Mike Wirth, the CEO of Chevron Oil, got a two page profile in the Sunday New York Times business section.
They asked him what guiding advice he had got from his father, who worked in the porcelain division for Coors beer company, where they made the ashtrays with Coors logos to be distributed to bars and restaraunts. And Mike Wirth said, "It was more of an example...My dad had a habit of walking through the shop floor. He knew who won the high school football game on Friday night. Everybody there felt they knew him. That was an important lession for me. Treating everybody with respect and decency was the key to his success, not being a Ph.D."
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| Alexandre Yersin, Discoverer of the Plague bacillus |
This was just after he'd been asked about cutting 20% of his workforce, "What is it like, as a chief executive, to lay off so many people?"
"In a commodity business, costs always matter. We have to stay competitive and the most difficult thing we do is downsize our work force."
Oil is always boom and bust, and maybe people working on the rigs and in the oil companies expect to be laid off work and don't take it personally, but it certainly affects them personally, and one wonders whether it would matter at all to them that Mike Wirth might know whether their kid's football time won or lost on Friday night or whether they fel he knew them when he fired them.
It's just the nature of the business, of many businesses, that it's impersonal at some level. It's just profit and loss, overhead and income.
For some reason it reminded me of a scene which played out decades ago in my office in Chevy Chase. I had just added up the dollars and cents and decided not to renew the recently increased lease on my office and to work for a for profit hospital system, where I would not have to worry about rising rents, increased costs of malpractice insurance--all I'd have to do is see patients and somebody else had to deal with insurance company reimbursements and photo copy machines which broke down.
So, I'm sitting there at my desk and a lean and active man arrives in a tailored suit. He was, I guessed, a first generation guy, Middle Eastern origin, and he was a product of the George Washington University medical school, a newly minted urologist and he was looking over the office, which had lots of natural light and was a lovely place to see patients and he asked me if I was going to get a bigger space and why I was leaving the suite. I told him I was leaving private practice, sick of having to worry about money.
And he said something, without malice, but with a sort of knowing smile, "Just can't compete, huh?"
Which caught me off guard.
I'd never thought of medical practice as a competition.
It's true, when I opened my practice there were 12 other endocrinologists within the four block area of Friendship Heights, Chevy Chase, and by the time I left we were down to three. And as the other endocrinologists retired or moved on, or relocated, my own practice got noticeably busier.
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| August Maake |
But I'd not thought of myself, perhaps naively, as being in competition with those other guys.
The only competition I'd ever thought about was a sort of bragging rights dependent on where people had gone to school, which did not matter at all to other doctors or to patients. Anyone with an "MD" on the wall was the same as any other MD to most of my patients and to the other doctors referring patients to me.
The snob appeal of having gone to a famous, Ivy League, medical school had no traction in DC. The three local medical schools, George Washington, Georgetown and Howard were not schools anyone at my "prestigious" medical school would have been please to "match to" for residency training programs. The closest "prestige" school was Johns Hopkins. But that whole sort of academic competition had long since cease to matter and seemed to be a sort of fool's game, a relic of a gilded age, where people looked down their noses at others because of notions of "the right family" or, fortune, birth or social connections.
It was a sort of fantasy of personal quality pasted on something that was really impersonal, like knowing about high school football games.
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| Money Is What You Want |
Famously, Fitzgerald told Hemingway, "The rich really are different," and Hemingway replied, "Yes: they have more money."
But Fitzgerald was thinking of the ruthless people, among them his long desired unattainable paramour, Ginevra King, who would never marry him because he was not competitive in the commercial sense, i.e., he did not have enough money. Her world was about money, and he was not competitive in that world, at least when she knew him.
And here was this young doctor, just starting out, and he saw medical practice as a business venture, a competition with other urologists. He would take out loans or use family money to hire a staff to bill insurance companies, to make appointments and to then phone patients to be sure they would show up and if not, to plug other patients in those empty slots, and he would have other staff to pursue delinquent accounts and he would invest in equipment so he could do cystoscopies in his office and keep more of the money from those procedures, and he would join clubs to meet new people to refer him patients. He would invest in computers to streamline his billing and collections. He might hire a scribe to follow him around so he would not have to waste time writing medical records and he could see more patients every day. He would hire assistants to place patients in rooms and to do blood pressures and vital signs so he could see and BILL more patients every day. Like a profitable restaurant, if he could "turn over the tables" faster, he could generate more profit.
As for my experience, working for the big hospital corporation: It was wonderful. They just asked me to see the patients scheduled, they gave me an hour to 45 minutes for new patients and half an hour for follow ups, until electronic medical records arrived which allowed me to see patients faster, so ultimately I went from 16 to 22 patients a day, but none of that seemed rushed.
But then, after about 5 years, their business people looked at the numbers and they realized that the real profit in their system lay at the hospital. The practices they supported which saw patients who were not hospitalized, the daily in office type of non urgent care at best broke even, but clearly the pulmonary, endocrine, primary care, rheumatology, neurology, practices were not money makers. Even the procedure heavy practices like oncology, hematology, cardiology and gastroenterology were only really profitable if their procedures were moved into the hospital and the doctors moved to doing just the most profitable procedures and not dawdling on the time consuming practice of patient care which required history and prescription renewals and patient examination.
So the organization closed down all those practices and kept the hospital functioning, which was just fine for profits. The hospital got all the patients it needed from the emergency department, and they ultimately opened emergency walk-in departments in surrounding towns, which were profitable.
As for all those patients who needed their diabetes or congestive heart failure or arthritis or cancer taken care of, but did not require immediate hospitalization, well that was just not profitable and it would be somebody else's problem.
It's not that the CEO's of the organization were bad people; they were simply doing their jobs--to maximize profit for their share holders. The CEO's did not live in town. They actually lived thousands of miles away. They might have known the scores of their local high school football games.
And they could compete with anyone.
