Adapting and evolving
Howard P. Kern took over this spring as president and CEO of Sentara Healthcare from longtime CEO David Bernd, who grew the system from a $600 million revenue organization when he took over in 1995 (then Sentara Health System) to nearly $4.7 billion when he retired in March. While growth of the not-for-profit, integrated 12-hospital, Norfolk, Virginia-based delivery system will still be important under Kern's leadership (he served for 18 years as president and chief operating officer at Sentara before taking the top job), he plans to focus a lot of attention on the health system's relationship with the consumer. In fact, one strategic priority involves building an Amazon-like agenda into the organization, which includes a 450,000-member health plan.
"In the future, competition will be around the consumer and the relationship we can develop with the consumer over their lifetime," he says. "Today we tend to look at our delivery system as designed from provider side out, but we need to design it from the customer side in."
He predicts that in as little as five years from now, consumers will be much bigger drivers of healthcare consumption and choice than they are today. He says the successful organization needs to internalize the fact that high-dollar, expensive services that used to drive the train will do so less and less. Healthcare systems need no less than a fundamental reset of their priorities. In other words, they need to meet consumer needs first, and clinical and provider needs follow.
"The consumers, as much as we're trying to give them transparency, they take that for granted—and that's not to say we won't continue to focus on it, but we need to win on the customer experience," he says. "It's almost an Amazon-like agenda. It won't surprise me if in 10 years we will have organizations like Walgreens helping consumers achieve value through the continuum, so we need to evolve. Our competitors may become our partners."
Indeed, what's value as consumers define it?
Kern discusses the idea of putting the consumer first, which might seem intuitive, but in healthcare, given the provider's arm's-length relationship with the consumer that has developed along with the third-party payment system, it is certainly not. That has to change, he argues.
Philip Betbeze is the senior leadership editor at HealthLeaders.