B000U5KFIC EBOK (45 page)

As Munger pressed toward those goals, said Borthwick, there were
bad feelings and damaged relationships. "The breakage was not unlike the
breakage that you get in a takeover of a company, and you do things differently from the previous management. A lot of people trained in their
old ways can't adjust and they have to leave."

After a long, bitter battle with other board members and some staff
doctors, Munger and his supporters prevailed. "Ten years later, I hate having had to go through the heartache and tragedy, but I love many of the
people I now work with," said Munger.

Munger personally has recruited many physicians to the hospital
staff, which is unconventional for a lay chairperson of a large nonprofit
hospital. Charlie is intrigued by the technology of medicine and gets a big
kick out of working with the doctors.

By the time Leeka took charge of the medical center, good relations
existed between the staff and the board, but the business side was still a
mess. The hospital had such a large backlog of uncollected bills that in
the first year of his administration, Good Sam took a staggering $20 million bad-debt write off. But from then on things got better. Leeka had become accustomed to Munger's personality and they clearly were on the
same team.

"I see people who just don't understand him," said Leeka. "They
think he's zoning out. He's not. He's sitting there looking at cash flow, return on investment three years out, then back filling to see how he can
make it work."

Leeka says that Munger insists on running the hospital with one purpose in mind-serving the community in the best way possible. "There
are tricks a hospital can do to squeeze extra revenue from low-income
and Medi-Cal billings, but Munger won't allow that," said Leeka.

Following the Northridge earthquake, said Leeka, other hospitals in
the area tried to maximize the funds they got from the Federal Emergency
Management Agency by claiming every old crack in their cement was
caused by the earthquake. After the Good Sam buildings were examined
and it was decided there was no significant damage, Munger would not
file a FEMA claim.

"He won't do anything just for money," said Leeka. "He'll go into a
business (health care special services) even if he knows it will lose
money, if it is the right thing to do."

Good Samaritan is now a base for various specialty practices that
draw patients from all over Southern California, the western states, and
even from abroad. These specialties include California's largest cardiology program; Southern California's second largest cardiothoracic surgery
program; new treatments for brain disorders; women's health services,
including obstetrics, gynecology, neonatal intensive care, urogynecology,
breast cancer and fertility services; orthopedic surgery, especially joint
replacement and pelvic reconstruction; opthalmological care, including a
very large retinal surgery practice; an oncology program; an advanced digestive diseases program, and one of the largest kidney stone treatment
units in Southern California.

Perhaps the most gratifying sign of the hospital's turn around was
when it was chosen one of the best hospitals in the country by U.S. News
& World Report in the July 27, 1998, issue.

There are still many physicians in the area who do a slow burn over
Munger's reorganization tactics. Nevertheless, Good Sam is on far better
medical ground than it has been. However, its financial condition is still
shaky, despite substantial cash reserves. Although there has been progress, Munger said that there are always a lot of questions and "ifs" at a
major inner-city hospital. Even with the best laid plans, long-term success
isn't guaranteed.

"I have a lot of respect for Good Samaritan Hospital, but it's a very
tough hand to play," said Hal Borthwick. "And if you ask Charlie why he
does it, one of the things he'll say is that he doesn't want all the hands that
he plays in life to be easy ones."

In the decade that he's been chairman, Munger has become a familiar
figure at the hospital. Leeka says staff members all have their favorite
"Mungerisms," stories or aphorisms or jokes that Charlie has told, perhaps
more than once. Each year, Nancy and Charlie attend a dinner at the hospital's institutionally plain auditorium to hand out 5, 10, and even 40-year
pins to faithful employees. One year Leeka asked Charlie to come to the
podium to say a few words. Charlie clambered to the stage, but went to
the wrong microphone, one that was not turned on. He began talking, but
the audience could only hear a muffled mumble.

Nancy shouted "Charlie, the mike's not on," several times, but Charlie paid no attention. The engineers rushed around behind the scenes for
several minutes trying to get power to the microphone, which they finally accomplished. The sound boomed into the auditorium just as
Munger wrapped up. "Thank you for working at Good Samaritan," he
said, and turned and left the stage.

A BREEZE RUSTLES THE NORWEGIAN pines and Cass Lake laps a little more aggressively than usual on the shore on the beach in front of the Munger
house. Charlie is at the head of the breakfast table, as a small group of
family members polish off eggs, turkey bacon, and rewarmed homemade
biscuits from last night's dinner.

Charles, Jr. came in late the evening before to join his wife and
three children at Star Island. He's a late arrival, flying in from Sacramento, California, where he was working with a state commission on rewriting the kindergarten through twelfth-grade science and math curriculum for California schools. The conversation is focused on education as Charles, Jr. explained what his committee of college professors is
trying to accomplish.

Charlie, Sr. has some ideas on higher education that he would like to
express, but at the same time 2-year-old Nan, Barry Munger's daughter,
also has something to share. As the adults talk right on, she sits at her
grandfather's side and at the top of her lungs sings the alphabet song, from
A all the way to "now I've said my ABCs, tell me what you think of me."

As if in duet with the little girl, Charlie, Sr. is saying that he'd like to
create a true liberal arts college in which students have no major and few
elective courses. They would have a set curriculum in which they learn
enough about math, sciences, economics, history, and so on, to he truly
well-educated for today's world. No specialization would be allowed
until graduate school. The problem with many of today's young people,
Munger argues to his unconvinced offspring, is that they specialize too
early and never learn some subjects they can't live well without. They
don't know enough about the world. As if to prove her own versatility, the
laughing toddler Nan has moved on to "Twinkle, Twinkle Little Star."
Same tune as the alphabet song, different words.

THE MITN(;ER CHILDREN RECEIVED A public school education until they
reached middle school (except the youngest, Philip, who attended private
school beginning in the fourth grade). All five sons graduated from
Harvard-Westlake, a private school in Los Angeles that was named around
1900 when the founder, formerly from Boston, wrote to Harvard University, and asked permission to use the name Harvard for his new secondary
school in Los Angeles. Emilie Munger, like her mother, went to Marlborough School, and Molly and Wendy, who were living in Pasadena with
their own mother, attended Westridge School. Molly eventually departed
and enrolled herself in public school.

The entire family is passionate about education. Nancy Munger has
been a trustee both for the Marlborough School and her college alma
mater, Stanford University. In 1997, Nancy and Charlie Munger donated
$1.8 million to the Marlborough School's Campaign for a New Era in Ex-
cellence.j They also gave a major capital gift to the Green Library at Stanford and funded a Munger Chair, or professorship at Stanford Law School,
so that business can be taught within the law school curriculum.

Charlie has served as a trustee for Harvard-Westlake for more than
three decades. He is an active trustee and for part of the time was chairman. He's so fond of the school that he hopes some day his memorial service will be held in the chapel there. At the school, Munger has been
able to blend his dedication to quality education and his admiration of science and architecture. He and Nancy donated more than $7 million to
build the Munger Science Building and Charlie himself was involved in almost every aspect of the building's design. Before Harvard School and
Westlake merged, Munger believed the science laboratories were too limited. After the merger, there were twice as many students studying science in the upper grades. Munger declared that it would have been
educational malpractice not to have expanded the science facilities.

"The problem with most buildings is that they don't build enough
flexibility into them. We tried to assure that the science facility will
work, and work well, for the better part of a century. I see no reason why
it should become obsolete," Munger said at the dedication ceremony.'

The state-of-the-art building is nestled on a hillside overlooking Coldwater Canyon. It includes a dozen customized laboratory-classrooms, a
conference room, a computer center and a theater-style lecture hall with
each of the 110 seats wired to accommodate laptop computers. Some of
the features of the building might not be obvious to a casual observer.
Benches in the biology, chemistry, and physics labs, for example, are different to accommodate the different kinds of lab work. While Munger left
many of the decisions on the building to the teachers, he insisted on
top of the line ventilation and heating systems, and that the building far
exceed current earthquake standards.

Charlie spends hours reviewing the architectural plans for buildings
at the school. On one occasion, Munger asked an architect to make a
change in the school's auditorium to put a slope in the floor, but the architect said that it couldn't be done. Munger pushed until the architect
found a way.

Oddly, the architect did not seem to be offended by Munger's persistence. "No, he doesn't offend people." said Otis Booth, who also serves
on the Harvard-Westlake board. "He has a great ability to turn a phrase
and make things amusing."

Although most of Munger's time and money has gone to support the
exclusive private schools his children attended, he is sympathetic to the
plight of public schools.

"I'm a product of the Omaha public schools. And in my day, the people who went to private schools were those who couldn't quite hack it in
public schools. And that's still the situation in Germany today. The private schools are for people who aren't up to the public schools. I prefer a
system like that. However, once a big segment of that system measurably
fails, then I think we have to do something different. You don't just keep
repeating what isn't working."

Munger said he would favor the school voucher concept if the vouchers were given only to poor people. "The better off people don't need
them, since they already can afford choice and are exercising it. It
wouldn't bother me at all if vouchers were only for people otherwise destined for failed schools. But I think we have to do something in our most
troubled schools to change our techniques. I think it's insane to keep
going the way we are."

Charlie's conservative-even puritanical views-emerge when he
contemplates the state of higher education today. He is especially offended by the "victim" mentality that he says is fostered in U.S. colleges.

"You could argue that the very worst of all academic inanity is in the
liberal arts departments of the great universities. You can see the reason
if you ask the question, `What one frame of mind is likely to cause the
most damage to an individual's happiness, his contribution to others, and
the like-what one frame of mind will be the worst?' The answer, of
course, would be some sort of paranoid self-pity. I can't imagine a more
destructive frame of mind. Yet whole university departments want everyone to feel like a victim. And you pay money to send your children to
these places. And this is what they teach them!" said Munger. "It's amazing how these pockets of irrationality creep into eminent places."

Then Munger adds a little midwestern Zen, what he calls "the iron
prescription: every time you think some person, or some unfairness is ruining your life, it is you who are ruining your life."

As he did that August morning at Cass Lake, Munger often muses
over ways to improve undergraduate education. His views are largely derived from reviewing his own education and from watching his own
eight children-and now his grandchildren-attend a variety of schools.
"Our education was far too uni-disciplinary," claimed Munger. "Many
problems, by nature, cross many academic disciplines. Accordingly,
using a uni-disciplinary attack on such problems is like playing a bridge
hand by counting trumps and ignoring all else. This is bonkers, sort of
like the Mad Hatter's tea party. But nonetheless, too much of that thinking remains in professional practice and, even worse, has long been encouraged in isolated departments of soft science, which I define as
everything less fundamental than biology."'

Munger is not impressed by the notion that the scope of knowledge
has become so massive that few people can become truly multidisciplinary, and still have enough time in life for a career. "You don't have to
know everything," insists Munger. "A few really big ideas carry most of
the freight."'

Certainly Munger's concepts of the big ideas do not coincide with
those of many academics. He says, for example, that mastery of both psychology and accounting should be required of lawyers, rather than
taught as mere elective courses. Munger claims that most people would
be better off if they were trained for their professions the way pilots are
taught to fly: "They learn everything that is useful in piloting, and then,
must retrain continuously so that they can cope promptly with practically
any eventuality," he explained.