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Moving Towards the New Healthcare: The Scottsdale Institute's Donald Wegmiller Shares his Long-Term Perspectives

November 15, 2012
by Mark Hagland
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On his succession to the role of chairman at the Scottsdale Institute, Donald Wegmiller looks towards the future of healthcare

On Nov. 14, leaders at the Scottsdale Institute announced that Donald C. Wegmiller, who had helped co-found the not-for-profit collaborative with Stanley R. Nelson, the organization’s co-founder and chairman, had succeeded to the role of chairman, shortly following the passing of Nelson in August.

Wegmiller, who has enjoyed an illustrious career in healthcare, has held a number of significant staff and voluntary positions, including CEO of the Allina Health System in Minneapolis, and chairman of the American Hospital Association. While serving as chairman of the Scottsdale Institute, he will continue as chairman of C-Suite Resources, a Minneapolis-based business intelligence firm specializing in providing market intelligence on healthcare to firms serving hospitals and health systems. Wegmiller spoke on Nov. 15 with HCI Editor-in-Chief Mark Hagland regarding his perspectives on the current trajectory of the evolution of the healthcare industry, and where future trends are taking us. Below are excerpts from that interview.

We’ve known each other for many years, and you’ve been involved that entire time with the Scottsdale Institute. You’ve been involved with Scottsdale for over 20 years, correct?

Yes, from its very inception, in 1992. Stan [Stanley Nelson] and I—after he retired from Henry Ford Health System, he was looking for something to do. And we were having breakfast one day, and he said to me, “You’re running a big system at Allina, and I ran a big system at Henry Ford, and these systems will never amount to anything as long as the hospitals and docs have different information and financial systems; and we’ll never get anywhere as long as that is the case.” And he said, “Why don’t we get together a whole bunch of smart friends, and have them bring along their really smart IT people?” And that was the origin of Scottsdale. Jim Reep, then the chairman and CEO of then-First Consulting Group, was the ringleader of all this. Stan was serving on an advisory board to FCG, and mentioned this idea; he told him he’d had breakfast with me. And Jim Reap provided us with his staff resources, largely Erica Drazen and Ralph Wakerly. And also later, when FCG went public, granted to Scottsdale Institute, a not-for-profit organization, a gift of original-founder stock in FCG, which we subsequently sold. The value was initially something like $200,000, and since then, we’ve earned interest on that funding. And at times, we were gaining ten, fifteen, twenty thousand dollars a year, which was a lot of money for a then-struggling not-for-profit.

Donald C. Wegmiller

And we were ahead of the times: keep in mind that this was long before electronic medical records, and long before there were CIOs or CMIOs. In fact, I think Scottsdale Institute had the first CMIOs in its member systems. But after our fledgling beginning, as all of these developments took place, Scottsdale Institute was in the sweet spot, because we were there; we had a lot of organizational support. Intermountain Healthcare, Cedars-Sinai, many other organizations, have stayed with us for many years. And Tom Priselac, CEO of Cedars-Sinai [Thomas Priselac has been president and CEO of Cedars-Sinai Medical Center since 1994], is going to come back this coming year, almost ten years to the day that he presented in 2003, when he had come and spoken and said, we just spent a whole lot of money building an EMR, and it’s a failure. And now he can say it’s a success. And I’m sure he’ll tell us in April that they learned a great deal from the initial failure. But it demonstrates Scottsdale Institute’s ability to have important leaders get together and share good, bad and indifferent. At the spring conference coming up, for example, we have Tom and six other major system CEOs coming, to talk about how they’re attempting to move their organizations from volume to value.

I think it’s a testimony to Stan and Jim Reep and others that seven of these leading CEOs would come and do this. We don’t pay them or their expenses. It’s an atmosphere where they can come and share together. I’m very proud of Scottsdale Institute, because the success of his vision. And we have a great staff, led by Shelli Williamson. And it’s fun.

It seems that now is an exciting time in healthcare.

I think it is; I think it is one of the most exciting times ever.

And I think the policy landscape is far more clear than ever before.

Yes, absolutely. I think the perspective among all the stakeholder groups is as consistent as it’s ever been.

Most would agree that we now have three important elements going forward: enhanced policy clarity; a consensus on a  vision of where healthcare has to go; and tools, especially IT, that can help us do things.

Yes, I agree, and that third element is extremely important. Some people back in the 1990s had some vision of where the system had to go, but we didn’t have the tools. And one of the reasons that the CHINs in the 1990s and then RHIOs in the early 2000s, fell apart, was because of a lack of sharing and collaboration; which is why it’s so exciting now.

And we have a consensus on where the healthcare system is going, and what the new healthcare is, right?

Yes, absolutely. And when all the interviewers were asking what might happen during the election campaign, if Romney were elected versus Obama reelected? And everyone said, it won’t matter, because we’ll all be doing the same thing, anyway.

I think finally that the healthcare culture is beginning to change.

Yes, it’s beginning to.