An Interview with John Gunn

I came to the United States in 1969. It was during the Vietnam War; a lot of guys had been drafted and it was tough to find qualified accountants in the States. Blue Cross came to London, chose about 35 qualified accountants, and flew us over for a one-year project. I decided I should get a Green Card -- which was easy to do at the time -- just in case I liked it here. During that year I met some folks at Arthur Andersen, which was the big accounting firm in Chicago, and they asked me to come to work for them. So I did. One of my clients was Michael Reese Medical Center, which was having a lot of financial problems. Reese eventually offered me a job, and I was there for about eight years.

When I first came to Memorial, adult patients who had cancer were primarily treated as inpatients. Then we started a program to administer chemotherapy on an ambulatory basis, which we'd been doing for a number of years with our pediatric patients. Our studies had shown that outcomes were the same whether treatment was given on an inpatient or outpatient basis. This meant that we had to significantly expand our ambulatory services. First, we renovated existing floors of the Enid A. Haupt Pavilion in the hospital; by the 1990s we had outgrown that and created the Evelyn H. Lauder Breast Center on 64th Street, the Laurance S. Rockefeller Outpatient Pavilion on 53rd Street, and The Sidney Kimmel  Center for Prostate and Urologic Cancers on 68th Street. At the same time we were beginning to establish our network sites outside Manhattan. If you go back 15 years, Memorial Sloan-Kettering Cancer Center used to have about 150,000 outpatient visits each year. Now there are about 450,000. We've had a 300 percent increase in outpatient visits.

We believe that the treatment of cancer is going to change significantly over the next 15 years, and we are working on a strategic plan for Memorial Hospital and its clinical services. We're not entirely sure what the changes are going to be, so we want to make certain that whatever structures we build will be flexible in their use. We don't want to bet the farm on the wrong approach. Several of our Board members are experts in strategy planning in their own businesses, and we're gratified by their enthusiastic offers to assist in Memorial Sloan-Kettering's strategic planning.

In 2006 healthcare costs for the nation were $2 trillion -- approximately 16 percent of the Gross Domestic Product. Both government and employers -- who between them pay about 70 percent of the cost -- are fed up and frightened by the magnitude of this issue. There are enormous financial challenges faced by institutions like Memorial Sloan-Kettering in delivering state-of-the-art cancer care in an environment of rapidly rising costs of new technologies and therapies. Fortunately, our relationship with insurers has been fairly good because our finance people have been able to persuade the insurance companies that there is value to them in having their patients treated at Memorial Sloan-Kettering that goes beyond giving the insurers an enormous discount. The insurers know that if they send their patients to us we'll do a good job taking care of them, and that the costs of care will be essentially the same as at another institution, but the patients will likely have a better outcome. So insurers have been prepared to do business with us based more on our pricing structure than on the traditional 40- to 50-percent discount they usually insist on.

However, this is somewhat easier when dealing with local insurers. When negotiating with the "big three" -- Wellpoint/Blue Cross, United, and Aetna -- which are all headquartered outside New York City, we aren't dealing with insurers who have had a long history with Memorial. So we have to keep providing them with data that we believe show us in a better light in terms of outcomes.

For the first time in this country, there's a huge desire to measure outcomes. For years the idea of comparing one facility with another or one doctor with another was frowned upon. But as the public is forced to pay more of the costs of their own healthcare, they want the ability to do some investigating before they make a decision about where to seek care. This means, for example, giving the public access to malpractice databases so they can see if a doctor has been the subject of lawsuits. It's only fair. There aren't many businesses that run on the basis of, 'Trust me; I'm going to help you.'

One question that concerns employers is: Do I get appropriate value when my employees need to be hospitalized? In fact, Memorial Sloan-Kettering gets patients back to work sooner than if they were hospitalized elsewhere, and that is clearly of value. So not only are we compiling data to show that outcomes are better for patients treated at Memorial Sloan-Kettering, but also that their return to work is faster.

The big issue facing the healthcare system in the US is bringing the system under control fiscally without denying many patients access. The traditional model of the provision of healthcare in this country has been through the employer. However, more and more employers are reexamining that, particularly the smaller ones. Over time, the forward-thinking people will be looking at better, faster, and cheaper ways to deliver care. As the trajectory of ever-increasing costs for healthcare shows no sign of easing up, the system we have now is truly an unsustainable model.

We have our challenges, but I'm happy to say that wherever you look, Memorial Sloan-Kettering is doing extraordinarily well. We're the only Double-A credit-rated healthcare institution in the state. Our financial position is quite strong. For 2007 our operating budget is close to $2 billion. And if you look at the reserve we had back in the early 1980s, it was a fraction of what we have today, which is close to $3 billion.

Philanthropy is also enormously important. I think many people choose to give to Memorial Sloan-Kettering because they understand that the diagnosis and treatment of cancer can be improved, if properly researched. So if we can continue to provide the care we've been providing and do the outstanding research we've been doing, outcomes will continue to improve. While we may not necessarily offer a cure to all patients, early detection and early and innovative interventions will make cancer a chronic disease for many people, and the treatments will be much less debilitating.

Some of my interests outside Memorial Sloan-Kettering, the things I do for relaxation, include taking cooking classes in different types of cuisine. Also, I shoot competitively at various shotgun sports and have competed in Russia, Italy, England, and across the US.

But what I like best is thinking about the future and how we're going to stay on top. I enjoy challenges; I enjoy change. I encourage the people who work for me to take some risk and want them to succeed with new ideas because it's the new ways of doing things that keep us ahead of the game. The whole ambiance we've had for years at Memorial Sloan-Kettering is to strive to be the best we can be. That's what those who work here are aiming for.

I think the men and women who work at Memorial Sloan-Kettering are very proud of their contributions. We get the most fantastic letters from patients about never having been in a hospital like ours, which is very satisfying. All our staff know that what they do, directly or indirectly, affects patients. This is a very special place, a unique organization with a great Board, a superb management team, and wonderful people.