Heartland Health CEO Talks Value

St. Joseph, MO, would hardly be the place that many would think could provide a model for healthcare value in the new decade. They said the same thing about Danville, PA (home to Geisinger Health System), yet during the healthcare reform debate, that system has consistently been referenced as an example of how coordinated patient care can be delivered at a value price with high quality.

St. Joseph's Heartland Health, an integrated delivery system with 351 staffed inpatient beds, boasts a similar "best in value," pedigree, yet received little of the national spotlight afforded to Geisinger, Cleveland Clinic, and Mayo as government, payers and consumers look for ways to incentivize quality at lower costs. But that may be changing. In fact, Heartland Health just won the Malcolm Baldrige National Quality Award in the healthcare category for 2009, in part because of process improvement implementation techniques that have helped it reduce waste, costs, and errors. The system's performance management program incorporates goals from the organizational to individual level and provides incentives to employees through a rewards system.

I recently talked with its physician CEO, Mark Laney, MD, who is a believer in the Mayo model, and is incorporating parts of it at Heartland. A pediatric neurologist, he trained at Mayo, and is even president of its alumni association.

HealthLeaders Media: Tell me about yourself and Heartland's journey toward winning the Baldrige award.

Laney: I started on Aug. 1, 2009, so I'm new, succeeding Lowell Kruse, who had been here for 25 years. One of the interesting substories of the Baldrige journey is a good news/bad news situation. The good news was that after I had been here between six and eight weeks, we were selected for a site visit. The bad news was the visit was in three weeks. I went into intense "Baldrige school," self taught, not wanting to let the organization down. But it was one of the best things happened to me in my first 100 days because I had to do a deep dive into the guts of the organization at a much faster pace. That sped up my knowledge and understanding.

HM: What did you do at your prior jobs that intrigued the search committee at Heartland?

Laney: Prior to coming here, I'd been in Fort Worth, TX, at Cook Children's Hospital, and had been a pediatric neurologist for eight years. I had spent last 12 years as head of the hospital's multispecialty physician group, which consisted of about 300 physicians and 120 nurse practitioners. My biggest initiative, I guess you could say, is that we integrated our physician practice into Cook Children's. I was one of the first three doctors who joined and we grew it. I personally recruited about 120 of them.

HM: Was it important to the search committee that they hire a physician to head the system?

Laney: There were eight candidates brought to interview for the Heartland CEO position. Two were physicians. They didn't necessarily target one, but they were interested in the possibility. The theme that came out through the search process was the future importance of improving quality and safety and aligning physicians with a hospital or system. Because of my past experience I was a really good fit for where they were. They were financially very stable, so they weren't looking for that guy. They really wanted to improve relationships with physicians and looked at the future of healthcare and where it's going, and if a person had both a medical and business background that would be a good combination.

HM: Value is growing in importance to healthcare consumers and payers. What are the ways Heartland is demonstrating value and what do you still have to improve upon?

Laney: We are the only hospital in our community, but our main competition consists of the hospitals in Kansas City, which is 50 miles away. We have patients from Kansas, Iowa and Nebraska, so we have a large regional draw in a rural area. We have a health plan, but it is in a run-out. We had about 30,000 lives and had fantastic customer satisfaction but never got enough lives to get over the hump of risk. But what's interesting is we're transforming the staff that ran it to something called Community Health Improvement Solutions, which will sell wellness strategies to local companies to help them manage their employee healthcare costs.

Demonstrating value goes back to our mission statement. We've promised the right care at the right place and at the right time with outcomes second to none. We want to be in the top decile for quality and safety measures, but bottom quartile for costs. We want to provide the community great care at less cost than others are--which is really the stated goal of healthcare reform. So we've used our Baldrige tools and expertise to improve processes across the hospital to save money. Where we can save money, we don't have to raise our rates as much. This year, we got a hospital value index award. St. Joseph is a town of about 75,000 and stable, and it's made up of hardworking families. We feel like we need to work hard for the best interests of the community.

HM: why do you think Heartland is best positioned under an environment that rewards outcomes and not procedures?

Laney: The Baldrige journey has to do with providing world-class quality and commitment to excellence. It forces you to plan how it's structured and working. That value proposition and attention to detail runs through the whole culture. My predecessor brought in talented individuals who were experts in Six Sigma and lean who can consult with divisions across the hospital and help them redesign processes. It's like having an internal consulting firm. Process improvement is something we do really well. We're a vertically integrated system where we have 125 physicians who are employed via the medical center--about 70% of our medical staff. Heartland Foundation is different from most in that it really isn't a fundraising vehicle. It's an entity that works on improving the health of the community by trying to reach children at a young age on things like character building and community involvement. So we're investing in those kids 50 years before they have health problems so they don't need the hospital as much.

I truly believe in my heart that an integrated system with a hospice and foundation and clinic are all working together to provide seamless medical care. That is the best model to manage a population's health. We're structured in a way to meet what I think are going to be changes in reimbursement and law coming down the pike. When they recruited me, they told me Heartland was a jewel, but it's a diamond. We've talked a lot about teamwork and group practice, and we put the needs of the patient first.