Larry Kaiser, chairman of the department of surgery and surgeon-in-chief for the University of Pennsylvania Health System, is responsible for more than 110 surgeons in his own department, and he leads one of the largest thoracic services in the country. Michael Useem, director of Wharton’s Center for Leadership and Change Management, recently spoke with Kaiser about the challenges of playing a leadership role — not just in a major medical center, but also in a health care environment that has experienced radical changes over the last decade. An edited transcript of the conversation follows.

Useem: I’m going to begin with your own experience in a leadership role as chairman of the department of surgery since 2001. If you could talk through briefly the actions that you have taken to expand the university’s surgical services during your years in this position: What have been the critical steps, and what kind of resistance or conflicts have you encountered along the way?

Larry Kaiser: I think in terms of critical steps, one thing that I might bring up [is that] to ascend to a role like this, there is no specific preparation that surgeons have, or for that matter any physicians have, that necessarily prepares you for a leadership role. So those of us who come to these roles come to them in different ways. From our standpoint, I took over a department that had been led by the same individual for 18 years. When my predecessor took on this job, being a surgical chair was a lot different; the priorities and expectations were different. Specifically, because we are so influenced by the reimbursement rates determined for us, not by us, the landscape had changed significantly. When my predecessor took over, the money was flowing in and there was no issue with professional fees. By the time I took over in 2001, professional fees had been reduced significantly. The Balanced Budget Act of 1997 was well into play. Hospitals were having a difficult time. I took over when the health system was just in the midst of beginning a recovery from a very difficult time in the 1990s.

But we had a vision, which I think I articulated fairly well to the faculty as to where I wanted to see us go, and we set out doing that. It required some significant changes in leadership. For instance, my predecessor was the chairman of the department. He was also the chief of the division of vascular surgery, chief of the division of transplant surgery, and program director for the general surgery residency. So I was immediately faced with making these appointments — and not without some opposition, I would say. There were clearly people in each of those divisions who felt that they should be the division leaders. Right away I was faced with making some critical decisions that I knew would have a major influence as we moved forward.

From there it was really a matter of setting the tone, which under my leadership was significantly different than that of my predecessor. I, [unlike] many surgical chairs in the country, still maintain a busy clinical practice, and at the time I had a very busy clinical practice. In terms of leadership in a department of surgery like this, the credibility that one gains by still being a busy practicing surgeon can’t really be overestimated. People see what you’re doing, they know I’m in the operating room, I’m doing the same things that they’re doing. It’s very easy for chairs of clinical departments to remove themselves from the clinical piece and really be seen, I think, by their faculty somewhat as an outsider. So I had some credibility coming into this job.

In terms of the kinds of resistance, I think that my constituency, that is a group of surgeons, tends to be a fairly difficult group to work with. I don’t think you could find a greater accumulation of cynics than you would find in a department of surgery and certainly in this department of surgery. One of the first things that I did was put into place an organizational structure that previously didn’t exist in this department, and that included things like having regular meetings of the faculty — which previously had not been held — and meetings of the division chiefs on a bi-weekly basis, something that had never been done. I also had hired a chief operating officer who came with a considerable amount of experience and who really helped in terms of my own leadership development as well as in formulating the organizational structure that previously had not been in place. I think having put together an organizational structure that was transparent and had clear reporting relationships as much as anything set us on the right path.

Useem: Let me pick up on your observations about the style of the people that you are working with here. To the outside world, surgeons are often seen as a well paid, hard charging, fairly authoritative group of people. As they walk into the operating room, to what extent does this, at least this perception that many people have of surgeons, if true, get in the way of the teamwork and the flexibility required in the operating theatre?

Kaiser: I think you correctly point out that all surgeons, whether on the surface hard charging or not, must have some basic leadership ability. Something as simple as seeing a patient, recognizing what they need to have done, putting a team together to do an operation on a patient requires some leadership skill, albeit not the same as leadership skills when looking at the bigger picture. But still, the surgeon is the leader of the team, and any day a surgeon is in the operating room, he or she is leading a team. So right off you’re dealing with people who see themselves in leadership roles and, by definition, do come with some skepticism of being told what to do by others and, for that matter, being led by others. Many of them are quite independent, and that independence is fostered on a daily basis. 

So I think the challenge for someone leading a department like this is really just to be able to set the course and then to engage people in that vision and [get them] to join you in really pursuing the course. One of the things that I did at the beginning was to make it very clear where I thought this department needed to go, the kinds of things that I thought we needed to do, recognizing that we had some tremendous advantages here. We had a large research endowment that had been built up over many, many years. The first endowed chair of surgery in the country is the chair that I now hold, so the endowment goes back to the mid 1800s. There’s really no other department of surgery in the country that has the type of resources that we have in terms of endowment income that we can use for research purposes. 

Useem: Let me ask about the experience of your own and your fellow surgeons in the operating room with teams that are constantly changing. So as you walk in, it may be a different anesthesiologist from the day before. The residents, the technicians, the nurses working with you are ever changing. To establish your own authority, to build the teamwork needed to work with this team in the operating room, what does it take? What are the leadership qualities that are essential to make that happen?

Kaiser: It takes somebody who is very confident in [his or her] own abilities. I think you’re correct in your perception that often we are working with different people on a daily basis. The problem is that much of what we do is based on teamwork, and we’ve had a major emphasis in this department as well as other departments around the country on patient safety. To really achieve optimal patient safety, especially in the operating room, does take a team approach. So on the one hand, if we’re working with different people each day, one has to very quickly be able to form a team, work closely with that team, but we do that by standardizing a lot of the things that we do in the operating room. 

Ideally, there is some consistency on the team, even if it’s not every member. For instance, I work with one scrub nurse essentially every day I’m in the operating room despite the fact I may be working with a lot of other different people, certainly different anesthesia people, different residents, different anesthesia residents, different technicians. So, yes, there are a lot of people who are different, but then we try to maintain some level of consistency on the team as well. And often that individual is the one who’s saying, “Here’s how we do it.” Yes, it is a challenge, but it’s a challenge that we need to meet every day because of the tremendous emphasis we place on patient safety.

Useem: Two separate questions here: What’s the most challenging part of being in the operating room, again from a leadership standpoint? And then, really a separate question, what’s the most challenging aspect of your service as department chair and surgeon in chief?

Kaiser: There are different challenges that we face in the operating room each day. For me, one of the challenges is I have a lot of issues going on outside of the operating room, and I need to be able to put those behind me as I go into the operating room, recognizing that I’m going to be out of commission with respect to leading the department. On the other hand, things don’t happen minute-to-minute leading a department like this, but they do happen minute to minute in the operating room. So the challenge is working in different environments, totally different environments. Working as a department chair outside of the operating room, working inside of the operating room, are really two different roles, yet I think the leadership piece bears a lot of similarities. 

I learned that lesson early on when I was asked a question about a surgical pathology issue, even before I had officially started the job as chairman. I made a statement about the surgical pathology service. It got around and it came back to me that the department of surgery had spoken, not Larry Kaiser, and I learned quickly that one has to be fairly careful how you phrase things because it’s now the department of surgery speaking as opposed to just one individual speaking. Whereas in the operating room, yes, I’m functioning as an individual as part of a team, but outside of the operating room I’m really functioning as the department of surgery as such, and I’m seen as representing that department. 

Useem: Surgeonshave often been seen as one of the engines of income for a hospital, an engine of growth, if you will. With the government cracking down on Medicare payments, is this still true? Will it be true in the future? What’s the role of the department of surgery here and elsewhere in serving as a major source of income for hospitals?

Kaiser: There’s absolutely no question that procedural specialties, especially departments of surgery, still are the major driver of margin for hospitals, and they are the major drivers of revenue. It’s the activity in the operating room that drives the revenue of health care organizations. There’s absolutely no question about it. That being said, we have to differentiate between revenue being generated on the hospital side and revenue being generated by professional fees [that come from] the practice of surgery. 

On the one hand, we’ve seen some significant decreases in reimbursement for the professional service side of things, but hospitals by and large are still doing well based on revenue from procedures. Specifically, the dominant procedures are those that occur in the operating room as well as in the cath labs and other places. You then have to look at the direct costs that are involved in supporting those activities, but by and large if you look at the services that drive hospital revenue, it is still the surgical services that do that. I think that’s going to be the case for a long time to come.

Useem: Looking back over the last decade, thinking about surgery as a specialty, what are some of the changes in the profession that you have been part of, have witnessed, have seen? Second part to the question: Is surgery as appealing to medical students as it has been historically? Is it still as appealing now? Third question here is the entry of more women into surgery. Is there a trend that you’ve seen over the last couple of years of more women coming into surgical specialties?

Kaiser: I think in terms of how the specialty has changed — and when we talk about surgery as a specialty we’re talking about really multiple areas of specialization — [it comes down to] the improvement in technology. What we’ve seen is a marked shift in the kinds of things that we’re able to do, especially in high priced technology.

If you look at what has occurred over now the past almost 20 years with the shift toward more minimally invasive approaches to operative procedures and the technology that’s involved in that: We are now doing many operations with robotics. Very expensive piece of equipment, yet what that’s allowed us to do is to work through very small incisions, allowing patients to leave the hospital early, allowing patients to have less pain following a surgical procedure. The classic example of that is prostatectomies. Now with robotic prostatectomies you have a very expensive piece of equipment, but it also allows one to do that operation where the pain from the operation, the recovery from the operation, is significantly quicker, and it’s really a better operation. But it comes at a price.

You had asked me a little bit about medical students: Just briefly, 50% of medical school graduates these days are women. Surgery in the past had been a field where women had not, at least in general, been attracted to it. One of the things that we’ve worked on is making the field more attractive to women. Family issues are particularly important for both men and women, and when you survey medical students, lifestyle issues really are the key to choosing a specialty. We have worked very hard to try to convince people that one can have a very active and satisfying lifestyle and yet still be a surgeon. There are a number of specialties in surgery that one can choose from, and we hope to continue making our specialty as appealing to as many people as possible. 

But the numbers show that fewer people, far fewer people, are entering surgery now than in the past, especially certain areas. We’ve had a tremendous problem in cardiothoracic surgery, in attracting people into the specialty, and that really is one of the biggest challenges that we face in that field.

Useem: To what do you attribute that decline?

Kaiser: Again, I think the lifestyle issues. There’s a perception that the lifestyle in cardiothoracic surgery may be somewhat limiting. Also, one has to deal with the issue that reimbursement is not what it was. People are looking at perhaps 10 years of training following medical school. When the rewards are not quite what they used to be and you can do other specialties and have a much nicer style of life, the other specialties are just attracting more people who used to be interested or who previously would have gone into cardiothoracic surgery.

Useem: Two final questions here to wrap up. Looking back at your last six or seven years as chair of the surgery department, what’s the best part of the job? What’s the toughest part of the job?  

Kaiser: The best parts of a job like this are being able to work with a tremendously talented group of people and seeing them excel and seeing how well the department can do. When you take a job like this, you have to be willing to sacrifice your own personal goals for the goals of the department. One has to derive the major satisfaction from seeing how the department itself does, how other individuals do. I’ve been tremendously satisfied to see us produce some incredible individuals here as well as to see this department do extremely well.

I think the most challenging parts of this job [stems from the fact that] I serve a lot of different masters. I have the health system where I have concerns. I have the school of medicine where I have concerns. I have my own patients where I have concerns. So I think you have to be willing to be able to deal with multiple constituencies. Certainly not everybody sees things the way I do. It’s been a challenge to work with various groups of people. It’s a very satisfying challenge, but it’s clearly a challenge. 

The other thing, of course, is we have a lot of non-surgeons who are employees in this department, and we’ve got to create an environment where people want to come to work. None of us could do this without having administrative assistants and nurses and technical people who want to work with us. I’m pleased to say we’ve really created an environment here where people like working. We have very low attrition. So I think that’s the most challenging part.

Useem: One final question for you here. If a professional friend were to call you up who has had an offer to become chair of a surgical department at a major medical center or hospital around the country or abroad for that matter, in light of your experience in leading this department and this university medical center, what advice would you have? What personal guidance would you provide the person?

Kaiser: Well I’ve certainly been called upon to offer that advice. I think it’s a great job for the right individual. I don’t think being a chair of a major department is right for everybody. What I’m looking for if somebody asks me that question is what that individual’s motivation really is. If they truly are motivated by the desire to surround themselves with talented people and to get their satisfaction by how the department does and how other individuals do and they’re willing to put their own individual needs behind them, then I think it’s a great job. 

But if somebody is in the midst of a tremendous research career and they think that they can continue being successful in their research career just as they had been and yet still lead a major department, I think it’s probably not the right job. They would find some significant frustration. So I think for the right individual who’s at the right point in their career, it can be tremendously satisfying. I get up every day looking forward to coming to work. It’s a great job. For me, it’s ideal.