Submitted: 30 June 2014
Four interview sessions: 5 November 2012, 27 November 2012, 9 January 2013, 29 April 2013
Total approximate duration: 4 hours 50 minutes
Interviewer: Tacey A. Rosolowski, Ph.D.
For a CV, biosketch, and other support materials, contact:
Javier Garza, Archivist, Research Medical Library
About the Interview Subject:
Leon Leach (b. 1948, Bridgeton, New Jersey) was serving as Executive VP and CFO for Cornerstone Physicians Corporation in 1997 when he came to MD Anderson to serve as the institution’s Executive Vice President and Chief Financial Officer. In 2000 his role was expanded to include executive leadership for finance, business development, marketing, facilities, human resources, information systems, and technology commercialization: his title was changed at that time to Executive Vice President.
Under Dr. Leach’s fiscal leadership to date, MD Anderson’s revenue has increased from $900 million to $3.4 billion, its operating margin has grown from $25 million to $343 million, and the institution has developed numerous strategic business opportunities. Dr. Leach serves on the board of Proton Therapy GP Management, LLC, which manages the MD Anderson Proton Therapy Center. He also serves on the board of the University of Texas MD Anderson Services Corporation, non-profit responsible for MD Anderson’s business development.
He earned an M.A. in Christian Education from Southwestern Baptist Theological Seminary (conferred 2001) and a Ph.D. from the University of Texas School of Public Health (conferred 2011).
Major Topics Covered:
Personal and educational background; faith
Career track in corporate insurance
Changing economic environment of healthcare, late nineties to 2013
MD Anderson as a fiscal institution: history of operations, bringing sophistication to
Tools and strategies for economic forecasting, growth, and fiscal stability
Fiscal leadership in an academic institution
Strategic initiatives: The Proton Therapy Center, sister institutions, satellite centers, capital campaigns
The MD Anderson presidents; Ronald DePinho; The Moon Shots
A note on transcription and the transcript:
This interview had been transcribed according to oral history best practices to preserve the conversational quality of spoken language (rather than editing it to written standards).
The interview subject has been given the opportunity to review the transcript and make changes: any substantial departures from the audio file are indicated with brackets [ ].
In addition, the Archives may have redacted portions of the transcript and audio file in compliance with HIPAA and/or interview subject requests.
Interview Session One: 5 November 2012
A Dissertation Overview
Chapter 01 / Educational Path
Education and Work Experience
Chapter 02 / Professional Path
Moving to the Provider Side of Insurance
Chapter 03 / Professional Path
Bringing Fiscal Sophistication to MD Anderson
Chapter 04 / The Finances and Business of MD Anderson
Communicating about Finances in an Academic Setting
Chapter 05 / The Administrator
A Role in a Global Institution
Chapter 06 / View on Career and Accomplishments
Interview Session Two: 27 November 2012
Strategic Decisions and Increasing Patient Numbers
Chapter 07 / The Finances and Business of MD Anderson
The Economic Forecasting Model: A Tool for Growth
Chapter 09 / Institutional Change
Growth Initiatives: Capital Campaigns, Global Oncology
Chapter 10 / Building the Institution
Financing the Moon Shots Program and Changes to MD Anderson Structure
Chapter 11 / MDACC in the Future
Bringing Structure to MD Anderson’s Finances; Developing Spiritual Strength
Chapter 12 / View on Career and Accomplishments
A Prescription for Fiscal Health: Be Pro-Active
Chapter 13 / MDACC in the Future
MD Anderson Presidents, Values, and Teams
Chapter 14 / Key MD Anderson Figures
Interview Session Three: 9 January 2013
Strategic Financial Initiatives: MD Anderson España
Chapter 15 / Building the Institution
Strategic Financial Initiatives: The Story of the Proton Therapy Center, Part 1
Chapter 16 / Building the Institution
Interview Session Four: 29 April 2013
MD Anderson Banner and Satellite Care Centers
Chapter 17 / MD Anderson and Other Institutions
Tools for Economic Modeling and the Budget at MD Anderson
Chapter 18 / Overview
A New Economic Climate Will Shape MD Anderson’s Fiscal Future
Chapter 19 / The Finances and Business of MD Anderson
The Proton Therapy Center, Part 2
Chapter 20 / Building the Institution
Streamlining the System
Chapter 21 / Institutional Change
Communicating the Need to Change
Chapter 22 / The Administrator
Interview Session One: 5 November 2012 (listen/read)
Interview Identifier (listen/read)
Chapter 01 (Educational Path)
A Dissertation Overview (listen/read)
In this segment, Dr. Leach describes the subject of his dissertation (entitled “Academic Medical Centers: A Framework for Strategic Repositioning”) prepared in completion of work for his Ph.D., conferred in 2011 by the University of Texas School of Public Health. (He worked on this degree while fully employed at MD Anderson.) Dr. Leach was interested in the factors that support the success of strategic initiatives. He explains that he built his dissertation around three case studies of strategic repositioning: The Baylor College of Medicine’s decision to own and operate a hospital; MD Anderson’s 2008/’09 attempts to improve operational efficiency; and The efforts of the UT Medical Branch at Galveston to expand service to additional locations. He lists the decision makers he interviewed and summarizes his findings.
Next, Dr. Leach clarifies why he pursued degrees beyond his M.B.A. while serving as Executive Vice President of MD Anderson. He sees both his Ph.D. and his M.A. in Christian Education (Southwestern Baptist Theological Seminary, 2001) as personal challenges. He describes the value of the process and discipline of working toward his Ph.D., which gave him an opportunity to serve on a restructuring committee at the Baylor College of Medicine. He gives examples of how the experience provided him with an appreciation for how different leaders view the same situation from different perspectives.
Chapter 02 (Professional Path)
Education and Work Experience (listen/read)
Dr. Leach begins this Chapter with a brief overview of his modest family beginnings in Port Norris, New Jersey, where his father worked as an oyster fisherman. (He tells an anecdote about owning his own boat at the age of twelve.) He then shifts to the educational and professional path. He begins with his long relationship with The Prudential Insurance Company of America (1963 – 1973) where he began working while earning his Associates Degree from Cumberland County College in New Jersey (conferred 1969). Dr. Leach explains that he didn’t have the money to go to college, so he worked full time at Prudential (with claims) and attended class at night for virtually all of his schooling, including his undergraduate work at Rutgers University (B.S. 1973) and his studies for his M.B.A. at Widener University (1976). Once he received his MBA, he was fast-tracked at Prudential, leading to an opportunity to serve as Vice President of Marketing in Nashville, Tennessee.
Chapter 03 (Professional Path)
Moving to the Provider Side of Insurance (listen/read)
Dr. Leach explains that his role as Vice President of Marketing for Prudential in Nashville (1980 – ’85) gave him his first experience with the health-care provider functions of insurance companies. He describes his experience managing all parts of the health-care delivery system. He then explains that his career expanded once again when Prudential purchases Merrill Lynch’s real estate division: he moved to California to become the Chief Financial Officer of the Prudential Real Estate Affiliates. When Prudential asked him to return to Newark, he says his family did not want to move again. At this point, he moved fully into the provider side of health care, developing the professional management of physician’s offices.
Chapter 04 (The Finances and Business of MD Anderson)
Bringing Fiscal Sophistication to MD Anderson (listen/read)
In this Chapter Dr. Leach explains that by the nineties, he had “turned into a serial entrepreneur” working in high-risk situations. Rethinking his career, he realized he had reached a point where he wanted to “give back” and, very near that time, Michael Myer called to tell him that MD Anderson was looking for a CFO. Dr. Leach then describes the fiscal context when he assumed the role at MD Anderson. He also talks about John Mendelsohn’s vision for the institution and some of the changes made early in his role as CFO (e.g. shifting the institution from fund accounting to GAAP accounting; canceling managed care contracts as a shock tactic so HMOs would renegotiate).
Dr. Leach observes that Charles LeMaistre’s downsizing strategy was the right approach for the situation. He also notes that the reports submitted by the consulting firm hired to evaluate MD Anderson’s financial fate under HMOs (negatively) distorted the institution’s importance to health care delivery in Texas. Dr. Leach knew that managed care was not going to be able to “squeeze” MD Anderson.
Dr. Leach goes on to assess the institutional situation when he arrived. The administrative team was in place; he developed a business modeling system to predict how the institution would need to grow. He explains the “Value Proposition,” an equation that quantifies cost savings. As an example, he explains that the equation can show how much money MD Anderson saves patients by giving them a correct initial diagnosis (as opposed to having to correct a diagnosis given by a non-MD Anderson physician).
Dr. Leach discusses his economic forecasting model and talks about his goals as CFO.
Chapter 05 (The Administrator)
Communicating about Finances in an Academic Setting (listen/read)
In this Chapter Dr. Leach explains that he had to make some adjustments to work in an academic setting after years in the corporate world. He faced challenges communicating difficult financial and accounting information to MD Anderson faculty and did presentations on “weathering the storm.” He talks about coming to respect the academic side of medicine and the need of faculty to understand the measures he was instituting.
Chapter 06 (View on Career and Accomplishments)
A Role in a Global Institution (listen/read)
In this segment, Dr. Leach explains that his work at MD Anderson has been meaningful because the institution has an impact on people globally. He mentions the Dr. Ronald DePinho’s Moon Shots Program will take the institution’s mission “to a new level.” He then lists the opportunities that the institution has afforded him.
Interview Session Two: 27 November 2012 (listen/read)
Interview Identifier (listen/read)
Chapter 07 (The Finances and Business of MD Anderson)
Strategic Decisions and Increasing Patient Numbers (listen/read)
Dr. Leach begins this Chapter by observing that strategic decisions evolve over a process. He demonstrates his point with examples from 2008-2009, when the administration addressed disturbing reports that MD Anderson was less productive than it should have been. He describes the metrics used to assess productivity and underscores the importance of bringing relevant information to the groups in a position to change matters.
He notes that a key indicator of the institution’s success is the number of new patients seen: this number was slipping in 2008, and this fact was pointed out to the faculty leadership, initiating an eighteen-month difficult process of change that resulted in a broadening of “faculty templates” (the types of patients each faculty member sees). Dr. Leach comments on how academic and corporate contexts respond differently when changes are instituted and notes that MD Anderson no longer has the luxury of such long lag times given an economic climate that demands more responsiveness.
Chapter 08 (The Finances and Business of MD Anderson)
An Evolving Economic Context – and New Challenges (listen/read)
Dr. Leach states that MD Anderson is defined by its commitment to translational research, and in 2012 one half of funds for research come from operations, with over 250 million spent on research per year. He then talks about factors that shape the institution’s balance between investments in patient care versus those in research. He notes that in the current economic climate, faculty may be required to find a different balance and spend more time in the clinic.
Dr. Leach then explains why the “triple threat” model of a faculty member (one equally devoted to research, patient care, and education) may no longer exist. The institution, he says, may have to depend more and more on specialists, as the economic context is evolving and the institution must respond to be successful. This will demand different faculty roles.
Chapter 09 (Institutional Change)
The Economic Forecasting Model: A Tool for Growth (listen/read)
Dr. Leach begins this Chapter with comments on how MD Anderson grew under the leadership of Dr. John Mendelsohn and how they worked to balance resources in order to develop research.
Dr. Leach then discusses the Economic Forecasting Model he began to use on arriving at MD Anderson to predict the pressures that specific growth initiatives would place on operating margins. He describes the variables, limits, and uses of the model. In the former economic context, predictions were valid for six years. Now it is more uncertain.
Dr. Leach explains that the forecasting model was his brainchild, developed while he was in the insurance industry, and refined to suit MD Anderson and bring intellectual rigor to the budget for the first time. It is a key strategic planning tool.
Chapter 10 (Building the Institution)
Growth Initiatives: Capital Campaigns, Global Oncology (listen/read)
Dr. Leach begins this Chapter by explaining that funds from the Capital Campaigns are all factored into the Economic Forecasting Model. He briefly mentions his role in keeping the Board of Visitors aware of what his office is doing to develop the institution. He then moves to the Global Oncology initiative, which was started because of data that indicated that the institution was paid more for patients who came from out of state. He then talks about the international sister institutions and MD Anderson Banner. He explains that the goal is not necessarily to bring these institutions to the level of care offered at MD Anderson, but to raise the level of care as high as it can go. In addition, quality of care at these other institutions is the primary considering; spreading the MD Anderson brand and increasing name recognition is a secondary consideration.
Chapter 11 (MDACC in the Future)
Financing the Moon Shots Program and Changes to MD Anderson Structure (listen/read)
Dr. Leach begins with general comments on Dr. Ronald DePinho’s Moon Shots Program –a speculative and expensive initiative, he says, designed to move the bar. He notes his belief that the most exciting developments in cancer will be coming in the next four to five years.
Dr. Leach then explains that, with the complexity of research today, a new framework is needed to think about conflict of interest. He then notes that the Moon Shots will reorganize all of MD Anderson, moving the institution to more efficient structures that free faculty members’ time so they focus on what they do best.
Chapter 12 (View on Career and Accomplishments)
Bringing Structure to MD Anderson’s Finances; Developing Spiritual Strength (listen/read)
In this segment, Dr. Leach summarizes his contributions to MD Anderson and the growth his work on higher degrees has offered him. He first stresses that MD Anderson has undergone exponential growth and moved to a more businesslike structure, and he underscores that an institution must be self-sufficient so it is free to reinvent itself.
Dr. Leach then says he has been pleased to have a role guiding the finances and structure for the institution’s accomplishments, which have come through the efforts of fantastic doctors, scientists, and research support.
Dr. Leach then talks about the degrees he earned while serving as Executive Vice President: his Ph.D. in Public Health and his M.A. in Christian Education and what they contributed to his abilities to perform in his role for MD Anderson. The M.A., he explains, helped him develop patience, a quality that takes spiritual strength. He needed patience to deal with complex challenges in strategic positioning.
Chapter 13 (MDACC in the Future)
A Prescription for Fiscal Health: Be Pro-Active (listen/read)
Dr. Leach begins with Chapter by explaining that institutions tend to hold onto the old rather than moving ahead into change. He then talks about activities that will enable MD Anderson behave pro-actively in the current and future economic context. He notes the importance of commercializing technology, of moving science to the bedside, and establishing relationships with other institutions. MD Anderson, he says, does well with managed care companies, as they recognize value, though he is not certain that the federal government will do the same. He says that health care is a current target of the federal government as health care represents 20% of the economy. He expects that the institution will create savings from a more streamlined organizational chart and continued strategic positioning. He discusses his roles with the state government in Austin.
Chapter 14 (Key MD Anderson Figures)
MD Anderson Presidents, Values, and Teams (listen/read)
Dr. Leach begins this Chapter with the observation that John Mendelsohn and Ronald DePinho were the right leaders for their times. Dr. Mendelsohn had the courage to invest, he says, and turned MD Anderson into one of the few exceptions to the managed care rule. Now Ronald DePinho is building on John Mendelsohn’s work. He talks about “moral suasion” and the importance of communicating.
Dr. Leach then talks about MD Anderson’s values and the moral responsibility that the institution has to deliver on their promise.
At the end of this Chapter Dr. Leach names important members of his staff and says that the secret to success is hiring well so one can benefit from the strength created by building a team.
Interview Session Three: 9 January 2013 (listen/read)
Interview Identifier (listen/read)
In this segment, Dr. Leach explains that the increasing costs of health care signaled that traditional reimbursements for medical services were going to come under pressure, creating the necessity to look for other revenue streams. The sister institutions created such a possibility as well as satisfying the institutions mission to eradicate cancer globally.
Dr. Leach tells the story of starting his first day on the job in September of 1997, meeting with President Dr. John Mendelsohn and then immediately going cold into a meeting with Spanish representatives to talk about opening a cancer center from scratch in Madrid. Dr. Leach explains why the Madrid location was selected and describes some of the challenges met. He explains the main lesson learnethat MD Anderson is best suited to guiding institutions to create new cancer centers, rather than itself owning and operating new centers. The España project gave rise to a new department for consulting services, Global Business Development.
In this Chapter Dr. Leach explains the rationale for building MD Anderson’s Proton Therapy Center and describes the unusual financial partnerships that enabled it to be funded. He begins by noting that only a few proton centers existed with only one providing patient care –and that one, in Loma Linda, California, only treated prostate cancer. Dr. James Cox [Interview # 32] made the case that proton therapy was a next step in cancer care. He notes that he ran feasibility studies that confirmed that MD Anderson had the patient volume to support a Proton Therapy Center offering treatment for many different cancers. Dr. Leach then describes a first attempt to finance a center in partnership with Tenet Healthcare Corporation and why that failed. He explains the feasibility studies done regarding patient availability and the possibility for reimbursement, and other financial concerns at the time. He then talks about the consortium that responded to the call for proposals: The Styles Company (a healthcare development company) and the Sanders Morris Harris Group (investment banking firm), both Houston based. He goes on to explains what these companies brought to the project, who eventually invested, and sketches the innovative dimensions of the consortium/partnership between a government supported academic institution (not usually business friendly) and private investment. Next Dr. Leach explains why some technological challenges made it necessary for the Proton Therapy Center to open with only one of its four gantries in operation and outlines the financial implications this had on Hitachi, the company providing that technology. The delay opened the possibility that investors could return their shares to Hitachi, receiving back their money plus a percentage of their investment. The Center ran for a year with only one gantry. (The interview cuts off abruptly.)
Interview Session Four: 29 April 2013 (listen/read)
Interview Identifier (listen/read)
Chapter 17 (MD Anderson and Other Institutions)
MD Anderson Banner and Satellite Care Centers (listen/read)
In this segment, Dr. Leach sketches the partnership established with Banner Healthcare in Gilbert Arizona, leading to the opening of MD Anderson Banner in 2011, the first fully autonomous center carrying the MD Anderson name. Dr. Leach explaining that the motive to expand beyond 1515 Holcombe comes from the MD Anderson mission –to cure cancer in Texas, the U.S. and the world. The center at Banner came about as MD Anderson experimented with a process of adapting MD Anderson care procedures to make them more universal. He notes that MD Anderson seeks out institutions with which there is a “meeting of minds” on how cancer services must be delivered.
Dr. Leach describes MD Anderson’s multi-disciplinary approach to treating patients, giving the example of the wide range of options that teams consider for prostate cancer.
Dr. Leach explains that MD Anderson is open to establishing partnerships with institutions that embrace a multi-disciplinary approach. MD Anderson does not need to seek out partners, as institutions approach MD Anderson. Dr. Leach next talks about the many lessons learned by establishing partnerships. He mentions MD Anderson Orlando, Florida, which he says eventually morphed into a Banner-like situation. He explains some of the financial challenges setting up MD Anderson Espana, an initiative that also became more like Banner. Through these experiments, “We now know what a good partner looks like.” Dr. Leach then discusses the regional care centers, explaining that they were created to offer patients more access to services.
Dr. Leach explains how MD Anderson insures the quality of care at satellite centers, giving an example of MD Anderson physicians in Houston confer via teleconference with colleagues at MD Anderson Espana.
Chapter 18 (Overview)
Tools for Economic Modeling and the Budget at MD Anderson (listen/read)
In this segment, Dr. Leach explains how economic modeling and budgeting works for the entire institution, using a “current year plus six years” plan. This long view helps his team accommodate building plans, anticipating the financial effects of expansion. He explains several cost-saving measures that have been taken to bring the budget under control. He is also proud to report that administrative costs for the institution have dropped 4% (from 15% to 11%) since 2008 and there are 200 fewer employees in Business Affairs. Dr. Leach describes how financially-focused employees are imbedded throughout the institution, influencing the complexity of bringing these costs under control.
Chapter 19 (The Finances and Business of MD Anderson)
A New Economic Climate Will Shape MD Anderson’s Fiscal Future (listen/read)
In this segment, Dr. Leach explains that the Affordable Care Act will drive systemic economic changes that will have a dramatic impact on MD Anderson’s finances. He anticipates that the sister institutions and regional care centers will help bring in patients and that it will be necessary to continue to seek out cost-saving measures. Dr. Leach also states that the Moon Shots will eventually generate technologies that the institution can commercialize: the Moon Shots have already created interest from donors and philanthropy has increased. He explains that unlike previous financial fluctuations, the current economic situation represents a “sea change” in which the country is now saying “We won’t pay so much for health care.” MD Anderson’s financial health is connected to the nation’s limited resources, and Dr. Leach explains that the institution must continue to be “a good steward” to be successful.
Dr. Leach explains that, with the new financial realities, MD Anderson will become more patient-centered. He then explains that that the MD Anderson mission to cure cancer will carry the institution through. He anticipates that the institution will become a leader in looking at patient outcomes, noting that the world already has confidence in MD Anderson and that “we have what it takes to thrive.”
Dr. Leach acknowledges that academic institutions are slow to change and speaks about anticipated faculty responses to the need to change. He then describes the shift in thinking that everyone at MD Anderson has to embrace in order for the institution to move forward. He explains the paradox of getting individuals to accept that “We’re number one and you want us to change.”
Chapter 20 (Building the Institution)
The Proton Therapy Center, Part 2 (listen/read)
Dr. Leach explains that the 2008 financial meltdown resulted in a financial situation in which MD Anderson was able to purchase shares in the Proton Therapy Center previously held by other investors at a very good price. He lists the parties that came together to form the unique public/private partnership financing the Center and explains what the Center means to MD Anderson.
Chapter 21 (Institutional Change)
Streamlining the System (listen/read)
Dr. Leach describes the review of administrative processes conducted in 2012, shortly after Dr. DePinho’s took over as president of the institution. He gives background on the review and explains why Dr. DePinho requested that MD Anderson perform it earlier than required. He describes the constitution of the committee in charge of the review and their recommendations: reducing administrative overhead and staffing, reducing redundancy in staffing.
Dr. Leach asserts that, despite the economically challenging times, the institution needs to continually invest in research to preserve what MD Anderson’s leading thinkers and doers in care. Research, he states, is the “driver for who we are.”
Dr. Leach repeats, however, that the institution must learn to operate differently or risk not being as robust as it is currently.
Chapter 22 (The Administrator)
Communicating the Need to Change (listen/read)
Dr. Leach talks about how he communicates with faculty and staff at MD Anderson about the need to change. He explains that he has been influenced by Harvard leadership specialist, John P. Cotter, who wrote a book called A Sense of Urgency. Dr. Leach explains some basic concepts from the book, then describes how he goes about talking to heads of departments and divisions to create buy in from leading faculty members who will disseminate the message.
University of Texas MD Anderson Cancer Center
Making Cancer History Voices® Oral History Project
Research Medical Library: Historical Resources Center
Original Interview Profile # 28: Leon Leach, M.B.A., Ph.D.
This interview of Dr. Leon Leach (b. 1948, Bridgeton, New Jersey) takes place over three sessions (November 2012 and January 2013) for a total of approximately four hours and fifty minutes. Dr. Leach came to MD Anderson in 1997 to serve as the institution’s Executive Vice President and Chief Financial Officer. In 2000 his role was expanded to include executive leadership for finance, business development, marketing, facilities, human resources, information systems, and technology commercialization: his title was changed at that time to Executive Vice President. The interview takes place in Dr. Leach’s office in Pickens Tower on the MD Anderson Main Campus. Tacey A. Rosolowski is the interviewer.
Dr. Leach received his BS in 1973 from Rutgers University and his MBA in 1976 from Widener University. His career with insurance companies began in 1967, when he began working full time for the Prudential Insurance Company of America in order to pay for college. He rose to the position of Senior VP and CFO, leaving in 1993 to work more directly on the provider side of health care. He first assumed the position of CFO and Senior VP of Managed Care with the California company, Candle SubAcute (’93-’94). He then moved to CareAmerica Health Plans, where he served as Senior VP and CFO from 1994 to 1995. Dr. Leach next served as Executive VP and CFO for Cornerstone Physicians Corporation from 1995 to 1997, when he made the move to MD Anderson. Under Dr. Leach’s fiscal leadership to date, MD Anderson’s revenue has increased from $900 million to $3.4 billion, its operating margin has grown from $25 million to $343 million, and the institution has developed numerous strategic business opportunities. Dr. Leach serves on the board of Proton Therapy GP Management, LLC, which manages the MD Anderson Proton Therapy Center. He also serves on the board of the University of Texas MD Anderson Services Corporation, non-profit responsible for MD Anderson’s business development. In 2004 the governor of Texas appointed him to the Texas Health and Human Services Commission., and he has served as Chair of the Commission’s subcommittees on Medicaid Reform and Uncompensated Care and Hospital Funding. While serving as Executive Vice President, Dr. Leach earned an M.A. in Christian Education from Southwestern Baptist Theological Seminary (conferred 2001) and a Ph.D. from the University of Texas School of Public Health (conferred 2011).
By virtue of his long experience in corporate insurance, Dr. Leach sees MD Anderson through a unique lens, and this interview sheds light on the fiscal workings of MD Anderson during its most dramatic period of growth. Dr. Leach is proud of bringing an “intellectual rigor” and system to the institution’s fiscal plans. He analyzes the economic context in which the institution operated in late nineties and discusses the tools and strategies MD Anderson used to grow and achieve fiscal stability. Dr. Leach also addresses the financial challenges that arose in 2007/’08 and the measures taken to bring the institution back to profitability. He discusses the special challenges posed in an academic institution, where strategic changes are negotiated, rather than imposed from a chain of command, as in corporate America. He visualizes the impact of the current economic climate on the institution’s organization, faculty roles, and research –including Dr. Ronald DePinho’s Moon Shots Program. He discusses the strategic value of opening national and international sister institutions, satellite care centers, and the Proton Therapy Center. Dr. Leach also reflects on the mission of MD Anderson and ties this to the institution’s long-term success.
Leon Leach, M.B.A., Ph.D.
Notes on Material Lost Due to Equipment Failure, Session Two
This became significant, Dr. Leach explains, with the economic meltdown of 2008, when many investors exercised this option. Hitachi did not want to run a proton therapy center, and MD Anderson, Harris, and Styles were able to purchase the center for pennies on the dollar. Dr. Leach then explains the legal and economic status of the Proton Therapy Center vis a vis MD Anderson and sketches what it represents financially to the institution.
Lessons for Strategic Growth and Financial Health
Dr. Leach describes the lessons learned through the Proton Therapy Center: become more involved in varied aspects of health care deliver to control your destiny; MD Anderson should do what it is good at to further its; and remember, “no margin, no mission.”
Chapter 18 (Building the Institution)
Strategic Financial Initiatives: MD Anderson Banner, Gilbert, Arizona
Approx. 14 minutes
In this segment, Dr. Leach sketches the partnership established with Banner Healthcare in Gilbert Arizona, leading to the opening of MD Anderson Banner in 2011, the first fully autonomous center carrying the MD Anderson name. He also talks about the satellite care centers around Houston. Dr. Leach begins by noting that such initiatives can only be successfully undertaken when there is a “meeting of minds” on how cancer services must be delivered.
Faculty and the “Employee Model”: A Guarantee of High Standards of Care
Dr. Leach explains it is important that MD Anderson’s partners share a vision –for example a vision of multi-disciplinary care as a key to successful cancer treatment. He explains the “employee model” that guarantees that all MD Anderson faculty adhere to the same standards of care and contrasts this with systems outside of the institution.
Dr. Leach notes that Banner is a like-minded institution and explains what MD Anderson and Banner each brought to the partnership. He also says that MD Anderson will be developing more autonomous centers, probably in the west and south. President Ronald DePinho supports this long-range vision and under his direction McKinsey & Company was hired to do a growth analysis. Next Dr. Leach talks about the rationale for opening the satellite care centers around Houston.
Satellite Care Centers Address the “Complex” in the Texas Medical Complex
Dr. Leach quips that the Texas Medical Complex is ‘complex’ and daunting for many patients –one element of the rationale for situating care centers so patients have local access to MD Anderson care.
The local care centers, he notes, created a cultural change for faculty.
The Challenge of Getting to the Texas Medical Center
Dr. Leach imagines a patient who lives in the suburbs driving in to Houston for an eight A.M. appointment.
Dr. Leach observes that it is cheaper for MD Anderson to build facilities outside the city and notes that the institution has just purchased property near Katy. He briefly talks about why the Woodlands will be the next location for a care center. He then touches on the importance of personalized care.
The Promise of Personalized Care
Dr. Leach describes what personalized care will offer to patients.
MDACC in the Future
Approx. 10 minutes
Future Developments and A Secure Financial Future
Dr. Leach explains that President Ronald DePinho’s Moon Shots Program will generate many financial opportunities that have not yet been imagined. He sees MD Anderson evolving into an institution where patients will come for specialized treatment or for specific cancers.
MD Anderson Care: A Shop that Repairs a Lot of Trucks Every Day
Dr. Leach explains how he describes the value of MD Anderson care to the people who live in the town near his ranch. “If your pickup truck breaks down,” he says, “you don’t take it to the shop that only repairs one or two pickups a month. You take it to the shop that repairs hundreds of them.”
Finally, Dr. Leach summarizes that MD Anderson will have to be more accessible in order to secure its financial health. He notes that very few of the faculty are clinicians only. While not advocating any change of the research-based culture, Dr. Leach explains that there must be a discussion about encouraging some faculty to serve only as clinicians and also for the institution to “open portals” to see a wider spectrum of cancers.