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Analysis

Centura Health CEO: Why We Hit Pause on 'Mad Rush' to Value-Based Care

By Jack O'Brien  
   February 28, 2019

The Centennial, Colorado–based system is maneuvering the new political climate and preparing for the entrance of corporate disruptors to the healthcare sphere.

Peter Banko, CEO of Centura Health, admits healthcare is a complicated business.

Systems face the gradual transition to value-based care, outside pressures posing an existential threat to their operating models, and changes to health policy on the horizon at the state level in the absence of meaningful legislative action out of Washington, D.C.

In an interview with HealthLeaders, Banko laid out how Centura is adapting its forward-looking strategies to better align with the system's core operations, and he explained why his team's push toward telehealth has been impeded.

This transcript has been lightly edited for length and clarity.

HealthLeaders: What new initiatives has Centura been considering, and what would they mean for the system, both on the financial and clinical sides?

Banko: We had a 2020 strategic plan, then we refreshed it this year and looked out to 2025. I would say there are two big things from that plan that will guide us over the next year.

The first is our operating model, I know a lot of systems have been trying to shift from a holding company to an operating company and centralizing system services like human resources and other things. We took a hard look at our operating model, which we think is the platform for success.

We didn't swing the pendulum like most other systems did to a lot of things being run out of the enterprise. We formed operating groups that are built around the market and the consumer, so we've shifted the locus of control there. The pendulum, while some are swinging it one way or the other, we swung it more towards the middle and tried to create a balance. Even within Colorado and western Kansas, healthcare is local, and we wanted to build structures that allowed us to listen to the market, listen to local governance, listen to physicians on the ground, and listen to our leadership teams.

The other one was we found that our market wasn't pushing towards value. All the payers are doing well financially, all the health systems are doing well financially. We just said we're going to take a pause on that mad rush to value and start to build the capabilities that payers and consumers wanted, and 95% of our new 2025 plan is focusing in on our core business.

On the cost journey, costs are just too high. We've got about a $350–$400 million cost reduction goal over the next three years. We're six months into that, so this year was targeted around $123 million, and we'll probably end up taking out about $135 million just to lower the cost of care. Those have been the two big issues from our 2025 journey.

HL: What are some of the challenges in moving toward value-based care?

Banko: I would say two things. They're both enablement. Physician enablement, giving physicians the tools they need to be able to manage value-based care. [Systems] have all done Epic or Cerner or whatever EMR, and that's not the end-all-be-all. I think there's opportunities to use that data to deliver to physicians in a way where they can impact the patient at the point of care.

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And the other place—we're well behind Amazon or Walmart—is delivering to consumers information they need to make decisions about their care on their iPad or iPhone. How long is the wait if [a consumer] went to a retail center at Walgreens versus an urgent care center? How much does it cost to really be transparent? We focused a lot on that. We've got a whole innovation center in my office with a bunch of millennials that are helping us figure that out. We're trying to assemble consumer data.

I think healthcare providers, to provide value, have to understand what the consumer wants and needs, which is probably on their phone and being able to deliver it to them.

HL: When you last spoke to HealthLeaders, in 2017, you talked at length about telemedicine, so I'm curious to know if your opinion has changed since then.

Banko: I hate to say this, but in the [past] two years we haven't made a lot of progress there.

This is mainly because I think we needed to rethink our digital platforms. Since that time, we've hired a CIO from outside of healthcare, so we've spent the last two years trying to understand consumers and building a digital platform that was able to deliver what we need to deliver, and there's still a future there.

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Health systems have to catch up with other industries and build the backbone to be able to support it; otherwise, we're just creating apps and doing things that are disjointed from one another. It really needs to be connected to the whole care continuum, so offering up a consumer digital opportunity versus retail or coming to an urgent care center.

I think we've got some work to do there, and that's where we have been spending our last two years, and we probably have another year left before products start to hit the market.

HL: Do you think that the corporate disruptors moving into healthcare could push along some significant changes in an industry that's notoriously stubborn?

Banko: I think Apple and Amazon need to partner with payers and providers to make it happen. I think if you're not in the trenches every day, if you're not a physician that's seeing patients and understanding how things work, I think we could find better solutions together. Instead of providers, payers, and Apple doing it on their own, I think if we all got together in a room, we would end up with a better solution and one that actually worked.

I'm just skeptical that they can pull it off on their own without having the practicality of how things work in the real world.

HL: What healthcare trends are you following that are perhaps under the radar?

Banko: I think the current political climate stands out as unique in my experience. We had big changes in the [midterm] elections in November, as both of our [state health] ministries in Kansas and Colorado shifted more Democrat.

In Kansas, that starts to open up the discussion around Medicaid expansion, which has been healthy in Colorado. And it was healthy in Arkansas when I experienced it.

In Colorado, it's probably a different climate around employers and consumers, who have been wanting affordability for several years. The industry has stonewalled that for a variety of reasons, but now the all-Democratic legislature and Gov. Jared Polis are taking it on aggressively.

I would say the biggest thing on my radar—it hasn't been on for years, even when the ACA was passed—is state action around trying to fix healthcare, because they're not seeing any action at the federal level. Nor do I think our industry (both payers and providers) has done the work that we probably should have to avoid this conversation.

Jack O'Brien is the finance editor at HealthLeaders. 


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