In 2014, Marinko Rade found himself in an unexpected situation. The then 31-year-old had been offered a daunting task in his home city of Rovinj in Croatia: to take over the orthopaedic and rehabilitation hospital ‘Martin Horvat’ as CEO. From the outside, this could have been viewed as a huge opportunity for a clinical scientist who was just completing his PhD. But Rade knew better – the hospital was facing years of consecutive losses from a laissez-faire management style. Salaries had become unjustifiably high and expenditures were out of control. It reflected the broader climate at the time: a third of European hospitals were reporting operating losses, according to a 2014 Accenture Hospital Rating Report of more than 1,500 hospitals.

“The board of directors selected me because I showed a very good affinity towards numbers and logical thinking,” says Rade. “But their rationale was that I would have the energy, audacity and stupidity of a young person – when you throw yourself into something and try to change it.” Martin Horvat Hospital cut expenses by 18.6 % and posted a profit of around 200,000 € after the first financial year under Rade’s oversight. “It wasn’t a lot. But it was huge for a hospital that was showing financial losses for 14 years in a row since 2000,” he says. And to prove it was not a stroke of luck, the hospital wrapped up its second year with 250,000 € in net profit. “It was not by mistake,” says Rade.

Seven years later, the orthopedic and rehabilitation hospital on the St. Pelagius Peninsula plans to bring in more than € 3.4 million in revenues based on 2021 projections. (The hospital only brought in € 2.1 million in revenues in 2020 as a result of the global pandemic) Annually, it tends to over 15,000 patients and the facility is even being touted by the Rovinj tourism board. Even so, Rade admits it still takes “some magic to make a public hospital profitable”. Croatia has among the lowest health expenditures per capita in Europe at around € 1,361. This is about half the EU average, according to a 2020 report by the OECD and European Union.

Marinko Rade
...completed his PhD in Clinical Medicine at the University of Eastern Finland. In 2014, he became CEO of the Martin Horvat Orthopaedic and Rehabilitation Hospital in Rovinj and continues to be a research adviser at Kuopio University Hospital in Finland. He received his MBA from WU Executive Academy in 2020.

When we ask what ultimately makes a hospital successful, Rade laughs: “Good question! We refer to ourselves as good when we have a short enough waiting line and manage to provide a solution to our patients’ problems. We are good when people are travelling to us from 800 kilometres away, even when they have five different hospitals on the way that could solve the same problem.”

Rade grew up in the popular tourist city and fishing port of Rovinj. The Croatian and Italian native has a strong affinity for the region to this day, joining the swimming marathons and charity runs in his hometown every year. Even as a national rowing champion, his real dream was to become a physicist (despite being told by his professor that lab work would bore him). The physics plan didn’t work out, but lab work did – first with a Masters in Orthopaedic Medicine from Middlesex University, then a PhD in Clinical Medicine from the University of Eastern Finland. Following that, a postdoc in Clinical Research at Kuopio University Hospital in Finland during his CEO post at Martin Horvat (he is still a research adviser there). The accolades have since followed him. His website and Linkedin profile include a long list of international scientific awards from the Finnish Spine Society, the International Society for the Study of Lumbar Spine as well as the Republic of Croatia.

But Rade does not shy away from the elephant in the room: His path seemed to be paved in academia and clinical science rather than in business. After a decade of studying and conducting research abroad in Finland and the UK, he developed an expertise in spinal pathologies and predictive algorithms. Managing a 133-year-old hospital – especially one that was in dire straits – was not something his research had set him up for. “I wish there was a golden formula for everything,” says Rade, who admits there was a lot of trial-and-­error at the beginning. “You have to come in with logic and humility, and be ready to admit that you’re wrong everyday.”

His overhaul began with assessing the hospital’s workforce of 130 employees. “How many of them are just waiting to go home at 4pm? And how many of them are really willing to innovate and put their back into it?” He then went on to redefine the hospital’s main services. Martin Horvat would specialize in orthopaedic, neurological and paediatric rehabilitation rather than complicated surgeries (which were already being served by a hospital just an hour away). Another strategy was to seek expertise from outside the hospital, cooperating with researchers from the University of Eastern Finland, Kuopio University Hospital or King’s College London (whom they sought help from on spinal research). “The most intelligent person is almost never in the room,” Rade says.

But after five years of leading Martin Horvat, Rade knew it was time to hone his management skills. “I had a strong feeling that an MBA was the missing piece,” he says. “I was in need of having different professionals and leaders to help me analyse my ideas.” This is when he turned to the WU Executive Academy in Vienna – a global MBA program designed for experienced professionals in cooperation with the University of Minnesota. Rade used the next 16 months as a sounding board to test new ideas for the hospital with peers and professors. “It’s possible that a lot of people agree with you because you’re the CEO. But at the MBA, we’re all just students. There is no CEO between us.”

The learnings in Vienna’s classroom are still evident in the hospital today. When it comes to the negotiating table, Rade always aims for a non-zero-sum outcome. “If we collaborate, and integrate our needs and our interests, maybe we can manage to come to a situation in which two plus two equals five.” He calls this “expanding the pie”. In this case, Rade is referring to the roughly € 20 million he managed to secure from the region of Istria (which happens to be the owner of the hospital) and the City of Rovinj. Realising there were mutual interests between all parties, Rade threw out the obvious question: Why not collaborate and renew the hospital together?

The investments have transformed Martin Horvat into a facility that resembles a modern holiday resort rather than a hospital. The location helps – Martin Horvat sits on the east coast of the Adriatic Sea just a short drive away from Rovinj. Already, more than € 2.6 million has been spent on renovating the hospital buildings (scheduled for completion in 2022) and the house even has its own private rehabilitation beach (the first of its kind in Croatia).

“The hospital was always seen as something apart from the city. You go there when you’re sick, nothing more,” he says. “But this is wrong – the hospital must be an integral part of the city and of our daily life.” Certainly, this will change in the coming years. Martin Horvat recently hosted a swimming marathon bringing together patients, local citizens and athletes. Construction of a new swimming pool complex is also underway, which, as Rade emphasises, will be mutually beneficial for both the hotel and the city’s medical tourism. One area will be dedicated to Olympic swimming and waterpolo training, another for rehabilitating patients from Martin Horvat. The development will also be home to a thalassotherapy centre for patients (using seawater as therapy). The next stage of the hospital’s overhaul includes a € 7 million marina just a stone’s throw away featuring 375 nautical berths to serve local fishermen and recreational boat owners.

“We didn’t have this money before. I brought a lot of different people in with different interests,” says Rade. “And all together by negotiation, we managed to find a common ground.” He is conscious that funneling the funds into new projects will be key to the long-term success of the hospital. At the moment, profits are making up 2 % of the total revenue. “Profitability has to be low because I have to invest everything I can into renewing,” Rade says. When all the investments are completed by October 2022, Rade expects revenues to grow at a 18.9 % CAGR (compound annual growth rate).

Asked to describe himself as a leader today, Rade chooses words such as ‘excitement-seeker’, ‘broad-minded’ and ‘empowering’. The description is a testament to his education and professional journey, which has pushed him outside of his comfort zone at times. Ultimately though, Rade feels at home with his foot in both worlds: “Being a successful scientist and a successful CEO can really be two sides of the same coin.”

Text: Olivia Chang
Photos: Gianmaria Gava, Danijel Cerin

Diese Advoice erschien in unserer Ausgabe 7–21 zum Thema „Smart Cities“.