The Evolution of Philanthropy and Other Thoughts
Reflections from Munson Healthcare's Retiring CEO

John M. Rockwood has served Munson Healthcare as President and CEO for the past 12 years during an era marked by both unparalleled growth and escalating challenges.

Throughout his tenure, John has concerned himself most with what is best for people – patients, employees, physicians, and the community. Those who know him best describe him as resolutely ethical.

The first question he consistently asks is “What is the right thing?” followed by “How will we make that happen?”

Increasingly, the answer to “how” has included philanthropy.

John will retire on Dec. 31, 2005, after 22 years at Munson. Below, he shares his thoughts on the rising importance of philanthropy, his career in health care, and the future of Munson Healthcare.

In the past few years, we’ve heard a lot about the need for philanthropy. Why has it become a focus for the organization?
Health care funding has become extremely complex. There are a variety of factors that leave us with a thin operating margin, and thus limited capital to reinvest in buildings and equipment. A significant factor in our funding equation is that we must provide care for a growing population of people who have no health care insurance. We’re also experiencing decreasing payment levels from most of our larger insurers. Along with that, costs for emerging medical technologies are on the rise. Philanthropy makes the crucial difference in whether or not we keep pace with necessary capital improvements and has become a permanent part of our funding plan.

Munson Healthcare receives generous support from the community and those dollars are put to good use. Many of the services we offer — the Women’s Center, the Munson Manor Hospitality House, the Hospice House, and soon the new Emergency Room — are available because the community recognized the need and helped provide the funding. The community’s support is simply invaluable.

Your retirement will come just one year after the retirement of former Munson Medical Center President and CEO Ralph Cerny. Is there any concern about a leadership void at Munson?
The Munson Healthcare and Munson Medical Center boards have thoughtfully planned for the transition of leadership for five years. Ed Ness is doing an outstanding job as the new CEO and President of Munson Medical Center. Our administrative team today is superb, comprised of very talented individuals. The system and the medical center are in excellent hands.

How is your successor being chosen and what qualities are the search committee looking for in a new CEO?
Again, it is a process that has involved thoughtful planning and input from key stakeholders throughout the system. Working with a consultant, the board’s search committee is conducting a national search for someone who will continue to position our organization as one of the premier health systems in the Midwest. I have every confidence they will find and hire the right person.

You’ve been involved with health care for 34 years, as a health care analyst, chief financial officer, president and CEO. How has the business of health care changed?
There is no doubt that financing health care is increasingly difficult. We’ve been through some tough years and, frankly, we’re in for more. The question that needs to be answered is, ‘Who pays for health care?’ Increasingly, hospitals are providing financially for care of the uninsured and under-insured and we will continue to do so. However, a better solution needs to be found because this burden is too great for hospitals and physicians to bear alone.

What are some ways you’ve impacted the Munson Healthcare system?
There’s really so little that you do by yourself. You hire terrific, talented people and then allow them to rise to their potential. I don’t think most people realize what a qualified group of administrators we have — they are the best in the state.

The relationship we established with the Trinity hospitals in 1998 has also been important and very positive, as well as the relationship with the affiliated hospitals. It has brought about better-coordinated care for patients as well as better economies and efficiencies from both the business perspective and the patient perspective. In seven years, we have made a lot of progress.

It’s also been important to work with the medical staff to develop physician leadership on our boards — our medical staff is now well represented at the board level.

Munson Healthcare is 20 years old. How is the system functioning?
I think it’s doing what we intended it to do. By having a system of affiliated and partnering hospitals, we are coordinating the way we work together as a region to improve health services. That was the purpose, and that’s what is happening. Small, solvable issues sometimes arise, but we have an overriding commonality of purpose – we’re all dedicated to providing the highest level of health care for the people of northern Michigan.

In light of the very significant challenges facing the health care industry, what is the outlook for Munson Healthcare?
It’s important to focus on what takes place in our hospitals every day. People are receiving outstanding care in settings that are consistently ranked among the best in the nation. There’s no question that the next few years are going to be challenging. There will be more tough decisions ahead. But the leadership team throughout the system is committed to improving efficiencies and remaining financially strong so that a high level of care continues to be available in northern Michigan.

What will you miss about being President and CEO of Munson Healthcare?
Without question, I will miss the people here. Many of the board members and administrators are personal friends, so hopefully I will continue to see them. I have tremendous respect for the skill, dedication, and compassion of our staff. It has been a privilege to provide leadership to such a terrific organization.

John and Ginny Rockwood