John W. Polanowicz Interview Transcript

The following is a transcript of our interview with John Polanowicz To find links to the audio files and more information about the interview, please click here.

These transcripts are made possible by a gift from the NNEAHE.



Mark Bonica:
 
Welcome to The Forge, John.
John Palonowicz:
        Thank you for having me.
Mark Bonica:
        You went to the United States Military Academy at West Point where you majored in engineering. Why did you go to West Point and how did you choose engineering?
John Palonowicz:
        The second part of that is the easiest. At the time, the only degree that West Point gave was a Bachelor of Science in Engineering, so it was N of 1 in terms of the degree choice. But I had been interested in going to an engineering school in any event and had an opportunity to go to West Point. Was already thinking about doing an ROTC scholarship. The combination of a great engineering school with a liberal arts basis and going to West Point made the choice pretty easy.
Mark Bonica:
        Within engineering, what was your subfield?
John Palonowicz:
        Actually, I spent most of my time around computer science, computer science and math at the time. Everyone is required to do a series of core courses around basic engineering, mechanical engineering, physics, electrical engineering. After I did those, I had some affinity on the computer science side so stayed with that.
Mark Bonica:
        Interesting. When did you know you wanted to serve in the military? I mean going to West Point implies a tour afterwards. When did you know, "This is something I want to do"?
John Palonowicz:
        I think as I started looking at going to colleges, grew up in upstate New York, oldest of four, was going to be the first one in the family on either side to have gone to college, to perfectly honest, I look at the military service initially as a way to get to college. It was a way to help pay the bills to go to a college.
        Then a West Point cadet had come to talk to our school about the academy. I had known his brother. I had actually played sports against his brother for a long time, so I had known him as he was older. He talked to me about West Point. I didn't really know that much about it. I went down and visited. I will tell you, by the time I finished the visit and I came back, I'm like, "Okay, this is where I want to go. This is what I want to do."
Mark Bonica:
        What was it about it that sold you?
John Palonowicz:
        You know, first off, the place in and of itself is impressive. It's an amazing place. The time that I spent there, both in terms of the classes, and then we were doing some athletic things while they were there, they just felt comfortable. It was smart, driven people who by and large didn't take themselves too seriously, which was good. There was a lot of focus on athletics. I think they do a great job at it, so when you come back it's like, "Oh my gosh, this is exactly where I want to go."
Mark Bonica:
        You were commissioned in 1984. What branch did you go into?
John Palonowicz:
        I chose aviation. Went to Armor Basic because this was before the aviation had their own basic course. From there, Airborne School, Ranger School, Air Assault, and then finally got down to Fort Rucker to learn to fly helicopters.
Mark Bonica:
        What did you fly?
John Palonowicz:
        I flew Black Hawks. I flew Black Hawks.
Mark Bonica:
        You served in the Army for about six years with your final position as a company commander for a Black Hawk assault helicopter company. What was the mission of that organization? Tell us a little bit about what you were doing.
John Palonowicz:
        I was in the 7th Infantry Division Light, which is now deactivated. The Army was testing the new light infantry concept, so it was infantry units and field artillery, all that had very few vehicles. We had two Black Hawk companies supporting a 10,000-man infantry division. We were the guys that flew the infantry in. We hauled field artillery pieces around. We moved the field artillery. We did resupply runs. Basically anytime the units were in the field, we were in the field to support them, which was great. It was a really good unit, tons of flight hours, and really interesting missions.
Mark Bonica:
        Roughly how many men were under your command?
John Palonowicz:
        I had about 120 men and women under my command. We had female aviators and female crew chiefs, in addition to platoon sergeants, and first sergeants, and everything else.
Mark Bonica:
        Okay, wow. How many Black Hawks were in that?
John Palonowicz:
        In the company, there's 15 Black Hawks, three platoons of five apiece.
Mark Bonica:
        What lessons do you recall from your time in the Army? What did you learn about leadership and so forth?
John Palonowicz:
        Yeah, I think the main thing, and this really started, and they tried to grill this into you at West Point, but a big part of being, I think, an effective leader, whether it's in the military or otherwise, is this concept of selfless sacrifice, putting the men and women that work for you first, holding them accountable, but providing them the tools and the supports that they need to do their job. Candidly, a lot of the things I have learned from when I was a platoon leader, to when I was an executive officer, and then a company commander, you still use today even.
        It's kind of funny. People are often like, "Oh, well, it must be so hard doing this given that in the military it's all people do what you say." We're in an all-volunteer Army, so it's not the '50's pictures of the drill sergeant barking out commands and everybody hopping to. A lot of what I learned there, and a lot of what most of the individuals coming out of the service academies suits them very well in today's business environment.
Mark Bonica:
        You served in the Army for six years. You're a West Point grad and a pilot. It sounded like you had some exciting things. What made you decide that's enough time?
John Palonowicz:
        Yeah, so I finished up my company command after I had done some combat time in Panama during the Noriega invasion. After I gave up my company, because of the mission that we had, I spent in the last two years that I was in about 40 or 50 days at home. I was deployed to Panama, to Uruguay, to Paraguay. I was in Korea. I was in The National Training Center, the Joint Readiness Training Center. Just not around much.
        At the time, I had the conversation with our branch officials to say, "I will go any place in the world as long as it's an accompanied tour, so that my wife could come with me." Who she had a JAG commission because she had gone to law school while I was basically deployed for that whole time. The response back was, "That's great. You need to go to Korea on an unaccompanied tour for 18 months." I'm like, "No. I'm not going to do that." They talked about potentially if I didn't want to do that, I could go back to school and teach at West Point. I was, candidly, at that point, I was just burnt. I'm like, "Really? I've done this, and this, and this, and this. Send me any place in the world, just as long as my wife can come."
        Now today, with the multiple deployments, there's many of these stories today. Back then, not in what has been the longest conflict that the United States has been in. The amount of time that I spent away was almost unheard of. I thought it was a relatively minor ask given you've got the whole globe to send me to, just send me someplace where my wife can come who I haven't seen much for the last two years. At that point, I decided to get out.
Mark Bonica:
        You left the Army. You went to work for Stryker, which is a medical technology company. What was your role and what was it like making the jump from flying helicopters and being in the Army, to working in a medical technology company?
John Palonowicz:
        Coming out of the military, there's an entire industry set up around identifying and hiring junior military officers that are coming out of the military. At the time, there's two major tracks that you went. There was a lot of interest in having the junior military officers be sales reps, so pharmaceutical sales reps, or medical device sales reps, or going into an operations role.
        I can remember I was in San Francisco at a junior military officer recruiting thing. I had an opportunity to meet the team at Stryker. The individual that I would be working for was a Stanford grad, Stanford MBA, Navy nuke guy. A friend of mine from West Point already worked at Stryker as an operations guy. When they talked to me about an operations role there, there was some people that I already knew there, some people that had relatively similar experiences.
        The company Stryker, at the time, under John Brown, had prided itself on 20% growth year on year and they had done it for 15 years in a row or something. The company was really in an exponential growth mode. It was a good fit and I didn't have to move, which was even better.
Mark Bonica:
        But you weren't there all that long because you shortly after went to Stanford Business School yourself and earned your MBA. Why the MBA?
John Palonowicz:
        The individual that I mentioned, the Navy nuke guy who I worked for, Stanford undergrad, Stanford MBA, after I had been there about a year and a half or so pulled me aside and said, "I think you really should think about getting an MBA." Actually, I can remember having an interesting conversation with him about, "I don't think I really need it. This is good. I think I'm doing a good job." He said, "Oh no, no, no. You're doing a great job." He goes, "But if you want to go to the next level, either in this company or in other companies, I think it's really important for you to consider getting an MBA."
        I listened. Did the GMAT prep course and applied to, and was fortunate enough to get into, Stanford. After about a year and a half, I started all over again at Stanford, which was a tremendous, tremendous opportunity. Having gone to West Point as your undergraduate piece, it was really nice for two years to be in shorts, and Tevas, and a T-shirt for two years' worth of classes at Stanford.
Mark Bonica:
        Yeah. After you graduated, you worked briefly as a consultant for the APM Group. Then you transition to working at UMass Memorial where you quickly rose to be the vice president of operations. How did you come to be in health care delivery?
John Palonowicz:
        I think it started really at Stanford. At Stanford, in my class there was six or seven physicians who were there on a grant to have physician leaders with MBAs. I ended up literally paling around with a couple of them. We were racing mountain bikes. We were doing triathlons and everything.
        I started taking some of, when it came time for the elective classes, started taking some classes. Alain Enthoven was teaching some high-level economic health care delivery classes. We took a couple classes over at Stanford University outside of the business school. I had a pretty good idea I wanted to do consulting. I wasn't really interested in i-banking or anything like that coming out of Stanford.
        When I interviewed with a number of the consultants, APM was one of the firms that was there. I ended up being accepted for their summer internship program. At the time, obviously as a non-clinician, I was a little hesitant about, "Well, I haven't been a nurse. I haven't been a physician." But a lot of what goes on in health care delivery is really operational things. It's process, and it's throughput, and it's length-of-stay management, and it's productivity, and those things.
        It was an interesting opportunity to work with them on a consulting basis. We did projects from Children's Pittsburgh, to the Ken Norris Cancer Center out at USC, strategy jobs for the University HealthSystem Consortium, and then my last client was UMass Memorial.
Mark Bonica:
        Ah, okay, so that's the connection.
John Palonowicz:
        Right.
Mark Bonica:
        As your last client, they offered you an-
John Palonowicz:
        Yeah, we had moved from California back to the East Coast after my wife's mom passed away very suddenly. We had two very small kids. The constant travel was starting to be, not an issue, but I was looking for something a little more stable.
        When I got to UMass and started working with the CEO and the COO there, they took me out to dinner and said, "We'd really like to not have to have outside consultants every time we have a problem. Would you be interested in developing our own consulting group?" At the time, they had, I think, 10 or 11 affiliated hospitals.
        I put together a business plan. Ultimately, that's what I did for them for the next couple years. We had management engineers. I had finance people. I had a couple clinicians. We did productivity. We did staffing. We did supply chain. A lot of operational improvements for the organization over the next couple years as an internal group.
Mark Bonica:
        You weren't just looking at the main hospital, you were actually looking at the whole system?
John Palonowicz:
        Right. We looked at the main hospital, kind of law of big numbers, right?
Mark Bonica:
        Sure.
John Palonowicz:
        If there's opportunity there, let's get it there. But we also looked at some of their own facilities, their own community hospitals, and then opportunities, particularly around the supply chain with some of the affiliated hospitals.
Mark Bonica:
        Interesting. That must have given you an interesting perspective on all the operations of the organization, both the larger facilities as well as some of the smaller facilities.
John Palonowicz:
        Well, it did. I think what it did for me is realize that at some point, I would want to transition from a more consultive role for the organization, to actually being responsible for driving the performance, and driving improvement, and being responsible for the broader piece, which is ultimately how I ended up transitioning from running their performance improvement into the VP of ops role.
Mark Bonica:
        How long were you actually in the VP of ops role?
John Palonowicz:
        I think we did the merger with Memorial, so probably two and a half years or so.
Mark Bonica:
        Was that role just at the main facility or was that a system-level role?
John Palonowicz:
        That was at the main facility and at the time we had merged with Memorial, which was one of the other large facilities in Worcester, so it was over both of those campuses originally. Then we went back to a campus-specific model, so I went back to the university campus.
Mark Bonica:
        It seems like maybe you found your niche at this point in terms of health care delivery, health care operations. At what point did you say, "This is what I want to do with my professional career"?
John Palonowicz:
        It's an interesting question. I joke with people I'm still trying to figure out if this is what I want to do. But I had cut my teeth from a health care operations piece for a while, certainly in the years doing the consulting. The consulting for UMass gave you a really broad understanding of how the delivery system worked. Then moving from the consulting side into an operational role where you're really responsible for the day-to-day, and managing the people, and managing the resources.
        At the end of the day, I've always felt that I'm an operator. I just happened to be an operator doing it for health care, which is a great mission, working with really good people that every day who want to try to make a difference for people. To be perfectly honest, I think it snuck up on me.
Mark Bonica:
        It wasn't a plan.
John Palonowicz:
        No.
Mark Bonica:
        Your background didn't scream, "I'm going to be a health care executive."
John Palonowicz:
        Yeah. Let's see, "I was jumping from helicopters and now I'll be a health care executive." Right?
Mark Bonica:
        Yeah. In 2003, you became the president and CEO of Marlborough Hospital, which is a member hospital of the UMass system. You were pretty young at that point at this. I'm guessing about you weren't maybe even 40.
John Palonowicz:
        I think at the time I was the youngest CEO in Massachusetts at the time. Yeah.
Mark Bonica:
        That's impressive. How were you selected for that role?
John Palonowicz:
        The former CEO was leaving to go to a health care system up in Buffalo. I had worked with her before on a couple operational issues. When the job came open, I went to the CEO of UMass Memorial and said, "I've been doing this VP of ops piece for a while." He was relatively new in the role. His initial response was, "I don't want you to go. I need you. Marlborough is a small community hospital that UMass Memorial is the 800-pound gorilla of the system. We need you to continue to drive the performance here." But I had a couple conversations with him. I think at the end of those, he ended up being very supportive of, "Okay, if this is something you want to do, you should put your hat in the ring."
        It was a full, outside search that the organization, that Marlborough had pulled together. It boiled down to I was one of the finalist candidates and then there was an individual from outside the system. Candidly, I think, from what I found out afterwards, the physicians had actually almost completely wanted the outside person. I don't think it was much about me. It was an issue of they thought that they were going to get a UMass person and not somebody that was really focused on Marlborough and doing the things that Marlborough needed.
Mark Bonica:
        They were worried about your loyalty?
John Palonowicz:
        Yeah, they were worried, you know, "Is this just going to be a figurehead for UMass is going to tell us what to do and everything?" For me, the first couple years was really establishing myself with the organized medical staff around, "At the end of the day, we are a part of the UMass Memorial system, but it's my job to do the things that Marlborough needed to do in order to improve."
        Over time, it didn't take forever, but over that year, I think people really started, certainly the clinicians understood that I was 100% dedicated to Marlborough and its success. I think they saw it through going back to the system and fighting a number of battles on behalf of Marlborough where had I been a UMass guy, would have rolled over and said, "Oh well, the system told us we had to do this." It worked out well.
Mark Bonica:
        What was it about going to the CEO role that really intrigued you and made you want to do that?
John Palonowicz:
        I had been the VP of ops for a while. I think the thing that was exciting to me about the CEO role is being in that seat and be responsible at an even broader level. VP of ops role, you're very focused on operations. The CEO role, there's board relations. There's a treasury function. There's foundation and fundraising that you have to do. There's care and feeding the communities that you serve. I just looked at it as something I wanted to do. I thought I was ready to do it. It was something I was really interested in going after. Had it not been at Marlborough, over some period of time it probably would have been someplace else.
Mark Bonica:
        UMass Memorial is about 800 beds give or take?
John Palonowicz:
        Mm-hmm (affirmative).
Mark Bonica:
        How does Marlborough compare?
John Palonowicz:
        Small. We are a 79-bed community hospital. Been around for a little over 100 years. Had a full service minus OB. They had stopped obstetrics 15 years before that, but strong orthopedic group. Good cardiology group. The emergency room was staffed by clinicians from UMass Memorial, so we had really high-quality emergency ED docs in the community, then a number of other services, rheumatology and some of the other areas. Much smaller scale, which allowed you to really have a very personal touch on everything. You knew the names of every employee. You knew about their families. You knew all the docs. You knew what was going on with them, which was a great environment.
Mark Bonica:
        You raised the issue of the physicians having some concern about you. Tell us a little bit how does that work, why the physicians explicitly had a voice in the selection process? Because that's something kind of unique about health care.
John Palonowicz:
        Yeah. In this instance, the organized medical staff, and it's changed now over time, but at the time, the vast majority of the organized medical staff was private physicians, private practice physicians.
Mark Bonica:
        Not employed by the hospital.
John Palonowicz:
        Not employed by the hospital. This was before a lot of the affiliation models that we see now. Actually, totally independent. Did not have a physician hospital organization where there would at least be shared goals and some alignment. Had an independent physician organization that they did their own contracting separate and apart from the hospital. In that model, I think the only employed physicians that we had at the time when I started there were the emergency department physicians and anesthesiologists, kind of hospital-based services. The ortho group, private. The cardiology groups, private. All the primary care physicians were private.
        In those models, and the model has changed somewhat over time, the private physicians wielded a significant amount of power in the organization because they make the determination about, "Well, am I going to continue to bring my surgeries here or do I go to the competitor? Do I continue to send my admits to you or do I send them someplace else?" It continues this way to a degree. It is a real balance between creating the right environment where the clinicians want to come, and bring their services there, and the power that they have over being able to do that.
Mark Bonica:
        What's surprised you about becoming president and CEO for the first time?
John Palonowicz:
        I don't know if there was any real surprises. I think that the things that were of interest is how many things you had to be juggling at any given time. If we're doing a capital campaign, in addition to running a hospital, and being responsible for those finances, you are spending a tremendous amount of time at meet-and-greet functions. As one of the biggest employers in that community, there is the expectation of you're going to be a member of the Chamber, and then ultimately I served as the president of the Chamber for years. There's a number of other things where there's just an expectation for you to be there.
        I think when I came to the role, I was confident from my ability to run operations, and certainly work with the clinicians. The piece that I didn't realize as much is how much outside of the building that time was going to take. Luckily, I live the next town over, so we were doing a lot of events at night. I can remember my wife, who works for Congressman McGovern, Marlborough was in his district, so a lot of the community events actually worked out great because she was there representing the congressman and I'm there representing the hospital.
Mark Bonica:
        It was an accompanying tour.
John Palonowicz:
        Kind of date night. I was like, "Oh, what function are we doing tonight? Are you going to be there? Yes? Okay, great. I'll see you there."
Mark Bonica:
        That's funny. Okay. You served as president and CEO of Marlborough until 2011 when you became the president of St. Elizabeth's Medical Center. What made you decide to leave Marlborough at that point in time and take on the president role at St. Elizabeth's?
John Palonowicz:
        I had gotten a call from an individual at then Steward, who was the COO of the system, Bob Guyon, a retired lieutenant colonel, a really great health care leader. He called me if I would call and come in and have a conversation with him. At that point, I had been at Marlborough for eight years. The average lifestyle of the CEO is three, three and a half. But I had always felt that Marlborough, though, was so much work to be done.
        Ultimately, as I was getting close to the end of the eight years, we had completely turned the finances of the organization around. We had started an aggressive recruitment to employ primary care doctors/physicians in. After beating the drum with Southborough Medical Group for years, we had created all new space in their building where we had outpatient women's imaging, and we had our endoscopy center there, and a number of other things, so that relationship had been settled. We were getting ready to break ground on a cancer center.
        I think at that point I started thinking, I wasn't actively seeking anything, but I was like, "I'm ready. If somebody called me, I might be ready to take the next step in terms of a larger organization." I had gotten the call from Bob to come in and met with him here in Boston. He pitched me on this idea of running St. Elizabeth's which was the academic teaching hospital for the relatively-new Steward system that came out of the old Caritas system. Bigger program, teaching program with residents. There was research going on and an opportunity to move from a small community hospital to an academic teaching center here in Boston. The opportunity to work for Bob was really appealing. He's a really strong health care leader. He did a pretty good pitch. That's how I ended up at St. E's.
Mark Bonica:
        You mentioned it's a teaching hospital. Given the larger scale, to teaching, all these other additional things that you took on, what was it like making that jump then from smaller community hospital up to a teaching hospital?
John Palonowicz:
        Yeah, I think the change wasn't so much around the teaching versus the non-teaching. I would say that the big change that I had was more around the function of going from a not-for-profit system to a for-profit system. I used to joke with folks that the numbers were always important to us at Marlborough. Obviously, when I got there we were struggling financially. We had to do a number of really difficult things in terms of aligning the operations. But as I joked, I think I looked at more numbers in the first six months at St. Elizabeth's than I had in eight years at Marlborough.
        It's a little bit of a stretch, but we were much more proactive about things. Instead of waiting until the end of the month and going, "Oh geeze, what happened to our surgeries this month," you're looking at your surgeries the first week. You're looking at them the second week. If they're not there, the question is, "Can we pull surgeries in from next month or do we staff the ORs down?" Being much more proactive around managing the organization.
        The teaching piece, it's great with the medical students and the residents there. To me, that was another piece of the program. The real change was this going from a little more reactive mode to a very proactive mode. "What's our staffing today? How's it set up for tomorrow?"
        Right now, here at Steward, we use predictive analytics. We had brought in a data robot to help us build a predictive model around our volume, taking into account seasonality, and ED volumes, and surgical schedules, and socioeconomic factors. Right now, about two weeks out, I have about a 97% accuracy on what my volume on the inpatient units will be next week. You think about what that means from a staffing perspective, I can staff in a much more effective way if I know a week and a half from now what I'm going to have to staff because I can pull in per diems. Or I have to flex down, I know how to do that. I already have that instead of having staff show up that morning and going, "Oh, I'm sorry, there's no patients here, do you want to flex down," which is never a good conversation to be having with the staff.
Mark Bonica:
        Is that at the system level? We're jumping a little bit ahead, but is that at the system level now, this knowledge is pushed down throughout the Steward system?
John Palonowicz:
        It's one of the things that our model is the local hospitals, the leadership teams there, are really strong operators. Strong on operations. Strong in working with their organized medical staff and incentivized around quality, patient safety, and the patient experience.
        A lot of the tools with our model we do run from a corporate perspective and cascade those out to everyone so that we've got some consistency around doing that. If you think about it, we went from eight hospitals to 16 with the CHS, the Community Health Systems acquisition, to now 34 ultimately when the IASIS transaction closes. It's really important for us to do that, otherwise we'd have 34 different approaches to how we're looking at staffing, or how we're looking at scheduling, or how we're looking at pre-certs or authorizations. Part of our model is taking the things that can be routinized out, doing them in a consistent way, and sending them back to the team so their focus really is on operations, growing volume, quality, safety, and the patient experience.
Mark Bonica:
        Fascinating. A point I wanted to ask you about, and since you brought up, a big change for you was going from the nonprofit to the for-profit. Some people think that health care should not be for-profit. How do you respond to that?
John Palonowicz:
        We actually look at, and I do believe this, it's not so much for-profit and nonprofit. It's taxpaying and non-taxpaying is the difference. I think if you looked at a number of not-for-profit systems, and you looked at their earnings, and you looked at what they do from a community benefit perspective, I would argue the taxes we pay in the community and our commitment, Steward's commitment to continue the level of community benefits that we had done prior to the conversion to for-profit, we support the communities as much as anybody. The differential, again, it's I have a not-for-profit status, but based on my balance sheet, if I look like a Fortune 100 company, whether I'm a not-for-profit or for-profit, there's a lot of revenue in there.
Mark Bonica:
        It sounded like you were saying the culture difference, though, between the for-profit and the not-for-profit is it's much forward-thinking.
John Palonowicz:
        Yeah, well, I think for us we have to be. If you think about the Caritas system that ultimately became Steward, it was a bankrupt system underneath the diocese. At one point we tried to, this was before I came, we tried to sell the system to a number of other large, religious health care systems. Could not give it away for a dollar. We would give it away for a dollar and the systems-
Mark Bonica:
        Nobody wanted it.
John Palonowicz:
        Nobody wanted it.
Mark Bonica:
        Wow.
John Palonowicz:
        You know and I think part of the challenge, there was a lot of debt. There was significant pension obligations, which we've subsequently covered and cleaned up. We're in tough communities. We're not in some of the more affluent communities in the commonwealth. We're in communities that have oftentimes struggled: Fall River, Taunton, Dorchester, Methuen, Haverhill. High degree of government payer, high degree of Medicaid in those.
        For us, having to be able to do all the things that our not-for-profit colleagues do, and do it with a significantly worse payer mix, and not necessarily the rates that some of the other larger systems get, require us ... We want new emergency departments, which we've replaced, I think, six of the emergency departments already. We want the latest and greatest equipment, or at least our clinicians do, so there's investments there. There is investments in the plant and infrastructure that we want to be a part of. In order to do that, and no one's handing us out the dollars to do that, so we have to do it ourselves, which means we have to be much more proactive about how we manage things so that we can invest back into our staff, and our facilities, and ultimately the community.
Mark Bonica:
        You were at St. Elizabeth's for not quite two years when in 2013 you were appointed to be the Secretary of the Executive Office of Health and Human Services for the State of Massachusetts. How does one come to be the Secretary of EOHHS?
John Palonowicz:
        I had gotten a call from the governor's office one night. They had told me that there were looking to make a change in the secretary role. The conversation went on. I was talking to the governor's chief of staff. I had said, "I'm certainly glad to help." My wife had done some work for the governor in his two election campaigns. I knew the governor. I had met him a number of times. I said, "Let me look through my contact list and I'll see if I know somebody." His chief of staff said, "No, I'm calling to ask you if you'd be interested." I'm like, "Oh." I was totally flabbergasted by it.
        I went and talked to the governor. It was a great conversation. I said to him, "Governor, no disrespect, but I am not a policy guy." I said, "I'm relatively intelligent and I can figure things out, but if you're looking for somebody who's totally brushed up on health care policy, or how the health care delivery system works from a government perspective, that's probably not me." He very quickly said, "We have a lot of people that can do that." He goes, "What I need is somebody to help come in and lead the organization."
        We talked a little bit. I said, "Well, that's something I can do. If you've got the subject matter experts to know about how ultimately we're going to have to respond to the Zika virus, or I'm going to have to have policy procedures around what we're going to do around the opioid crisis, and you really want somebody to help lead and manage these state agencies, that I would be interested in." One more conversation after that and he asked me to serve out with him the rest of his term as the secretary.
Mark Bonica:
        Wow. What is the scope of HHS in Massachusetts?
John Palonowicz:
        Here in Massachusetts, EOHHS is 15 state agencies. It's about 22,000 employees. At the time, it was about a $19-billion budget, which is a little more than half the state budget at the time. The agencies are primarily the social service and support agencies for the commonwealth. It was the Medicaid program, MassHealth. It was the Department of Public Health, the Department of Mental Health. Veteran Services, which for me was fantastic because, as a combat vet, I got to work with Secretary Coleman Nee, who worked for me providing veterans services across the entire commonwealth. We had two soldiers' homes, one in Chelsea and one at Holyoke which are, in effect, nursing homes for our World War II, Korea, and Vietnam vets primarily. Department of Developmental Services. Department of Transitional Assistance, which is the welfare program. Department of Children, Youth, and Families. It was a broad, broad spectrum of the social safety net programs that the commonwealth has.
Mark Bonica:
        What was most challenging for you making that? You had some familiarity with health care operations, so you probably were a natural with some of the health care side, but what was most challenging to you in that role?
John Palonowicz:
        Finding enough time to get read into all of the things that were going on was really a challenge. I think in each of those agencies, you had either a commissioner or an executive running them. On a day-to-day basis, it was the agencies ran.
        I think the biggest challenge that I found is, to be perfectly candid, there were things that you would look at a problem and you would have a relatively rational operational approach, given my background, and then realize that in order to do that you had to not only get the governor on board, and his staff, get the Senate on board, get the House on board, get the advocates on board. By the time you went through that whole process, sometimes your solution looked very different than what you would had originally envisioned because you had to go through all of these multiple screens to do things.
        As somebody who's, I think, a little more action-oriented, that was a challenge. Because at the end of the day, you're like, "Let's do it. This is what we should do, right?" They're like, "Well, Secretary, the regulations aren't set up like that, so in order for us to change that, we'll have to change the regulations, which means we have to go the Secretary of State to do this." That was the one challenge.
        I think the one thing that was really interesting, and I've had this conversation with any number of people, there is this perception of the state worker who is just running the chain out, and doing what they're ... You know, a typical state worker. I did not see that. I mean, every organization has that. I saw really smart, really hardworking people who are paid at a state pay scale, which is not anything to write home to Mom about, who were there at 7:00 in the morning, and they're working on policies and procedures at 7:00 at night, or coming in on the weekends. Whenever anybody says, "Oh, what was it like to work with all the bureaucrats," I'm like, "There is a lot of bureaucracy. There's no question. But there's a lot of incredibly hardworking people trying to make a difference, too."
Mark Bonica:
        It was 2013 when you took over. What were the most pressing policy issues that you were dealing with, whether it was in health care, or any of the other number of responsibilities you had?
John Palonowicz:
        I think we had any number of major things going on. First, when I first stepped in, started on January 22, and I think within that week I had to make a decision on whether or not I was going to retain the commissioner of the Department of Transitional Assistance that had recently, on or about the day that I started, an auditor's report came out about some significant welfare fraud using the EBT cards here in Massachusetts. It set off a whole chain of events around photographs on the EBT cards, and whether that was acceptable to the federal government or not, and how you did that.
        The Department of Transitional Assistance. I did ultimately remove that commissioner and put an individual in who had been the chief of staff in that role as really a strong operator to try to address that. Throughout the course of the first few months, we had issues with the Department of Transitional Assistance.
        There was ongoing issues with the Department of Children and Families, the DCF, in terms of the case workers. We had some real tragedies that had befallen children here in the commonwealth under DCF's watch.
        The commonwealth had voted in medical marijuana. They gave the Department of Public Health the responsibility of implementing the medical marijuana statute, which was incredibly challenging. At the end of the day, the Department of Public Health is used to working with home health agencies, and hospitals, and everybody else, not necessarily the folks that originally had applied to take over the medical marijuana dispensaries. They were not all knights on white horses.
Mark Bonica:
        Say it isn't so.
John Palonowicz:
        Yeah, right. We were basically legitimizing what was in effect an illegal substance every place else. It was some real challenges there. Then I think that there's just ongoing things that happen. If you think about 22,000 people, managing across those 15 state agencies, around all the social safety net programs, invariably there's going to be challenges.
        The last big one that we had was when the Affordable Care Act went into place. The Health Connector, which I was on the board of, was responsible for standing up our own website. Initially, it was a real failure, as did a number of exchanges across the country fail. We had brought Optum in, and we had brought in a number of other folks, hCentive, and others, to help us recast, fix, and then move forward on the website.
Mark Bonica:
        What would you say were your biggest accomplishments during that time?
John Palonowicz:
        I would say a couple things. We were able to, before I left, we signed a $40-billion waiver with the federal government for ongoing support over the next five years for the Medicaid program. It had support for a number of our disproportionate-share hospitals, a support for the Medicaid population. That was a huge undertaking. I had a lot of incredibly hardworking people in MassHealth helping us get it over the finish line. A lot of late nights going back and forth with the federal government about getting that done.
        I'd say one of the other big ones, I had talked about DTA before, transitional assistance. We had been slapped with about a $30-million penalty. It had to do with mailing information out that didn't include voter-right applications, which is a federal requirement. The state had not been doing that before I got there. The USDA fined us $30 million.
        We did a major negotiation with the USDA and the FNS to, instead of paying $30 million, we would invest $30 million in our core systems to help better manage the population. That was a big negotiation. They wanted the money. We didn't want to give them the money. But we put in a commitment to spend the money to actually improve the systems that would ensure that that didn't happen again. That saved the state from just doling the money back to the federal government.
        Then on a personal level, while I was the secretary, we had the ongoing saga of a young woman who had been seen at Boston Children's who ultimately had been remanded by the courts into DCF custody. It went viral. It was a national issue. Mike Huckabee was talking about it. They were on the Dr. Phil show. Ultimately, negotiating with the courts, with DCF, with the families, and will all the providers, a way to get her to ultimately be able to go home in a safe manner. It took about 15 months of the time to ultimately do it, but we were able to finish it just shortly before I left as the secretary.
Mark Bonica:
        Wow. You left EOHHS in 2015. That was because the governor's term had run out.
John Palonowicz:
        Right.
Mark Bonica:
        At that point, you came back to the Steward Health Care, where you took on, rather than going back to your CEO role, you took on, first, the Executive Vice President for Insurance and Physician Operations, and then most recently, now the Executive Vice President for the Hospital Services Group. Before we talk about your current role, and we've talked a little bit about Steward already, but let's talk about Steward, where it is today. What are the major components of the system? You mentioned the number of hospitals. What else is going on?
John Palonowicz:
        The organization is set up really as a series of business units. Until our most recent acquisitions, we had the Hospital Services Group, where all of the acute care and our long-term care hospital would sit. That's the organization that I'm not overseeing. We have a large physician enterprise, Steward Hospital Physician Services, which is where we have, here in the commonwealth, about 750 employed providers, including mid-levels. Then we have the Steward Health Care Network, which is our managed care contracting. It's where we do our accountable care. We're in Pioneer and now Next Gen. It's where we've been accepted as one of the pilot organizations in the new Medicaid ACO program here in Massachusetts.
        It's, again, until we purchased the recent CHS facilities, which just adds another hospital group, kind of the central group, we haven't come up with whatever the final name of it's going to be. Right now, it's two hospital groups, our original Steward facilities, the new CHS facilities, Steward Medical Group as a business group and we'll do on a national basis. Then Steward Health Care Network is where we do all of our accountable care and, ultimately, we'll have an insurance product in there.
Mark Bonica:
        One of the times we delayed this interview was because you were going through the CHS acquisition. Now, you're in negotiations with IASIS Healthcare to add another 17 hospitals. When you had the first acquisition I just mentioned, you acquired, was it eight hospitals in Ohio, Pennsylvania, and Florida? You had been centric to New England. Then you extended out along the East Coast and towards the Midwest. Now with IASIS, you're going to move out into the South and the West, so that Steward ultimately has, I believe, presence in 10 states. Is that right?
John Palonowicz:
        Right.
Mark Bonica:
        What kind of leadership challenges is that going to represent? How is that changing the organization?
John Palonowicz:
        It absolutely presents some leadership challenges. Part of it is, as we've brought on certainly the Community Health organizations, IASIS won't close until later this year, those challenges we're just starting the conversations with them in terms of their management teams and structures.
        I think that the main challenge is as we did the purchase, it was a little bit like the dog finally catching the car. Like, "Okay, we've been talking about this for a while. We've not caught the car. Okay, now what do we do?" Not so much, "What do we do," but, "Boy, we basically doubled our size. We certainly didn't double our management team and double the support."
        I think everybody in the organization has been working tremendously hard to try to do the integration and trying to grow the system in a really thoughtful way. The easier thing to do would be like, "Oh, well, if we have one of these, we now need two of these." I think everybody has been very committed to really looking at it and saying, "Well, do we need two of those, or do we need a different model, or is one and a half of those going to be sufficient and can manage the operations?"
        I think there's a lot of, as we run into each other in and around, there's a lot of, "How are you doing? Everything okay?" Because people are on planes going back and forth. You don't see them for a week or so. It's like, "Oh, I was in Florida for the week," or, "I was in Ohio and then Pennsylvania. I just got back today."
        The challenge is I think taking our model, which we think has been very successful here in Massachusetts, applying that in some of these other markets, which those markets are very different than what we have here in Massachusetts, and doing that in a thoughtful and rational way. Because at the end of the day, we still have to, again, drive enough performance so that we can invest in ourselves, and invest in our staff, and in invest in the community.
Mark Bonica:
        What scales well and what is maybe where you do have to double as you double in size?
John Palonowicz:
        Yeah, you know, I think there's a number of things. We had already, as we had talked about earlier in terms of how we do the model, we've pulled a lot of those services that are scalable into a corporation function. We have a central billing office that does all the billing and collecting for the entire system. We have centralized all the information technology and systems at a corporation level. At the local level, there are technicians and techs, the computer breaks, or if the printers dies, or anything, but we really support that from a centralized level.
        Things that I think work well centrally, legal. It's easy to centralize the function. The billing and collection process. Our HR and benefits is much easier to do from a centralized approach, as opposed to everybody having their own individual HR policies, and procedures, and benefits.
        Then the other things that we're doing from a centralized perspective are we continue to be centralized in our approach around our medical group, the Steward Medical Group. The things that have to be done locally are the things that we do locally here at the hospital. We need all the hospital presidents to be really strong operators. We need their teams to be operationally-focused and figuring out ways to work with their clinicians, to grow the volume in their respective markets. I think what we're taking is the model that we had done here, scaling up the pieces that we need here from a facility's perspective, or an IT perspective, or a legal perspective, and then trying to overlay them over the acquisitions.
Mark Bonica:
        How did you make the choices about the acquisitions? Was it just their availability or was it some sort of fit that you saw, potential fit that you saw? How do you go about making those choices?
John Palonowicz:
        Yeah, I think two separate issues. One with the Community Health Systems. Community was required to divest themselves because of some of their covenants of a number of facilities. The places that we were able to buy, while we're very excited to have them in the Steward system, if you looked at them, our geography in Massachusetts, we have this daisy chain from northern Massachusetts up in Methuen and Haverhill, down to Fall River, kind of down eastern Massachusetts. Almost everyone of our hospitals systems, either primary or secondary service area, tend to touch each other at certain points. It's a really logical progression.
        Obviously, you look at us on the map now with CHS, the Ohio and western Pennsylvania really have that system. Florida has that with the three that are there. We have one hospital in Bethlehem that doesn't necessarily tie with some of the other ones. Again, while we're very excited to have them, part of it was what CHS was willing and/or interested in diverting.
        IASIS is a little different because it's the entire company is being merged in. That came as a package. What they had done in Utah, and Arizona, and Texas, and I think there was one in Louisiana, that came as part of the system.
Mark Bonica:
        You want to take the model that you developed here in New England, you're starting to push that out to the CHS acquisition and, presumably, eventually the IASIS. What's the process of bringing the Steward model to a facility that had not been under your leadership in the past?
John Palonowicz:
        I think it's been a couple things. One, and we went through these growing pains here, the original Caritas system truly operated as six independent entities. They did not have shared-governance documents. They didn't have consistent bylaws for the board, consistent bylaws for their medical executive committees, consistent policies and procedures.
        One of the first things we're doing is going in. Now, some of this is now subject to ensuring that as we're changing the bylaws that they're consistent with whatever the state's laws are in that respective state. But the first thing is setting a baseline for the operating model of, "Here's our consistent policies and procedures. Here's our consistent bylaws for the medical executive committees, for the medical staff, and the boards. Here's what we're doing. Here's our approach to employee benefits so that our employees here are being treated the same and are fairly, in terms of the benefit packages, that they are in the other places." There's an operational piece. We're applying how we look at our staffing and labor and productivity. We're rolling out our supply chain initiatives because we always think there's some opportunity there. There's some true operational pieces done.
        I think the other big piece is aligning the work that we've done with our employed medical group and with Steward Health Care Network in terms of contracting with the individuals. Remember, we talked about it in Marlborough where the hospital and the physician group were basically two separate entities. That model doesn't work in the new health care world of accountable care and taking risks. There really has to be a more alignment with the physicians. Steward Health Care Network is out doing road shows in all the communities to have those providers sign up with us so that we have shared contractual alignment on both the hospital and the physician side, which puts us in a much stronger position to have conversations with the payers.
        Operational approach, kind of day-to-day, daily care and feeding in the organization, but candidly, we're also looking at CHS didn't do some of the capital investments that we think are important. It's taking a look at have they been capital-starved? If so, what's a logical capital plan to get them on? Which the local facilities love because at some level I think they feel like someone's paying attention to them now.
Mark Bonica:
        Let's talk briefly, specifically, about your role now as the executive vice president for the Hospital Services Group. What is that role? What's the scope of it? Then how does it fit into the rest of the leadership structure at Steward?
John Palonowicz:
        The Hospital Services Group is, as of right now, is all the facilities, the eight acute care facilities, and the long-term acute care facility, our New England Sinai down in Stoughton. My responsibilities, all eight of those organizations report directly to me. From a P&L perspective, I am responsible, how they're doing from a volume perspective, how they're doing from a budget perspective, what we're going to do in terms of capital investment in those.
        I've structured this where I have a chief operating officer working for me, and a chief financial officer, and a number of other individuals to help oversee and manage that. Our job is not to run the hospitals on a day-to-day basis. That's why I have those management teams there. But our job is, because we've skinnied down the management teams to be much more operationally-focused, to give them the tools from a corporate perspective that they can use to help better manage their business at the local level.
Mark Bonica:
        Will all of the hospitals, once the acquisitions are settled, will they all report to you then in your role?
John Palonowicz:
        No. I think the way that we're focused on the structure is just on a scale perspective, I will continue to run all of the facilities here in the commonwealth, or in the Northeast, depending on whether or not we continue to grow some additional facilities here. Then there'll be an individual, my counterpart will run those, will do that same thing for the central region. We'll have two regional approaches to the way the hospital runs mainly because at some level, as a part of the acquisitions of CHS, there is a lot of work to be done there to get them to where they should be from an earnings perspective, and address the capital that we talked about, and the staffing, and the alignment model.
        At the end of the day, the hospital business unit here, we are the primary driver of earnings. Talking to the CEO, I think he and I agree that my focus has really got to be on we don't have any hiccups here. He is out continuing to grow the system. He'll put people in place to help drive the volume there. He needs to be confident that we've got this here; while he's out growing the system, we're not slipping here in Massachusetts.
Mark Bonica:
        There's you over the hospital operations for a portion of the system. There is going to be another person like you who is going to have the other portion.
John Palonowicz:
        The central, mm-hmm (affirmative).
Mark Bonica:
        Who else is at your level?
John Palonowicz:
        Right now, there's the CEO of the organization. Until the acquisitions, it was me running the Hospital Services Group. We had a physician leader running Steward Medical Group, then another physician leader running the Steward Health Care Networks. Those were the three business unit, now four, with the new acquisitions, reporting directly to the CEO. Of course, the CEO has a CFO, and a general counsel, and marketing and communications reporting to him as staff positions. But from a business unit driver, there is the three of us, now four with Community acquisitions, reporting to the CEO.
Mark Bonica:
        What makes Steward so successful? Why is it working as well as it does?
John Palonowicz:
        I think there's a couple things. Without sounding too much of a sycophant, I think a big part of why Steward is successful is Dr. de la Torre. He is an incredible driver of performance. He was the one who really helped develop and create the model that we're using now. He is very aggressive about the model and wanting to grow this model elsewhere. A lot of our success is continuing to implement the ideas of how he has laid out what the vision is going to be. I think that's a part of the success.
        I think the other part has been we've recruited a lot of people, a lot of really hardworking people who feel like, well, you can figure out the acronym, but it's, "Figure it out, get it done." No one is so high-bound around, "Well, that's not my job. I don't get involved in that." It's a very supportive senior leader structure of each other. We jump in and help and put our shoulder to the wheel when it's needed.
        If you think about it, before we did the IASIS deal, we're a $1.5-billion startup. We had only been around for seven years. In the course of the last year, we've doubled in size. Now, with IASIS, we'll double again. There is a real feel of entrepreneurialism and growth, which attracts a certain kind of person. We've been really fortunate to hire some really great individuals to help us with that.
Mark Bonica:
        As the executive vice president for the Hospital Services Group, what keeps you up at night? What do you worry about most?
John Palonowicz:
        I think the things that really keep me up at night are a couple things. One, I am very cognizant of the fact that as we have proceeded on this growth road, I have got to make sure that we here in Massachusetts continue to hit what we said we were going to do. Every day, we're really focused on, "We said we were going to get to this level in the budget. That's where we've got to get to. It's not really an option."
        We have, as a part of the recent MPT transaction where they bought all of our facilities, there are coverage covenants that we have to be at. I am not going to oversee a hospital business unit that misses or comes close to missing the covenants. That keeps me up at night because health care is very difficult. There is a few levers that you can pull around volume, but if you don't have a flu season, your ED is going to pretty light for the month. If all the physicians go to their national meeting for a week, the OR might be quiet that week. That keeps me up.
        The other thing is I always feel ... And this is where we have a chief medical officer who has always been just a gem to work with because he feels the same way. You asked earlier about the not-for-profit/for-profit. I think there is kind of this stigma about the for-profit piece around, "Well, you're only interested in the numbers and not on the quality side." That's not my frame of reference. That's not the lens that I look at things through.
        When I was at Marlborough, we were the first community hospital to win the Betsy Lehman Patient Safety award. It was a lot of hard work by all of our staff to do that. That was important to me. We spend as much time in our hospital closed meetings where we're supposed to be talking about finances, we have the first 30 minutes of that meeting starts with quality, safety, and the patient experience.
        The chief medical officer comes in. I have the entire senior leadership team, mine and the hospital's, talking about, "Well, what's going on in your patient experience scores, your patient satisfaction scores? What's going on with your quality indicators, your falls, your serious reportable events, your nosocomial infections? What's going on with your ED throughput? Your ED throughput seems to be slowing down this month. Your ED door-to-doc time is off. What's going on with that? That's driving your left-without-being-seen." That's a quality metric. If someone came to the emergency department and left without being seen, that's a challenge.
        The things that, in addition to what I had mentioned before, the things that keep me up is much like when I was at EOHHS with 22,000 employees. We have 15,000 employees here. If everybody came to work and you said, "Okay, everybody can have one bad day a year," well, of 15,000 employees, you've got a lot of people across your organization on any given day having a bad day. I think what keeps me up is we've got to get better on our patient experience because I think it's a critical driver of people wanting to continue to come here.
        We've got to keep our Leapfrog scores up. We had all but one of our hospitals were Leapfrog A's. A couple of them dropped to B's because of the patient experience. Our focus is getting them back to Leapfrog A's. We want to make sure that the experience is good. I almost feel like we have to do even better because people think, "Well, it's not important to you." It's like, "Okay, A, it is important to us and, B, we'll show you that it's important to us because here's the objective metrics. It's the Leapfrog scores. It's our hospital compare scores, which we want to put up against anybody."
Mark Bonica:
        Let me transition and finish up with a few questions about leadership in particular. How would you encapsulate your leadership philosophy?
John Palonowicz:
        In general, I would say I try to give people the direction and the support they need. I am not a very good micromanager. I can do that if I have to, but I'd much rather have somebody come and say, "Here's what I've thought. Here's how I'm going to manage it. Do you think it would work?" Happy to give you feedback and input on having had a lot of experience in this to say, "You may want to think about it this way. Remember, that that could be a concern."
        But at the end of the day, for me, it's finding the right people and putting them with the support they need so that they can ultimately be successful because otherwise, if every decision has to come all the way up the chain, we cannot be as nimble, or as progressive as we need to be. I talked about this earlier. I do not want to be running eight different community hospitals. A, I can't. There's just not enough time in the day. And B, if that's the case, why do I have that management team there? They're there for a reason. They're there to be the key local leaders. Figuring out how to give them the support they need so that they can ultimately be successful.
Mark Bonica:
        What are the characteristics and behaviors of a good leader and how do you aspire to those yourself?
John Palonowicz:
        I think the characteristics are you've got to be honest. Anytime there's any question about that, you've lost. I think you have to be transparent around what you're trying to do and trying to accomplish. You have to be available. When somebody calls with a question or an issue, you've got to be available, which means unfortunately, as health care continues to change and continues to grow and become even more complex, means you're available at night. You're available on the weekends. You're available on the holiday. You're available when you're out of the country. Because when somebody needs help or needs some guidance, you have to do that quickly.
        Then I think in my mind you have to be, this is probably the Boy Scout in me, courteous, kind, I don't know if I'd go with obedient, but cheerful, thrifty, brave, clean, and reverent, right? I, to this day, send Thank You notes to people when I hear things where they've gone above and beyond.
        Or we had a CT tech at one of our facilities, a radiology tech who the regs just changed. We could no longer cross-cover into CT and to CAT scan. He took it upon himself to go back and within 60 days got a certification of a CAT scan. I heard about it through the grapevine. Dropped him a letter. Like, "Brian, that was really tremendous what you did. Thanks for all you're doing."
        Those letters drives my HR crazy because I'm always asking, "Could you get this person's home address?" Because I tend to send them a little handwritten note to their home address, which is incredibly powerful. I think we've lost a little bit the art of writing letters to people. I've never forgotten when I would get letters from people the kind of impact that has. I have done that when I was at Marlborough. I did it when I was at St. E's. I did it when I was the secretary.
        I was at a function. I was giving a talk to a number of students at Suffolk a couple months ago. It was their capstone. I was talking about a number of different things. One of the people in the back sticks their hand up. Because we were talking about leadership and everything. The person said, "Secretary," I guess the secretary title stays with me no matter what but, "Secretary, I just want to let you know," and they were telling the rest of the class, "What he's talking about matters." He goes, "You may not remember, but you wrote to me," after she had done something at one of our facilities. "I got the letter and it came to my house and I opened it up. My whole family was sitting at the kitchen table when I opened it up. I had this beautiful letter from you thanking me for what I had done and everything. That made a difference."
        I still do it today. You do it at the end of the day. You knock them out over coffee on the weekend. It makes a big difference.
Mark Bonica:
        I love that idea. That's something we try to talk to our students about, writing Thank You letters as well. That's a leadership success. Can you share maybe a leadership challenge that maybe you had to learn the hard way, a leadership lesson that maybe you had to learn the hard way?
John Palonowicz:
        Yeah. I'm still learning today, right?
Mark Bonica:
        Sure.
John Palonowicz:
        Leadership, the path around leadership, really never ends because the industry changes, the environment changes. There's always something. That book which I love, What Got You Here Won't Get You There, is fantastic. I had an opportunity to sit with the author and talk to him on a number of occasions. I pull it out every couple of years and just reread it because I think it's relevant. For me, one of the more recent ones is I had been having a conversation with the CEO about an individual. I thought he was wrong. I thought that-
Mark Bonica:
        The individual or the CEO?
John Palonowicz:
        No, I thought the CEO was wrong about this individual. I thought I could get the person there through working and counseling and everything. One of the things that, certainly in our environment I learned from this, is if there's a gut feel about something, you're better off making that move sooner rather than later.
        In this instance, I thought I could fix it, but I wasn't really sure. I didn't really have a solution to solve that positional problem. I was like, "Well, at least I've got somebody sitting there." In hindsight, I'd had been better off having that very difficult conversation right upfront and then starting a process to fill that. Because over the period of time the damage that was done, which we're now uncovering, the damage that was done in the organization from not making that decision earlier on was, we'll fix it, but I think what I learned was at the end of the day, if your gut says that you should do something, even if you don't have a solution, you may be better off doing this. He was right. I've actually told him he was right, which was always fun.
Mark Bonica:
        What you were kind of describing was maybe mentoring. You had a vision of being able to mentor this individual. Can you tell me a little bit about whether did you have mentors earlier in your career and maybe now even?
John Palonowicz:
        Nothing as formal as specific mentorships programs. I had certainly the CEO at UMass Memorial. When he was there, I would call and ask him if I had a particularly thorny thing. The challenge is once you get to certain levels in the organization, I actually think being able to phone a friend on things is really important because oftentimes you can't have that conversation with somebody in your particular organization. It may be sensitive enough that you don't really want to open yourself up to that. It's important to cultivate those people that you can do. He was one.
        We also had an opportunity when I was in the UMass system, they invested in executive coaches for all of the CEOs. There was no performance issues, but they felt like we were working great in our lanes, and in our silos, but not necessarily working as well together as a team. They brought somebody in and I still call that individual to this day. "I'm thinking about this. What do you think about this?" It's great to have that person to reach out to.
Mark Bonica:
        Do you fill that role for other folks now?
John Palonowicz:
        I do. There's a couple people that I continue to meet with. Certainly, when I was the secretary, some individuals that are there that are either still in state government, or have transitioned from state government, that I'll continue to meet with. My job every day is mentoring the executives that report to me. It's a part and parcel of what I feel like we have to do every day. The more I can grow, both the team that works for me and the leaders at the local level, the more I can focus on, "What is the next strategic step that we should be doing, or where is the next area we should be going," and not how they can handle an issue or a concern locally for themselves.
        I think the mentoring thing is important. It's back to the leadership piece. I'd rather work with somebody and teach them, or have them come along so that they can do it themselves. The easiest thing in the world is just to tell somebody what to do, but at the end of the day, that's not scalable because there becomes too many decisions where you have to tell somebody what to do. You need them, and I want them, to be able to think on his or her feet about the scenario that's in front of them, think about what the solutions are, think about what the potential pitfalls or what the traps are, come up with a recommendation.
        Happy to have the conversation about what I think might be the issue, but then let them succeed or, to some extent, fail on something. I've done that before, too. It's like, "I don't think this is the right thing, but if you think it's right, you think you can deliver on it, I will support you." Then we may have a different conversation when it doesn't work out.
Mark Bonica:
        I don't want to keep you any longer. Let me just close on this. What advice do you have to early careerists who aspire to lead in a health care organization, perhaps in a system like Steward or somewhere else?
John Palonowicz:
        I think my advice would be the people that I find who have success are the people that are willing to jump in, and roll their sleeves up, and truly understand what's going on in the organization. It's too important a step to skip.
        It's very difficult to come into an organization at a level where you haven't done the hard work to really understand what it is. You gain credibility with the staff. You gain huge credibility, particularly on the health care side, with the clinicians where, if you really understand, if you're talking about patient flow through the emergency department, and you've really spent time either in the emergency department or working with the ED teams to understand what really happens when you have emergency service providers coming in, you have the walk-in patients, you have transfers from other facilities, if you're looking at, without that understanding, just looking at it as a number on a spreadsheet going, "Wow, your door-to-doc time is really bad, what are you going to do about it," without that background understanding of well, what makes up that door-to-doc time and what are the other things to do that, I think it's just too important to skip.
        I think people want to automatically be in charge of something. I think the people would be well-served to spend the time to understand it. It's one of the reasons why I thought coming into health care, being a consultant early on, was great because I learned a lot about the inner workings of a hospital. Because you spend a lot of long nights pulling through how the flow worked, what the numbers meant, where it came from, working with individual staffs at the hospital. It served me really quite well.
Mark Bonica:
        Thank you so much for your time today. This has been great.
John Palonowicz:
        I was so happy to be a part of it. Thanks.

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