Whoever takes over the top post at Group Health Cooperative next year will be stepping into some pretty big shoes.
Cheryl Scott-who colleagues and industry observers say has become synonymous with Seattle-based Group Health-will retire as president and CEO at the end of the year, capping an illustrious and often tumultuous 25-year career with the nation's oldest and largest consumer-run healthcare system.
"Cheryl has set Group Health on a course of financial strength and clinical excellence," says the health plan's chairman, Grant Hendrickson. "She showed how Group Health can remain an independent industry leader in volatile, difficult times."
Indeed, when Scott took the reins of Group Health in 1997, the not-for-profit system was losing tens of millions of dollars as it struggled to adapt to the managed-care market. But through a series of carefully calculated changes-which included shifting the company's product mix, shedding unprofitable business lines and creating valuable alliances with key providers-Scott has helped establish Group Health as one of the Northwest's pre-eminent health systems, ending 2003 with 560,000 members and a net surplus of $150 million.
"I didn't want to be a CEO who has to look back to the good old days," Scott says of her retirement. "I wanted to leave at the top of my game, with good energy, at a time when I'm still looking forward and can continue to be a change agent."
While she has yet to determine her next career move, Scott says her current interests lie in tackling the uninsured problem and improving public education. The 54-year-old executive already serves as an associate clinic professor of healthcare administration at the University of Washington, her alma mater, and chairs the Alliance of Community Health Plans.
A fourth-generation Northwesterner born two years after Group Health was founded, Scott was educated in Seattle public schools and received her undergraduate degree in journalism. But a four-year stint at a local crisis center-where she was shot at, had knives drawn on her and watched people die-changed her mind about how she wanted to earn her living.
"It was clear to me that there was a real need for more leadership in healthcare," Scott says. "There were great doctors, nurses and therapists, but the management was uneven. By the time I left the clinic, I knew I wanted to pursue a career in healthcare ... because I saw it as a business with a heart."
Scott returned to the University of Washington to earn a master's degree in healthcare administration, then spent two years as assistant hospital administrator at University Hospital, Albuquerque. In 1979, she moved back to Seattle and joined Group Health as associate administrator of its Eastside Hospital, where she developed a training program for middle managers and automated the information system, and established new cost-containment and quality-assurance measures.
Scott moved up through a variety of positions at Group Health, including regional vice president, vice president of human resources and COO before taking over the top post from Philip Nudelman, who became chairman of Kaiser/Group Health. "I never imagined staying as long as I did," Scott says. "But the caliber of the people here and the purpose and the mission of the cooperative really get into your blood. And I haven't looked back since."
Group Health said it would conduct a national search for Scott's replacement.