Lessons from the C-Suite: Judy Persichilli, CEO of Catholic Health East-Trinity Health

How a nurse-turned-CEO sees the industry

This interview with Judy Persichilli, the interim president and CEO of Catholic Health East - Trinity Health, was conducted and condensed by Lisa Bielamowicz, M.D., and Dan Diamond, and facilitated by Eric Larsen, managing partner.

Q: How'd you end up in health care?

Persichilli: I know some leaders talk about how they fell into the industry. For me, I always wanted to be part of a caring enterprise—I never thought I'd be doing anything other than working in health care.

Some of that probably comes from my family. My mother worked in a law office; she had standing in the community as a person who helped others.

That was something I was proud of—that people would go to her from all walks of life. And watching her taught me the value of doing and caring for others.

Q: And unlike some of the other CEOs we've spoken with for this series, you began your career in nursing.

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Persichilli: I did. In fact, I went to a diploma school for nursing—at the time that community colleges were in competition with diploma nursing—and the director had changed the program from 3 years to 2 years.

That meant I'd be out in the world working before I turned 20, which was exciting and motivating because all I ever wanted to be was a nurse.

But my father was a little skeptical. I'll always remember, right after I graduated from the diploma school and he asked me, "Do you want to go to college now?"

Building a career

Q: How did you go from staff nurse to hospital administrator?

Persichilli: I've always worked in Catholic hospitals—my first job was as an ICU nurse at St. Francis in Trenton.

After several years, I came to the realization that there was a lot more going on in the hospital than I could see, on my level. And often, the people making the decisions didn't seem to have much clinical knowledge.

That struck me as odd—I thought decision-makers in healthcare should have some clinical background—and I wanted to be able to help shape the type of care we delivered.

So I went back to school and ended up getting a Master's in Administration.

Q: And since then, your career has been a study in achievement: hospital executive, hospital CEO, and now health system CEO. Can you talk about a time when your path didn't unfold as planned?

Persichilli: About thirty years ago, I was asked to start a QA program in Trenton. And while there were challenges, I loved the opportunity—it gave me a really broad perspective on hospital operations.

But then I got an unexpected surprise. The sister CEO came and told me, "I'd like you to go work in the finance division."

And I thought, "No way. I love quality; it's my life's work."

Needless to say, I was moved. I spent several years in the finance division and that provided invaluable learnings that helped to shape my career.

Q: So how did being moved away from your 'life's work' and to a different part of the hospital turn out?

Persichilli: [In the short term], it allowed me to build a new set of skills in finance, ones that I draw on to this day. But I did have to come out of my comfort zone and that was difficult.

"Here's what I ask myself: Where is that individual’s best potential, and what can I do to put him [or] her in the right position for their success?"

But the sister CEO's decision also influenced my own leadership style, and I've tried to take it forward when working with staff. She saw something in me that I did not see in myself. Mentoring and developing individuals became a part of my life.

Here's what I ask myself: Where is that individual’s best potential, and what can I do to put him [or] her in the right position for their success?

And sometimes that does mean putting people in new roles. For example, after I became CEO of Catholic Health East, I asked the CFO to take over as COO. He brought his financial acumen to the operations of a multi-institutional system and performed admirably, extraordinarily.

CHE-Trinity merger

Q: You were CEO of Catholic Health East when the organization announced plans last year to merge with Trinity Health.

Persichilli: That's correct. We'd been having discussions for months.

Q: Together, you've formed the nation's second-largest not-for-profit health system. Can you discuss the reasons behind the merger?

Persichilli: At both ministries, we believed it was important for us to develop an even stronger national presence—one that could give us more opportunity to transform health care and be a national advocacy voice for the poor and vulnerable.

Some of this, too, was strategic repositioning in light of the health reform law—at CHE, we forecast a 3% operating margin and 10% EBITDA over the next ten years to be successful.

And that was before we had to deal with pressures like fiscal cliff issues and the sequester. Putting that all together, it seemed like we needed to take significant cost out of our system along with significant restructuring of the way care is delivered to meet our goals.

That was what really started the conversation. We wanted to know—is there somebody else out there that's facing the same challenges and looking at solutions in the same way? And Trinity Health did feel the same way.

Q: What benefits are you hoping to gain from being an even larger multi-state system?

Persichilli: We have to start with the assumption that bigger is better in certain areas. For example, does getting bigger substantially lower the unit cost of care? And from our first review of it—it was clear that there's millions of dollars of opportunity from this partnership. More than $300 million of cost synergies have already been identified.

"We have to start with the assumption that bigger is better in certain areas."

The next steps have been developing the economies of skill to spread best practices in care delivery across the enterprise. One goal is to have transformative initiatives in patient care; for example, we have 11 functioning PACE programs—the most in the nation.

And again, our unified voice can strengthen our nation's Catholic health ministry.

Q: Drawing on this experience, what advice would you give to other executives trying to lead a merger?

Persichilli: When bringing two cultures together, two large disparate entities like ours, there's been a lot to navigate.

We've been able to draw on some good operational experience—there's a lot of mergers & acquisitions experience on this team—to smooth the path. And we've tried to make sure that our updates are disciplined and concise. Nothing is left to wonderment.

We also make sure that everyone on the team knows exactly what we need to accomplish, what we need to do.

And I've been in three different health systems; I've seen the good, the bad, and the ugly of system-ness.

So one quick piece of advice? Hm. How about, "Listen, and listen intently."

Superstorm Sandy

Q: Some of your hospitals were caught in the path of Superstorm Sandy last year. Can you describe the experience, and what did you learn?       

Persichilli: Several of our hospitals in the northeast did get caught up in the hurricane, although it didn't hit our facilities as much as some.

However, it was a very real challenge for some of our New Jersey hospitals. Hundreds of staff slept over at hospitals in Trenton, in Camden, in Newark, in order to make sure we had sufficient coverage and services, especially for anyone who was affected by the storm.

Part of our readiness wasn't clinical, but operational—making sure our IT team was [standing by] in case of outages, or that our supply chain team knew about the needs on the ground and were able to promptly respond.

And we also learned by watching the disasters in New York City, with some of the hospitals there that got flooded. It made us ask ourselves: Is there a possibility that our generators could be knocked out by a storm?

If so, are we ready to manage the situation, and what can we do to be prepared?

Q: It sounds like you look beyond your own experience.

Persichilli: Exactly. When you're part of a large system, we learn constantly from one another.

Leadership lessons

Q: As we discussed earlier, your own background combines finance and quality, which prepared you for your current role. What sort of skill set do future leaders need, and how do you prepare them?

Persichilli: I think if you're looking at the gaps in many young leaders' experience and knowledge base, there needs to be a blend of finance skills [and] an understanding of clinical operations.

This is something we've thought a lot about. We developed a Leadership Academy with Seton Hall University—a two-year curriculum designed to focus on organizational leadership and transformational leadership.

Our goal was to take those individuals who are up-and-comers, and give them an opportunity to get real leadership lessons. And we graduated our first class [several years ago]; several are now CEOs.

We're hoping this prepares us for a transformed health care system, which really requires a change in the process of care. [Basically], we're moving to the new world while still trying to deal with the old ways of reimbursement. Strategic agility and able to function well in ambiguity are skills we are looking for.

Q: About one-in-ten CEOs are nurses like you. What can nurses bring to the boardroom?

Persichilli: Nurses are the only clinical discipline that's trained in care across the continuum. And that means nurses are perfectly poised to be leaders in a reformed health care system.

"Nurses are perfectly poised to be leaders in a reformed health care system."

I still see myself as a nurse, and hope I can help other nurses become leaders, too. Nurses need to find their unique voice and secure a place at the table and use it.

Q: Any closing leadership lessons?

Persichilli: First, always take time to reflect—on who you are as a leader, on the impact you're having on your community and colleagues—and learn from those reflections.

And second, a healthy dose of humility goes a really long way. Leaders who think they have it all figured out…eventually figure out that they don't!

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Kevin Lofton, the CEO of Catholic Health Initiatives, offers his perspective on how being an ED administrator helped prepare him for life as a hospital leader, what he's learned since his days as a 'baby CEO,' and his vision for the future of CHI.

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