February 13, 2024
Welcome to Perspectives, Leerink Partners’ signature podcast, where we share our insights and interview leaders across the industry to get their perspective on how they’re driving innovation. We’ll also be digging into the backstory to learn more about what has most influenced their success. Be sure to check out all episodes by Leerink Partners.
Thad Davis: Hello, I’m Thad Davis. I’m Senior Managing Director here at Leerink Partners. And it’s my pleasure to be joined here, by a friend and colleague, Marty, who is the CEO of Ardent Health Services. So, great to see you again, Marty.
Marty Bonick: Great to be here Thad. I appreciate you having me.
Thad Davis: So as everybody knows for the, for the listeners here. Maybe this is the first time you’ve listened to the podcast, so I definitely recommend checking out some of our other episodes. We try to focus here on getting to know who we’re speaking with, in this case, Marty. He’s leading one of the largest hospital services companies and in the United States, and he’s had quite a career on the way to get into this seat. So, we’re trying to understand his thoughts and emotions during that journey and then talk, and I think what’s going to be interesting also we’ll spend a little bit of time talking about some topics around the digital hospital and kind of where hospital systems and hospitals themselves kind of fit into an ever evolving healthcare ecosystem. Before we get into it, why don’t we just level set a little bit before we dive into your past and just give us kind of a blurb about Ardent and the scope of it, what services you perform, how you go to market. Because I think Ardent approaches the market and, and partners with people in a different way. So let me just hand to you for kind of a little blurb about Ardent.
Marty Bonick: Yeah, So Ardent Health Services has been around since 2001 and it’s a current iteration and historically has been seen as a traditional health system hospital company that’s, that’s my goal since I’ve been here over the last three years to change that to be much more of a consumer focused health services organization. But as we stand and as people might classically look at us, we’ve got 30 hospitals across eight markets in six states We’ve got over 200 clinics and outpatient sites of care and about 1,400 providers that work with us, 23,000 team members, caring for about 3 million patients a year as we go about our business and, uh, from a revenue perspective, we’re a little over $5 billion. So that’s kind of the key stats is as many people might look at us, but again in much more of a transformational journey about how we approach the work that we’re doing in the communities we serve.
Thad Davis: That consumer focus, especially during this kind of time that you’ve been at the helm here, understanding kind of your perspectives on that was, that’s what triggered this. So, I’m excited to talk about that a little bit more. But before we get into learning about what the, the handprint you’re putting on that, you know, a $5 billion hospital services company. It all goes back to your time in Chicago. See, you’re a Chicago guy originally. I was not, I was not aware of this entirely until I did some of the background work here.
Marty Bonick: Yeah, I’ve been away from it enough that I guess maybe I’ve lost the accent. But, yeah, born and raised, in Chicago. But I started off by Midway Airport and gradually moved further into the south suburbs. But, my father’s a construction worker and my mom was a nurse. And so those are the only two things that I knew growing up. You know, as I was thinking what to do, you like to follow in your father’s footsteps and I used to work side jobs with him and help mix cement and carry buckets of materials to the job sites and what have you and, and, that’s what I thought I was going to do, you know, how our family was raised. And he says, “no, you’re, you’re going to go get an education. You’re going to do something more with your life.” And you know, he said, “I’ll break your legs if you try to do this.” The only thing else I knew was my mom. She was an LPN and worked at the hospital, a local community hospital. And so, you know, it’s like, okay, well, I guess I want to be a doctor then. I went through school and, you know, I was a pre-med psychology major, and thought that that’s how things were going to work out. And then, um, you know, it comes down to your, your GPA and your MCATs and you’re in or you’re out. And, you know, I was the first of my whole extended family to go to college, let alone think about beyond college. So, I had to figure out what to do with myself and, uh, I was an EMT during my college years. And so, I got to work in a hospital and an ambulance getting to, to, to deal with patients and again, thought that practical experience would mean something in a medical school application, but it didn’t. And so, I, I was fortunate to have a great boss that I worked for at the time. And he’s the director of a cardiopulmonary services and his name is Dell Smith. And I’ve kept in touch with him loosely over the years, but, but he said, “you know, well, you, you’ve got this mind that’s always trying to figure out how to make things better or change processes or what have you. Have you thought about administration?” I’m like, “what’s that?” Like, you know, I thought the doctors ran the hospital. I didn’t know what a CEO was. I didn’t grow up in a business world or context. And so, I took a, an intro class to, um, healthcare administration, my senior year at University of Illinois. And that was my first foray into the whole business side of you know, I never took an economics class or any, any of the things you would possibly think about. So that was sort of the, the journey. So, I, I went from there to WashU at St. Louis, Washington University, and got my, um, Master’s in Health Administration and also a dual degree in Information Management, which has come in handy in the world that we’re living in right now. That began my, my journey into the professional side of, of hospital management.
Thad Davis: So, you actually, after you sort of identified this, because you did, you’ve been exposed through the family with your mother being the LPN, you’d had some exposure, obviously pre-med, you’re going to be kind of around the medical profession. Then you’re doing EMT work, which is, I mean, that’s, that’s high pressure, high hustle type, type stuff going on there. And then, so you, you went from Illinois down to WashU and it grabbed up the masters before you moved on to, before you moved on to Hillcrest. Is that, is that how that worked?
Marty Bonick: Yeah. So, I got recruited, just like a doctor does a residency program or a fellowship, in the Master of Health Administration world they have sort of a similar track on the administrative side. So, you do an administrative residency or fellowship. And so, I went to Hillcrest medical Center in Tulsa, Oklahoma as an administrative fellow coming out of WashU. And, uh, spent the first year that I was there sort of rotating around the hospital getting to interact with the different leaders and different departments and sort of doing a mini sort of practicum in each of the different areas and got to learn about managed care and got to learn about the clinical operations and got to learn about the financial side of the business and, you know, and so on and so forth, you know, across the system.
Thad Davis: Interesting. So, and then at that point, you’re like, “I’ve got the, I’ve got the hospital bug.” At that point, or yeah.
Marty Bonick: A lot of the health administration programs of that time, you know, were geared towards a career in the hospital world because that, that was the you know, the big focus and emphasis of healthcare. I mean things have changed, you know since I’ve gone through the program and there’s so many different facets to healthcare that people coming out of those programs now have a lot more options just as our nurses have a lot more options to do things, you know this is the world is advanced. But at the time that was the path that I’d say, you know, 90 percent of the class was on is, is, you know, career in hospital management.
Thad Davis: Obviously you landed at, at Jewish down in Louisville, but how, like, how, what, what’s the path that somebody takes through that and what did you learn as you kind of went through that path that now, now that you’re outta the, the academic and actually, uh, get the hands dirty.
Marty Bonick: Yeah, so I’d say that there’s probably two different pathways that, that people might think of coming out. And, and I’m biased obviously to the, the path that I took. But, you know, one is, is you, you get to be a subject matter expert in a certain field. Maybe it’s a department like laboratory, maybe it’s medical records, uh, you know, and you sort of work your way up the ladder, and that’s how a lot of people in healthcare have grown their career. They started off in a very narrow focus and then gradually took on more and more exposure. But, but it’s hard. You sort of, if you’re on that track, it’s tough to break out because somebody goes and this happened to a classmate of, a colleague of mine. Uh, he went to a prestigious hospital for his administrative residency and right after his residency, he got put into a manager director of a lab department and then when it came time to expand and say, well, I want to be over multiple services. They said, “well, what do you know about radiology or what do you know about surgery? You know, you’re a lab person.” And so, so, you know, not to say that you can’t be successful and there’s many examples of people who have, but it, but I think it’s a tough path because you get very narrowly focused on one area, but the healthcare is very broad. So, the path that I did is administrative fellowship. I had the opportunity and a lot of this comes down to the organization sponsoring these, these residents or fellows. They’re perspective on it, but Hillcrest had a, a leadership development program and that’s how they looked at us. We’re not creating managers, we’re creating leaders. And so, they deliberately exposed us to each of the different key aspects of the health system. Again, you know, sort of think of all of your corporate services, your human resources and your hospital operations, your managed cares, your financial operations, you know, facility services, you know, so we got a broad exposure to all of those different things to, to get a survey. And I wasn’t, you know, masterfully competent in any of those, but I had a broad perspective of how the interconnectedness worked. And so, from there, I became a director of operations and took on a handful of departments. And then I became a VP of operations and took on some more departments. Fun fact, in 2004, Ardent bought Hillcrest Medical Center. And I got moved over to one of our sister hospitals, as the COO, and then became the CEO. And so, you know, you’re progressively taking on more experience. And again, in leading a hospital, I said, it’s kind of like leading a small city. We never sleep, you know, we’re open 24/7. We don’t get to close for the holidays or for inventory. We’ve always in operation. But it’s about people, we’re not machines and factories. And so, you know, as a leader, I’ve got to be able to help other people get their jobs done. I never became the subject matter expert in any one particular area. Had an appreciation for it, but more importantly, how do those dots connect and how do you help people work through those challenges? Because healthcare is just so interdependent and as a patient or as an organization, very few things stay within their, their lane. Everything sort of crosses boundaries.
Thad Davis: I don’t think until you just mentioned this, how could you be the CEO of a hospital system without ever being the operator of a single hospital, I mean, I guess you can because it’s I guess once the system gets large enough It becomes the ops are diluted down to or rolled aggregated enough to do that. But I mean like they do it for like they growing and adding hospitals. How many operators are there out there that have your background? I mean, this is like a block and tackle background. You would ground up.
Marty Bonick: Yeah, and I’d say that there’s a lot of people, you know, if you look across the industry and then the typical players, a lot of people I think had that, those early experiences. and there’s some newer entrants that may have came out of a finance background or a different avenue. And again, it can work. I think the advantage is when you’re trying to make hard decisions, and again, these last few years have been full of hard decisions that needed to be made. When you understand the impact, you know, I would say that healthcare is like a spiderweb. You know, if you tug on one string of the spiderweb, the whole web moves, you know, and it’s, it’d be nice just to say, we’re going to clip this one string out and everything’s going to be fine, but, but anything that you touch has a tangential repercussion. That’s something that we have to deal with. And so, if you really understand at a grassroots level, it makes it a little bit easier to, to have to balance those tough decisions that we’re all being faced with right now.
Thad Davis: Going back to your, going back to your family experience for a second, just kind of listening to you here and hearing that background, I mean, like a deeply pragmatic family. Like you, you picked up, a nurse is always a pragmatist by, by training and default. And then you picked up a love of that. And then your father being construction is like the ultimate process person. You were cursed with medicine and process out of the gate.
Marty Bonick: Never saw those two together like that, but, but you’re right. I mean, it definitely, I mean, there’s, there’s a way in which you build things and they’ve got a layer and stack together and You can say, I want to build this and have it turn to the side, but it’s not going to support its weight and it’s going to tumble, you know, so yeah, that’s an interesting insight that you gave me. Thanks Thad.
Thad Davis: There you go. Yeah. So then at Jewish, you were the overnight administrator, which also I, I thought this was interesting. Like you’re, you’re the, like literally the graveyard shift at that point?
Marty Bonick: Well, yeah, actually that was when I was in grad school, so that was, uh, that was in grad school. Two, two different, uh, Jewish hospital experiences. Barnes Jewish in St. Louis was going through a merger combining Barnes Hospital and Jewish Hospital, and I was there and they, they had what they called an administrator on duty and so each year they would hire two or three grad students to basically work all the night shifts and weekends and holidays. So, there was quote an administrator in the building 24/7 and again that’s the first only place I’ve ever seen that model, but it was a big I mean 1,700 bed, you know inner city hospital coming together and so there was always interesting things going on. And so, I worked from 5 pm to 7 am the night shift and then we’d go and do my classes, uh, afterwards. And I only had to do that long shift a couple of times a week. And then we worked the weekends and we’d split it up amongst the five of us. So, the five of us that were in the program had to cover all the Monday through Friday, 5 pm to 7 am and then 24/7 on the weekends and divide that calendar up. And so, you know, again, forced us to have accountability and a work ethic to make sure it was there, but we would deal with everything from patient complaints or family complaints to bomb threats. I remember, you know, getting bomb threats in the middle of the night. You’re in an inner-city hospital and, you know, the world is the world. And anything and everything in between. You know, I’d spend a lot of time in the ER because that’s where the action was at night. But I would round the floors with the nurse supervisors. And that was my hands on practicum to what I was learning in grad school, was also getting to see how does that translate in the, in the real world. But again, we got that early, early indoctrination in terms of how do hospitals work, particularly when there’s no management there, you know.
Thad Davis: “Who are we going to get to do the overnight shift? Let’s go get the five kids from the university. They’ll do it.”
Marty Bonick: That’s one of the things I’ve always said. You probably remember this. Some of your audience may not, but I’ve always said that about my career and how I got here. Remember the Life cereal commercials? “Give it to Mikey, he’ll try anything, you know.” Give it to Marty, he’ll do anything. Like, you know, I didn’t know what I didn’t know, you know. So, I’m just, sure, I’ll do that, and you figure it out.
Thad Davis: He’s a problem solver. He’ll get it done one way or the other. Is he going to like it? I don’t know. We’ll just give it to him and see what happens.
Marty Bonick: That’s exactly how I built my career.
Thad Davis: So there you go. So transitioning, so down, and then you, you’re in Louisville, and then you made the move over to Community, and you moved up from like, what we’re trying to do is bridge your time, like, there’s a difference between running a unit, and then running multiple units, and it requires a transition of sort of, leadership, style, et cetera, and so when you went to Community, then now, now, Community, was a very, very large, multi-unit operator. So, like, what was the difference between what you were doing, like, from just personal, like, leadership, how you’re feeling, things like that, about, like, running the unit, like, night shift, day shift, regular way administrative duties in a unit, to this, like, large platform where you have dozens of yourself that you’re sort of overseeing.
Marty Bonick: From grad school is that overnight administrator to Hillcrest, worked my way up to CEO, Jewish Hospital in Louisville, running a multi hospital campus in downtown Louisville and then Community. I came in as a vice president of operations and later became a division president with them. And that was when they acquired HMA and got up to 206 hospitals, I think, at their, at their heyday. One of my peer colleagues, uh, when I came to Community said, you know, when you’re the hospital CEO, you’re the quarterback on the field to use a football analogy. And so, you’re out there and you snap the ball and you’ve got to decide, do I throw, do I hand this ball off, do I take a knee, you know, what, what do I, do I just run up the middle? You’re, you’re the CEO and you’ve got to make it happen, it’s on your shoulders. When you move into a more corporate role where you’re now overseeing a bunch of facilities. You’ve got a bunch of quarterbacks. You’re, you’re the coach on the sideline now, you know, or the general manager, you know, depending on how you want to look at that. From your experience, you can say, oh my gosh, this guy’s wide open, throw the pass, throw the pass. Well, you’re not the CEO on the field anymore. You’ve got to help them see the opportunity, that you’re seeing. You know, if you’re sitting up in the sky box, and you’re seeing the field, you’ve got a different perspective than the person that’s on the field running the play. And so, you’ve got to be able to really transition from being that player to being a coach. And ultimately, I’ve got to decide when do I bench the quarterback, or, coach him up, but if I can’t, do I have to bench him and bring somebody else in? So, going from being kind of a subject matter expert of, okay, I know how to run a hospital. So now I’ve got to teach and, and coach and help, help a group of people run a group of hospitals to accomplish, you know, an overall objective for the company is a learning curve, but, but I got great experience at Community starting as a VP of, of operations. I got to work with a group of about 15 hospitals and got to move to another division and take on another group. And then I became a division president, which was a larger group and had VPs underneath me. So now I’m the general manager with coaches underneath me that have, you know, players on the field underneath them. And you progressively understand again, tying the company objectives and strategies learning how to coach to, you know, think about putting a new off in your new coach at a football team, you come in and you’ve got your offensive playbook and your defensive playbook where you’ve got to communicate and you’re going to teach people what that looks like. And so, it’s, it’s a much different role than when you’re, you know, the player on the field, just moving from team to team.
Thad Davis: Extending the football analogy, which I think is a good one, because it’s like, you’ve got players in the field and you got your offensive coordinator, you got your head coach, then you got the general manager, then you got the CEO. It’s like, so we’ll work our way up. We’ll work our way up to the, uh, the owning the team.
Marty Bonick: I work with the people that own the team. Yeah.
Thad Davis: Has it been more like you felt it and it’s more been a flow to you? Or have you like sat down and like, “listen, I actually have like a, I have a small notebook where I’ve wrote the system down and I have the system and things like that” or you’re like, you know, “no, I’ve, I’ve picked this up over the years and I’ve really just absorbed a lot of experience and I just know what to do and when to do it.” What is, what’s the blend there?
Marty Bonick: Probably more of the latter. You certainly, you know, I, I was, fortunate or misfortunate, however you want to look at it. I think it was fortunate that in my 11 years that I spent with Hillcrest the first go around, I had 10 different bosses. you know, you read enough about management, I do believe this, that the people in general don’t leave their companies, they leave their bosses. You know, and, and that was the case. So I, I, you know, over my first 11 years in a sort of an administrative career, I had 10 different bosses, some by, you know, people around me.
Thad Davis: I’m not, I’m not sure what that says about you. It was like, you have like, your boss is like, “I can’t work with this Marty guy, I’m out of here.”
Marty Bonick: I would say resiliency is, you know, one of those things that you have to learn and, and how to, resiliency and adaptability, uh, you know, and again, which I think are, two, you know, two key values that I think anybody that wants to have a career in healthcare in these days certainly have has to exhibit, you know, the world is changing and you’ve got to change with it. And it’s not always easy and you just have to keep going back and you can’t let a little setback, you know, just knock you over. You just got to pick yourself up, dust yourself off and keep going. And so, but I firmly believe that you learn from every experience, and I learned a lot over those years and you would see what works and different leaders you know, everybody’s got a different style, a different tone, a different approach. But there’s a lot of commonality if you, if you sort of boil it down. So, at Hillcrest, I had 10 bosses in 11 years. When I went to Jewish in Louisville, I had, I think, 4 different people I reported to in 5 years.
Thad Davis: You’re like, you’re like, “I can’t deal with this boss change. I’m just going to be the boss.”
Marty Bonick: So finally, you get there, but, but there’s always something. So we have a board and, you know, now I report to a board and I have owners, you know, so, so you’re always going to have somebody, but you, but you’ve got to have that resiliency. But if you have a learning mindset that I can learn from all of these people. that I’m working with. And again, people are going to change. Go back to the football analogy. Some players change teams, coaches get changed. You know, I had a really, you know, Tom Brady and Bill Belichick, you know, they had a chemistry and then one of them leaves, you know, and now they’ve got to learn new players and new systems and new coaches. And again, I think healthcare is very similar. If you look at the average tenure of a hospital CEO, it’s, you know, depending upon the time period that we’re in, you know, somewhere between three and six years is fairly average. People are either moving up in their career and they’re changing, or you know that the world is changing and the organization needs to change. And so, you know, hospital CEOs and head football coaches and offensive defensive coordinators have a lot in common when you when you start to look at it. It’s a relatively small world and small industry at the end of the day because you don’t see a lot of people come in and run a hospital that, that aren’t healthcare operators. Because it is just so specialized and so unique and the nuances of the finance and managed care, you know, are just so different than most secular businesses, that if you don’t understand the inner workings and again, you’re working largely with fairly low, tight margin organizations, you need to know what you’re doing. There’s not a lot of room for error so to your point, you do learn what works and you carry those with you, and you learn some things along the way that doesn’t work and, and try to steer clear of it. And so, you know, through, through repetition, it just kind of becomes ingrained in like the word you use flow, versus, you know, sort of checklist mentality because every situation is a little bit different, but you have some basic principles to build on that you know are going to work, and then you adapt for the situation that you’re currently in.
Thad Davis: And so, from Community, you actually, you’ve been dipped in, dipped in the hospital world all the way up to that point that you took a, you went down and actually went to what effectively is a, uh, hospital outsourcing company in PhyMed. They do other things around, but it’s a physician linked anesthesia focused business. And you took on the, you took on the leadership helm there, and, and, and what was that transition like? That’s a big move right there.
Marty Bonick: It was, and, you know, I, I think, I’ve always had this mindset. My wife, may call it a curse, I guess, that, you know, I, I, I get bored easily, and, and I, I like to challenge myself. I, I’d like a challenge that, you know, things that are hard to do I don’t know just the way I’m wired. I like, I like the challenge versus being on autopilot. And so, moving to PhyMed, you know, I think I got to a point where I felt like I had, I’d gotten to a pretty good position in the, in the hospital world. But you know, my perspective is the hospital industry just has not changed as much as it needs to. And I wasn’t in a position where I was going to be able to, to singularly influence that where I was at. And I wanted to do something that was a little bit more progressive, but when you’ve done something for 20 years and that’s all you really know, how much risk do you want to take? So I’m, I’m, I’m not anti-risk, but I’m not foolishly going to jump into something that I’ve, you know, I’m not going to be able to, to climb my way back up. Yeah, that goes back to that pragmatism that you talked about. And so, yes, the thought process was, “okay, if I go and run an anesthesia company, and I’ve worked with anesthesiologists on the other side my whole career, that’s not too far of a leap, but it is different.” I wanted to learn private equity. You know, there’s a lot of talk about that, and there’s goods and bads that people can talk about. I think that’s mostly good. But not having that experience directly, um, that was a challenge, and my wife also has a health administration master’s degree, and we can speak the same language at home when it comes to the hospitals, but when I went to the private equity world, it was like learning a new vocabulary. And she, she would come back and she’s like, “you’ve got your sectors and spaces and multiples” and all this stuff that we didn’t really talk about in the hospital world. And so, it was a learning experience, you know, I learned a ton from that, it was an opportunity for me to, to sort of take a sabbatical is the way I look back on that time now, away from the industry, sort of refocus, get to work more directly with the physicians and clinicians on the frontline and think about things through their, their lens, that I think has been an additive again and coming into the role with Ardent, but, but that experience was a nice break and a good opportunity to challenge myself, one, to learn a new industry in private equity, and two, to refocus my thoughts about healthcare in a global context.
Thad Davis: That’s actually, like, not to smooth over the scale of what was going on at Community, you had a very operating role where you’re doing sort of quarter-to-quarter finances and then transitioning to private equity, CEO and there’s, I mean, more importantly, there’s a massive amount of revenue flowing through you. So, it’s like, okay, I’ve got a lot of responsibility to make sure this PnL works. When you get to the PE side, there’s like, there’s actual value creation and like this other level of sort of like, not ops, but like balance sheet creation or value creation, there’s like the two different worlds. Same thing with like being a banker. It’s like, I understand probably the value creation, the value balance sheet, but you know, running the, running like an ops thing and like the, like getting PnL done every day, you know, that requires the experience. I mean, you mentioned that you’re like, listen, language change. It’s like a, that’s actually like a knowledge experience I get. Not that you’re not being exposed to it, but doing it’s a different thing.
Marty Bonick: Very well said. As a hospital operator inside of a multi system environment, you’re really a PnL manager. And you get to know the PnL really well. You know what levers that you can pull that are going to drive value. At that context, but you don’t get a good view into the rest of the financial territory. So, I, you know, in all my years leading up to PhyMed, I had never met with an investor, investment banker like yourself, prior to PhyMed. And again, the way in which bankers look at businesses and analysts look at businesses compared to the way that we look at the businesses, everybody’s got their lens and there’s not a right or wrong. They’re just different. But that exposure really helped me to understand the bigger picture when you, when you getting to a company where you’ve either got public investors or private investors that are looking to create a return on their investment. Um, yeah, you look at the business differently. So, you know, connecting the dots. Having the core experience of knowing, you know, what works and what doesn’t work. And running a single unit and multi-unit organization. And then coupling that with the bigger, broader picture of, you know, an investor stakeholder universe. In terms of how they see performance of a business. Now you’ve got to strategically put those two together. And so, you know, that’s the experience that I’m grateful to have had. And you know, I would say God had a plan. I might not have been able to chart the path that I did on my own, but with his guidance, I’ve ended up in a place where all of it comes together and, and it allows me to see the world, you know, running Ardent now where I can understand an owner’s perspective, an investor’s perspective, and, you know, the physicians and clinicians and team members that, you know, are, are making a living and, and ultimately, they’re the ones that have to, to create that value and how do you, how do you translate between those different stakeholder groups. So, all of that experience has come together nicely here.
Thad Davis: Putting the timing aside situation, do you think that you would’ve had the Ardent opportunity had you not done the PhyMed situation? Because like, like there’s, there’s lots of divisional folks, but you had something different. You had the division and you had the, the private ownership ’cause for those listening Ardent is a privately owned, organization with equity owners that are financially driven on that in that basis. But do you think that you’re like, actually, I was the perfect person.
Marty Bonick: Yeah, I mean, I, you know, I never get to too far into the what ifs in life, but, but I have thought about that. And I said, whether I had the opportunity or not. Who knows? But I would say that I certainly would not have felt as qualified or competent had I not had that experience.
Thad Davis: You’re like, I understand how to run a PnL, and I understand what I need to do on the, to create PnL value and kind of what that, what the like for somebody that owns private, because it’s a public format, that’s a quarter to quarter, year to year trend. But a private, you’re like, I need to do something here over a time box period of time in the PnL to create value for these owners who are not going to be here potentially, for long term. So, it’s a very different situation. I saw your speech at the, uh, healthcare council, the Nashville Healthcare Council has put on this new event. And then, and Marty was on stage with a couple of the, the leading investors and, and people creating value in kind of the IT chain and in the hospital. And then I, I laughed and in a good way that, uh, whenever a general catalyst started to move to acquiring a hospital. I was like, I was like, they, they’re bugging, they’re bugging Marty’s office in there. I’m like using, they’re like putting, I was like, everything you were talking about, about like the digital front door, things you’ve done at, at Ardent, kind of expanding the community format, the hospital and the ecosystem that is cord in a region by the hospital can be commanded by the hospital. It just requires more reinvestment. And there’s a transition, all these things you were talking about, like this meeting, like three or four months ago that I was, I was in with you. I was like yeah, we’re here now. I actually looked at it and I was like, man, hospitals, golden era right now. It’s a good time to be a hospital. What do you think? What do you think about all that?
Marty Bonick: Well, yeah, I mean, it’s, I don’t know that there’d be a lot of people that would say it’s a good time to be a hospital right now. If you look at the industry, it seems to be a tale of two cities. You’ve got some that are performing quite well and then others that, uh, you know, are still, you know, upside down and still trying to figure their way out of this post hurricane mess of Covid that we’ve had. And, you know, I think it really comes down to the operational leadership discipline, you know, throughout and a strategy to get there. But for me, I see it as an opportunity. And so, connect another dot. So, we are privately owned. We’ve got great owners, Equity Group Investments out of Chicago. Um, and they’re not your typical private equity. They’re not private equity for one. They are. We are. privately held, but they’re long-term equity. So, they want to be part of our story for a long term. And so that, that really is a different dynamic than the quarter over quarter public pressures of some of our peer companies.
Thad Davis: That’s a lot better for a hospital company right there.
Marty Bonick: Yeah particularly given, you know, since I’ve been back here at Ardent, uh, you know, for, for round two here for the last three years. I mean, this has probably been one of the most challenging economic environments, you know, certainly in my career and, you know, for, for some period even beyond that. I mean, yes, we’ve all weathered the conversion to DRGs and the Balanced Budget Act of ‘96 and the depression of 2008. But, but all of those are really small compared to the magnitude of what Covid did to the industry. But two things happened, Covid happened, which I think is a catalyst for opportunistic change. And on a personal front, I, I think you know the story Thad I, I was, uh, training for an Ironman and got hit by a car when I was on a bike ride. And I got to spend four days in a trauma unit here at one of my academic centers in Nashville and really become a patient for the first time in my life. Yes, I’ve been to a doctor visit or a minor ER. But an acute patient where you’re relying upon, you know, doctors and nurses to take care of you, you know, and so I was pretty banged up. I got hit by a car that was going 55 miles an hour when, when I was hit. Um, and so thrown 75 feet in the air, uh, before I landed. And so, you can imagine multiple broken bones in the thorax and was banged up pretty good. And so, I got to experience care for the first time as a patient from a patient’s viewpoint. And, you know, what I can say Ardent doesn’t own any facilities in Nashville, so it was not one of our facilities. But we’ve got a lot of great facilities in this town and this is a, it’s an academic medical center. It’s not hard to figure out. But the care that I received was great. My accident happened on September 11th of 2021. So Covid was still active, but this was the Delta phase, you know, where it was super spreaders and, you know, high hospitalization rates. And so, you know, at this, this hospital, I’m pretty sure that most every patient was either a trauma patient or a Covid patient, you know, and so the, the nursing staff is thin. We’ve all heard about the, the staffing challenges and pressures in the industry. And again, our hospitals are no different than the national hospitals are no different than the national hospitals. Everybody is, you know, in this, this challenge staffing period. And so, but the care I got was great. The people were great. They were attentive. They cared well for me. They got me well. But I had, uh, a number of things once I was discharged from the hospital. You know, ambulatory surgery visit and an MRI and physical therapy. And again, the clinicians, the caregivers in each of those settings were all wonderful. But, but what really dawned on me, you know, as a sitting and looking at it from a patient lens, is just how bad the system is. We don’t, as a system, and I’m not trying to point fingers at any individual or any, any organization, but as an industry, we do not respect people’s time, their input, their, their wallets, you know, the way that, that every other consumer based industry does, you know, we have got this, “we have built it and you must come” mentality, um, you know, that’s existed in healthcare delivery for a long time because we’ve built these big buildings and if you need healthcare, you’ve got to come to us and you’ve got to sit in our waiting rooms and deal with our scheduling systems and our billing systems and they’re complex and they’re, they’re cumbersome and they’re not patient friendly, they’re not consumer friendly. And so having experienced that on the other side of this and now going, “okay, for the last 25 years, this is what I’ve been doing” and I’ve, you know, really never really experienced it from, from the consumer’s viewpoint. So that really coupled with the opportunity that Covid has created from a need to do things differently has really transformed my, my vision about what the art of the possible is, for the industry and for Ardent. I think this industry is full of people that have the right intentions and want to do good, but we’ve got systems and processes that have cobbled together based upon how the economics of healthcare gets paid and reimbursed.
Thad Davis: It’s a process design issue like you were talking about. It’s like all processes grow and it’s like a vine. It just grows, and it kind of goes places, and it tries to get, it tries to go in a specific direction, but it’s, it’s somewhat organized, but it doesn’t look quite organized, and then once the vine’s grown, you’re like, “Oh, wait a second, if I put some scaffolding around this and kind of guided it maybe it’d be better.” Okay. Well, what do we do here? Can we bend the vine around or we do we have to cut it back? What do we got to do here? How do we make changes around that and I think like a lot of people, people hate the end result of the process but they don’t understand it. They give this and he grew up this way. We’ve got to transform right now.
Marty Bonick: I agree, and I think that’s the opportunity, and it’s, you know, I’ve been saying this for a little while now, that this is, again, from a healthcare delivery organization, this is ours to lose. And, you know, you can see what’s, what’s happening, and there’s a lot of buzz out there about, you know, Amazons and CVSs and Walgreens coming in and, you know, taking this more consumer centric approach to healthcare. And, and that’s great. We need the challenge, we need the competition, but, but we have the relationships with the patients. We know what they need. It’s, it’s imperative upon us, and this is, this is the philosophy that I’m trying to instill across Ardent, is we have the relationship with the patient. Nobody knows that better than we do in terms of what do you need and where’s the best place to do that. But we have to sort of disrupt ourselves because if not, Amazon’s going to come in and they’re going to try to take that urgent care business away or that telehealth business away and guess what, when you go to one of their clinics or go to one of their you know telehealth, what happens when you need that, that x-ray or that lab test or that procedure? Well now you gotta go back into the health system, you know, to do that. So, they’re, they’re not able to, to truly treat you. We can, but we have to get away from this mentality. “We have built it, and you must come” to “what care do you need and how do we deliver care on your terms, not ours?” Because that’s how we win your trust. That’s how we win your loyalty. I don’t want people to go to Dr. Google. And search for where do I get healthcare? I want them to think about our hospital, our system, is that one stop shop and we’re not going to force you into something that you don’t need.
Thad Davis: This probably, going back to the Chicago thing, I lived in Chicago for many years, and you see, like, picking a system out like Northwestern, and it’s extremely regionalized, it’s very tight, and it’s very integrated. So, if you go into the system there, and using that as a comparison to other things, I think that, you know, there’s always improvement to do, and always, there’s some sort of stuff, duct tape behind the scenes. But the, but if you go into the Northwestern system there, you have a very good sort of a continuity effect. They, the doctors, the physicians, the out, and it’s like you can go to them and have a good experience. And then it’s dense and it has a nice placement within the local ecosystem. Something like that is quite delightful. And, and, and they draw in a lot of care, and they can actually hone the delivery of care through that versus like, I think your, your example, like you’re like, “wait a second, I got, just got discharged. I’m going to a separate ASC. I’ve got to manage getting from X to Y and things like that.” It’s just, it’s just an unusual patient experience. And it depends on like the system grows and there’s so many different ways this is done. And it’s like one of those, it’s like hospitals are one of these areas where it’s like the probably within the four walls, the execution and operation but once you get to the systemic level, there’s a lot of differences. between systemic execution. It’s quite unusual relative to non-healthcare industries of things at this scale.
Marty Bonick: Right. And Covid ultimately will be a great accelerator and tipping point. And out of something bad, my hope is that something good for the industry happens and that we really embrace the need for change, uh, and embrace technology. I think there’s so much, and again, I think the word of the year is AI. You know, we can probably all agree upon that, and AI is not going to change everything, but it’s going to create a lot of opportunity. And in this industry where we’re, you know, we, we have, we’re sitting on a ton of information and data that we put into systems and, and up until this point, there’s not been a ton of utility coming back out of that outside of research studies, but in a practical way, the opportunity for us to create smarter hospitals with devices and technology that’s working for our clinicians and giving them real time in the moment feedback. In healthcare, we’ve put all kinds of information into a system, but we don’t get a lot of utility out. Well, now you have technology that can listen to a conversation. If, if you and I were a doctor patient conversation going on, and you’ve got an AI ambient listening, uh, tool in the background that’s picking up that Thad just mentioned this historical thing and, and the way electronic health records are organized, you know, a doctor’s not going to go back and look at 20 years worth of history, but it’s like, okay, this is not the first time Thad said this. It’s come up three times in the last ten years, but now that ambient technology can be surfacing that and putting it out there. Well, now the doctor might see a different pattern that he or she might not have seen before. The opportunity to start to leverage the information that we’ve been putting into these systems for all these years and to give, you know, useful information and helpful information about what a patient’s going to respond to, what they might react to, interactions between drugs and therapies that are being offered by different clinicians and a person’s care journey. There’s just so much opportunity to start to bring all this together. So, I’m pretty excited about it, but we have to be very deliberate about how those things are going to play out for us to be able to, to really leverage that and, and sort of help the organizations leapfrog into the 21st century like so many other consumer organizations that we interface with.
Thad Davis: You have obviously great resume, but you’re involved in a number of sort of both industry as well as your charitable organizations. How do you decide what to do? What do you take away from that and how, like, how do you view that and kind of the ecosystem of the things you’re involved with?
Marty Bonick: Yeah, I mean, time management, you know, these days is paramount for everybody to, to make sure that you’re, you’re spending your time in a way that’s, I think, one, that you can provide value to others, um, you know, and, and, and I look at, you know, is there something I can offer an organization, and two, is there a reciprocal opportunity to learn and grow from that personally, and so, um, you know, some of the things that I’m involved in, the federal, the, the American College of Healthcare Executives is, is, professional organization for healthcare executives and focus on, you know, continuous learning and personal development and improvement. And I’ve always been a lifelong learner and, you know, hope that that never stops because the world is changing. And I want to, I’m always curious, how do we continue to push ourselves, push our organizations and learn and learn from each other? The Federation of American Hospitals is an important commitment for me in terms of having a voice in Washington. So much of our payment and our reimbursement is government based, and if we don’t have a voice, then we’re subject to whatever happens. As much as I, may not enjoy the political process, if you’re not part of it, then you can’t complain about the results. And so that’s an important professional pursuit. Also serve on the board for, advisory board for, the Via College of Medicine, uh, Auburn’s campus medical school. And I’ve been involved with that since they, um, first started about eight years ago. And, um, I think we’re, you know, the ability to be involved in helping to train and shape the future of medicine is great. we’re all going to need it someday. I already got to experience that, but when you surround yourself with, with other, um, smart, motivated, passionate people around a topic, um, again, uh, and hopefully I’m able to contribute something to that, to that process, but also you’ll learn a lot from it.
Thad Davis: Yeah, that’s good guys. I highly. As I said on other podcasts, I highly recommend people dive into this because it can be, it’s very, very rewarding. I’m assuming you’re IFR rated. So, instrument, you’re instrument rated all the way up. Or where are we at in the, where are we at in the licensing and types? What are you typed on? What are you licensed to?
Marty Bonick: I have all my training and I’m a check right away from IFR certification. that is, hopefully will happen before the end of the year.
Thad Davis: Nice. Have to land without, without vision, right? That’s the, that’s the IFR test. Is that, you have to land and take off?
Marty Bonick: Instrument meteorological conditions, IMC. Flying through the clouds when you can’t see. you come out of the clouds when you’re, you know, a few hundred feet above the runway. So, um, you’re relying upon your instruments when you can’t see out the front window. So, so yeah, flying has been one of those things that I do. I’d say I like to collect experiences. Probably, I like to do hard things. I like to do things that are kind of off the beaten track. And so, um, I’ve got a good friend who, uh, passed away, uh, not too long ago, but, but he got me into doing triathlons and, Ironmans specifically, so I was training for my second Ironman when, uh, I got hit by the car I mentioned before, but I’ve done, I think, five or six half Ironmans now.
Thad Davis: You’re gonna get back on the Ironman road now? I mean, I know you’ve gone through a bunch of rehab and stuff. How are you feeling?
Marty Bonick: So, I’m two years out from the accident, so on the one year anniversary of my accident, I did a half Ironman, uh, last year, and then I did another one on the two year anniversary this year. The full Ironman is a commitment, and right now with the duties that I have, it’s a little bit of a stretch for me to, to be able to train, uh, to be able to do a full, but the half is still a pretty good,
Thad Davis: That’s okay. After a bicycle accident like that, I think the audience here will allow you a half Ironman.
Marty Bonick: Yeah. So, so those are the things that, uh, you know, I enjoy doing in my off time.
Thad Davis: What’s a great piece of advice that you were given that you’d like to kind of transition to the audience here?
Marty Bonick: I’ve been fortunate to have a number of good mentors in my career and learned so much from them. But I think two things, particularly to the, to the healthcare audience that may be listening out there the late Jim Harvey, he was the, the chairman emeritus of the Hillcrest Healthcare System and, uh, was my preceptor when I first came there as an administrative fellow, um, back in the 90s made a big impression on me. Always do the right thing. The right thing is not always the easy thing, the world that we live in with compliance and regulations and unfortunately you see some of the downfall of this happening recently in the, in the economic world when people think there’s a shortcut, there’s a, a fast pass, uh, you know, there’s something that’s, they’re acting in short term personal or business interest, rarely does it pan out. So Jim Harvey always impressed upon me, always do the right thing, even if it’s not the easy thing, and, um, that’s something that, you know, has stuck with me and, you know, been core to, to, to my personal and professional development, and try to, to live by, you know, so that’s, that’s one thing, and the other is just always be learning. The world is changing, and, you know, I’ve I feel like I get to be a student of life and, uh, and then you get to act upon what you learn from. But, you know, if, if you’re closed minded and, you know, just stop progressing then, you know, you, the value and utility you can bring back to your organization and from a leadership perspective is limited. And so, you know, always be learning always do the right thing.
Thad Davis: That’s great. Well, I appreciate the time, Marty. It’s great and congratulations on congratulations on everything we’ll have to we’ll have to do a little fork of the podcast to talk about like the deep dive on some of the some of the hospital stuff. You’re at the center of a massive amount of change and you can just tell that people are starting to, people you’ve been beating the drum for a while and people are starting to hear people are starting to hear it else where now too. So, but I thank you for taking the time out today to, uh, talk with us and, look forward to continuing the conversation offline.
Marty Bonick: My pleasure to be with you, Thad, today. That’s great. Thank you so much.
Thank you for listening to this episode of our Perspectives podcast. If you are interested in participating in future podcasts or would like to learn more about Leerink Partners, please email us at info@leerink.com.
