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Stanford Report, April 5, 2000

Mitchell and Dawes to lead demerged hospitals  


With the merger now a chapter in history, two veteran Medical Center administrators -- Malinda Mitchell and Christopher Dawes -- will formally take the reins as chief executive officers at Stanford and Lucile Packard Children's hospitals, respectively, it was announced this week by Eugene Bauer, MD, vice president for Stanford University Medical Center and Dean of the School of Medicine.

University President Gerhard Casper this week also named the members of the two new boards that will govern Stanford and Packard hospitals.

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Mitchell and Dawes have a combined 42-year history at the Medical Center and have served admirably as the chief stewards for their respective institutions, Bauer said.

"They are both spectacular managers," he said. "They have a long history here. They're incredibly loyal. They understand the subtleties of what it takes to bring this organization back into the Stanford fold."

Mitchell came to Stanford in 1975 as a clinical nursing coordinator and gradually rose through the ranks to become chief operating officer of Stanford Hospital in 1989. During the two-year merger of UCSF Stanford Health Care, she served as senior vice president and chief operating officer for the south campus.

Dawes served as unit manager and assistant director of nursing in the late 1970s and returned in 1987 to activate the Hospital Modernization Project. He was named executive vice president and chief operating officer at Packard in 1997 and served during the merger as senior vice president and chief operating officer for Lucile Packard Children's Hospitals at Stanford and UCSF.

Both will assume their new posts immediately, now that Stanford and UCSF have filed the final dissolution papers. The two medical centers already have separated their finances and stopped sharing profits and losses as of March 1. And the formal return of assets occurred on April 1.

"I believe there is a great deal of interest and excitement in moving forward, setting our course for the future and regaining our focus," Mitchell said.

She said she already has turned her attention to three key areas: growing the hospital's patient base, improving customer service and maintaining a cost-effective approach to management.

"We'll be spending time on increasing the number of patients who use our facilities, which is something we have not spent much time on in the last 2 1/2 years" of the merger, she said. "I also think it's important to rejuvenate customer service. Before the merger, there was intense focus on patient care and customer service, and we've been starting to talk to managers about renewing that focus."

She said the two hospitals will benefit from a system of widely shared services, including finance, information technology, contracting, purchasing and materials, human resources and support services such as housekeeping and dietary. Dawes agreed.

"I believe that the concept of sharing services is very important for our future, both from a cost perspective but also from a customer service perspective," he said.

Dawes said his priorities now for Packard are to continue the growth and development of leading edge services for patients while continuing to insure that the focus is on the child, family and pregnant woman. He said the hospital also will have to continue to manage its expenses in a thoughtful way.

"We have grown substantially over the last several years, adding more than 30 faculty members, almost doubling our inpatient activity and tripling our outpatient activity. So I'm immensely proud of the organization, and I think we have achieved a lot and have a lot to achieve in the future," Dawes said.

The new boards of Stanford and Packard hospitals will have 16 and 13 members, respectively, with 10 individuals sitting on both panels (see accompanying story). An additional six members will be exclusive to Stanford's board, while Packard will have an additional three members who will serve on its board alone. Mitchell, Dawes and Bauer will serve on both boards.

In the years before the merger, the two boards were entirely separate and independent. But with many services now shared between the two hospitals, there is expected to be considerable collaboration at the board level. Board members will meet on a quarterly basis, with the first meeting expected to be held at the end of April.

Board members will provide input to Mitchell and Dawes as they face the challenge of rebuilding Stanford and Packard hospitals financially in the post-merger era. Together, the two hospitals lost $17.57 million in the first five months of the fiscal year (September through January), Ken Sharigian, interim chief financial officer for Stanford, told a management group on March 16. Stanford has done a good job of keeping expenses down, but revenues also have been lower because of reduced patient volumes, Sharigian said. Patient volumes at Packard have remained high, with volumes for the first quarter coming in higher than last year and higher than expected for the current year, Sharigian said.

Hospital officials don't know at this point how financials will play out by the end of the year, Mitchell said. However, she said they are now putting together a plan that will put the hospital in approximately a break-even position next fiscal year.

"I think the advantage now is that we have local management -- experienced management -- directed at these problems," Sharigian said in an interview. "But we do have a challenge -- no question about that."

Bauer said he remains optimistic about the Medical Center's financial future.

"We have an incredibly strong executive management team -- Malinda Mitchell, Chris Dawes and Ken Sharigian. Many people who were here before are back. The clinical chairs are absolutely committed to making the institution financially solid and understand what that means. I think we're well-positioned to move forward," Bauer said.

With the merger's end, Stanford and UCSF will discontinue any sharing of services. Both sides abandoned hopes of integrating children's services in January and agreed in February to keep home health services separate as well.

On the academic side, Bauer said he expects some continued collaboration in areas where faculty members had formed valuable working relationships.

"We will remain collegial colleagues who will pursue collaborations in an opportunistic way, instead of a more formalized way," Bauer said. "I think it's a great advantage to medicine, education and research to have two such strong institutions in the same region." SR