As Warner Thomas cracked open a Weight-reduction plan Coke in a cold convention room the day after he announced he was leaving Ochsner Health, he was subdued and wistful when reflecting on his 24 years in New Orleans.
“It was a very onerous determination … actually onerous,” he mentioned, the chief’s typical assuredness lacking from his voice. “I really like New Orleans.”
He might be again, although. Warner is conserving his home in Uptown and plans to ultimately retire within the metropolis he’s referred to as residence since he turned the chief working officer of Ochsner at age 33. For now, the 56-year-old is renting in Sacramento, the place he’ll run Sutter Well being, California’s second-largest hospital system.
Within the wake of his departure, Thomas leaves a legacy of unprecedented progress in Louisiana. Ochsner Well being’s footprint swelled rapidly underneath his tenure, increasing from 8 hospitals and 38 clinics in 2012, when he became CEO, to 48 hospitals and over 300 clinics in ten years.
For some in Louisiana, Ochsner and Warner Thomas are synonymous, and the long-time government is taken into account a part of the system’s DNA. As his successor, Pete November, strikes from chief monetary officer to CEO on November 1, it’s unclear whether or not Ochsner will proceed buying partnerships, associates and hospitals at a speedy clip. For now, November says he is centered on the transition and the targets the hospital board already has in thoughts.
“The plan now we have in place will stay in place,” he mentioned. “Actually, we’ll take a look at exterior progress alternatives, however our focus has obtained to be caring for our sufferers and the communities we’re in right this moment.”
Ochsner has grown ‘explosively’
Ochsner didn’t got down to be the largest participant in Louisiana or the Gulf South, Thomas mentioned, however a number of pivotal strikes allowed it to achieve a foothold in lots of communities. Alongside the way in which, the system developed a network of charter schools, constructed two manufacturing facilities for private protecting gear, and finally turned the biggest non-public employer within the state.
“There’s solely a few well being techniques within the nation which have grown as explosively on this time interval,” mentioned Jeff Goldsmith, business advisor and founder of Health Futures.
For his half, Thomas bristles at the concept his drive is fueled by ambition for ambition’s sake. A remark from one other system’s stakeholder – that Thomas wakes up on daily basis and desires to “conquer the world” – is at odds with how he sees himself.
“They don’t know me,” he mentioned, shaking his head. “Folks don’t suppose I’m delicate, however I’ve a deep objective in what we do on daily basis.
“Are we fiscally accountable and ensure we function our group from a enterprise perspective? Completely,” he continued. “However the cause we do it… is about sufferers and about our communities.”
Thomas acknowledges it has taken a relentless optimism to information Ochsner from the place it was when he joined as COO in 1998 to the place it stands right this moment.
“I believe we do issues very nicely,” mentioned Thomas. “And if we do them nicely, why wouldn’t we attempt to influence extra lives and care for extra individuals?”
A defining merger and Hurricane Katrina
Thomas recognized two defining moments that allowed the system to increase. First, the Ochsner clinic and hospital merged into one non-profit basis, often called the Ochsner Clinic Basis, in 2001.
Previous to the merger, the for-profit clinic was owned by tons of of physicians with 26 places. The non-profit Alton Ochsner Medical Basis included an academic and analysis arm, Ochsner House Well being, the Jefferson Freeway campus and the Elmwood Health Facilities. The transfer made the entity extra highly effective, cemented its non-profit standing and centralized billing, assets and group buying energy.
“That was actually the defining occasion within the historical past of Ochsner to permit it to get to the place it’s right this moment,” mentioned Thomas.
The second second was born out of the aftermath of Hurricane Katrina. As nationwide chains retreated from waterlogged hospitals and the duty of bringing skittish docs and nurses again to town, Ochsner swooped in.
“Katrina landed 5 or 6 different hospitals of their lap after which they took off from there,” mentioned Walter Lane, a well being care economist on the College of New Orleans. Lane can be a board member of Slidell Memorial Hospital, an Ochsner affiliate since 2016, however was not talking on behalf of the hospital.
In an economist’s eyes, the development of hospital consolidation was inevitable primarily based on rising prices which have made it troublesome for small retailers to stay unbiased. However as a result of Katrina made New Orleans a much less fascinating market, bigger chains had been unsure about making a play for Louisiana’s market share. Thomas had an opportunistic imaginative and prescient of enlargement when different techniques had been in retreat.
“What Warner noticed was the development taking place nationally,” mentioned Lane. “Warner had this imaginative and prescient, I believe, recognizing in the event that they did not do one thing, somebody was going to.”
Ochsner Well being’s first buy after Katrina was three Tenet Hospital properties for $56.8 million, together with the now notorious Memorial Hospital, the place 45 sufferers died and controversy erupted over whether or not some stranded sufferers had been euthanized.
“That was an enormous wager at the moment,” mentioned Thomas, who described himself as a realist, however one which possesses an optimism that enables him to determine most challenges.
“I believe what we knew is that New Orleans was going to return again, however we didn’t know the timeframe,” he mentioned. “We knew that town could not achieve success if it did not have an incredible healthcare infrastructure.”
Thomas instructed the board that in two years they might in all probability be questioning why they purchased the Tenet hospitals, and in 5 years they’d be glad they did.
Thomas made the primary name to Tenet in late September, simply weeks after Katrina whereas he was nonetheless dwelling in his workplace on Ochsner’s foremost campus. Pete November was the lawyer on the opposite facet of the Tenet deal.
November’s problem
November spent a lot of his youth in Kentucky hospitals along with his mom, a single guardian who labored as each a house well being and oncology nurse.
“I spent plenty of time with my mother in hospitals within the afternoon, ready for my grandma to select me up or ready for my mother to get off her shift,” mentioned November. “My mother solely cared about one factor, and that was caring for individuals.”
November has been at Ochsner for 10 years, recruited by Thomas after they negotiated the Tenet sale, and mentioned he’s now centered on the transition. Transitioning hospital techniques could be notoriously troublesome after long-time CEOs exit, business consultants mentioned.
“Plenty of instances it’s actually onerous to comply with,” mentioned Goldsmith. “Usually the charismatic CEO would not do the onerous work of constructing the following two layers of management so that somebody is able to getting into his or her footwear, and persevering with to rock and roll.”
Thomas mentioned he feels OK leaving Ochsner now as a result of the hospital, and its succession plan, are in a great place. For the previous 20 years, he has recognized who may succeed him in a yearly analysis. When the Sutter supply got here up, the board already had that record of names.
Nationally, many hospitals are in worse monetary positions than they had been a 12 months in the past due to rising prices. November’s problem might be to align latest companions and associates with Ochsner’s method of doing issues.
“If you develop that quickly, you’ve got actually obtained an incredible administration difficulty in your palms,” mentioned Chip Kahn, the President and CEO of the Federation of American Hospitals. “It takes a few years to carry everyone into your tradition.”
Louisiana is a very precarious market due to its poverty. Over 60% of births are paid for by Medicaid, Kahn identified. And though the inhabitants is sicker than the U.S. common, the illnesses most frequently handled right here – infections, multi-organ illness and extreme most cancers – do not all the time present hospitals with adequate funding, particularly if the sufferers are insured by Medicare or Medicaid.
“You have got plenty of these sufferers in a spot like Louisiana, with each the ageing of the inhabitants and a poor inhabitants,” mentioned Kahn.
Thomas mentioned he was drawn to the California job as a result of its attain is extra important.
“I really feel like Ochsner is in a significantly better place right this moment than after I got here right here in 1998,” mentioned Thomas. “And it is in a significantly better place right this moment than it was after I took over as CEO in 2012. What excites me about Sutter is that I can have a broader influence and doubtlessly assist one other group attain its potential.”
Thomas didn’t say what he could be paid in his new position, however the Sutter CEO in 2019 made about $5.5 million in compensation, lower than Thomas’ $6.8 million in 2020. However Sutter’s earlier CEO, Patrick Fry, earned about $13.4 million in 2015.
