Ronald R. Peterson’s accomplishments as a health administrator over the 44 years he served at the Johns Hopkins Health System are remarkable. He was an MHA student at the George Washington University when he first arrived at the Johns Hopkins Hospital in 1973 to complete his administrative residency. At that time, the then 84-year-old hospital had always operated at a loss. Immediately following his administrative residency, Peterson's successes in tackling the administrative and financial difficulties as administrator of the hospital’s Henry Phipps Psyciatric Clinic, created the opportunity for him to be given the goal of helping the entire hospital operate more efficiently. The cost improvement program that he implemented had the hospital operating at a profit by 1977.
His successes continued from there. As Dr. Paul B. Rothman, dean of the medical faculty and CEO of Johns Hopkins Medicine, put it in announcing Peterson’s retirement: “In the life of an institution, there are leaders who leave such a deep and distinctive imprint that their influence spans well beyond the bounds of their career. Beyond any question, Ron has been instrumental to the success of this organization, and I have a profound appreciation for all of his contributions."
Peterson says that “The George Washington MHA program gave me a great foundation by creating a way of thinking that caused me to become open to life-long learning, willing to open new doors and think outside of the box a bit.”
Of all his achievements as a hospital administrator, Peterson says the following milestones are the ones Peterson is particularly proud of:
- About nine years into his tenure at Johns Hopkins, he was invited to manage the city of Baltimore’s former public hospital, known as Baltimore City Hospitals, after Baltimore’s mayor decided he wanted to divest the city’s responsibility for owning and operating it. Peterson led a dramatic revival, updating the physical campus and transforming a $7 million loss per year into a healthy bottom line. At Peterson’s recommendation, the hospital, now known as Johns Hopkins Bayview Medical Center, was acquired by Hopkins in 1984. Peterson was named its first president. “It was really my first major break, going beyond my comfort zone at the main hospital,” Peterson recalls. He credits the achievement for giving him the confidence that helped set the stage for his later successes.
- In the mid-1990s, after Peterson’s mentor, Dr. Robert Heyssel, who had served as the president of the hospital and chief executive officer of Johns Hopkins Health System, retired, the system’s board of trustees recruited a managed care expert who struggled with Johns Hopkins’ culture and clashed with the dean of the medical school. Peterson credits the board of trustees for responding with a significant amount of research to investigate how to ameliorate the situation, resulting in the creation of a formal alliance between the medical school and the health system and the decision that the dean of the medical school would be the CEO of the new entity, Johns Hopkins Medicine. After the troubled managed care expert stepped down, Peterson was hired as the president of the hospital and health system, initially in an interim capacity. “It was the opportunity to ascend to the role that I had aspired to,” he says. Within a year, he also was named as the inaugural executive vice president of Johns Hopkins Medicine. “I got in on the ground floor and helped to formulate the Johns Hopkins Medicine structure and organization.”
- In 2000, Peterson began working on a master plan for redeveloping Johns Hopkins Medicine’s East Baltimore Campus. Construction began in 2005 and ultimately more than half of the Johns Hopkins Hospital was rebuilt.
- Beginning in 2006, Peterson began working on an academically driven integrated delivery and financing system for the Baltimore and Washington region that Johns Hopkins Medicine by then encompassed. In addition to The Johns Hopkins Hospital and Bayview, the former city hospital, Johns Hopkins Medicine now includes four other academic and community hospitals in the region, including Howard County General Hospital (in Columbia, Md.), Suburban Hospital (Bethesda, Md.), Sibley Memorial Hospital (Washington, D.C.), Johns Hopkins All Children’s Hospital (in St. Petersburg, FL), and co-owns the Mt. Washington Pediatric Hospital with the University of Maryland. The Johns Hopkins Health System also has alliances with Greater Baltimore Medical Center in Baltimore City and Anne Arundel Medical Center in Annapolis, Md. The 40 primary and specialty care sites operated by Johns Hopkins Community Physicians throughout the region, as well as a home care division and four suburban health care and surgery centers, are also part of the system. The final part is Johns Hopkins HealthCare, which oversees the infrastructure for managed care health plans. “Developing a more integrated way of rendering health care services was the culmination of my career in the last decade. During the period, we added ambulatory-based and home-based services to the hospital-based services we offer, and we moved from a volume-based approach to a value-based approach,” Peterson says.
A switch from medicine to administration
Peterson attended Johns Hopkins University as a pre-med student with the intention of returning there for medical school. His plans changed after his father became seriously ill. “I got the advice that because I had a penchant for business in addition to my interest in health care and medicine, I might look into schools of health care administration.” The fact that he did better on his Graduate Record Exam than his Medical College Admission Test helped propel him toward an MHA. Back in the early 1970s, the George Washington University’s MHA program was part of its School of Government and Business, and it was considered (then, as now) one of the best in the country.
“What I really liked about my GW training is that we learned from a combination of both full-time professors and part-time faculty who came from the field. I like the fact that we had both the opportunity to be well-grounded in academic and philosophic aspects of the emerging field of health administration, combined with the practical sense and dose of reality we received from the part-time faculty. We also did some of the project work in small teams, and that was a good way to learn team-work, which has increasingly become how we get work done in health care.
“In retrospect, the decision to go into health administration turned out to be the right one,” Peterson says. “Going to GW worked out very well. I did quite well as a student, and then had the good fortune to get an administrative residency at my first choice, The Johns Hopkins Hospital.”
When Peterson arrived as a health administrator at Johns Hopkins, it was not unusual for major academic hospitals to operate at a loss that was covered by borrowing from their endowments. He says the prospect of working at a financially challenged facility didn’t discourage him. “In the mid-1970s, we began to see a significant increase in inflation, and that was particularly true in health care,” he says. That, he explains, is why the leadership of Johns Hopkins was interested in trying a methodical approach to contain the rate of growth in expenditures.
His training at GW gave him a good foundation in health care economics and health care financial management, Peterson says. He also credits advice he got for helping to contain expenses from an unusual source, Larry Phillips, a Johns Hopkins vice president for human resources who had previously worked at the General Electric Corporation. “He introduced me to a team-based, cross-functional approach to cost improvement that had been used at General Electric. “I convinced my mentor, Dr. Heyssel, that it might do well for us to give it a go, given that a number of processes inside hospitals are cross-functional in nature,” he recalls.
Advice to New and Up-and-coming Health Administrators
“When I was looking for a health care administration residency, it was largely looking for a hospital residency,” Peterson says. “Today there are so many different opportunities, because a lot of what we’re doing is not necessarily based inside hospitals. Newer health care administrators may not necessarily work in a hospital environment anymore. I think that it’s important in choosing a residency to think about both what your individual interests are, as well as what you want to prepare to do in line with where health care delivery is going. I would also look for evidence that the respective institution is committed to granting a robust experience during the residency period,” he says.
“Early on in my career, it was my good fortune to have as a mentor the person who happened to be the head of Johns Hopkins Hospital. As we began to interact and work together, it was he who caused me to really think beyond my own comfort zone. He gave me opportunities and wasn’t inclined to micro-manage. When he dispatched me to the first real job that I had, as the administrator of a psychiatric hospital within The Johns Hopkins Hospital, I was very inexperienced. There was no director or administrator, and I had to relate to a group of five psychiatrists and behavioral scientists who were trying to hold the fort until the next director was recruited. It was baptism by group therapy… and a great experience.
“I began to recognize that the person who was emerging as my mentor was giving me an opportunity and testing me a bit in terms of my capability. It was he who invited me to lead the cost improvement effort; he gave me the opportunity to serve as the administrator in our children’s center. It was he who gave me the chance to go out to the former Baltimore City Hospitals. I learned the importance of having a mentor, and because of that for the last 30 years, I’ve made it a point to reach back and mentor others. I think it’s a terribly important thing, particularly early in the career, to seek out someone who is willing to give you a little bit of direction and spend a little time with you. So much of what we do isn’t available through book learning, the normal didactic process, but occurs as on-the-job training. So the presence of a mentor is extremely important in this field as far as I’m concerned.”
Over the years, Peterson says that a significant number of GW MHA students have completed residencies at Johns Hopkins facilities. Johns Hopkins Health System also offers an administrative fellowship for students who have completed masters degrees in health administration. “The younger people from GW’s MHA program with whom I’ve interacted in the last decade or so have been bright, interesting people who have done very well,” he says.
Peterson’s Thoughts on the Past – and the Future
In considering the changes in health care administration that have taken place in his time, Peterson says: “When I came to Johns Hopkins in the early 1970s, health care delivery was hospital-centric. It was limited to a hospital-based approach of the hospital interacting with the faculty and the school of medicine. What I’ve witnessed over the years is a movement away from everything being done inside the hospital. Now there is a lot more ambulatory-based work, a lot more emphasis on doing a much better job of coordinating care and much more emphasis on preventive measures and trying to do as much as possible for patients in the home setting. It has been a quest to find the most appropriate venue for care that is cost-effective, safe and appropriate,” he says.
Newly minted health care administrators may not even end up working inside a hospital because of the opportunities that now exist beyond the hospital walls, Peterson observes. “I think we’ll continue moving in the direction of value-based care, rather than a volume-based proposition for how health care is done,” he says. He also expects to see greater use of precision medicine that is guided by science and aiding practitioners in identifying which patient will respond best to which particular regimen—and recognizing that not everyone who may be diagnosed with a particular disease is going to respond in the same way. Similarly, he predicts that a lot will be done with data analytics and using big data to do a better job of understanding “cohorting” patients and which groups of patients will need to have the focus of a more significant application of resources, care-coordination, and so forth.
As he ends his career, Peterson says he is satisfied with what he has been able to achieve as a health care administrator. And that is arguably how we all want to be able to feel about our professional lives.