Freudenberger leads OakBend through 10 years of growth

CEO recently won Entrepreneur of the Year award

By Joe Southern

(Photo by Joe Southern)
OakBend Medical Center CEO Joe Freudenberger poses at his desk with the award he won from Ernst and Young as a regional Entrepreneur of the Year in the healthcare category. Freudenberger is marking his 10-year anniversary at OakBend.

As the country finishes celebrating Independence Day, Joe Freudenberger continues to celebrate the spirit of independence each day he reports to work at OakBend Medical Center in Richmond.

The hospital’s chief executive officer is marking 10 years on the job and said he appreciates the rare opportunity he has to lead an independent, nonprofit hospital.

“We’re very proud of what we’ve done. Independent, nonprofit hospitals are quickly vanishing,” he said. “I believe we are the last remaining independent, nonprofit in the greater Houston area. We’re very proud of that. We think it’s a great way to connect with our community. It’s unfortunate the economics of healthcare have caused a lot of independents to have to sell out, because the closer you are to your community the better you can tailor your services to the unique needs of the community.”

Freudenberger, 56, is a native of New Orleans and was just recently honored by Ernst and Young (EY) as a regional Entrepreneur of the Year in the healthcare category. He credits the independence of the hospital and his entire team for the win.

“Frankly, to the extent that you can be creative, you have more flexibility to be creative if you’re independent than if you are part of a larger organization where there are more guidelines to how you conduct business. So, we have the duel benefit of being financially secure and being independent, so we really can do some innovative things. I think that’s what caused E&Y to award the Entrepreneur of the Year award to me,” he said. “To me it’s not only a reflection of what I’ve done, I’m only a small part of the overall picture, I think it’s a reflection of what the organization has done.

“If you think about it, for an organization to be creative, the board has to have an interest in that and the tolerance for the risk-taking that comes with creativity. And then you have to have an executive team that is creatively oriented and similarly willing to tolerate the risks associated with doing things differently than the other guys do it. And then you have to have a workforce, the staff, that say, ‘hey, we’re willing to try new things, too.’ And I’m just so impressed with how our organization has just adapted these new concepts and they really make a difference in people’s lives,” he said.

One of those innovations is the no-wait emergency room.

“For example, we have the only no-wait ER in the greater Houston area for a hospital. You’ve got some no-wait facilities that that are independent, free-standing, but we’re the only no-wait ER in a hospital in the greater Houston area,” he said.

He said they average 3,000 patients a month in the emergency room and average 130 minutes “door-to-door.” Freudenberger said the national average is 200 minutes and the industry gold standard is 180 minutes.

“A door can either be up to the hospital into a bed or a door can be discharge back to home. We do it in 130 minutes and that starts with the registration process … and once you’re in the back, the focus is moving you through the process as quickly as possible,” he said.

To do that, he said, it requires teamwork.

“What we’ve realized is it’s not one group of staff that make that difference. It’s not just the ER nurses or the ER doctors, it’s everybody. It’s the floor staff, it’s the doctors that do the admitting, the doctors in the ER, it’s the staff in the ER, it’s housekeeping, it’s plant operations and making sure rooms are always in operation so we can put patients in beds,” he said. “It’s how fast the housekeeping staff can turn over the room in the ER. There’s not a person in the hospital that doesn’t have a role in that. And that’s why, I think organizations that have more of a focus on their community can do things creative like that.

Another innovative feature is OakBend’s elder care unit.

“This is a fairly innovative approach to elder care because the traditional model of caring for the elderly is to keep them safe, which means keep them in a bed so they don’t fall and break a hip or some other joint,” Freudenberger said. “The problem with that is when you lie around in bed your muscles atrophy and you lose functional capacity to the point where you could lose the physical capabilities to thrive outside the hospital setting or an institutional setting, which is terrible. Our model is to get the patient up and walking as quickly as possible.

“So we strongly discourage patients from eating in their room. We try to get them into a communal dining area or at the very least out into the family gathering area where they can sit and watch TV while they eat. We just want to get them out of their room because that forces them to walk and forces them to engage and forces the heart to pump blood and the lungs to breathe air and good things happen when the body is moving. We’re able to achieve remarkable outcomes by doing that,” he said.

Freudenberger said their process is beneficial to the patient.

“Ultimately what we are able to do is get a patient well within three and half days as opposed to the average length of stay for a Medicare patient in the United States, which is almost five and a half days,” he said. “When you can get a patient through the hospital in 40 percent less time than on average, the research that I’ve read suggest that benefit is retained by the patient for up to a year post-discharge. That’s pretty cool. We’ve got a great leadership team that makes it happen every day.”

Freudenberger attended Tulane University where he majored in math and economics and then received his master’s degree in business administration with an emphasis in finance in 1986. From there he spent 10 years with Deloitte as a management consultant and then 11 years as a chief financial officer at Cypress Fairbanks Medical Center and Memorial Health System of East Texas. He came to OakBend in June of 2007 as the CFO and in October was named the interim CEO. The board of directors made him the permanent CEO three months later.

Upon his arrival at OakBend, the hospital was embarking on one of its most ambitious projects. It was constructing a new hospital at the intersection of Highway 59 and Williams Way.

“Obviously opening up a second hospital was a huge leap forward for us,” he said. “That didn’t come at a particularly good time. 2009 was the height of the recession so that made it a significant challenge. Independent of opening up a new hospital, was opening it up in the middle of the worst recession in modern history. It’s not what I would have chosen, but who knew when we kicked off that project in late 2007 that the economy would turn so sour so quickly.”

Today the new hospital is facing another potential challenge. The Williams Way overpass was recently torn down as part of the Highway 59 expansion project. The road will not be rebuilt for several months. Freudenberger said it’s too soon to tell what the impact will be.

“I haven’t seen a significant shift in volume but it wouldn’t surprise me if that shows up over the course of time. The good news is you can still get to our Williams Way facility. You can get there via Sansbury on the back side or you can do the flip at 762 and get there on the front side,” he said. “We’re worth the extra drive time.”

Another challenge OakBend faces is being the proverbial small fish in a big pond.

“How do you compete effectively in a highly competitive market with some very well known, well-recognized names like Memorial Hermann, Methodist, etcetera. We had to create a reputation for ourselves that gave people a reason to pick OakBend over those guys. I think we’ve been very successful at that,” he said. “We’ve been growing at a rate that is in excess of the national averages for hospitals … so things have been going very well there.”

Freudenberger said competing with the big guys is one of OakBend’s major accomplishments.

“The biggest accomplishment in my mind is doing just that, overcoming that challenge. And when we changed our name to OakBend (in 2004) we had to really reintroduce ourselves to the community and that takes a while. I think we’ve done that very effectively,” he said. “We’ve got a great marketing and public relations team. We’ve established a solid infrastructure. We now have a thriving fundraising organization. So as a nonprofit, if you’re not doing a good job of fundraising, you’re missing out on both the contribution that that represents as well as the connection to your community.”

In addition to the two hospitals, OakBend has a surgical hospital in Sugar Land, four surgery centers spread out between Fort Bend and Harris counties and a number of sites where they provide outpatient services such as imaging, physical therapy and sleep labs.

“One of the things we have coming down the pike is we are looking to establish an OakBend facility in Wharton,” Freudenberger said. “This is a community that lost their local hospital and we’re trying to re-establish services to provide them that. … We hope to have that operational towards the end of this year or the beginning of next year.”

In Freudenberger’s tenure, OakBend had seen annual revenue growth rise from $160 million to $1 billion. The hospital employs 1,200 people, including 400 physicians. They see an average of 100,000 patients a year across all facilities.

“Things are good,” he said. “We want to continue growing, continue innovating, coming up with new services and new ways of delivering services. … Our quality indicators are outstanding. It’s a good organization, a good place to work and a good place to be cared for.”

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