to have to figure out how to maximize the experience when it comes to quality, safety, and service. It begins from the moment the patient parks, the contact with staff and costs ? all are part of the patient experience. One of the things that we suffer from as an industry is that we still have the patient coming to us. The patient will sit in the waiting room for 30 minutes, or they may sit in the ED for four hours. We must figure out how we can better provide access to our services. And with that, the answer comes with technology. Organizations must re-engineer their processes and look towards technology to enhance those processes.

One of the keys to the success of the organization is managing the culture of your organization. We all use Disneyland as an example. Additionally, why are the Ritz Carlton and the Four Seasons so successful with their service? It?s the culture, it?s the people they choose, and it?s the training and reinforcements they provide to create the culture. Some healthcare organizations, like Children?s Hospital, have a great culture of service to families. When we opened our new hospital, we had to do a lot of reinforcement because now we could treat more families, from more areas, and from areas that we never provided in before. We now had to furnish services and be culturally competent in a lot of other communities because we now had the capacity to do so.

Taylor Hilderbrand: What has been the most difficult barrier to overcome while attempting to increase the engagement among a patient population??

Richard Cordova: The culture. You have different kinds of organizations and different kinds of hospitals. You have smaller community hospitals, community hospitals that have teaching, larger public hospitals, and academic medical centers. I would think you must approach each one a little differently. It?s very difficult to get the Kaiser-like culture going in an academic medical center where you have nationally and internationally recognized specialists and sub-specialists that are teaching, doing research, and doing clinical work. And most likely, they are doing more teaching and research than they are clinical work. To get access to them is a privilege in their eyes. How you turn that around and create an optimal customer service experience is a real challenge.

Each of these hospitals have different challenges depending on what their structure is as well. A crucial step in this is getting physician buy-in at the very beginning. When I had my experience at Children?s, I found it wonderful working with Pediatricians ? they are great to work with. Pediatricians were very motivated and very committed to the children and families.

Taylor Hilderbrand: What advice would you give to senior executives who are currently navigating their organizations through such unprecedented change??

Richard Cordova: People in the C-Suites who are doing strategic work right now are going to find that they are going to have to make changes that will hopefully fit into any future scenario. For example, I think that there have been enough statements made from both sides of the aisle to know that we are migrating away from fee-for-service. I have heard it from Senators and others that fee-for-service is dead, and we must start moving away from that model. Reimbursement may come in different forms, but even insurance companies are going to start shifting the risk to providers and saying, ?Here is $150 PMPM ? take these individuals and help manage them.? So, there are certain things that you need to figure out that will work in any scenario, and then focus on those things. That will keep you busy for some time while attempting to try and figure out the unpredictable.

Senior executives cannot hole up in their offices at this time. Conversely, they need to get out and talk with their peers, they need to participate in their chapter?s educational events, and they need to get out and look at systems that work. I would suggest that they tour and visit the Kaiser system, the Mayo Clinic, Cleveland Clinic, and the Geisinger system. I recommend visiting the systems that are taking on risk and have well-organized medical staffs that are integrated as part of the fabric of the organization. It is not a hospital over here, and a medical group over here, and they then form an alliance; that?s not ultimately going to work.

When I was the President of the Southern California Region of Kaiser, there was a Chief Executive of the Southern California Permanente Group. He and I led Southern California, and we worked as a team and did everything together. We did budgets together, we decided on what the rates were going to be together, we looked at capital budgets together, and we also decided on what hospitals need to rebuild together. You must have an integrated model ? that?s what Senior Executives need to figure out, but that?s hard to do when you have several community physicians that are used to fee-for-service and say, ?Now we are going to do this.??

Taylor Hilderbrand: You were asked this very next question 10 years ago when healthcare delivery and financing models were unrecognizable compared to their present-day appearance. With that, I would like to ask you once more: Would you still recommend health management as a career??

Richard Cordova: It is still a great career, but here is something to be aware of. If you are a lay administrator and are getting your Masters in Healthcare Administration, I hear a lot of individuals saying, ?I want to be a hospital CEO.? Being a hospital CEO is now a stepping-stone to a career in system healthcare management where you are managing multiple facilities, managing an integrated healthcare model, and managing partnerships with physicians. You may not become the top-dog and get to the system-level CEO position because physicians are now being recruited for those positions. You must understand the new model and how you are going to fit into it. It is different than it was ten years ago when the CEO?s of hospitals were lay administrators, business people, and so forth; that has since changed. Even the role of a CEO in a system has changed. In a system, the hospital administrator is more a manger of the institution than a CEO. They don?t have to worry as much about functions that are done at headquarters. It is a different model and a different career path now.

But would I still recommend it? Absolutely. Most of these jobs and most of the people going into this business are mission-driven individuals who want to make contributions to the community, and what better way to do it than this career?