Imagine finally landing that big job as chief executive officer and discovering that the manager who'll be reviewing your performance is Jack Welch, the tough-minded former boss of General Electric Co. and a consensus choice as one of the most effective executives ever.
Intimidating? That might be one way to describe the scenario.
Just ask Ellen Zane about the sometimes daunting impact of such sky-high expectations in her somewhat similar situation. A veteran healthcare executive who ran a successful hospital and physician network throughout the 1990s, the hard-charging Zane was appointed in December 2003 as the first woman president and CEO of Tufts-New England Medical Center in Boston.
Zane answers to a high-powered board of directors that includes a figure whose stature in the healthcare industry nearly matches Welch's reputation in the world of big business. That would be Stuart Altman, an acclaimed industry insider who has helped shape America's healthcare policy for more than three decades on everything from hospital payment systems to universal health coverage. He's one of the 20 members of Tufts' board who oversee Zane's decisions and direction.
How, one might ask, do you manage to run a big hospital when you have one of the nation's foremost healthcare economists peering over your shoulder?
"If you know Stuart at all, you know that he's intimidating intellectually but not personally," Zane says. "People feel very comfortable about picking his brain; they find him not only stimulating but down-to-earth. As busy as he is, the big brain that he brings to the table is quite amazing. He's very engaging, very funny. You know he's good at what he does-and he knows he's good at what he does-but he doesn't wear it on his sleeve."
For his part, Altman, a professor since 1977 at Brandeis University who has been in and out of government since the early 1960s, chuckles at the notion that his professorial presence might be imposing to some. "I've never thought of myself as intimidating," he says. "I certainly try not to be, in the sense that one is overbearing or believes that their views should always win out. The other thing is that this is a board that's made up of very successful people-this is not a group that would be intimidated.
"If anything, I think it's the other way around," he says.
(Altman isn't the only renowned economist serving on the boards of healthcare organizations. See story, p. 28.)
In an era of Sarbanes-Oxley and the specter of increased oversight of not-for-profits by the federal government, the addition of industry experts like Altman is a logical reaction, observers say. The Senate Finance Committee is now considering tough new guidelines relating to the size, structure and composition of the governing boards of not-for-profit businesses.
The importance of stature
If new guidelines are passed, says Michael Peregrine, a lawyer with McDermott, Will & Emery, "A lot of boards are going to have even more of an incentive to appoint people who bring a certain level of expertise. But the boards of larger, more sophisticated healthcare organizations are already looking to broaden their perspective. These billion-dollar-a-year organizations are looking to raise the bar, and they're well-served by having in their midst someone with broad experience."
Even though the toughest new federal accounting rules don't apply to not-for-profit hospitals (at least not yet), the message remains clear: "The spinoff from Sarbanes-Oxley is to seek people with specific expertise, especially in the areas of healthcare financing," Peregrine says.
Altman acknowledges that the days are long gone when the local hospital can get by with filling boards with the local auto dealer, banker or restaurateur. "You are there as a critical community sounding board, and you have a fiduciary responsibility," Altman says. "You're not just there to make sure that it makes money."
Altman, who once served as Brandeis' interim president, casts a very long shadow. A graduate of the City College of New York, he went on to earn a master's and a doctorate in economics at the University of California at Los Angeles before signing on as an economics consultant with the Defense Department in 1964. Since then, he's served on about a dozen key government advisory boards on healthcare and other issues.
"It's like that old advertising campaign, 'When E.F. Hutton talks, people listen,' " says Joe Morone, chairman of Tufts' board of trustees and the president of Bentley College in Waltham, Mass. "Well, when Stuart talks, we all listen."
Morone says Altman has a way of easing tensions and helping the disparate members of the Tufts board see the bigger picture on important issues facing the 394-bed academic medical center.
"You can be deeply enmeshed in a debate about something that's highly specific about a particular problem and a particular time," Morone says. "And he has a way of putting those debates into a much broader context, which tends to diffuse the tension. That kind of perspective is marvelous and very valuable. He has had a powerful effect."
As far as Zane is concerned, any apprehension about not quite measuring up to some exacting standard of excellence is balanced by the comfort of having someone like Altman on hand to provide advice and long-term direction.
Altman has considerable experience on the boards of Boston-area hospitals. He spent a dozen years on the board of Beth Israel Deaconess Medical Center, serving until he reached his term limit in 1990. He also was named to a Massachusetts state healthcare commission and was an adviser to the state attorney general on healthcare policy.
"I think I do understand many of the forces that are affecting (healthcare) in particular, both nationally and in Massachusetts," says Altman, who has been on the Tufts board for three years. "So I try to be helpful to the board whenever I can. I try not to overdo my knowledge of healthcare policy to hog discussions."
Mitchell Rabkin, a physician who was Beth Israel Deaconess' CEO from 1966 through 1996, a period that spanned Altman's board tenure, described his longtime associate as a positive force in healthcare who brought a combination of insight and humor to his oversight role. Altman, who has exercised influence in both Republican and Democratic administrations over the years, was "pretty much a heavy hitter by the time he first became involved" with the hospital.
Now CEO emeritus of Beth Israel Deaconess, Rabkin does not begrudge his close competitors at Tufts the chance for unfettered access to the sage advice of a healthcare guru like Altman. "My feeling," he says, "is that every hospital should be trying to be the best it can be. I think it's fine."
Altman was the first chairman of the Prospective Payment Assessment Commission, the panel formed in 1984 to advise Congress on the Medicare payment system and a predecessor to the Medicare Payment Advisory Commission. He also was a member of President Clinton's health policy transition team and chairs the Council on Health Care Economics and Policy, a nonpartisan think tank that is co-sponsored by the Robert Wood Johnson Foundation. He is also a member of the National Academy of Sciences' Institute of Medicine.
The best and the brightest
Andrew Epstein, a physician who is executive vice president of the Boston-based Bard Group, a healthcare consultancy that has worked with many area hospitals on governance and leadership issues, says the best and most talented CEOs will always clamor for a board member with the kind of background and knowledge that Altman boasts.
"The notion of having somebody with this level of expertise and national scope is really valuable," Epstein says. "Because they can either help to support the CEO's own notions, and validate them, or provide an important enhancement to the CEO's thinking to make sure the strategy is even more robust. Even the best CEOs want a substantive dialogue."
For less accomplished or confident executives, the presence of an individual with Altman's stature might be a bit humbling. But Zane and other key members of the board are quick to point out that Altman isn't trying to manipulate the board from behind the scenes. He is direct, sometimes blunt and occasionally forceful but chooses his words carefully and leads by example, they say. And he doesn't bend the board to his will by virtue of his personality, which is described by many as fairly low-key for such an influential industry expert.
"I wouldn't say that he's even one of the more vocal members of the board," Morone says. "He's quiet until he can bring some pearl of wisdom that puts everything in context for us. When he has something to say, it's usually at a pivotal point."
Altman is among several high-powered officials on the Tufts board. In addition to Morone, who will leave his college presidency later this summer to assume the CEO position at paper-supply giant Albany International Corp., the board also includes Lawrence Bacow, president of Tufts University. Bacow is a scholar who holds an economics degree from the Massachusetts Institute of Technology, a law degree from Harvard and a doctorate from Harvard's Kennedy School of Government.
"Nobody dominates the board," Bacow says. "This is definitely not a board of shrinking violets or of those looking to one person to be the oracle. I would say each board member has something to contribute. And Stuart's contributions are incredibly valuable. In Stuart's case it's his encyclopedic knowledge of the industry and, especially, of government policy."
Bacow, like Morone, praises Altman for his ability to boil down issues to their essence and help set a clear agenda. "We turn to him for the big picture," Bacow says.
The highly charged atmosphere of big intellects hasn't entirely eclipsed Zane, who came to the job with a strong background of success in a competitive metropolitan area. Before her appointment at Tufts, she spent a decade as president of Partners HealthCare System. She also served as CEO of 174-bed Quincy (Mass.) Medical Center. Zane, who seems to be pulling the system out of a deep financial hole-Tufts lost $54 million over the past two fiscal years but posted a modest operating profit in the first quarter of this year-says Altman gives the medical center a big edge as she plots long-term strategy.
Part of that strategy appears to involve creating a new bond with physicians who can provide a steady stream of referrals to the academic medical center. Earlier this month, Zane announced plans to purchase a 164-member primary-care group, almost tripling the existing number of network doctors.
"I can't be specific about the strategies-those are our deepest, darkest secrets," she says. "But I can tell you this: (Altman) provides a perspective that enlightens the process. He gives us an enormous strategic advantage."
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