Read the Conversation
EF: What was your mission given when appointed? And why was it the right choice for you coming from the banking sector?
PW: My decision to join Life Healthcare is an interesting journey. I retired in January 2020, then the circumstances made me revisit what I'm capable of as an executive, which led me to a series of conclusions. One that I wasn't going back into banking, two I wasn't getting back into life insurance, and three, I had to find a new industry that had strategic challenges and that the way forward would be technology-based, that had high regulatory impact, had a big base of people and a large scale of influence and impact across society. Then, I was introduced to Dr. Toby Cosgrove, probably one of the best chief executives of a healthcare company in the history of healthcare. This is how I got introduced to the industry. How Life healthcare ended up being the right choice for me was probably one of the biggest gifts an executive has received. I got a new career at age 55 in an industry at the center of attention and has to change, not forgetting its responsibility and purpose. It's very easy for me to get up in the morning and come to the office, because the challenges are plentiful. But the higher-order purpose of the healthcare company delivers, particularly in times of stress, really tests executives and makes sure that they deliver.
The way Covid-19 has played out this clinical crisis is only the first piece of the problem. Once the clinical crisis has been identified, the impact immediately became financial. It didn't move gently into the financial crisis, people's lives changed overnight.
As a banker, I was probably best equipped to be the head of a company that was now having to face down a financial crisis. The mechanisms of dealing with the financial crisis that presented in our company ran in parallel to deal with the clinical crisis. The clinical crisis was run by clinicians, irrespective of the financial implications, the patients safety and clinical outcomes, as these were at the top of our priorities. So in this particular context, the pandemic had no change in priority, which is unusual because in other industries.
To navigate financially, cash preservation became orders of magnitude, which meant people had to be very precise on costs. The dividend policy of the listed company was effectively reset to zero, and cash preservation and cost control became the financial measures that everybody had to subscribe to. And at the same time, we had to spend more money on those clinical measures that protected both our nursing staff and frontline staff and our patients. The dichotomy inside the healthcare company became one of two contrasts, saving money because there's a financial crisis, but investing money in PPE. So when I saw the clinical crisis merging with financial crisis, the reality was that COVID had turned into a crisis of leadership. So whilst the clinical components were identified and been treated by the clinicians and became accurately predictable in terms of the model, and the financial models have been understood and addressed by the bankers, the reality is we have industries not just in healthcare, where the crisis is all around leadership. So when we spoke earlier about working from home, about what it does to the dynamics inside the company, the intriguing part about running a healthcare company in a pandemic, is that leadership challenges were largely very similar to other companies that had also been put into the crisis for different reasons, and with different marginal impacts. But certainly one where you could see that leadership became the important outcome to be traded to be driven by it. That's where Life healthcare was in a fortuitous position under the stewardship of a very strong board, multi-talented and disciplined board that had seen many industries and challenges before, together with a well-balanced leadership team that could address clinical financial and leadership issues, we were correctly composed in order to be able to address the challenge.
EF: Do you think the crisis is a financial or economic one?
PW: I think the macroeconomic impact of a pandemic basically reduces the livelihoods and the economic output of economies. But the manifestation of that in the daily lives of people is we've got less money and expenses haven't dried up. So I think depending on which lens you view it through, it is both economic and financial, depending on how you want the question answered. The duration of the impact was obviously then a function of the actions the central banks took in order to be able to put the shock absorber into the economic crisis, which softened the financial crisis. So economic first, financial second.
EF: What are the lessons learned that you can take away from these 10 months?
PW: The primary lesson learned in our company was the adaptability that needed to be put in place and the speed with which decisions were taken. And we've got an interesting contrast between the approaches in wave one of the pandemic and wave two, viewed from a South African context. The clinical uncertainty of what we were dealing with, led to a large component of decision making being centralized. And that's a natural reaction when people are scared. It was a completely natural reaction in the corporate world to do.
In that particular context, as the confidence of the organization improved, and waves loomed in front of us, we knew that the pandemic would impact different parts of our geography at a different time. So that ‘one size fits all’ decision making process clearly had its pitfalls, that if you shut down all elective surgery across the country, you would be making the wrong call. In phase two we gave greater decision making to the hospital manager. So in addition to hospital managers' decision rights, we created Covid-19 management committees at the hospital level, where the clinicians were able to make the decisions that were in the best interest of patients. And in so doing, the collective decision-making by individual location ended up with the best answer for the patients. Whereas in the previous wave, the decision was made in the center, and it was just presumed that it was a protected institution, we were able to localize the decision making, which then allowed us to speed up the decisions making process dramatically. The conclusion was that hospital managers with local decisions and an empowered management style, having to deal with a centralized decision-making process and bureaucracy doesn't work. This gave me an opportunity to decentralize the decision making powers inside the organization. Trust the hospital manager. In the context of being able to look after patients, speedy decisions are very important which is why we took this approach. The result was that patient satisfaction improved severely. However, patient satisfaction in the context of search type pandemic conditions can never be as good as they are in well-orchestrated times where everything's under control.
The lesson learned is around the speed with which decisions are made, trust in people and an oversight hierarchy that they can take comfort in. If the decision gets too big, they should be able to ask quickly. And we show that Life’s ability to deal with a crisis is amazing. I’ve told my executive team that they should execute day-to-day projects as they do with in-the-moment crises to continue succeeding.
EF: What courses would you make part of the core program of an MPA?
PW: I don't see a pandemic, any different to a banking, financial crisis, and probably don't see it any different to Napoleon managing Waterloo. So if you want to try and prepare executives for moments of extreme resilience, you can't take a leader that's inadequate, and give them any course of the university that puts him in a position to be able to deal with it. There's a further line, some leaders that have done well, in circumstances like this have a basic fundamental that you can't teach them. You can't teach them courage, and you can't teach them judgment. So on the basis that you're giving me raw material to work with, you're giving me leaders that have got courage and judgment.
The course that I would first offer in the MPA is a course in listening. Because when things go wrong, when you're sitting in the corner office, unless you know how to listen, you're going to make the wrong decision. And the second course that I would give to an individual in managing a pandemic is compassion. Because when the heat goes up, if you aren't able to allow people to make mistakes, it's an impossible organization to run. Because everything is not going according to the book. And it's in that moment where the organization is trusting its line of judgment, and things go wrong, that you've got to, first of all, listen, and second make sure you don't lose the person. So the issue that I'm really getting down to is the leadership criteria to take an organization through the pandemic are more important than the technical skills of the people that already exist in a well-run organization. So the basics in an organization only get tested in a pandemic or financial crisis on those two criteria that I've identified.
Third, communication is incredibly important. You have to make decisions fast and if you can't get your point across, things don't get done and you don't bring the team along with you. If you do it in a fluffy way people won't take you seriously. That moment of actually having your team listen and being able to bring them along, I think gives you the kit to be able to deal with the problem.
EF: Can you elaborate on the key performance indicators that you used during these months and how they were different from banking KPIs.
PW: The performance indicators in our company are divided between the clinical and the non-clinical outcomes. In the non-clinical outcomes, there was just a question of emphasis and change. So we looked into the remedial financial components around cash preservation, and non-essential costs. So in effect, that all manifests itself in watching what happens at the deeper level and making sure that your restrictions around cash outflows are carefully monitored. In the context of clinical outcomes, the pieces of the puzzle that land on my desk, at a higher level, can be broken down between the ultra-performance of the case settings, along the lines of patient satisfaction, adverse events, and the pure clinical measures, hospital-acquired infections, the staff adverse event ratio, and we've got a matrix of about 10.
In the context of Covid-19, certain treatment modalities alter the outcome that was achievable. So if we pick pressure ulcers, as an example, as the length of stay of a Covid-19 patient was significantly longer than your normal elective surgery patient or previous medical cases, the incidence of pressure ulcers went up as the length of stay increased. So the absolute number worsened. That didn't mean people have given up and not treating the patients properly, it was an eventuality, in some instances that were explainable. So what we needed to be very careful of was to make sure that in managing the conditions and the output, we were sensitive to changes in treatment modalities, and second of all, the pressure that the system got put under. So it's one thing, to have a set of clinical outcomes when you're running at a 60% occupancy, it's another set of clinical outcomes when you're running non-surgical, but closer to 80, or 85%. And it's another set of clinical outcomes when you've got the people that are working on it who don't get a chance to sleep. So the expectation level is always to deliver perfection to the patient. But as management one also has to be realistic, that you're dealing with a crisis, and you have to have an open mind. So tracking Covid-19 admission volume, by individual location, was an incredibly important part to get the right overall view of the hospital group, bearing in mind that you had to reconfigure your hospitals to deal with Covid-19 patients. So you couldn't just admit a Covid-19 patient generally onto a ward, you had to resect your hospital and designate COVID and non Covid-19 wards. But an appreciation of where the volumes were hitting the institution or the hospital settings became an important part of our conversation. So the only real difference between normal times and Covid-19 times from a KPI perspective was one an appreciation for whether Covid-19volumes were arising across the geographies. And second of all, whether clinical statistics have been impacted by just sheer pressure that has been placed in the system.
EF: How do you balance resources between communicable diseases and chronic diseases?
PW: The decision to balance the resources was dictated by demand, not by supply. So what we found is there was a drop off in the chronic disease treatments as people got scared of hospitals. So we found that a whole range of non-communicable disease conditions all of a sudden disappeared. How is it possible that people stopped having heart attacks? How is it possible that your incidence of new cancer patients went down? We saw, more particularly in our scanning and diagnostic business in western Europe, that a number of preventative and diagnostic scans for chronic conditions went down dramatically because people weren't coming to the facilities to get their scans done because they felt that they could be delayed, or they didn’t want to risk getting infected. Inside our own hospitals, our accident and emergency admission dropped by in some instances 85%. By virtue of that change in presence, you had to redirect your resources.
EF: How do you see the role of digital in the industry, especially in changing user experience at the hospitals?
PW: A telehealth conversation might well point you to a path lab of pathologists by way of an answer. So the acuity of the condition demand is an important determinant as to the applicability of the channel. Interestingly enough, from what we have seen in my conversations with Dr. Cosgrove at the Cleveland Clinic, there was a resistance to telehealth from the clinicians before the pandemic. Then the volume of telehealth consultations hit in the middle, 30% of the consultation were done via telehealth, our number was in between 30 to 35% of the volume and post Covid-19 came and settled at about 25%. So from it not being a dishonourable practice at all, it then became an essential practise in order to better look after people and then it settled at probably twice the initial volume. On Mental health, we are definitely seeing an uptake in consultations with psychologists or psychiatrists, palliative care treatment programs, where the patient-specialist relationship is easy to maintain. And when one looks across the practising clinicians, different practices have different desires to practice telehealth. Some physicians argue that the main challenge faced is an incomplete or misdiagnosis, as a result of not having the complete picture, and not being officially trained on such tools. I think it's a very important development in South Africa to be able to take care of places where you're unlikely to ever see a doctor or as a substitute for private health care consultations in the insured market in South Africa. I would say it's a long way from the acute hospital group care setting we are currently running other than some of the mental health and occupational health offerings that we run as employee health services.
EF:Do you have any observations on Life Healthcare performance during Covid-19 times??
PW: If you dissect the Covid-19 period, the elective and surgical cases are more profitable than dealing with the pandemic cases. And that's in a nutshell how you would have to summarize the halves of the year that ended September of 2020. I'd only been in the seat for 30 days when the year ended. So it was quite an interesting learning curve. I think in general terms, occupancy levels are obviously important. The incidence of elective surgeries is clearly an important financial indicator or driver. And the return to normal occupancy levels allows you to be able to run your infrastructure at the levels for which it was constructed. And those become the three things you have to watch carefully.
EF: I'm sure you're familiar with the Iron Triangle. If you had to choose two elements between price, speed, and quality, which two would you choose as your tools to navigate through a healthcare transformation of this magnitude?
PW: In the context of how Life Healthcare positioned itself in the pandemic, we were open to treat non-insured patients in our facilities. So the delivery of care was not based on affordability. If someone arrived and needed to be looked after, we didn't ask. So technically speaking, the delivery of care in a pandemic was for all intensive intensive purposes, it could have been free. So I think fast and good is the only way to be able to deal with it in the context of how we playback to the morals and values of the company. We know that nurses and doctors would deliver care to a person on the street for nothing. There was no moment in time where if we had been paid more, we would have done more. It's fast and good.
EF: As a final question, what would you like your 2021 tenure to be remembered for?
PW: I would like it to be remembered as a year in which I demonstrated the capabilities as a leader that allowed us to playback on our strengths, that I listened to my colleagues, and that I was able to pull the team together. It's impossible to ask for an unblemished record as a leader, but if you're making more good decisions than wrong decisions, you kind of got the thing swayed in the right direction.But underpinning all of that, bad things also happen for good reasons. I can figure out arising from a pandemic, is this jolt to the system, that means healthcare had to change. And healthcare in different sectors needed to be improved, to be able to deliver faster and goods to more people. So I'm seeing the moment of COVID as being the trigger, for making sure that we future proof healthcare delivery systems in a better way, across all aspects of delivery.We must appreciate the learning process, and it’s our responsibility to build that back into the system. So if we take the example of the availability of PPE, there was a worldwide need for it, we never anticipated that the same problem would hit all healthcare institutions all over the world, all at the same time. So there was an aspect of planning that can't happen again. I think the dependency on the supply chain, both locally and internationally, also came into question. I would like people to remember I lead the institution in a calm, fair and balanced way without panic.