Health Care Hall of Fame - 2006

C. Thomas Smith says he ended up in healthcare "somewhat accidentally," after a college fraternity brother introduced him to the field.

Intrigued, Smith contacted John Gilbreath, a member of his church who also was the chief executive officer of what is now known as Baptist Health in Little Rock, Ark., where Smith grew up. Smith spent the summers of 1958 and 1960 at the hospital, first as an administrative intern and then as acting personnel director, and was able to try a bit of everything, including mopping floors, watching the switchboard and observing surgeries.

"That was it," Smith recalls. "I just fell in love with the field. I knew it was what I wanted to do, and like they say, the rest is history."

That is how a person who briefly considered serving his church instead received an MBA in hospital administration from the University of Chicago in 1962 and went on to lead nationally recognized teaching hospitals and other influential healthcare organizations, such as healthcare alliance VHA. "To me, this seemed the best of both worlds," Smith says. "It was a way of helping serve the community, but it also combined it with business, the intrigue of how to make organizations work."

Smith, 67, may have gotten into healthcare by accident, but his achievements since that fateful college encounter have been anything but accidental, say colleagues, friends and family. He would have plenty of opportunities in the years that followed to prove his skill at making healthcare organizations "work."

`He knew where he was going'

Among the colleagues who have known Smith the longest is Joseph Powell, who comes from a family of hospital administrators and was a longtime CEO at Baptist Memorial Hospital in Memphis, Tenn. Smith worked at Baptist Memorial Hospital, Memphis, as an administrative intern between his junior and senior years at Baylor University, and then worked there for five years after he received his MBA, as an administrative assistant and then as an administrative associate. Frank Groner, the hospital CEO at the time, asked Powell to be Smith's "shepherd," Powell recalls.

"He was one of the most normal smart people that I have ever known," Powell says of the young Smith. "He was very goal-oriented. He knew where he was going, what he wanted to accomplish, and he was developing his plan."

Smith spent more than 30 years in hospital administration, culminating in a 14-year stretch as president of Yale-New Haven (Conn.) Hospital. In 1991, he became president and CEO of VHA, in Irving, Texas, a position he remained in until he retired in 2003. Among his other career highlights, Smith served as chairman of the American Hospital Association, was vice president and executive director of the hospital and clinics at Henry Ford Hospital in Detroit, and was associate director of the University of Minnesota Medical Center in Minneapolis, as well as serving on numerous healthcare company and association boards.

"He combines his intellect with his ability to express himself and influence others very effectively," says Joseph Zaccagnino, who succeeded Smith as president and CEO of Yale-New Haven Hospital and considers Smith a mentor. "He is a gracious individual of the highest integrity, and he has positively impacted each of the organizations that he has been associated with, and the people that operate them."

Zaccagnino, who worked closely with Smith during his tenure at Yale-New Haven, says Smith was able to make physical improvements to the hospital while at the same time producing stronger financial results. He was also responsible for introducing one of the first diversity training programs in the country at the hospital back in the 1980s. In 2001, Yale-New Haven became the second healthcare provider ever to receive the U.S. Labor Department's Exemplary Volunteer Efforts award, in part for its commitment to diversity. Zaccagnino credits Smith with planting the seed that led to that honor.

"Recognizing the importance of diversity in the workforce, Tom worked to identify appropriate resources to help us formulate and implement a cultural diversity training program," he says. "I would attribute his early work as a major factor in enabling the organization to achieve that some 14 years after he was gone."

Cultural diversity was not the only way in which Smith was ahead of his time. One of his passions was improving clinical performance, and he was able to do it on a national scale while at VHA.

When Smith became president and CEO of VHA in 1991, he had already been a member of its board for four years. The alliance was founded in 1977 to encourage not-for-profit hospitals to use their collective clout to win leverage with vendors through group purchasing agreements, but Smith also saw it as a platform to push for quality.

One of Smith's early goals was to get chief medical officers from member hospitals to admit that performance was not always optimal. He traveled around the country encouraging VHA members to work together to improve performance, recalls Curt Nonomaque, Smith's successor.

"The bottom line was, this was about saving lives," Nonomaque says. "Tom really took the initiative to start a program where our members could go out and show measurable results."

In 1998, Smith hired Stuart Baker -- now the alliance's chief operating officer -- as VHA's first executive vice president of clinical affairs, to oversee programs to improve patient safety and define practice-improvement measures.

Baker notes that Smith began implementing ideas to improve quality at VHA hospitals even before the Institute of Medicine came out with its watershed report on the topic in September 1999. "He was paddling upstream for this," Baker says. "As a result of Tom's presence here, the clinical performance and patient safety at VHA hospitals is better than before in a documented, measurable way."

Five years ago, VHA started a program called the CEO Work Group for Clinical Excellence. All of its 15 founding organizations have achieved 90% performance on evidence-based guidelines for treating heart attack patients, and the group has since moved on to tackle ICUs, pneumonia, stroke and surgical infection prevention.

In addition, in 2005, 75% of VHA members showed measurable improvement in certain nationally recognized quality indicators, and this year, VHA aims to get all of its members to be able to do the same, Nonomaque says.

"It's one thing to say we're trying to improve the quality of care, it's another thing to be able to demonstrate that you've actually done it," he says. "That's the way the country is going, and he was ahead of his time."

In addition to tackling quality, Smith managed to bring direction to an organization that had been suffering from a lack of morale, insiders say. Gordon Sprenger, one of VHA's founders, a longtime CEO of Allina Health System in Minneapolis, and the chairman of VHA's board when Smith was hired, says the organization "had some real problems, and we needed someone who had tremendous credibility in the field."

At the time, VHA's entire future was in question because of concern that the organization was not bringing value to its members, Sprenger says. The board was looking for a CEO who could reorganize the alliance without alienating its members.

"It was clear in my mind and to others on the board that the single person who could do that was Tom Smith," Sprenger says, "and he didn't disappoint us."

During his tenure, VHA's membership swelled, as did the volume of purchasing handled under its contracts. In 1991, there were roughly 700 members and the alliance was handling some $4 billion in procurement annually, according to Smith. When he retired 12 years later, there were some 2,200 members and $22 billion of purchasing handled by Novation, the supply business jointly operated by VHA and University HealthSystem Consortium since 1998, he says.

`Back to basics'

"Not only did he get us back to basics, but he also recognized the times and realized the value to members if they got on the quality-of-care bandwagon," says John McMeekin, the former president and CEO of Crozer-Keystone Health System in Springfield, Pa., and a longtime VHA board member. McMeekin says it is Smith's no-nonsense leadership style that allowed him to achieve so much at VHA. "Tom took an organization that was stumbling, had grown bigger than I think it was able to manage itself, and needed to be shaped up a little bit, trimmed down a bit, and better focused," he says. "What Tom did in his time at VHA was clearly a lifesaver for that organization and a very distinguished contribution to the shareholders and members of VHA and also to the field of healthcare management."

Smith agrees that VHA was a "struggling organization" when he took the helm. "My goal was to bring the organization together around a common vision, coalesce membership around that mission and around a senior management team. I believe we had some success in doing that."

Nonomaque, who worked closely with Smith for almost 11 years at VHA and rose up through the ranks before succeeding him, says Smith's perfectionism and desire to lead by example have influenced his own leadership style. "Tom was famous for looking over his bifocals at you, giving you the `Tom Smith' look," he says. "For folks who didn't know him, you had to be prepared, because he would ask the important, vital question, and if he didn't think your answer was up to snuff, he'd let you know."

Smith was also "unflappable," Nonomaque says, which served him well when the business practices of the entire healthcare GPO industry were challenged near the end of his tenure by a U.S. Senate subcommittee in a series of hearings that were public and somewhat painful. "He always handled the criticism in a respectful manner," Nonomaque recalls. "Even though he didn't agree with all the comments being made, I think he always handled them professionally."

Nonomaque says the GPO inquiries were probably among Smith's greatest challenges at VHA. "Why it was so hard was that if you know Tom Smith, you know that he has the highest standards of personal integrity," he says.

Integrity is the quality Martha Smith, his wife of 45 years, singles out when asked what she admires most about her husband. "I don't think the man has told a lie in his life," she says. "He didn't do business that way."

Although most of his colleagues say Smith tends to be a serious person, both his wife and Nonomaque note that he has a lighter side and is not afraid to show it. He is not above doing the chicken dance or the macarena. And he has also been observed wearing very brightly colored sport shirts on the golf course.

Now that he has retired, he has even more of an opportunity to give in to his sense of humor with his son, daughter and two grandchildren, Martha Smith says.

"His grandson calls him, `Bald head,' " she laughs, "and Tom just thinks it's hysterical."

During his career, Smith's greatest personal challenge was finding a balance between his demanding work and his family life, she says. For his part, Smith counts himself fortunate in both realms. "I've been exceedingly lucky to have the spouse I've had for all these years," he says. "Obviously, at the end of the day, when the career is over, what you've got is your family. You start with them and you end with them. One has to take pride and joy in that first and foremost."