Keeper Of The Vision

December 27, 2007
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Rick Breon Tends
Spectrum Health's
'World Class' Goals

Six months after Richard Breon moved into the executive suite at Spectrum Health, the names of the organization's two original hospitals were reinstated: Blodgett and Butterworth.

It was a group decision, really, recommended by a committee and OK'd by the board of directors. It cost just a few thousand dollars to implement. But it spoke volumes about Breon's understanding of what it takes to make a merger work, said Birgit Klohs, president of The Right Place and a Spectrum Health board member.

"What Rick has been able to do is really blend the two and move the organization forward," Klohs said.

Breon became Spectrum Health's president and CEO in 2000, the first in the post who had never been employed at Butterworth Hospital in Grand Rapids or at Blodgett Memorial Medical Center in East Grand Rapids. The two hospitals were joined in 1997 to create Spectrum Health. Breon was the top pick among 400 applicants. He had surfed the waves of a merger at his previous post as president and CEO of Mission Health in Evansville, Ind., and while Spectrum's budget has a few more zeros, his tactics in Grand Rapids were similar.

"You had competing interests for 100 years, and now you've brought them together. You've got to create a culture of togetherness," said Breon, sitting down for a rare few minutes in his comfortable Grand Rapids office. "The pride in the organizations and the history — still today, they run very deep. And I think it's important to recognize those things. It adds value to the organization."

"Time resolves a lot of those things," he added. "It's 10 years out. Culturally, we've moved on."

Plans laid out for Spectrum Health in the 1990s are now, brick by brick, coming to fruition on the Michigan Street hill. The Fred and Lena Meijer Heart Center has been open since 2004, the Lemmen Holton Cancer Pavilion will open this year and the new Helen DeVos Children's Hospital is expected to open in two years. Spectrum Health has committed to keeping Blodgett Hospital in East Grand Rapids with a $98 million construction program, also to be completed in about two years.

"Look at open heart surgery; I think there's an example," said Breon, who is serving as president of the Michigan Health and Hospital Association for 2007-08.

"We had two distinct programs here, and we combined them into one. If you look at any metric one would use to measure the mortality or quality of the services we have, we'll compare with anybody in the country. Anybody.

"That was done because I think the physician community and the facility that we built, and just the way people were working together, allowed us to provide better services and enhance the quality. At the same time, if you look at the cost associated with what we provide, we'll compare that with anybody's, as well. So, to me, that's where the value comes in: what we're doing, how well we're doing it and at what cost."

Michigan Medical PC CEO Ted Inman said Breon's ability to move Spectrum Health forward began with his outreach to the different segments of the health care community. MMPC is a multi-specialty practice with more than 200 physicians and has a close relationship with Spectrum.

"Very early on, he wanted to meet with us because we were a large group that had a lot of our patients at Spectrum, a lot of contracts with Spectrum," Inman said. "He really looked at physicians as being a driver in the health care market and somebody that needed to be a partner with the hospital."

Inman credited Breon for jump-starting strategic planning at Spectrum Health, and for putting together a strong management team.

"One of the things Rick has done very well is get the right people on the team and let them do their jobs," he said. "He's a big-picture person, not a micro-manager."

Breon grew up in small town Iowa, the youngest of nine children, before earning a bachelor's degree in economics and psychology from Iowa State University. Still undecided about his future, he followed his wife, Peggy, to Peoria, Ill., where she had landed a job as a radiology technician. 

"I decided to get a job," Breon recalled. "I found one in an entry-level management position at a hospital. Other than that, I'd never been in a hospital, other than getting my tonsils out when I was 5 years old."

After four years, Breon realized he'd found his life's work. He entered the University of Iowa for a graduate degree in health policy and management, the same program that produced Metro Health Hospital President and CEO Mike Faas, another native of Iowa. They didn't cross paths on the Iowa City campus, but did when both held administrative posts in the Hawkeye state.

"This was back in the early to mid-'70s. It was a very, very different time," Breon said. "It was a period where I thought you could make a difference … and I suppose that's the thing that drew me more than anything else: the ability to interact and work with all types of people, which is one of the things I thought I did better than others. … The whole thing was, you can make a difference in the lives of people by running these organizations in an effective way."

Breon worked at hospitals in Illinois, Iowa and Texas before moving to Indiana to become president and CEO at Evansville's Mission Health, which encompassed St. Mary's Medical Center and its 1999 purchase of Welborn Baptist Hospital. Breon had been president of St. Mary's. Today the entity is known as St. Mary's Health System and is part of Ascension Health.

But even more than melding mergers, Breon said lessons learned on his "very first job after grad school" have stuck with him today. He worked at what today is Iowa Methodist Medical Center, which he said was "very solid" and "did a lot of good things."

"I had worked my way up quickly in that organization. But one thing that was becoming obvious to me, and the reason I left there — I could have stayed my whole career — was the whole idea of corporate complacency that creeps in when you're doing well. It's one of the things that stuck with me my whole career, the whole idea of getting complacent and arrogant.

"That was a turning point in my management style. … There are so many new and challenging things, you are constantly being tested in your ability to be flexible. That's a challenge that happens every day."

Those skills came into play in 2006 when Breon and then-chairman of MMPC, Dr. James Buzzita, a Spectrum Health board member, proposed that MMPC become part of the health system. But after objections from doctors and other Spectrum Health board members, including major benefactor and Amway co-founder Richard DeVos, the concept was dropped.

"Some people look at that as a failure," said Inman. "I think it was actually very visionary on both of our parts. It didn't happen to come together, but it points to his (Breon's) desire to look into doing this differently."

Breon is a strong believer in the nonprofit model in health care, and he and his wife have put their money behind it by funding a scholarship at the University of Iowa for health care students planning a career in nonprofits. He said the "community-minded" actions of nonprofit hospitals meet "with my set of values.

"That doesn't mean you can't have business acumen to make decisions," he is quick to clarify. "If you don't use business acumen to make decisions, you're going to be in trouble. Does that mean that's the only thing that drives us? Absolutely not.

"At the end of the day, we like to reinvest what we make back in our organizations. If you ask the person on the street, they don't know what nonprofit means. I think a lot of people think 'not-for-profit' means you don't make any money."

And under Breon's watch, Spectrum Health has done just that. In its annual public budget meeting, he reported that the health system as a whole expects a margin of 3.4 percent — $92.7 million — on a budget of $2.6 billion in fiscal 2008. When Spectrum Health was new, margins were running as low as 0.6 percent.

According to an IRS document that covered the fiscal year ending in June 2006, the latest form available, Breon is Spectrum Health's million-dollar man: His annual salary is reported at $945,355, benefits at $426,616 and expenses at $19,352, putting total compensation at $1.39 million. Modern Healthcare reported in July that the average total cash compensation for a health system president and CEO is $898,500.

A golfer, Breon, 56, lives northeast of Grand Rapids with his wife, Peggy. They have two sons, Michael, 29, of Indianapolis, and Mark, 26, of Grand Rapids.

Spectrum Health's seemingly non-stop construction along Michigan Street will indeed come to an end in about two years, Breon promised. He also predicted it will be 25 years before the health system will again face the need for such major capital investments.

"People will come if you have good clinicians, quality physicians, quality staff, and if you have the kind of facilities to be able to take care of them — all of those elements together."   HQX

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