Memorial Healthcare System's CEO says it is "investing a lot in tech" to further inform consumers as they make healthcare decisions. "We'll add more and more outcomes [data]… although we're [already] pretty comprehensive."
At the conclusion of a months-long national search last April, former chief operating officer and interim President and CEO Aurelio Fernandez was confirmed in a unanimous board vote to take off the interim tag and lead Memorial Healthcare System for the foreseeable future.
The $2 billion (revenue), six-hospital public health system serves South Broward County, Florida (it's official name is the South Broward Hospital District).
Fernandez discarded the interim tag he wore for three months at a delicate time.
He was the candidate widely preferred by employees in a very public national search that saw over time, every external candidate withdraw.
It will be tough to fill the shoes of his predecessor, Frank V. Sacco, a 28-year CEO who worked for the health system in various capacities for 42 years.
In a wide-ranging interview, Fernandez, 64 answered questions about his plans for the health system as he begins to work quickly at coalescing a vision with the cooperation of physicians and the health system's 12,700 employees. The following has been lightly edited.
HealthLeaders: What's the biggest challenge you face?
Fernandez: We have to factor in the [independent] physician practice and its relationship to each of our institutions. Hospitals can't move forward without integrating the needs of the medical staff. We need to hear what their issues are as partners and not just as customers of the hospital.
Hospitals bring discipline and structure that's imperative to provide the level of care you need as a provider. But especially in a competitive market like south Florida, it's important to understand how the economics work… the dynamics that direct patients to go from one provider to another.
That goes beyond quality of care and goes to the ability to provide care at prices the market bears. I understand medicine has to be provided in a cost-effective manner so that may mean more alignment of and consolidation of certain specialties.
HealthLeaders: You mentioned care at the price the market will bear. How can a safety net health system compete in that world?
Fernandez: We are a six-hospital chain with high-end services. All of these services are very expensive. How we deliver in contract negotiations in a marketplace that has strong market incentives boils down to how we get the physician community to partner with us.
We have a clinically integrated model that is currently overseeing a large segment of the local population: 100,000 lives. In order to deliver on our shared savings model, we need to align incentives with the medical community.
We have to convince them that it's in their best interest to align with our healthcare system. I believe the medical community has recognized from a quality perspective that we're most desirable. We have an excellent story, because we have excellent outcomes. Others out there are telling the same story but we have transparency on outcomes, and do well there.
HealthLeaders: But what about the financial side of that equation?
Fernandez: Of course, the educated consumer will shop based on both price and outcomes, so we still have to price at a level that is, honestly, where the consumer is willing to pay a slight premium for that care.
We'll have price transparency, but we're not pricing below market to get additional volumes. Price has to cover the cost to provide the care.
Here there is a large concentration of for-profits that drive market forces. Because there's excess capacity, you have the economics of discounting to point that's below costs, which puts folks like ourselves in a difficult predicament.
HealthLeaders: You said that the informed consumer will help bridge that gap. How so?
Fernandez: The consumer needs information that will influence their decision-making. If a patient is going to have a procedure, he or she is interested in how [our facilities] compare.
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We like the educated consumer. For that reason, we're investing a lot in tech and the consumer will use that to meet their health needs.
We'll add more and more outcomes to enhance what we are already showing, although we're pretty comprehensive. We would love to show all physician outcomes, but that becomes difficult when you're not an employed doc. We can do the employed. We have a large clinically integrated network (Memorial Health Network) and a joint venture with Holy Cross, another hospital in the area.
In that network are 28 quality matrices the physicians need to follow and if you have savings of 'X' dollars but your quality does not reflect what's expected, you will not receive [shared savings] distributions.
Philip Betbeze is the senior leadership editor at HealthLeaders.