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HL20: Douglas Hawthorne—A Chance to Do Something Big

Philip Betbeze, for HealthLeaders Media, December 13, 2013

But will the cost of innovation overwhelm even a large system like Texas Health, which still relies on inpatient care to a significant degree?

"It's a great question and our board asks how we're doing this businesswise constantly. The hospital has been our livelihood."

Hawthorne says the changes are gradual but sweeping.

"We've stepped in gradually with payers to the point at which we now have an ACO contract with Aetna, and a draft of one with Blue Cross. We can't give up the revenue base that's been the lifeblood of the organization in terms of hospitalization, but filling beds is no longer how you assess the business model for us."

The question for Texas Health—as well as many other hospitals and health systems—is how to create revenue by keeping people well.

Hawthorne says Texas Health is getting a lot more buy-in from the business community, "which is realizing that by investing in options like this, they'll have happier, more productive employees," he says. "They get it, and they know as well as we do that they have to make modifications in payment methods to include reimbursement for helping keep people well. It's a fine balance."

Not that he wants to err on the side of caution. Turning a battleship takes time, after all, but it also takes decisive moves.

Hawthorne says the organization has been cautious with its investments in financially uncertain areas.

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