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CEO’s prescription for sickly hospital

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in Best-Practices Leadership,Leaders & Managers

When Wright L. Lassiter III came on board in 2005 as CEO of the Alameda County Medical Center, and its flagship, Highland Hospital, it was losing millions of dollars each year.

HIV-infected blood was being tossed out with the regular trash. Nurses were openly defiant. And the place had churned through 10 CEOs in 11 years.

What followed was a turnaround so successful it now serves as a model worth emulating. Here’s how Lassiter turned around botched finances and a dysfunctional culture:

Grassroots money hunt. He told 85 managers, “It’s up to you” to find $21 million in cost cuts and new revenue. “We’re not going to solve this problem. You’re going to solve it.”

Odd-couple arrangements. Lassiter and his newly named COO, Bill Manns, formed cross-functional teams to spark fresh thinking.

For example, one team looked at the $96.50 kit used to test newborns’ umbilical-cord blood. They found a 29-cent kit that could do the same job. Savings: $322,000 per year.

Layoffs as a last resort. Only after combing for savings and new revenue did Lassiter and Manns consider layoffs, gaining buy-in from the unions, says Manns.

Removing toxic employees. In the old days, a doctor might ask a nurse to draw a patient’s blood, and the nurse might say, “Why don’t you do it yourself?”

That negative culture wasn’t unusual in the days before Lassiter arrived. In response, dozens of nurses were fired, a change that “made all the difference in the world,” says one doctor.

Eliminating bottlenecks. Collaboration has enabled the hospital to double the number of routine colon­os­copies performed each year, which equals more revenue for the system.

— Adapted from “Medical Wonder: Meet The CEO Who Rebuilt A Crumbling California Hospital,” Russ Mitchell, Fast Company.

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