Hospital Payne Connect

December 9, 2002
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GRAND HAVEN — He came to town as a consultant to help clean up the financial and other problems ailing the local hospital.

Four years later, Mike Payne is still there and planning to stay around for a while. What started out as a temporary consulting job that evolved into a senior administrative position three years ago has led Payne to the top position at North Ottawa Community Health System.

Payne, 54, last month was named president and chief executive officer at North Ottawa Community.

“It’s almost as if I got a three-year trial,” said Payne, a veteran health care executive who was drawn to seek the top position at North Ottawa for the professional opportunity it represents.

The health system, though one of the smaller ones in the western Michigan market, is still “large enough to be current” and pose a professional challenge, yet “small enough to be personal” so that he can make a substantive difference in the operation and handle the job as a hands-on executive, Payne said, echoing North Ottawa’s marketing slogan.

“That fits the philosophy of why I wanted to do it,” Payne said.

That fit goes beyond the job.

While in Grand Haven working as a consultant, Payne found the community to his liking and the social and cultural values and lifestyle similar to that of his native Kansas. At the same time he found that he wasn’t too keen on consulting, a livelihood that kept him on the road most of the time, away from his family, and rarely offered him the chance to participate in the results of his work.

“It’s really a lonely business. You never feel part of the team. You never felt connected,” Payne said. “I do enjoy being around people and I enjoy seeing results.”

Payne formed his own consulting firm, Payne & Associates, after separating from North Kansas City Hospital in North Kansas City, Mo., where he worked from 1983 to 1998 as a senior administrator, including the last six years as CEO.

Prior to joining the city-owned, 350-bed hospital that generated annual revenues of $350 million, Payne spent seven years with Gulf Oil Chemicals, a division of Gulf Oil Corp. In 1982, while working as manager of employee relations at Gulf’s Overland Park, Kan., operations, he was facing a transfer to Houston.

But he and his wife, Kay, didn’t want to go to Houston, preferring to stay in the Midwest. A new opportunity arose when he saw a newspaper ad for a position at North Kansas City Hospital that required 10 years of human resources experience and a master’s degree.

Payne recalls telling Kay, “I don’t have either; I think I’ll apply.”

He did and ended up with a job offer as the hospital’s vice president of human resources — which he promptly turned down. But the CEO wouldn’t let him pass and kept calling.

Payne eventually changed his mind and accepted the job, an opportunity that he now calls “the best thing that ever happened to me.”

In the following years, he took on several additional responsibilities — training and development, risk management, safety, quality assurance, purchasing, housekeeping and food service, and security — and earned appointment as CEO in 1992.

Admittedly “not a politician,” Payne parted company with North Kansas City Hospital in March 1998 and decided to try consulting.

At the same time North Ottawa Community Health System, working to recover from deep financial losses and operational problems, embarked on a major restructuring under new CEO Mike Funk. A mutual friend of Funk and Payne’s mentioned to Payne one day that Funk was looking for a person to help out in the turnaround as a consultant.

“He said, ‘Why don’t you think about going up to Michigan and doing a little work?’” Payne recalls.

He called Funk, drove up to Grand Haven, met the human resources staff for an hour “and away we went.” Payne went to work at North Ottawa as a consultant and, taking up residence in a local motel, promptly became what he jokingly refers to as “customer of the year at Days Inn.”

A year later, Funk asked Payne to take over as vice president of operations, a position he promptly accepted after growing accustomed to the community and hospital.

“I like it here,” he says. “I’m having a ball. What is it about this second-chance thing that it is so much fun?”

Payne’s first goals as CEO of North Ottawa are to substantially upgrade the health system’s information technology and embark on an “aggressive” community needs assessment that will help determine future medical services and identify how best to affiliate and craft referral agreements with tertiary care centers in the region.

“We need to have a menu of things we can do very well and then ship out to our strategic partners the things we can’t,” Payne said. “There are things we will be able to do as good as the big guys and stick to that menu.”

Payne also wants to solidify ties with Horizon Medical PLC, a group that consists of most of the primary care and specialty physicians in the area. He knows he must keep costs under control and will work to build on the ability of North Ottawa to offer medical services in a convenient, customer-friendly environment.

“I want to create a hospital where every person who comes in here, we treat them like they are a guest in our home,” said Payne, who’s hoping to bring some stability to the CEO’s position at North Ottawa.

Recent chief executives going back about a decade have lasted about three years in the position, a trend that Payne says must stop for North Ottawa to move forward.

“Stabilization at the top to implementing the long-range vision is the mark of a winner. I’m here for the long haul,” he said.

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