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A Unique Vision

Henry Ford Health System CEO Nancy Schlichting on fostering health care innovation and talent

By Dawson Bell

 Pages 10 – 13

Henry Ford Health System CEO Nancy Schlichting is on a glide path to retirement after 16 years with HFHS and four decades in health care, with stops in New York City, Chicago, Akron, Columbus and Philadelphia. Schlichting is leaving on a high note, with the system recognized for a Malcolm Baldrige National Quality Award, the revival of its iconic Detroit hospital and Midtown neighborhood, and the successful launch of Henry Ford West Bloomfield. Schlichting is on the Detroit Regional Chamber’s Executive Committee, having previously served as board chair and chair of the 2012 Mackinac Policy Conference. She recently sat down with the Detroiter to discuss her retirement, health care innovation and what comes next.

What attracted you to the field?

My career actually started when I was a 15-year-old volunteer at a hospital in Akron, Ohio. I originally wanted to be a physician, but I passed out at the sight of blood too many times. So, I found this thing called health care administration … and really felt that it fit me very well. It was complex. It was interesting. It just seemed like important, rewarding work.

What is the most critical component of effective leadership?

I think my fundamental job as a leader is to create a great environment for the people who work in the organization, and I have a basic philosophy in health care that we have to take care of the people who take care of people.

What’s your assessment of the overall health care system. Is it working?

No. I’ve always had concerns about the model11 of how we drive cost, access, quality. I think the quality curve has gotten a lot better. I think the Affordable Care Act has allowed better access. I think the payment model continues to reward the wrong thing, but we’re moving now toward a more rational approach. The difficulty is … that transition. Health care has become a huge portion of the American economy … 18 percent of GDP. As we work to reduce unnecessary (costs), we end up taking a hit on the revenue side. And yet others in the marketplace (doing the opposite) end up with more revenue. It’s a crazy world. To say that the health care system is working, probably not the way it should.

Health care is, as you say, a huge part of the economy. What is the role of HFHS in the local economy, in economic development?

The economic importance of health care is incredible. If you look at most communities today, health care is the major employer, but we are a true anchor organization in Detroit. We not only looked at some of the more traditional ways we could contribute – whether it’s jobs, obviously improving the health status of the community – but also the neighborhood around us. It’s a very symbiotic-type relationship. There’s a reason we’re called anchors. We don’t move … or relocate. We want to be part of the solution in Detroit.

How about the Detroit Innovation District, for which you serve as chair of the advisory committee?

This kind of came out of the Midtown work that we’ve been doing – how we buy locally, job creation. We started building our Innovation Institute a few years ago. We now have well over 300 projects. We’ve had our first commercially developed product, the (more patient-friendly) gown. We’ve now produced 35,000 of these with Carhartt for our patients. The idea … is that we create a physical, geographic area called the Detroit Innovation District and focus on three things. One is the real estate itself, to create better coordination and collaboration in the planning of the space. The second is commercialization. And the third is the knowledge economy. An example of that is the College for Creative Studies – the reason we have the new patient gown. We had students that came over … and they looked at things from a different lens.

What are the keys to attracting and retaining talent at a big urban health center?

I think it is your culture, the environment you create. People are looking for opportunity, a place where they can develop their careers. Frankly, it’s a lot about leadership, too. Leaders attract great people. Sometimes organizations want to put their people in a box. We try to keep that box expanding. I think that’s how you attract talent and keep talent. You create an environment that they love working in every day, with leaders who support them.

What can you tell us about Wright Lassiter, your designated successor?

I began talking to the board about leadership succession several years ago. They asked me to look around. It was a bit of happenstance. Wright and I served on a panel over a year ago, and he got up and talked about the innovation work he was doing in California. I was taken aback. So, when I got back I did what we all do. … I Googled him. Then I called him, and I said, “We’re doing succession planning, and I would really like the opportunity to get to know you.” The more I talked to him, the more I got to know him. … His demeanor, his style, his values, his intellect and strategic approach to things were all very intriguing to me. … He’s been here now for a few weeks, and I think people are taking very well to him. I think he’ll be a great fit.

What do you think of as your most lasting accomplishment?

I think probably the most important thing was changing the culture of the organization… to be more people-focused. I think the approach I’ve taken has always been to put people fi rst, patients and staff. The three most significant distinct accomplishments are the turnaround of

Henry Ford Hospital, the investments we’ve made. We made decisions to make investments in Detroit when others were not. Second, was the Baldrige Award. I think the quality journey we’ve been on has made a fundamental difference. Third is building a brand new hospital (in West Bloomfield) in 2009 and having it work. Those are things that I hope will be lasting and positive changes.

What’s next for Nancy Schlichting?

I don’t want another big job. I want to contribute in a meaningful way intellectually. That could be on boards, it could be teaching, some consultation. I want to contribute more to the community … to kids or people in need, and to take better care of myself. I love playing tennis, golf. I love to swim, and I’m trying to be a boater … but that’s really a stretch.