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Welcome to Episode #27 of Habitual Excellence, presented by Value Capture.

We are joined today by Theresa Frei, R.N., M.B.A., the Chief Executive Officer of the Sutter Medical Foundation in California.

In this episode, our host Mark Graban asks Theresa about how previous Lean work prepared Sutter for Covid-19 and what they had to figure out as this happened. How did the organization address fear amongst patients and staff? How can leaders demonstrate humility? And, we discuss why leading with safety is so important, including patient safety.

Theresa also shares how they accelerated a three-year telemedicine plan into just three weeks. She also shares about using Lean and continuous improvement principles to survive, rapidly adapt, and thrive during the challenges of the COVID pandemic, social unrest, and wildfires.



"I can't tell you how thankful I am to be working with these teams. They're the ones solving the problems and hats off to them, the front line."

"Our investment in learning, our investment and understanding what it was to lead — which was to really step back and let the frontline lead — really created a unique ability for us to not only respond to COVID, but to recover from COVID."

"We believe in humility when it comes to leadership, because the people doing the work need to solve the problems. What we need to do as leaders is provide them the tools and the learning to be capable."

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Mark Graban (2s):
Welcome to Habitual Excellence presented by Value Capture. This podcast in our firm is all about helping you and your organization achieve habitual excellence via one unifying focus, one value based structure in one performance system. In other words, it's about helping you capture dramatically more value through achieving perfect care and perfect safety for patients and staff. To learn more about value capture in our services, visit Well, hi, welcome to habitual excellence. I'm Mark Graban, and we're joined today by Theresa Frei. She is the CEO and president of Sutter Valley Medical Foundation in California.

Mark Graban (47s):
Theresa, how are you?

Theresa Frei (48s):
I'm doing great. Well, I'm glad you could join us. So I want to learn a little bit about your background and maybe if you could first explain that might be a part of the audience who doesn't really understand the terminology of a medical foundation. If you could talk a little bit about the organization first, That'd be great. Thank you. Yeah, it's actually a great question in California and I believe Texas, there is, there are laws about hospital systems and their relationships with physicians. So in California, a hospital system cannot directly employ a physician unless it's an academic or it is a safety net.

Theresa Frei (1m 28s):
So not for profit hospital systems like Sutter Health have to have a medical foundation which provides three services, research, medical care, and education to the community. And we contract directly with for-profit medical groups. Kaiser Health does this. Common Spirit does this, Sutter does this as well, as any other not-for-profits, Sharp including Scripps.

Mark Graban (1m 53s):
Cool. Thank you. Thank you for that. And can you tell the audience a little bit about your professional background and, and some of the steps into your career to bring you to this point of being CEO and president?

Theresa Frei (2m 6s):
Sure. So I'm a nurse. I started off my nursing career in the emergency room, spent 10 years there. And really, I think at that point realized that in emergency department, most of what you're seeing are errors in care. Errors because patients didn't understand how to take care of themselves or the health system wasn't prepared to provide the care that they needed. And so I became very interested in how could we provide better care? I did some leadership in the hospital in case management and worked at a health plan briefly, got my master's in business and then had the opportunity to work at Sutter Health and the Palo Alto Medical Foundation, which is really providing exceptional care.

Theresa Frei (2m 46s):
And the main reason why I chose that job because I had other people trying to recruit me, was the, my boss at the time Dr. David Hooper, he talked about our needs to provide an exceptional patient experience, that was high quality and patient centered. And he was a physician talking to a nurse about that. So I thought I got to go to work at this organization. And throughout the last 18 years, I've just been so impressed with the physicians I've worked with, et cetera, the leaders, and really centering on the patient centering on high quality care. So it's just been a joy the last 18 years challenging, albeit, but a real joy.

Mark Graban (3m 23s):
Yeah, well important challenges. And I guess that's part of what brings the joy, right? Yeah, yeah, yeah. So, you know, 2020 has been, I mean, speaking of challenges, we have had new challenges on top of challenges. So I was wondering if you could share Theresa, you know, how some of the previous work that you've done related to Lean and continuous improvement helped prepare you in the organization for COVID-19 and other things that had to be figured out here in 2020.

Theresa Frei (3m 54s):
That is a great question. So in 2014, I was the chief operating officer of Sutter Medical Foundation, which is there are two foundation models that report up to me, Sutter Medical Foundation, and Sutter Gould Medical Foundation we hired our first director of Lean. And Sutter Gould Medical Foundation have been on the journey about three or four years longer than us. So we were looking at how they were really changing their organization. And we have really, since then invested in our front lines. We believe in humility when it comes to leadership, because the people doing the work need to solve the problems. What we need to do as leaders is provide them the tools and the learning to be capable so that as a learning organization, we respond to the frontline, we receive their feedback and change.

Theresa Frei (4m 44s):
A few years ago, we actually started working with Value Capture on going deep on real-time problem solving and safety. And so we had done on that journey for a year or two, I think, two years when COVID came in. And so our investment in learning our investment and understanding what it was to lead, which was to really step back and let the frontline lead, really created a unique ability for us to not only respond to COVID, but to recover from COVID. And so we really very quickly changed the organization and adapted. But we've relied on the front line.

Theresa Frei (5m 25s):
We trusted that the frontline could help in response and recovery. They trusted us because we learned how to listen. We had, we learned how to be there. We learned, we knew we needed to be in the gemba, round, look to see, look to solve the problems, help them solve the problems. So it really, I think helped us tremendously. The culture that we have is really the reason why we're sitting where we are today,

Mark Graban (5m 53s):
But that's, that's great to hear and I'd like to kind of explore some of that a little bit more deeply. Can you talk about some of the things that had to be figured out? Both you know, I think, you know, things the public, or non-clinicians like myself might be, you know, aware of, you know, figuring out isolation and, and, you know, rethinking many aspects of, of care. What were, what were some of the other changes that you had to deal with? And, and maybe some that general public might not be so aware of. And I guess I'm thinking in terms of context, you're not dealing with this in a hospital setting, so that's different.

Theresa Frei (6m 31s):
Yeah, yeah, no, it's so thank you again, that's a great question. It's one that I've gotten from my friends as well. I think the first thing that everybody needs to understand that it's not in house, that, that isn't sitting in a bubble called healthcare is that this was an emerging science. This was as complex as you can get. We were seeing what was happening first in China and then Europe. And so there was a certain amount of fear of what's going to happen next. And I would say that on March 3rd, I was less concerned. And on March 4th, I was very concerned and it was evolving that quickly in California. And so it was something that we have never seen in my career.

Theresa Frei (7m 12s):
And I've been in nursing and in healthcare for 34 years. And so we had to look at things differently. The hospital really had a focus on isolation and treatment for us. We had to actually figure out we have to continue to give care. The complexity of what we do every day in our clinics is extremely difficult to turn off, it would harm patients. And it has harmed patients for them not to continue to get their chemotherapy to them, not to get their lab tests, to not get their medications, to not see your doctor. And what was really difficult about this one is we knew that the most vulnerable patients were the ones that had the greatest fear.

Theresa Frei (7m 56s):
We went from having average daily clinic visits across the Valley of about 20,000 every day on March 10th, that first little speck of COVID that was coming into California before they had the shelter in place. 10 days later, we would do down to a volume of 9,000. So when you start seeing that, the patients who you typically see in a clinic with diabetes and heart failure and oncology, all of these patients are afraid and they're isolated, you had to respond very quickly. And I feel very fortunate and very humbled actually to work with the team I work with because it was incredible. We relied on really understanding, I think I mentioned this Mark, the real-time problem solving.

Theresa Frei (8m 38s):
And so we had a first put a new front door on our clinics. We had to expand video very quickly and we had to divide up the leadership and go deep in the organization for problem solving. So first we had to make things safe. It was all about safety. By March 6th, we knew we've got to have all of these things in place within a week. The school district started closing that weekend. The largest one in California in Elk Grove closed on Monday morning. I had a leadership call and I think it's, I remember walking outside my clinic, my office, where I have it. And I walking around the parking lot thinking, how can I deliver a message about, I don't know, I have confidence in all of you.

Theresa Frei (9m 22s):
And that was the message on March 10th. We hadn't seen a significant drop in the volume, but the Bay Area had, and we knew it was coming out of. And so I got on a call with director levels and above on the medical group side on the clinic side and said, I don't know how it's gonna unfold, but it's no longer business as usual. We're going to cancel all our leadership meetings. We are going to focus on safety. We need to keep you safe. We need to keep our patients safe and we need to continue care. So very different, very, very different. But what was interesting is everybody appreciated having all of us say, this is very scary and it's not like anything we've seen before.

Mark Graban (10m 7s):
And you know, and to me, what you're saying, there is a great illustration of leading with humility, being willing to say, I'm kind of paraphrasing back to you, "we don't know, but we'll work to figure it out together" and acknowledging the real reality of, you know, this is scary. There's a lot that's unknown and helping people, you know, try to dive in into that together. As you were saying, staff were scared too. I was wondering if you could share a little bit more about that dynamic, the two sides of it. What had to be figured out to, you know, the best you could alleviate some of the patient fears and at the same time, you know, staff fears, people were afraid to come to work afraid to get sick.

Theresa Frei (10m 56s):
Yeah. So there were really four areas that we focused on in the very, very beginning. It was personal protective equipment management. So we have incredible people in our supply chain. We had to secure the supplies and we actually don't know how to figure out that a supply chain management and move away from just-in-time to today. You know, what's the clinic head count, which the staff head count. And we relied on the front line. We said, we need this done and they got it done. We need it for screening and advice. We had people coming in that had every symptom of COVID walking in our doors, not saying it before they got there. So all of a sudden, we had to say, before you come in, we need you to call the advice line.

Theresa Frei (11m 39s):
We need to call your office. We have to rely on the physicians to make decisions on what needed to be postponed, from surgeries to in-office visits. And then for video, we had to get that up very quickly. We allowed, when we set up the telehealth, we really wanted physicians you know, there were a few that really wanted to work from home, that were very afraid. And so, we figured out how to, in a HIPAA compliant manner, get them to work from home. But once we put video in, it was a game changer, it was literally a game changer. And again, we have at the elbow support team, amazing coaches that are former medical assistants and patient service representatives, some nurses, and they were critical to getting the tele-health app.

Theresa Frei (12m 27s):
Once we got that up, I rounded about a week and a half later, once we had enough PPE, I couldn't go out and round. If I was going to use PPE, that really the staff needs, the patient needs. Right? So when I went out and rounded, the fear was palpable. It was palpable among the physicians. The clinics looked really different and you could see the patients when they came in, they wanted to see that we had changed our infection control practices, that we had done things to keep them safe. And our oncologist and others said that with the video, there are many patients who had said, this is the only contact I'm having with the outside world.

Theresa Frei (13m 8s):
So they were socially isolated and they felt appreciated being able to see their physician. I talked to a few physicians who have chronically ill children at home, and they were afraid about harming their family, the real heroes in all of this story. And I think Rudi's focused on it are the people that are frontline that have had to adapt to changes that in the 10 years I worked in the emergency room, probably got, I talked to people, I got compressed into like three weeks, right, where you're going to be in PPE all day long. And our group, for those of you who haven't, I've worn a mask all day long and gown, it is physically draining. You have to figure out how to communicate with patients completely different.

Theresa Frei (13m 49s):
And our clinical teams have done it. You would not believe the compliments we get on a daily basis from our patients. And focusing on recovery, the three real-time problem solving teams, one of them was about infection control. We actually started that on March 13th, which was the same week that we said, we don't know, no, we've got to figure things out. And by March 20th, we had three problem solving teams that went deep from CEO down to the frontline, 40 or 50 people on in-person care, telehealth and surgical recovery, because we essentially shut our surgery centers down. And how are we going to take care of all those things that need to be taken care of? Heart valve replacement?

Theresa Frei (14m 29s):
So these weren't simple procedures, how long can we pass on them? How quickly can we make it safe for them to come in? So it was, you know, again, the courage on the frontline was incredible and you had to listen and you had to see it. So going to GEMBA was really important and they, and they also appreciated that we were listening to them.

Mark Graban (14m 53s):
Can you elaborate a little bit on, I mean, you talked about real-time problem solving. You know, there may be people in the audience who've worked with Value Capture, and are very familiar with that model, but I was wondering if you could share from your perspective, like what, what that process means, you know, maybe break it down. What makes it real time and, and what are some of the, you know, kind of approaches or structures that make it more effective problem solving?

Theresa Frei (15m 18s):
Sure. So real time problem solving is really clearly defining that problem. And then in the moment getting very, and I'm talking very detailed. So I, Solano County did not have that much, that, that a significant amount of code at the time on March 20th, I may only have 9,000 less than 50% of our normal clinic volume. We found a place that was safe. We deployed a team and we said, how do we create six feet, 10 minutes? How do we create a pull from the car? So typically patients walk in, they wait in the waiting room, the waiting room is full of magazines. It's full of stuff that now we have to clean.

Theresa Frei (15m 59s):
So how do we create the cleaning? So we started that on March 20th and we had a huge team. They created it, they solved the problem for six and 10. They solved the problem for masking and arrival from the car. So the patients would text, they would get arrive and get pulled in to the clinic visit. We would clean and they would leave. That spread through the month of April to over a hundred locations. And then by the end of April, beginning of May, we started auditing to make sure that in-person care was safe. And we sent out messages to our patients, it's going to look different and it's safe. Come see us. So by the, by the first week of June, we have recovered probably 85% of our volumes because we did real time problem solving.

Theresa Frei (16m 44s):
We didn't, I didn't say go do this. The people who do the work went out and said, how long will it take for a patient to walk? How long will it take for us to clean? How quickly do we do this? So we've got it. It's incredible to see again how the frontline solve these problems.

Mark Graban (16m 59s):
And, you know, you talked about, you know, the time spent building those capabilities and those habits. I was wondering, you know, if you could talk about some of the early stages of that cultural shift, you talk about leaders stepping back, as I've heard, other people say of, you know, not having as many top-down answers that habit or old habits of giving answers can be hard to break. I've seen from a staff perspective, it can also be difficult for them because they're used to receiving answers. And now they're being engaged in a different way that can be exciting or scary or both.

Theresa Frei (17m 39s):
Yeah, yeah, yeah, no, it took years when we first did Lean, but when we first started and we had great coaches, but I don't think we were listening and we weren't hearing. We were doing site visits to see was going on, but we really, we understood the concepts in a meaningful way. But when we went out to round, we were talking about, Oh, let's look at the huddle board. Let's look at this. When we went deeper into real-time problem solving and daily engagement in investing there really, then what you start doing is you understand the questions you need to ask, to understand the thinking. And we're still struggling with that, frankly, Mark, a little bit, because with everything with COVID, it became top-down.

Theresa Frei (18m 21s):
Right? Thou shall wear a mask because you will be taking temperatures. And now we've got to switch back to bottom up. And so it's been really incredible to see your frontline respond, but had we been still having to direct traffic, we would not be where we are. We would not, we would have had more exposures. We would have had a lot more things that were unsafe, but our focus was safety, respect for the front line and, and really seeing what the problems were, measuring them and solving them and having a frontline staff.

Mark Graban (18m 56s):
Wow. So that's really good to hear. I mean, it's a powerful endorsement of, of that model even during very challenging times and yeah.

Theresa Frei (19m 8s):

Mark Graban (19m 9s):
Oh, I hear you're saying, is there, there's still a time and a place where maybe, you know, time or speed was of the urgency and, and some things had to be mandated?

Theresa Frei (19m 19s):
Yeah, we can only have, yeah, we have, yeah, sorry. We have, we can only have one nursing protocol. That the senior infection to see a infectious disease specialist helped us with. And we had to change that almost weekly because of all of the changing science we couldn't have, you know, the 2000 physicians in the Valley and clinicians decide that each one of them would have their own nursing protocol. We had to have one. So there were things like that, that the science and the safety necessitated rapid set up and type control. And when you have to have tight control over process, you have to reduce the variation. That's pretty much what we had to do.

Mark Graban (19m 57s):
Yeah. And yeah, like to me, I mean, I think part of the mindset shift is where, you know, you find the balance. If the old default had been almost everything top down. I think even within a Lean culture, it doesn't necessarily swing 180 degrees in the other direction, but that top-down maybe becomes the exception when there are special circumstances. And it sounds like in some aspects of this, that was very true.

Theresa Frei (20m 24s):
Yeah, absolutely.

Mark Graban (20m 26s):
Because, you know, I'm thinking back to, I went and pulled up a quote, like, you know, one of my mentors had sort of expressed like even, you know, back to more of a traditional manufacturing setting, which is of course very different than healthcare, but the phrase, and I want to quote it directly, was that, you know, "you need unity in the essential and Liberty and the non-essential." And I'm reminded of that because like you were saying, there are certain things where it was so essential, really a matter of safety, it had to be done in a certain way.

Theresa Frei (20m 58s):
Yeah. Yeah. I love that quote. That's a perfect one.

Mark Graban (21m 2s):
Yeah. And, and, and doing so it doesn't necessarily then cut off the input in the engagement and the problem solving that that's required in parallel to that.

Theresa Frei (21m 12s):
Yeah. Yeah. Good example is, you know, when you're in so many different locations, we have small clinics where we have three providers and one desk, that's an arrival. They have to solve the problem for safe patient care. I can't say MOB that's down the road, sorry, medical office building that has 80 clinicians, they're going to have a different solution. And so to your point, you have to customize based on what the patients need and the care team.

Mark Graban (21m 40s):
So one of there are a couple other challenges, you know, that came up here in 2020 as if COVID-19 was not enough, especially in California and especially in Northern California, the challenges of wildfires, social unrest, and protests, and other things going on in the community. How were, how did you help address those as situations as a leader and how did you engage staff in problem solving there?

Theresa Frei (22m 10s):
Yeah. Well, thank you for that question. We'll talk about the social unrest first and because subsequent to that, the wildfires came. So over the last weekend of May, there were a lot of, there was actually, there were peaceful protests mixed with some violent protests in the greater Sacramento area. In many different to the communities that we serve and our clinics are sitting in these areas where there were social unrest. On Monday, June 1st, I was informed by one of the CEOs that we had been contacted. It was right around noon. And we were in a kind of COVID recovery because we were just starting to recover. And we had just been informed that there was expected social unrest to the extent of violence that was expected that evening and because of that, we had to close our clinics early.

Theresa Frei (23m 1s):
Our clinics, typically in some locations go well, past five o'clock or seven, and on Saturday, they're there between three and five. So we stopped what we were doing related to COVID. We spent the next eight hours because we said, we're going to have to plan for the week. This is not going to go away tonight. And we were partnering with local law enforcement, but our focus, again, went to safety. We needed to make sure our patients were safe. Our staff were safe, our clinicians were safe. And then we had to plan if there was physical destruction of the clinic, we did not want staff going in there in the morning. We did not want staff responding to any alarms that went off.

Theresa Frei (23m 41s):
So we spent literally in the next eight hours, and then we had late leadership calls. We got everybody on the phone that needed to get on the phone in the areas where there was unrest and we said, this is the standard work. And the next day, you know, I openly admitted, I haven't been through this before. I had been through wildfires. I've now been through a pandemic and emotionally it was taxing so we responded with safety. And then by the end of the week, I sat down with my leadership team, our leadership team, I don't see it as mine. And we reflected on the emotional toll of all of this. And we took a pause. I had this whole strategy retreat planned for that day, eight hours, social distancing on video, all of that.

Theresa Frei (24m 26s):
And I just said, it's going to be a few hours and the first hour, we're going to talk about what's happening. What does this mean to us? And it was a really, it was almost like a pause. And then, then we set up better together forms. And it's being led again by our diversity inclusion team, but it's the frontline leading it. It's people coming together and have conversations and then the wildfires happen. And so that was again, physically draining because you couldn't go outside, you couldn't breathe. However, we've been through wildfires before. And so we had great facilities team, we have great leadership on the frontline. We had people who were being evacuated from their homes and also responding in clinics.

Theresa Frei (25m 9s):
I've been evacuated before. And it's mentally unsettling to be somewhere doing work where you've got this split mind of, am I going to be able to go back? Am I going to get harmed? Those kinds of things, it's just draining. But I give a kudos to the federal health system. They did an amazing job. And then what was really cool, silver lining out of the wildfires, we got portable HEPA filters or not hyper filters, but we got portable air processing. We are now using those for our respiratory clinics because they process the air quick enough to make it safe for us to bring our respiratory clinics inside. Because through the COVID in March, we had cold, cold, rainy weather.

Theresa Frei (25m 51s):
And in the summer we had over a hundred degree temperatures. So we had to monitor the temperatures of the staff. So now again, silver lining, we got that. It, yeah. I'd say it's been a challenging year and again, the care teams have been incredible and the patients have been really very thankful, but also incredible, very patient with us as we've changed things.

Mark Graban (26m 12s):
Sure, sure. Well, you know, for being a challenging year, you know, certainly it's encouraging to hear of, you know, some of the, you know, of making the best of the situation and, you know, engaging people in a way where, where, you know, the organization is, is coping better than what it might have otherwise. And, you know, there's still, there's still a lot to go through, you know, this challenge is not done, but I'm sure that that creativity and that problem solving and that spirit will continue.

Theresa Frei (26m 54s):
Yeah, no, I can't tell you how thankful I am to be working with the teams I am. They're the ones that are solving the problems and, and again, really hats off to them, the front line.

Mark Graban (27m 7s):
Yeah. Well, I think it's, it's great to give recognition to them. So thank you for doing that. And we'll certainly do what we can to amplify that, that, that praise that's well deserved to, you know, the people in your organization and people elsewhere. So yeah. Other than saying, thank you for that, I don't know what else to add it's.

Theresa Frei (27m 33s):
Yeah. Well, no, I appreciate the conversation and, and appreciate the time to help share a perspective from a very challenging year.

Mark Graban (27m 42s):
Yeah. Well, thank you for your leadership and for sharing what you've been doing, Theresa, you know, I think we, we hope podcasts like this are, you know, informative and inspiring to other leaders and other developing leaders who aren't yet in a role like you're in now. So thank you. Thank you for sharing, you know, thinking through that and sharing those reflections on this challenging year, Theresa.

Theresa Frei (28m 7s):
Yeah. Great Mark thanks!

Mark Graban (28m 10s):
Our, yeah, so thank you. Our guest again has been Theresa Frei, I'm CEO and president of Sutter Medical Foundation. We certainly wish the best to you and to your team and your patients and your community.

Theresa Frei (28m 22s):
Great Mark, have a nice day.

OUTRO (28m 24s):
Thanks for listening to Habitual Excellence presented by Value Capture. We hope you'll subscribe to the podcast and please also rate and review it in your favorite podcast directory or app to learn more about value capture and how we can help your organization on this journey to habitual excellence, visit our website at


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