In his first month as CEO of Albert Einstein, now Einstein Healthcare Network, Barry Freedman awoke to a fire alarm at 2:30 in the morning.
On the way down 14 flights of stairs, Freedman bumped into a colleague who had just started with another healthcare system, who mentioned he needed to sell a few hospitals.
In what he now refers to as a “fire sale,” Freedman eventually purchased that hospital to upgrade MossRehab.
When Freedman joined, Einstein had a negative operating margin, and MossRehab was one of the few profitable areas of the business. Despite the fact that it was housed in a building that was “beyond ancient.”
The “fire sale” hospital was 100,000 feet larger than the facility his team was considering building on campus, for $14M less.
For Freedman, his interest in rehab was personal. “My wife had gone through a paralysis and was hospitalized for months,” he shared.
Barry Freedman served as CEO of Albert Einstein from 2003 through 2020. He is now an advisor on special projects and is the longest-serving health system CEO in the Philadelphia region.
The journey to Einstein CEO
Freedman’s first job was delivering newspapers at 6:30 in the morning throughout his neighborhood. On rainy days his mother was sympathetic and would drive him along the route so he wouldn’t have to ride his bike in the rain.
After that, he became a grocery stocker at the supermarket. By his senior year of high school, he’d saved enough to buy a plane ticket to Miami for a golf trip with friends.
In college, he washed dishes in the dining hall until he landed a job delivering Budweiser kegs. He loved that job because his beer deliveries were always “greeted with big smiles.”
One of the “several mundane roles” he took on after graduation was selling life insurance to physicians.
During his downtime, he was able to talk with physicians and hospital administrators. He concluded that healthcare was fundamentally changing. And in that change was an opportunity.
The administrators he’d met had social service backgrounds. But he suspected that healthcare was moving towards a more rigorous business model.
So he decided to do an MBA with a focus on healthcare.
After his MBA, he chose to work for a consulting firm and Mount Sinai Hospital in New York contracted his firm to assist with a financial turnaround.
Freedman ran that engagement and developed a close relationship with the CEO of Mount Sinai, who offered him an executive role at the hospital.
Within five years, Freedman was the Chief Operating Officer, and when his mentor and CEO left, Freedman had the opportunity to run the hospital as President.
After an unsuccessful merger with NYU, where Freedman briefly served as the interim President of Mount Sinai NYU Health, he joined Albert Einstein in Philadelphia as President and CEO where he served for 18 years.
“I’m still attempting to fully retire,” he shares, “but they won’t let me.”
Fostering a ‘we, not me’ culture
At prior organizations, “it was always ‘what’s in it for me? Me, me, me.”
At Einstein, Freedman wanted to focus on the collective good, not individuals.
This meant aligning the entire system under the same mission, annual performance goals, and long term strategic goals.
He introduced transparency and inclusiveness, in part by seeking input from department chairs for all major decisions.
As CEO, he cultivated social interactions with the leadership team, with dinners, golf, and team events.
At one dinner, Freedman orchestrated a scavenger hunt complete with limos to transport his leadership team from clue to clue.
He also fostered social connections with those outside his leadership team.
Freedman regularly held lunches with eight to ten randomly selected employees from across the organization, with “Vegas rules.”
Meaning, “what happens here stays here,” so staff could be honest and share issues with him directly.
Einstein’s merger with Jefferson University Health
Einstein was founded to serve Jewish Civil War veterans who were unable to get care elsewhere.
And unlike most care providers in the late 1800s, Einstein served those of all “creeds, colors, and nationalities.”
As CEO, Freedman wanted to ensure Einstein could continue serving vulnerable populations long after his tenure ended.
He realized Einstein needed greater scale to “achieve the synergies that would allow us to sustain the mission.”
Freedman also wanted to enhance research and academics, improve operating performance, access more capital, and position Einstein for longevity.
So he decided to pursue a merger.
He spoke with 16 different health systems and found that Jefferson’s mission and values matched well with those of Einstein.
Both health systems are committed to serving vulnerable populations, teaching, and research.
In addition to value alignment, Jefferson’s leadership was attracted to Einstein’s teaching infrastructure, in-demand suburban hospitals, and the reputationally excellent MossRehab facility.
Jefferson also appreciated Einstein’s 25% stake in a Medicare/Medicaid provider-based managed care plan, of which Jefferson already owned a large portion.
Internally, it was easy for both organizations to garner support for the merger.
External support was more difficult.
The merger faced opposition from local institutions and the area’s dominant insurance provider, who were concerned about the market presence and scale of the proposed new organization.
Eventually, the FTC and the Attorney General of Pennsylvania sued to block the merger.
After years of litigation, Einstein and Jefferson prevailed in the court, and the merger closed on October 4th of this year.
Learning from setbacks
While Freedman has had an incredibly successful career, it wasn’t without struggle.
“If anyone says they never failed, they’re not being honest,” he quipped.
The two major setbacks of his career were the failure of the Mount Sinai NYU merger and his unrealized dream of a collaborative New York children’s hospital.
Freedman was the architect of the Mount Sinai NYU merger and still stands by the enormous benefit it would have had.
The two organizations merged for a few years, but ultimately the cultural differences between the two organizations were insurmountable.
Freedman had to unwind the merger, which “was a major disappointment, personally and organizationally.”
Secondly, Freedman had hoped to bring together four academic medical centers in New York City and create a children’s hospital.
“To this day, I still believe that would be the best solution for children’s healthcare in New York.”
Competition and cultural differences meant his dream was never realized, and “those two things represent my greatest failures.”
He learned that no matter how great the potential benefits, “if you live in a culture of ‘me,’ there are too many opportunities for a few to veto what would benefit the whole community.”
If he gets the opportunity to “really retire,” he looks forward to spending more time with his grandchildren and playing golf.
