People & Opinions

Top GPO exec looks back, ahead in retirement

Perched atop the executive ranks of the nation’s largest group purchasing organization (GPO) carried with it some bragging rights and cache, and enabled the now former Novation President and CEO Mark McKenna to wield considerable power and influence in the industry.

But the top executive post at the market-leading Novation also carried with it significant responsibilities, including being the poster boy for an industry that has come under intense federal scrutiny for alleged anticompetitive practices.

Helping to create Novation back in January 1998 certainly represented a high point in McKenna’s career; as one of two GPO executives initially testifying before a Senate subcommittee on Capitol Hill more than four years later to defend and promote their GPO’s practices (as representative of the industry’s) was not so much.

Still, as one of the key architects of VHA’s and Novation’s meteoric rise in healthcare supply chain management in the 1990s, McKenna will be renowned for some bold and buzzworthy moves that positioned Novation to weather the competitive storm it continues to face.

McKenna became Novation’s president in February 1999 after serving as senior vice president of operations during the previous year. In fact, he was a member of the management team that designed the joint venture between VHA and UHC, resulting in Novation’s formation as the supply contracting arm of VHA Inc. and University HealthSystem Consortium in January 1998.

McKenna joined VHA in 1987, moving up the executive ranks within the alliance’s supply chain management division, including general manager of VHA’s medical/surgical business and vice president of marketing. Among his major accomplishments was leading the development of VHA’s lucrative private label business and its standardization programs.

Prior to joining VHA, McKenna served as director of marketing for IMED Corp., a manufacturer of drug delivery systems. Previous experience includes sales and marketing positions with Johnson & Johnson and American Hospital Supply Corp., which was acquired by Baxter Travenol Laboratories and folded into the new Baxter Healthcare Corp., then spun off as Allegiance Healthcare Corp. before being acquired by Cardinal Health Inc.

McKenna has served on the boards of directors of Novation and sister company HealthCare Purchasing Partners International since 1999. He also served on Neoforma’s board from 2000 to 2003 and is a past chairman of the Health Industry Group Purchasing Association (HIGPA).

Last month, Healthcare Purchasing News profiled fellow retiree Robert "Bud" Bowen who signed off from Amerinet back at the end of March after 20 years with the GPO.

Several weeks before Novation named his successor McKenna gladly shared some insights to similar questions with HPN Senior Editor Rick Dana Barlow about his career before Novation, at Novation and now his life post-Novation.

HPN: Now that you’re riding off into the sunset after 18 years with Novation and VHA, and previously with IMED Corp., Johnson & Johnson and American Hospital Supply Co., what are some of those tasks you’d finally like to tackle that you weren’t able to do because you were so busy?

MCKENNA: My daughter tells me that I really don’t have a plan for what I’m going to do. But I do for the short term. I plan to join the family and spend more time with them. We have a summer house in Cape Cod so this will be a good first test to see if spending the summer with them is a good thing. I’d also like to spend more time giving something back to the community, including working with a local university. [Editor’s note: He’s exploring board opportunities with several colleges.] Finally, I plan to sit on a small company board and serve as an adviser in some capacity. It’s time for a change, I think, and to try a different lifestyle that doesn’t involve a 40-, 50- or 60-hour workweek. I’ve always had a job. Now I want to see what it’s like on the other side.

Occasionally, executives of your caliber tend to use the term ‘retire’ as a loose translation for ‘itching for new opportunities’ so what would keep your foot active in the healthcare industry after you’ve had a chance to decompress?

Beyond what I’ve shared with you I don’t have any further plans. I want to test the flexibility in my new schedule, giving back to the community and serving as an adviser to small and mid-sized companies. Who knows where that will lead? If none of this satisfies my curiosity I probably could jump back into the market in a heartbeat but that’s not my plan. I just don’t see myself jumping back into full-time employment. Being an adviser suits me just fine. Do you know the difference between an adviser and a consultant? An adviser doesn’t write reports. But right now I just want to spend the summer with my family, take some time to decompress and decide specifically what to do in the fall.

As you look back on your career, what’s the most creative thing you’ve ever done?

Having the ability to be part of forming Novation, and taking two very different cultures and finding the right sequence to blend those cultures to build the processes that will benefit both organizations. Since then we’ve been able to build on that and based on what we see for the membership and our trading partners our efforts have allowed us to remain the market leader. It’s been a great ride working with both VHA and Novation over the years. I always tell people that every company I’ve worked for during my career I left it one year later than the previous one. Of course, if that were the case I should have done this 20 years ago.

After all this time what would people in the industry be surprised to know about you?

What you see is what you get. That has helped me in my career. If people see me at a conference they might be surprised to know that I’m a homebody. I like spending time with my family. After logging 100,000 frequent flyer miles each year for the last 10 years, I’m looking forward to being grounded.

Your successor, Joellyn Willis, not only is the first female to occupy the office of president of the nation’s largest GPO, but she also hails from outside of the healthcare industry (as did your predecessor). Does this appointment represent a change in direction, strategy or thinking by Novation? What’s your reaction?

Joellyn has a successful track record and extensive sourcing and procurement experience. By incorporating her experience with Novation’s healthcare contracting expertise, I believe we have the best combination of talent and leadership in the industry.

[Editor’s Note: For the record, since July 2003, Susan Devore has served as president of Premier Purchasing Partners, the group purchasing arm of Premier Inc.]

Finally, if a hospital executive (be it a materials manager up to a CEO) or a vendor executive wanted to join the executive team of a GPO, what sage advice would you give him or her? (Allow me to remove ‘Don’t talk to the media’ as an option.)

[Laughter.] That’s a good one, though. I’d have to say understand the underlying attributes of the organization, it’s goals, objectives and mission and do some introspection to see if your skill sets match up with the organization. It’s standard stuff that can be used for just about anything. But it’s also important to remember that what you do today won’t be sufficient for what’s needed – and expected – tomorrow. You need to stay out in front of things at all times with all active stakeholders because with all the technological development we see you’re always going to be striving to do things faster, smarter, cheaper and better. HPN