Execs Find Community Structure Is Good Medicine at Value Health

As Leslie D. Michelson sees it, one of the chief reasons society is deteriorating is the absence of community in people’s lives.

So when he and a like-minded entrepreneur, Jacqueline Kosecoff, decided 10 years ago to found a health services company, Michelson set two goals.

First, he wanted an atmosphere in which Type A crusaders bent on reforming the nation’s system of health-care delivery could thrive. Second, he wanted to create a corporate culture that would bind workers into a cohesive, supportive team during the long hours they would spend in the workplace.

Evidence indicates that the partners have succeeded on both scores.

The Santa Monica company they co-founded, Value Health Sciences, is the nation’s leading applied health services research company. Its software programs help doctors and hospitals in the managed-care industry assess how best to treat patients, determining such things as whether back surgery is called for or whether a pharmaceutical product increases risk.

In formulating the idea, the partners saw an opportunity to help ensure that quality would not erode as the emerging managed-care industry launched a relentless pursuit of lower costs.

Seeking to give the place a “ma and pa” feel, Michelson, 46, and Kosecoff, 47, agreed to operate as co-chief executives. And they encouraged the doctors, researchers, software programmers and support staff they hired to consider the company a family. If an employee was uncomfortable approaching Michelson, he or she could walk into Kosecoff’s office instead.

“It surprises us more companies don’t use that [co-CEO] model as we move from industry to services and intellectual property,” Michelson said. “Why would you settle for half the IQ and no ‘binocular perspective’?”

The co-CEOs draw employees out on significant events--both happy and tragic--in their personal lives.

When family circumstances warrant, the company goes out of its way to accommodate. If a parent has to leave at 4 p.m. to pick up a child, that’s OK. People basically are invited to set the hours that work best for them. And many workers telecommute from Phoenix, Boston and other far-flung locales.

“We mourn together, we celebrate births together, we take care of one another,” Michelson said. “We really care about one another.”

When Kathy Nitta, an associate vice president in software development, lost her mother last year, Michelson and Kosecoff urged her to take as much time off as needed.

“Leslie wrote a note to my family,” Nitta said. “Gestures and communications like this make me feel a real sense of belonging. I spend a lot of hours here--at least 60 a week. It’s important to find a culture where I’m comfortable.”

Michelson, who said he has occasionally dipped into his own pocket to help employees enmeshed in crises cover their rent or mortgage, said he knew the company had succeeded in establishing a community feeling when, five years ago, the staff pooled resources to replace a new bicycle stolen from a secretary’s garage.

“Nobody even asked me to contribute,” he said. “She was in tears because she was so touched.”

After the 1994 earthquake, when their office building was a shambles, Michelson and Kosecoff arranged for employees to meet with trauma counselors. They also insisted that everyone try to get right back to work, contending that business as usual would help repair frayed nerves.

When Michele Rutin’s husband-to-be decided to move to Phoenix 3 1/2 years ago, the associate vice president and product manager gave a month’s notice. Her bosses said, “If we can work it out, will you stay?” Rutin said she was shocked and thrilled at their willingness to let her telecommute much of the time.

Value Health, where pay tends to fall in the industry’s middle range, has an innovative approach to perks for its 180 employees. For example, the less a person gets paid, the more the company will subsidize the individual’s membership at a nearby health club.

For all the co-CEOs’ success in creating a sense of camaraderie, the company’s culture could be in for some big changes.

In June, shareholders of Value Health Inc., the Connecticut corporation that owns Value Health Sciences, approved a merger with Columbia/HCA Healthcare Corp. That Nashville health-care giant, with its strict bottom-line orientation, has been a lightning rod for criticism about the unsettling changes in health care and recently came under federal scrutiny.

Value Health Sciences employees admit to feeling queasy about the ownership change.

“You don’t hear much good” about that company, one employee said. “But I think our executives would fight to keep our culture.”

Michelson--who, like Kosecoff, plans to stay on after the merger--expresses hope tempered by realism. “I think we will be able to set our own tone and our own culture for as long as we’re successful,” he said. “If we fail, we will lose control of our destiny.”