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Analysis

Telemedicine Growth Is 'Key Part' to University of Kansas Health System's Mission

By Jack O'Brien  
   August 29, 2019

CFO Doug Gaston, who came out of retirement to lead the University of Kansas Health System, talks about the organization's focus on outpatient care and the underrated importance of cost control. 

After a long public accounting career, Doug Gaston retired in May 2014, but within a year later, he was recruited by the leadership at the University of Kansas Health System (UKHS) in Kansas City, Kansas. 

During his first year, Gaston assisted UKHS CFO Bill Marting, who eventually retired in June 2018. The system named Gaston as his replacement in July 2018. 

Gaston spoke with HealthLeaders about his first go as a provider executive, his "busy" debut year at the system, and his plan to provide additional quality care options to patients.

This transcript has been lightly edited for brevity and clarity.

HealthLeaders: How you would summarize your first year on the job?

Gaston: It's been busy. My [former] firm's biggest focus was healthcare, so it's not something I was unfamiliar with. 

About the time that I stepped into this role, we had built Cambridge Tower A, which is 124 beds, at the 10-story facility. One of our challenges then was we needed to fill it up to absorb some of that capacity and if you fast forward to now, we are close to capacity. 

We have nearly 1,000 physicians connected to us. We are trying to understand their growth plans and see what we could do to facilitate those. 

Since that time, we've built on to our medical office building, we've added a behavioral health facility that's opening this fall; we're going to have about 47 beds there. 

We continue to build out our Indian Creek campus, which is designed to offload some of our lower acuity patients and locate that in a population area that was attractive to us and where there was a need. 

We also acquired a physician-owned hospital in Great Bend, Kansas, which we completed in August 2018.

HL: Has the system been looking into urgent care or ambulatory surgery centers (ASC) as part of the business strategy?

Gaston: It's not something we've tackled too much this year; we've got to prioritize where we are. We have an ASC in the southern part of the city and we almost doubled that capacity. It's going to have two locations, one that we call KU Midwest, another on the Indian Creek campus. We've also entered into a venture in Topeka and there's some urgent care [centers] being added there, but we're just a 25% owner in that, so we've certainly expanded our footprint.

Related: KU and Other Hospitals Say Unfair Medicare Rule Will Cost Them Hundreds of Millions of Dollars

HL: How much has telemedicine played into the system's forward-looking business strategies?

Gaston: We've been in a collaborative for a couple of years to grow telemedicine, that's the future. If you look at the state of Kansas, there are a lot of hospitals, and I think that's one way that we can have outreach. We've got that going in Hays and that's going to be the future as we move ahead, so that's clearly something that we're focusing on, and we've kicked that off.

Our CEO Bob Page talks about how our mission is to improve the health of Kansans. Telemedicine is a key part of that, and we have no desire or capacity to acquire every hospital that might need help. Through telemedicine, I think we can provide some of this care to patients.

Related: University of Kansas Hospital Administrator Shares Impressions of Community and Healthcare

HL: What are challenges facing the system and what are some of the strategies that have been proven as effective remedies?

Gaston: For the whole industry, the margins are thinner than they used to be. It's mainly because unless you preserve your top line revenue, it gets eroded every year with payer mix and those other issues. 

The next strategy, and probably the main strategy in healthcare, is how do you control cost? The first thing you must do is understand what your costs are. We've beefed up our analytics group so we can make decisions the right way and have one source of truth. Cost accounting is important—I know that's not an exciting topic—but it's critical that we understand where we're profitable and how we can be more efficient. 

From an efficiency standpoint, one of the things I've been looking at is how—since we're now a system with multiple locations—can we set up a platform where we're not duplicating efforts? A lot of efficiency can be gained just by doing that.

Related: KU Health Plans to Purchase Another Hospital Outside the Kansas City Area

HL: Where do you see most of your dollars going to maximize return on investment?

Gaston: I think there's more of an [industry] trend to more outpatient services than inpatient. We've kind of bucked that trend, in the fact that we've built this tower and we filled it up. There still may be a demand for [inpatient], but I think one of our focuses this past year is on our clinics, making [clinics] more accessible, and making the patient experience consistent. 

I think as an organization, you've got to focus on what you do best, and what we do best is provide great care to patients and not get too distracted beyond that into other ventures. If we do that, we have great results with patients and the financial metrics will follow.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

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