The first reaction Bernadine Healy, M.D., had to the prospect of becoming American Red Cross president and chief executive officer was no thanks.
But legendary corporate headhunter Gerard Roche, chairman of Heidrick & Struggles, isn't known for giving up easily.
"Just don't say no (right away)," he pleaded with her by phone last spring. "That's all I'm asking."
Skeptical but curious, she agreed to keep talking, peppering Roche with questions about the job during several subsequent conversations.
By early summer, Healy, a cardiologist by training, had agreed to become the first physician to serve as president and CEO of the Red Cross since 1899. Her appointment was announced in July 1999, and she officially assumed the post in September.
In hindsight, she says, she can scarcely believe her initial hesitation.
"I can't imagine I would have even thought about saying no," Healy says during an interview in her office at Red Cross headquarters in Washington, overlooking the sweeping grounds known as the Ellipse behind the White House. "It's such a phenomenal enterprise."
Healy, 55, succeeded Elizabeth Dole, who stepped down in early 1999 to pursue a short-lived run for the Republican presidential nomination.
As president and CEO of the Red Cross, Healy leads one of America's best known humanitarian organizations and the largest supplier of blood to hospitals. Unlike Dole, a lawyer by training, Healy is a doctor who has successfully mixed science and medicine with administration and government service throughout her distinguished career.
Healy is drawing upon her entire reservoir of professional experience to lead the 118-year-old charity through an obstacle course of new challenges.
The Red Cross faces a wave of costly new requirements to further improve blood safety, such as nucleic acid testing, a highly sensitive but expensive method for detecting HIV and hepatitis viruses in blood. In addition, blood donations are rising less rapidly than demand, making even tougher the already tough job of ensuring that blood is available when needed.
Hard sell. When the Red Cross came calling, Healy says, she was quite happy in her fourth year as dean of Ohio State University medical school in Columbus. Furthermore, just months before, she had successful surgery to remove a brain tumor.
"It never occurred to me that this would be the sort of thing I would be interested in," she says. But after talking with Roche, she quickly became intrigued by the possibility of taking the reins of the Red Cross.
"Once I sat back and really thought about it . . . it became obvious to me that someone with my background at this point in (Red Cross') history could make great contributions."
Healy, a scientist to the core, consulted with her husband, Floyd Loop, M.D., the CEO of the Cleveland Clinic Foundation, and their two daughters about the new job that would take Healy each week from Cleveland, where they live, to Washington.
After hearing the facts, her family gave her its full support, she says.
Since last September, Healy has commuted to her job at the Red Cross as she had commuted for several previous positions, including her stint at Ohio State and a run as director of the National Institutes of Health in Bethesda, Md., from 1991 to 1993.
In the latter post, Healy feistily defended the NIH--the principal underwriter of biomedical research in the U.S.--from congressional critics who alleged that several well-known scientists had misused government research funds and committed fraud or other wrongdoing.
Unfazed by the political maelstrom, Healy sought the Republican nomination for the Senate in a 1994 race to succeed retiring Sen. Howard Metzenbaum (D-Ohio). Her rival, Republican Lt. Gov. Mike DeWine, prevailed in the primary and captured the Senate seat.
Earlier in her career, Healy oversaw the research institute of the Cleveland Clinic. For eight years she was on the medical school faculty at Johns Hopkins University, where she also served as director of the hospital's coronary-care unit. During the late 1980s she was a science adviser in the Reagan White House, a first for a woman.
As a physician, Healy says, she knew something of the Red Cross' contributions to healthcare. "Modern medicine could not exist without a safe blood supply that is readily available literally on a moment's notice."
A convert. Now, Healy extols the humanitarian virtues of the Red Cross's relief work.
She has made several high-profile trips in the wake of devastating hurricanes in this country as well as to the refugee camps outside Kosovo last year.
For Healy, the charity work seems natural. "Who didn't learn about Clara Barton? Clara Barton was one of the women heroes that we heard about in grammar school," she says, pointing to posters and memorabilia of the Red Cross founder that adorn her spacious corner office.
"At heart I'm a missionary," she says of her approach to medicine and public policy. "From the time I was a little girl I've always been a missionary."
But it was another matter to contemplate running the 30,000-employee outfit that blends high-profile disaster relief with the equally vital but behind-the-scenes business of supplying nearly $1.4 billion worth of blood and related products to hospitals each year.
Under Healy, Red Cross has reorganized its management ranks to improve operational efficiency.
Besides eliminating a chief operating officer position, Healy has sought to streamline and decentralize the organization, better reflecting its mission.
Some say more work needs to be done. The sheer size and centralized approach taken by the American Red Cross presents an ongoing management challenge, says Durhane Wong-Rieger, a member of the Blood Safety Council of Canada and an expert on blood policy. A top-heavy bureaucracy that emphasizes decisionmaking by the headquarters office, she says, is at risk of losing touch with the needs of its field organization.
One task remaining on Healy's to-do list is to find a replacement for Jimmy Ross, senior vice president of the biomedical services division for the Red Cross. A retired four-star general, Ross oversaw the $500 million turnaround of biomedical services during his five-year tenure. He left in January to become president and chief operating officer of a defense consulting firm. Jacquelyn Fredrick, COO for blood services, is running the biomedical services division on an interim basis while a national search for a permanent replacement continues.
Seeking new revenues. Tight margins are an enduring problem for all blood suppliers, including the Red Cross. The AIDS crisis that gripped the Red Cross during the 1980s and early 1990s under Dole has subsided, and the organization's financial picture has brightened. The Red Cross was in the black for fiscal 1999, with $2.4 billion in total operating revenue, contributions and gains on investments against $2.3 billion in expenses.
But in the modern age of supplying blood to hospitals, blood banks have to be run more like pharmaceutical companies. And that takes money.
And Healy is applying her missionary zeal to Red Cross' demanding role as a supplier of blood to hospitals.
As she explains, biotechnology and pharmaceutical firms commonly sport after-tax margins of between 50% and 60%. "Our margins in our blood enterprise are in the range of 1% to 2%," she says. Those thin margins limit necessary spending on research, something Healy is determined to change.
Last year the Red Cross spent $33 million on research and development in biomedical services, a 10% increase from the previous year.
But that's still not enough, she says, for a $1.4 billion business.
She aims to beef up spending on science by leveraging the Red Cross' own investments with money from philanthropic and government sources.
Healy's Red Cross, like its hospital customers, also looks to better rates from Medicare for relief.
"HCFA should have as much commitment to making sure that we deliver the safest blood as does a physician," she says. "And if, in fact, their failure to adequately reimburse the product means that we cannot move into areas that will provide a safer blood product, then that seems to me to be absolutely unacceptable."
The Medicare payment for blood, like so many healthcare technologies, isn't direct. Instead it's usually wrapped inside a fixed payment for a given diagnosis or treatment.
Those payments usually lag the cost of clinical advances or quality mandates imposed by regulators.
Healy says she understands when hospital administrators, struggling to meet their own bottom lines, are challenged by the cost of better blood.
But she underscores the special role of blood in medical care: "Nobody gets a unit of blood unless it's a desperate situation."
