The Tricky Art of Leadership Succession: Who Wants the Ball?

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It is a well-accepted axiom in business that to be successful, a leader must want to lead. The truth, though, is that business entities often struggle to find leaders because no one really wants to put in the time or make the effort to push the organization up the hill.

This is particularly true for medical practices, where many physicians only want to treat patients, and they look askance at administrative duties. Radiologists are no different from other physicians in this regard.

Edward J. Petrella, MD, recently stepped aside as president/CEO of South Jersey Radiology Associates (SJRA), PA, Camden, New Jersey. Petrella learned the lesson of the desire-to-lead vacuum early. He found himself in a leadership role at SJRA by default.

“In many practices, leadership falls to whoever is willing to take the green banana,” Petrella says. “I volunteered to do the business side of it. I didn’t want to, but nobody else was stepping up to the plate.”

Long before he decided to step aside, at the beginning of 2011, Petrella began looking among SJRA’s younger partners for a successor. He fastened on William F. Muhr Jr, MD, an MRI subspecialist who showed interest in administration. For several years, Petrella says, he nurtured and mentored Muhr, bringing him along slowly.

In January, Muhr succeeded Petrella as SJRA’s president and CEO. The irony, Muhr says, is that he was the only one who wanted the job. The pattern of a desire vacuum in leadership had continued for 20 years. “The job was open to anyone who was interested,” Muhr says, “and I was the only one. The partnership approved the change.”

Of course, by the time Muhr took over, he had been groomed and targeted for succession for years. Nonetheless, there weren’t many partners clamoring for the leadership role. “The world is run by those who show up,” Petrella says, quoting an anonymous aphorism.

Seeing a Better Way

Petrella himself showed up as SJRA leader, he says, because he could no longer endure watching money go to waste in uncollected billings. If the practice could collect the additional money, Petrella says, it could expand its locations. It could hire subspecialists and purchase technology to stay abreast (or ahead) of competitors. This is exactly what the practice did once he took over, Petrella says.
SJRA has deep roots. It began as a practice reading for a single Camden hospital nearly 80 years ago. When Petrella joined the practice, in the early 1970s, it had two outpatient centers and was reading for two hospitals. Today, the group has 45 radiologists (most are partners) and 10 centers, and it reads for three hospitals.

It also has become a highly subspecialized practice and a show site for a major modality manufacturer. SJRA was fifth in the nation to install its vendor’s dual-source CT and third to deploy its 256-channel MRI, Petrella says.

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“I was with the practice for 10 years, and the practice hadn’t grown much,” he recalls. “We had a haphazard billing system. You were handed a bill when you left, and if you paid, you paid. If you didn’t pay, nobody sent you a second bill. The only way you got a second bill was if you came back to the same office for a second procedure and they said you had a balance.”

SJRA first tried using billing companies to collect its outstanding receivables, but this didn’t work well. Petrella says, “You gave them the information, and they charged a percent of collections as a fee. It was 8% or 9% at the time. When you look at the dynamic, if you work the percentage of what is collected, 85% comes in easily. To collect between 85% and more than 90% requires a lot more effort, and the billing companies weren’t doing that because it cost them too much.”

Petrella convinced SJRA to hire a billing manager and bring collections in-house. The amounts collected went up and the cost to collect them declined. With the heightened cash flow, the practice was able to open new centers and purchase imaging equipment.

“I saw that unless somebody made sure we were collecting our money, we were going to be in a difficult position in keeping up with technology,” Petrella says. “I said, ‘OK I’ll take the leadership role.’” He adds that he was lucky that his partners valued his administrative role. He began with one full day per week devoted to administrative work and gradually increased that to three days.

“Not being full-time created the need for those long evening hours and weekends spent on the practice,” he recalls. “My partners