Kaiser's Benjamin Chu named president, CEO of Memorial Hermann

Dr. Benjamin Chu will become Memorial Hermann Health Systems's new president and CEO, marking the first time a physician will lead the Houston-based system. Chu begins the post in June.

Chu, 64, currently serves as executive VP of Oakland, Calif.-based Kaiser Foundation Hospitals and Health Plans. He also serves as group president of Kaiser Permanente's Southern California and Georgia regions.

The way healthcare is moving requires more clinical input, Chu said. While he doesn't believe in superimposing physicians in executive roles, a clinical background can be crucial.

"Having a clinical perspective than can more easily relate to doctors' and nurses' experience is a way to galvanize the entire system," he said.

Leadership is also crucial to Chu, and one of his goals is taking the time to develop a core of leaders at Memorial Hermann.

“I think this is my last job," Chu said. "To be able to make an impact, you have to really put the time in.”

While not a requirement, his history as a physician was an important trait for the new leader, said Will Williams, Memorial Hermann's board chair and managing director at JPMorgan Chase & Co. “All of our candidates had terrific expertise and qualities, but Dr. Chu had the total package.”

The trend to hire physicians as CEOs has been driven by the need for hospitals and health systems to change their operations as the delivery of healthcare changes. Physician-executives also often have greater credibility with clinicians than nonphysician administrators on clinical issues.

At Kaiser, Chu leads health plan and hospital operations for 14 hospitals and over 200 medical offices that serve over 4.5 million members in Southern California and Georgia. During his tenure at Kaiser, Chu implemented a fully integrated electronic health record system and population-health management tools. He managed a multiyear, $13 billion capital program and increased the health plan's membership to 10.5 million.

Chu also previously served as president of New York City Health & Hospitals Corp., and in 1994, served as acting commissioner of health for the New York City Health Department. He also was senior associate dean at Columbia University's College of Physicians and Surgeons, as well as associate dean and VP of clinical affairs at New York University School of Medicine and Medical Center.

In 2015, Chu was number 26 on Modern Healthcare's 50 Most Influential Physician Executives and Leaders.

He takes over for current President and CEO Dan Wolterman, 59, who is retiring after holding the position since 2002. Wolterman will officially step down on Aug. 1 and will assist Chu in his transition.

When Wolterman announced his retirement, board Chair Williams said the next CEO would need to be "visionary and thoughtful," someone who understood how healthcare is changing and how the organization needed to change along with it. During Wolterman's tenure as CEO, Memorial Hermann quickly expanded to 13 hospitals and more than 200 care sites.

For two consecutive years, Memorial Hermann has led the country's most successful accountable care organization, according to the system.

One of the system's challenges is to increase membership in its health plan. Houston leads the country in uninsured, Wolterman said. According to a Gallup-Healthways Well-Being Index poll, 20.8% of Texas residents did not have health insurance in the first half of 2015.

“How do we improve the health of our community when you have so many people uninsured and unable to access the system?” Wolterman said.

Chu said one of his challenges at Memorial Hermann is to better anticipate what care patients need and provide it for them.

“Healthcare all over the world is a passive endeavor. We wait until people are sick or have a complaint before we see them," Chu said.

Memorial Hermann made national news last year after staff at a women's health clinic called police on an immigrant patient using a fake ID, unaware that she was in the U.S. illegally.

Memorial Hermann reported $4.4 billion in operating revenue for its 2015 fiscal year, according to Modern Healthcare's hospital systems financial database.