In 1997, Lois Barrett wanted to call it quits.
At the time, she had been a board member at 949-bed Lee Memorial Health System for 17 years, serving the last eight as chairwoman of the 10-member board. The now 74-year-old Barrett thought it was time to go.
But with the system's president as well as its chief financial officer resigning, plus a couple of other top executives deciding to leave, all within a matter of weeks, Barrett, a former hospital executive, knew it was not a graceful time to exit.
After all, there were the issues of bringing in an interim president, starting a national search for a new president, reorganizing executive staffing, plus bringing three newly elected trustees up to speed on hospital matters.
In short, there was a lot of work to do.
"It wasn't a question of saying, `I can't,' but rather `Where do we start?' " Barrett says. "Problems are not to be backed away from."
That attitude helped earn Barrett MODERN HEALTHCARE's 1999 Trustee of the Year award for hospitals and health systems with more than 200 beds or annual revenues of more than $25 million.
Risk taker. In her time at the Fort Myers, Fla.-based system, Barrett has seen Lee grow from a single acute-care facility to a five-hospital system covering three campuses. The system also operates a 112-bed skilled-nursing facility, two home health agencies and a 110-physician multispecialty medical group.
When Barrett joined Lee Memorial's board in 1980, the hospital posted $1.6 million in net income on $28 million in net revenues. Assets totaled $23 million. In 1998, the system reported $33 million in net income on $305 million in net revenues. Assets had grown to $731 million.
And Barrett has had a lot to do with Lee's successes, says former President and Chief Executive Officer James Nathan. Barrett, with her snow-white hair, small features and gold chain-linked eyeglasses, comes off as being quite reserved and maternal. But throughout Nathan's 15 years as chief executive, which ended in 1997, Barrett has been a risk taker, he says.
In 1996, beating out the nation's largest healthcare company, Columbia/HCA Healthcare Corp., to purchase the scandal-ridden 201-bed Cape Coral (Fla.) Hospital for $145 million was very controversial, Nathan recalls. The not-for-profit hospital lost more than $35 million from 1994 to 1996, had fired three top executives for allegedly misspending more than $2 million in hospital assets, and had been fined $10 million by the Internal Revenue Service for misspending tax-exempt bonds.
But Barrett supported the acquisition because it was the right thing to do for the future of the system, he says. Cape Coral would expand Lee Memorial's reach into Western Lee County, and it would help Lee become more competitive with Columbia. Today, that hospital is turning a profit for the system. In 1998, the hospital's net income was nearly $2.1 million on net revenues of $70 million.
Nathan, 52, is now with a healthcare consulting firm, Legacy Alliance in Denver.
"We need more people (like Barrett) who look at things from a long-term perspective and who are willing to take the right risks," he says.
Grandmother to all. Barrett has always had a calming effect in very turbulent situations, says Lee Memorial's current president, William Johnson, who has been with the system since 1986.
At a 1997 board retreat intended to help Johnson and the board create new objectives, the system's CFO, Dennis Pettigrew, resigned after 12 years of service to become CEO at Erlanger Health System in Chattanooga, Tenn.
And soon after, the board's liaison to Lee's staff and its treasurer, both who had been at the system for 20 years, resigned, for health and personal reasons.
"I just saw panic in their faces," Johnson says. "But Lois provided a calmness to the group and just said, `OK, we'll go on.' "
Soon after that meeting, Johnson agreed to become the system's president. He wanted to create a completely different management structure, with three operating officers and several new top positions, to help manage an ever-growing system. He says he wasn't sure how the board would react to his proposal. To him the idea made sense, but it had a very unconventional structure.
But with Barrett's support, Johnson convinced the board that the idea was right for Lee Memorial.
"Lois extended to me a great level of confidence," Johnson says. "She helped one and all by this display of confidence."
Barrett says she has confidence in Lee's management staff. She believes it's very important to "grow" people into their positions to create a strong foundation for the future.
"I almost feel like I am a grandmother," Barrett says with a chuckle. Both the staff and the board "need someone older around who trusts them."
And her trust has paid off. In 1998, Lee saw its net income increase 50% to $33 million from $22 million in the year-ago period. Occupancy rates rose nearly 3 percentage points to 49% while net revenues increased 4% to $306 million. Of six hospitals in the market, Lee Memorial had the highest market share, at 53%, according to the Florida Agency for Health Care Administration in Tallahassee.
It's important to help board members become experts, too, she says. Instead of forming committee on top of committee, each board member is given an area to cover, such as information systems, facilities or ethics. The only separate committee the board oversees is finance. Board members are expected to become experts in their areas and report to the board on concerns and developments.
"I believe in empowering board members as much as possible, based on where their strengths are," she says. "I have yet to hear any complaints about it."
Moving furniture. For the past 18 years, Barrett has been an elected board member for Lee. Two board members are elected in a popular vote from each of Lee County's five districts; members serve a four-year term.
In 1980, she and her late husband, James Barrett, retired to the area from Cleveland where she had been CEO at Rainbow Babies and Children's Hospital, an affiliate of the University Hospitals of Cleveland. Her husband, a former military officer, suggested that running for the board position would be a good way to get involved in the community.
Barrett certainly had enough healthcare experience to lend to Lee. She had been at Rainbow in various positions since 1969. Before her post at Rainbow, she had been administrator at 127-bed St. Joseph Health Center in Warren, Ohio, for two years
At the time, Lee Memorial was in shambles. Barrett had been elected as part of a reform board, following a number of public battles over sunshine and public records laws. Meanwhile, there was a three-way feud between the board, then hospital President John Gadd and hospital physicians. The main problem was a lack of communication among the three groups, Barrett says.
The lack of communication was immediately visible at her first board meeting, Barrett recalls. Gadd, who had been the top executive at the hospital since 1961, had set up the meeting so that staff members sat between board members. No two board members sat together at the three parallel tables.
"This was not a good working arrangement," Barrett says. "How were (board members) going to get to know each other?"
She quietly pushed her chair back so that she could get a better view of other board members. Barrett recalls that Gadd was not happy with her opposition to the seating arrangement. He cynically suggested that maybe the newcomer had a better idea.
Barrett says she never thought for a second what Gadd and other veterans at the meeting thought of her. And as quietly as she had pushed her chair back a few minutes earlier, the 5-foot-2-inch Barrett stood up and rearranged the seating chart and furniture to make one table. That simple move may have changed the whole direction of Lee Memorial.
Time to move on? It's that quiet, take-charge attitude Barrett has successfully mixed and has used at Lee for years. But now that the new management structure is in place and the staff members are comfortably working in their new roles, Barrett is asking herself whether now is the time to move on.
"It's a strong hospital now; it's nationally known. And it has good leadership," Barrett says.
But will she resign? When asked, Barrett tilts her head and sighs. After a long pause, she says that she's almost back where she was in 1997 when she thought about stepping down. But every four years, three newly elected trustees join the 10-member board and there's always a future to plan.
"I don't want to see it go down the drain," she says.