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Murphy, Agee, and Werner
A firm believer in teamwork. Murphy is joined by Nancy Howell Agee, chief operating officer, and Dr. Mark J. Werner, Carilion chief medical officer, at the outpatient center groundbreaking.
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Miller with wife
Family time with wife Arlene and their two daughters is a priority for history-buff Murphy, who enjoys such leisure activities as cooking and spending lazy days at the lake.
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School of Medicine
Dr. Ed Murphy looks out from the site of the soon-to-be Virginia Tech Carilion School of Medicine and Research Institute.
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Dedicated to Carilion’s success as a top-notch medical clinic similar to the Mayo Clinic, Murphy has recruited more than 90 new physicians and presided over the groundbreaking of the 200,000-square-foot outpatient center.
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Dr. Ed Murphy
Dr. Ed Murphy: “For a community to prosper, it must have 1.25 percent annual growth, to sustain prosperity and be vital from a business perspective.” (Roanoke’s is 0.5 percent.)
Just who is Ed Murphy?
Certainly the high-profile president/CEO of Carilion Clinic. But beyond that?
Take a look. What you’ll find is talented, dynamic Joe Work. Up at 5:15, at the office by 7:15, putting in 60 to 65 hours a week plus board meetings three nights a week. On a treadmill after dinner. In bed by 10 so he can get up and do it all over again the next day.
Family? Yes, there’s Arlene, his wife of 23 years, and the couple’s two daughters, Sarah and Emily.
Hobbies? He likes cooking, raft floating, hanging out at the lake and time with the family. He’s a history buff and used to run and play the guitar, though not now.
But this genuine success story – Murphy ranks Number Four among Modern Physician Magazine’s 50 Most Powerful Physicians, one step ahead of the world-famous Mayo Clinic’s Denis Cortese, and 23rd among Modern Healthcare’s Most Powerful 100 People in Health Care and is relentlessly dedicated to one thing: the success of the clinic model at Carilion.
It is, Murphy believes, the answer to the system’s economic shortfall.
“We had to solve the financial dilemma and give the community greater value since we didn’t give them money [from a declined sale],” he says. “Our conclusion was to turn Carilion into a clinic like the Mayo Clinic, Cleveland Clinic, Lehey Clinic [in Burlingon, Ma.], Scott and White Clinic in Temple, Texas and Ochsner Clinic Foundation in Louisiana.”
The Team Mindset
Murphy’s method for achieving that goal is to draw together the expertise of his talented associates.
“I’m very team-oriented and it’s seldom that my doors are closed,” he says, obviously more comfortable using “we” and “our” when referring to his job than “me” and “mine.”
“We work as a group with a team expectation. It’s not hierarchical. It’s a team, collaborative and interactive.” Among the 14 key members of that team are Nancy Howell Agee, chief operating officer; Dr. Mark J. Werner, Carilion chief medical officer, and Donald Lorton, chief financial officer.
“As to my management style, I’m not intrusive. I lead by example and let people do their job. Actually, the question is: What’s OUR management style. We’re very highly interactive and tend to be very analytical, both focus-driven and data-driven; for example, asking what we want to accomplish over the next six months.”
How Murphy got to Roanoke and Carilion starts with a u-turn in the ’70s.
A Winding Road
Now 52, the Cohoes, N.Y. native spent nine years as an undergraduate at the University at Albany, initially studying business and economics and working in sales and marketing. Five years later, he switched majors to biology and chemistry and started over as a freshman. His objective: medical school.
To get there, he worked full-time as administrator of a university lab and full-time student, working and attending classes by day, studying at night. Even with a loaded schedule, he graduated with honors, earning a spot at Harvard, America’s top-rated medical school, and a job as a health economics consultant for the New York State Health Planning Commission.
In June 1985, one of 48 national Hewlett-Packard Award winners, he had earned his M.D. degree.
The Crowning Moment
“My greatest achievement,” he says now, “was going to medical school. Where I came from, not a lot of people went to college, much less medical school.”
Soon, Murphy had completed his residency in family medicine in Schenectady. But being a practitioner was not in the cards.
“I had a fair amount of business experience and had done research in my fourth year of med school,” he says. “By graduation, I had the sense that my career would be in administration, research or teaching.”
Increasingly important jobs and appointments followed. (See timeline below.)
The Road to Roanoke
As it turns out, his arrival in the Star City was a strange mix of fate and opportunity.
“The fascinating thing is I’d never been here,” he recalls, “but I was on the board of an insurance company and we were having a retreat that year at The Greenbrier and I flew into Roanoke. Before going to the meeting, I drove around a bit and I remember wondering what it would be like to live here. Six months later, a recruiter called to tell me about the job at Carilion.”
Today, Murphy is a vital force in the valley. In addition to his work duties, he’s taken on leadership roles with the Art Museum of Western Virginia, Carilion Biomedical Institute, the Roanoke Regional Chamber of Commerce, United Way of Roanoke Valley and the Roanoke Valley Business Council. In addition to his down time with the family, he enjoys the valley’s variety of restaurants and such favorites as Corned Beef, Frankie Rowland’s, Trio, Metro, Carrabba’s, 202 Market, Alexander’s and Nawab.
It’s a good, busy life.
“One of the things I like is that my schedule is highly variable,” he says. “At work, I have a good hour before people come in; I have alone time in my office. I write better in the morning and I focus on that.”
Is Carilion Money Mad, or Just Trying to Survive?
The critics beat one drum: Carilion cares more about money than patient care.
Actually, the answer may surprise you.
“Facts are facts,” says Murphy.
Carilion has been experiencing leaner financial times since the late ’90s. The culprit: Roanoke’s slow (.05 percent) growth rate.
“For the community to prosper, it must have 1.25 percent annual growth to sustain prosperity and be vital from a business perspective,” Murphy says. “The health care of individuals is splitting into two [provider] groups: those that are strong and solvent in growing communities and those that are weak and getting weaker. That gap is widening.
“As a community service facility, Carilion must have profits to pay for CT scans, new technology such as the cyber knife, cancer treatments like robotic surgery and modern facilities. What people want most is up-to-date healthcare; to see that it happens, we have to have good investment on reserve.”
The Bad News
On one hand, Carilion’s patient charges are increasing annually by 3.5 percent. On the other hand, the cost of doing business is going up each year between 5 to 5.5 percent.
“To stay in business, we must control costs,” Murphy points out, “But the final answer is growth in numbers; we must have a growth in volume to avoid a dilemma. Profitable hospitals have a growth of two to three percent in discharges every year, but the volume growth in patients here is very flat.”
And to complicate matters even more, Southwest Virginia and the Roanoke Valley have the largest percentage of uninsured citizens in Virginia. In addition, Carilion is required by law to spend $100 million a year on capital improvements and replacements.
How can Carilion survive?
According to Murphy, it has/had five choices: Selling out. Adding new services. Increasing its geographic region. Increasing its market share. Cutting costs.
However Murphy notes, there’s no place left to grow and Carilion already has 60 percent of the existing market. Adding new services? It currently covers everything except transplants. As to reducing expenses, the organization got out of the HMO business, gave away Burrell Memorial Hospital, closed down some operations and trimmed labor hours from 144 per adjusted admission to 118 in a one-time cut.
Actually, Carilion could have cashed in its chips at its peak.
“But if we had, unprofitable departments would have been done away with,” says Murphy, “and Carilion would have become a for-profit operation. We decided not to sell and we knew we had to do something that gives the community some value after turning down $1 million a week.
“We decided to stay not-for-profit, locally owned and give more value to the community.” The turning point: Carilion’s decision to become a national-level clinic.
A New Plan
That decision led Murphy and his board to one mission with three objectives: a clinic focused on healthcare, education and research. That called for one more large, one-time expense for new headquarters and personnel.
“We have to have doctors working together because this system won’t work in private practice,” Murphy says. “It requires highly focused attention. Part of the plan is to broaden the number and type of specialties but our doctors are aging and retiring, and while we have lots of specialists, we don’t have a lot of sub-specialists.
“With [our] research institution and medical school, we’ll be more competitive with [such medical centers as] UVa, Bowman-Gray [Winston-Salem, N.C.] and Duke [Durham, N.C.] to attract more patients.”
A Year of Storms
The 2006 announcement of Carilion’s reorganization as a clinic thrust Murphy directly into the eye of a medical storm.
Irate physicians formed The Coalition for Responsible Healthcare. Six radiologists jumped ship. Others eventually switched to rival Lewis-Gale Medical Center in Salem.
Murphy stuck to his guns, convinced that the clinic approach with large, multi-specialty group practices offers the ingredients for quick and efficient patient care in one place.
“The whole system is focused on what patients need,” he points out. “From my perspective, there’s decidedly a clinic flavor in patient care here.”
How did he survive the turbulent time?
“With open eyes,” he says, “knowing the effort is worth it and focusing on getting the job done. It wasn’t easy, but I had the support of the board. But I’m impatient. I get disappointed about how long things take to do.”
On the year’s done column, however, Murphy can mark down recruitment of all department chairs, the addition of more than 90 new physicians and groundbreaking for the 200,000-square foot outpatient center.
Now, with peace restored, Murphy is philosophic: “My idea of a perfect day?” he muses. “One that goes well.”
If hard work has a connection to perfect days, he can count on many more.