UPMC's five-year-old tablet-based program was initially only for patients with congestive heart failure, but is now in the process of expanding to as many as four other conditions, and is a valuable tool in preventing expensive and unnecessary hospitalizations.
This article first appeared in the January/February 2018 issue of HealthLeaders magazine.
Using it, patients answer questions daily about symptoms and medication adherence while the tablet receives data on vital signs from external devices such as blood pressure cuffs, which are transmitted to the call center.
Ramani says the average age of patients enrolled in remote monitoring is 72, so the system must be simple to use for older, less technologically savvy patients, like the 92-year-old who is using it with no problems, Ramani says.
"If you set it up right with large buttons, arrows, and a lot of white-glove assistance, you have great success," he says. "A fear for us was that the patients most likely to benefit would not be able to use it, but it hasn't played out that way."
Nurses telephone patients whose information triggers "red alerts," determined individually by the care team prior to deployment. In some cases, those alerts might entail adjusting medications or determining that a patient hasn't been getting the correct amount of medication.
Since inception, nurses have triaged more than 73,000 such alerts.
Given the costs, it's essential to effectively determine which patients would benefit from remote monitoring.
"Having kits for every patient is cost-prohibitive," says Ramani, so patients who have regular home healthcare aren't eligible, for example.
If there is patient reluctance to participate in the program, Lee mentions it comes from their anxiousness about being introduced to the technology while they are in the hospital.
It's difficult to learn while so much else is going on, says Lee, and they're preoccupied with going home.
But as they get more comfortable with the process, and they know a nurse is a phone call away, they generally feel positive about taking an active role in managing their health, Lee says.
"There are some patients who don't want to do this initially, but after they try it for a while, they don't want to give it up."
'The hands-on perspective of taking care of a patient gives you insight into running a health system.'
This article first appeared in the January/February 2018 issue of HealthLeaders magazine.
Chuck Stokes never wanted to be CEO. He would have been happy to finish his career at Memorial Hermann as its chief operating officer, a job he'd held since 2008.
So when longtime president and CEO Dan Wolterman retired in 2016, Stokes says he was not a candidate, and indeed, the health system sought a new direction in mid-2016 by hiring a physician CEO, Benjamin K. Chu, MD, from Kaiser Permanente.
But Chu's tenure lasted just one year. He resigned, effective immediately, June 19, 2017. It remains unclear whether he was forced out.
The board said he left to seek a role in crafting health and public policy, but he did not immediately find a new position. Reports suggest the executive, who had never been a CEO, struggled to adjust to the role and was a poor fit for the 13-hospital health system.
Stokes was immediately named interim CEO, and the board moved quickly, removing the "interim" tag only two weeks later.
He began his career as a critical care nurse at the University of Mississippi Medical Center in Jackson, and later became a nurse executive before completing his master's degree in health administration at the University of Alabama-Birmingham.
As he rose higher in the executive ranks, he began to get reacquainted with some of the doctors he used to work with in patient care. His role was different now, but he maintained a collegial role with those physicians, who joked that they could tell embarrassing stories about knowing him when he was just starting out.
When he was president of 650-bed North Mississippi Medical Center, the organization won the Malcolm Baldrige National Quality Award in 2006.
He came to Memorial Hermann as system chief operating officer in 2008, and its Sugar Land Hospital won the Baldrige award in 2016.
Yet even today, Memorial Hermann faces plenty of challenges.
The Houston-area market is reeling not only from the effects of Hurricane Harvey last fall, but also from a multiyear depression in oil prices.
The executive turmoil at Memorial Hermann has not been limited to the CEO. Numerous top executives recently left to take leadership positions at other large health systems, and the system laid off more than a hundred people in leadership roles in early 2017.
Its most recent layoffof 350 people was announced in late June, only days after Stokes took over as CEO.
Stokes calls himself "just an old clinician" regarding the circumstances surrounding his change of heart about leading the health system. He plans to revive morale and transform the way the still-profitable health system does business.
Following are the highlights of his recent conversation with HealthLeaders.
"The hands-on perspective of taking care of a patient gives you insight into running a health system. This is a clinically driven enterprise, and having someone understand that at the top provides a different dimension to decision-making. With movement from volume to value, we're going to have to deal with moving from an illness model to a wellness model. We have to get a handle on things that contribute to ill health. Those are things clinical people all know because we see it every day.
"I was not a candidate last time. I enjoyed the role as COO. Dan [Wolterman] knew that, and I did not put myself in that position. I enjoy operationalizing programs, and that has been my strength. Ben [Chu] made a decision that he wanted to go back into healthcare policy, and the board and I made a decision not to do another search. I was familiar with the CEO role and was in a good position to move forward. The medical staff and leadership team were comfortable with me. It was a symbiotic decision between the board and myself that this would be the least disruptive when there was a lot of unknown.
"The board really wanted to see me continue the legacy of anticipatory leadership that we've had for over a decade. We have a history of proactively anticipating the changes in the healthcare environment and responding to those before the rest of our market. As an example, we have 292 delivery sites across Houston, but we started putting hospitals in the suburbs years before the competition did. We put hospitals in The Woodlands and Kingwood and Katy and Sugar Land because we anticipated needing to be more consumer-friendly. Given the local, state, and national headwinds, they want me and our team to continue to anticipate changes, which is pretty scary. The benefit to me is that neither the medical staff nor hospital or health system leadership have to get used to a new person or leadership style.
"My leadership style is open, honest, transparent, and respectful of the talent in this organization. I think that's the type of leader everyone wants to follow and work with.
"What's next? Well, we know no one is going to pay us more money. Consumers and payers are looking for value. Our care redesign effort is a five-year journey with a goal of taking out $500 million in cost to make us financially sustainable. For example, we've implemented multidisciplinary rounding on patients. That means physicians, nurses, social workers, care managers, and PA professionals are making rounds when patients are admitted to the hospital to anticipate their discharge disposition within the first 24 hours. Will they be discharged to home, homecare, hospice? If we do a better job of anticipating, we can make those accommodations earlier in the patient's stay, which keeps us from scrambling and increasing length of stay trying to find a place for the patient.
"Our 20,000 employees and 5,500-person medical staff can submit ideas on how to improve care or reduce waste through a portal we developed called iGenerate. It's a simple thing but the people who know best about how to improve care are the docs, nurses, and the frontline people who do this every day. We've been doing this systemwide for about a year. This was generated from my experience with Baldrige. For example, one of our employees found our shredding service was charging us for every bin. But according to the contract, we should only be paying for the site. That will save us $100,000 a year, and not only that, they redid the contract and gave us a refund. Baldrige is not about winning the award, it's about the journey of getting better faster.
"Houston was growing at almost 100,000 jobs a year, but when oil dropped below $50 a barrel, it became a crisis. It's coming slowly back. The city is still growing at about 25,000 jobs a year but it's been more in service industry jobs, where people either do not have health insurance or have a $3,000–$5,000 deductible. They're using services but not paying the bill, so bad debt and charity care has continued to rise. We have to figure out how to mitigate that because I don't think it's going to go away.
"There's no going back: We've eliminated the COO position. In fact, we've eliminated two layers of senior leadership. I don't have an answer on how many years I want to stay, but the board has asked me to prepare this organization for both the changes we know are coming and those we don't. I'm in the best position to prepare us for that. I will know, and the board will know, when it's time for a leadership change. I'm comfortable with that, and so are they."
News that Amazon, Berkshire Hathaway, and JPMorgan Chase are forming a nonprofit company to cut healthcare costs and improve quality sent shivers through the sector. Details were sketchy, but if you are already taking strategic steps to improve value, you may be rewarded.
By now, you’ve heard that Amazon’s entry into the healthcare space, long-anticipated, will involve the creation of a new nonprofit company with banking giant JPMorgan Chase and the companies that make up Warren Buffet’s Berkshire Hathaway.
Though details are sketchy, a top executive from each partner will initially lead the effort, which is intended to use technology solutions to simplify the healthcare system and, more broadly, increase transparency and ultimately, cut costs. With nearly 1.1 million employees among them, no one should doubt their resolve, or their heft.
Given the scant details of the effort so far, gauging whether this is a transformative event or something that will nibble at margins is unclear. Amazon’s involvement, thanks to its huge success disrupting retail, is no small matter.
These companies certainly have market-moving power, at least in some geographic areas. But they may yet underestimate the magnitude of the challenge they face. Here’s one sobering statistic for them: Federal, state, and local government spending accounts for 45.2% of national health expenditures, while private business accounts for only 19.9%, according to the Centers for Medicare and Medicaid Services.
Other companies have successfully developed centers of excellence programs that reward organizations for transparency and provide bundled payments for episodes of care. Those ideas are meant to help healthcare move away from the fee-for-service payment system, from which many of its ills ultimately stem. We’ve covered these efforts for years here—the story on centers of excellence above cites value as its driving force and it dates to 2013!
The work of many of these groups and individual health systems has brought notable successes, but broadly, reducing the rate of healthcare inflation to at least the rate of general inflation has not been one of them.
Healthcare now represents, depending on your source, between 18% and 20% of GDP, a much larger share of the economy than almost any other developed nation. The inflation rate rises and falls, but over the past 20 years, the headline consumer price index has risen at an average annual rate of 2.2%, versus the price of medical care, which has risen 70% faster, at an average annual rate of 3.6%.
Whoa.
In words that are sure to become famous or infamous, depending on your point of view, Warren Buffett explicitly said in the press release announcing the effort that the “ballooning costs of healthcare act as a hungry tapeworm on the American economy.”
Well then.
How does that feel, healthcare leadership? It’s crude, but it’s hard to argue with the aptness of the analogy.
Most of the efforts I referenced above start with grand goals that ultimately devolve into programs that, while successful in a narrow, company-focused way, just nibble at the margins of a still-disjointed healthcare system that remains difficult for patients to navigate and judge value.
In covering healthcare services for nearly 18 years, I have witnessed a complex industry with many well-meaning leaders gradually coming to terms with the following:
Healthcare is technologically backward compared to other industries
It’s opaque
It has more than its share of fraud and abuse
It costs too much
The industry has also come, rightly or wrongly, to the following conclusions:
The propensity of individuals to consume healthcare services is nearly infinitely elastic
Government intervention has not worked
Value-based reimbursement is still spotty
These issues are beyond any one organization to solve
To use a healthcare-themed analogy, ever since Amazon managed to put traditional retail on life support, pundits have wondered when it might take on its biggest potential challenge—solving healthcare’s cost and quality conundrum. That the effort includes partners in a nonprofit company has to come as something of a surprise, and perhaps that makes it less scary to healthcare leaders.
However, no one should doubt its resolve, and starting with allies like JPMorgan Chase and Berkshire Hathaway’s variety of companies adds even more heft to the effort.
But here’s what healthcare leaders already know: This one effort will have as tough a time as any predecessor in changing the algorithm that makes fixing healthcare’s problems with cost and quality so diabolical. Buffett acknowledges as much.
“Our group does not come to this problem with answers. But we also do not accept it as inevitable,” he says in the release. “Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”
We’re all patients at one point or another, and we all pay for healthcare too. So for that reason alone, we should all hope the effort succeeds.
The tax reform law signed by President Trump just before Christmas means nonprofit organizations are in for some surprises.
Though it might yet prove fiscally irresponsible, the new tax law has been lauded by many not only for its tax cuts for corporations and individuals, but also for the fact that its expanded standard deduction has simplified tax planning for many, making itemizing of tax returns unnecessary beginning in 2018.
But the Tax Cut and Jobs Act hasn't simplified things for nonprofit organizations. Far from it. It's made things much more complex and, potentially expensive, especially when it comes to paying top leaders.
The new law, broadly, imposes a 21% excise tax on the amount of compensation that exceeds $1 million a year on the organization's top five executive salaries. But it's not that simple.
Many nonprofits don't know how far their tax liability might yet reach, say two attorneys who have studied the law's effects on nonprofit executive compensation.
In subsequent years, many more executive salaries could be ensnared in the excise tax net.
"This provision, this 21% excise tax, once you start getting into it, is not going to be an easy provision to comply with," says Jacqueline Henson, an attorney and specialist in tax-exempt organizations with the Washington, D.C., office of the Baker Donelson law firm. "It will make life difficult not necessarily for the largest of the largest organizations, but for the mid-sized. I don't think nonprofits know what's going to hit them yet."
Leveling the playing field?
The new excise tax was an attempt by Congress to curb some of what many find egregious compensation levels (see college football coaches) for what are supposed to be charitable organizations.
Therefore, Congress mirrored the nonprofit excise tax on a similar tax that applies to public for-profit companies.
But the law will ensnare many more than just the biggest nonprofits.
"On the surface, it looks like you're lining them up to compete on a level playing field [with for-profits] but that's not really what's going on," says Bill Robinson, an attorney with Baker Donelson, who specializes in compensation and benefits. "The mid-size nonprofits, who may pay a million in compensation, might be competing with private companies, who aren't subject to this rule, and that puts these folks at a disadvantage."
The threat of a 21% excise tax also makes it more difficult to compete for even the larger nonprofits, both attorneys say, but while it's too early to tell whether it will have much impact on salaries for the top executives who run those organizations, it is likely to materially increase tax bills for nonprofits.
But here's the catch: The tax doesn't only apply to the top five, and it's not just limited to salaries. It could touch many more people.
A running list
Initially, the law covers the top five paid employees of the entity. But those covered employees just scratch the surface, says Robinson.
"Once you become a covered employee, you're always a covered employee," he says.
Nonprofits will have to create an initial list of the top five but, thereafter, they will have to track compensation subject to the tax with a "running list" of covered employees.
"It might be five one year, and 10 the next year," says Robinson.
That's largely for one key reason: deferred compensation.
An organization might have employees who, for example, have never made more than $200,000 in a single year, but, who, after leaving employment, have a deferred compensation agreement that says if they're still alive five years after retirement, the nonprofit will pay them $1.5 million in deferred compensation.
It's subject to a lot of variables but "five years later, bang, this jumps forward, and you have to pay 21% excise tax on everything over a million," says Robinson.
One caveat about the law is the exclusion of licensed medical or veterinary medical professional compensation tied to the provision of services.
But this will cause other headaches in tracking how much time and what percentage of a medical professional's salary (think chief medical officers) comes from providing medical services, if any.
Targets on their backs
Other parts of the legislation also show that nonprofits were marked with a bull's-eye during its creation, says Henson.
"Eighty percent of charitable contributions are made by people who itemize," she says.
So how is that going to affect their giving to hospitals and other healthcare-related charities, among others?
Not only does the law add an operating burden to tax-exempt organizations, but it also adds a compliance burden. They will need to seek benefits and compensation law services, which also adds cost.
Some people will be studying the law to try to figure out how not to bump up against the million-dollar level, and they will doubtless come up with some strategies.
One idea would be to rearrange their corporate structure so that the nonprofit entity only pays the base salary, and other organizations which the nonprofit doesn't control, such as a joint venture, might pay compensation that wouldn't have to be included in the 21% excise tax analysis.
"That could be one possibility, but the entity gives up a little control," says Henson. "I expect people to take a look at their entire corporate structure. Hospitals and health systems certainly have the monkey on their back; universities, too."
Because of recent healthcare organization consolidation activity and general turnover, there could be uncertainty around CEO longevity. So, what's your plan for succession?
The hospital and health system CEO turnover rate is hovering around 18%. That's about average historically, but generally, that means many hospitals or health systems will have to replace their top leader every five years or so.
And being part of today's—and perhaps unprecedented—consolidation market, healthcare CEOs don't necessarily know how long they will have to implement essential performance improvement plans, given the disintermediation the industry faces from a move away from expensive inpatient care and its high-fixed costs, among other challenges.
Neither do boards, who are constantly aware that high performers are in danger of being snatched away and who can't afford to linger on leaders who don't show improvement.
And even with the recent M&A activity a suitor might come along and take the company and its top leader out through a merger, boards must manage the organization's succession plan as if its long-term future is as an independent entity, says Mark Armstrong, vice president of consulting operations for Quorum Health Resources, which provides consulting services and interim leadership for hospitals and health systems.
However, "the consolidation craze is going to continue in the near future, so a lot of turnover comes from systems being acquired or merged," Armstrong says.
Boards and to some degree, CEOs themselves, should focus on the following preparatory steps regardless of the climate of the industry as a whole, even if a change in leadership is not on the immediate horizon.
Step 1: Just be prepared
As reimbursements decline and costs go up, there's more pressure on margin performance. That's adding to the uncertainty around CEO longevity, but so are other factors, such as the aging of the candidate pool, and a willingness to bring in top executives with clinical experience, for example.
A complicating factor in CEO turnover regarding consolidation is that while there's been a lot of activity on the merger or acquisition, there's not a consummate level of attention to integrating the two entities, Armstrong says.
"Some of these newly acquired organizations were suboptimally integrated, so we're also seeing de-consolidation," he says, adding to leadership volatility over the long term. "I can't say we routinely see systems that are unprepared for executive turnover, but more often than not, they are less prepared than they should be," he says.
Step 2: Develop a performance improvement plan that outlives a CEO change
Where Armstrong and his colleagues at Quorum have seen CEO transitions go smoothly is where there's a clear performance improvement plan in place and good management of those plans so everyone knows the organization's objectives.
The board needs to remind the organization's employees that the performance improvement imperative doesn't just depend on the presence and leadership of just one person.
"Where we have seen less effective transition is in the absence of such performance improvement plans," he says.
Step 3: Develop a communication strategy
"When the turnover happens, there's got to be a clear communication plan in place [about] a change in leadership, and to remind people of what the direction the organization is going, particularly with the medical staff," he says.
Much of that crisis-level communication strategy can be prepared prior to a leadership change, if the organization has a forward-thinking vice president of public relations and marketing, who has put together contingencies for a variety of crises, including a potential change in leadership, for example.
"Communication, or lack thereof, in the transition is a vital component," Armstrong says.
Step 4: Boards: Be most vigilant when things are going well
The succession plan is ultimately the board's responsibility to formulate, even though the executive team is often involved. Ideally, the plan should identify an internal successor candidate, and the candidate's name should be shared internally to ensure stability in case of a sudden departure of the current CEO.
Boards should ask themselves what they would do if tomorrow the CEO told them he or she was leaving, says Armstrong. Furthermore, boards should identify someone who could lead the organization on an interim basis while a full search is conducted.
"When someone is involuntarily removed, that's often part of the plan," says Armstrong. "Boards are caught flat-footed more often when things are going well."
It could be tempting to think that your investment efforts in value-based contracting are wasted. But not so, says a former population health executive.
The future of value-based care has gotten a bit murkier in recent months. After hospitals and health systems have made substantial investments in technology, staff, physician practices, and spent considerable time and effort changing workflows and even the basics of their business model to adapt to value-based principles, they're left to wonder whether it all was wasted in the face of the proposed cancellation of mandatory Medicare bundled payment programs and growing MACRA participation exemptions.
But despite the chaos, it's worth recalibrating the changes you've made as an organization to adapt to the new reality, rather than returning to the practices and patterns of a volume-based business, says Chris Stanley, MD, the former system vice president of population health at Inglewood, Colorado-based Catholic Health Initiatives.
"No, those investments haven't been wasted," says Stanley, now a director in Navigant's healthcare practice, "but we are getting that question from a lot of our clients."
One thing to remember, he says, is that many organizations have made investments around episodes of care or in setting up ACOs to provide value beyond an individual program, such as hip and knee or cardio bundles. Those investments still have value beyond the isolated programs that are no longer mandatory, especially in the sense that they have helped align physicians, pull disparate IT systems closer together, and reengineer how care is delivered beyond an inpatient hospital stay.
Following are four tactics that Dr. Stanley suggests your organization can try that work well regardless of the reimbursement scheme, and which don't necessarily rely on specific value-based reimbursement programs to have, well, value.
1. Transition value-based investments toward the Medicaid population. Reducing unnecessary ER use and hospitalizations for Medicaid patients and the uninsured should pay off because these are populations for which providers are not adequately paid, if they're paid at all. Major elements of this strategy are squarely rooted in population health pillars, says Stanley, such as using primary care for risk profiling and other preventive care tactics. Developing community-based partnerships can help reduce uncompensated care costs with this population as well.
2. Leverage value-based experience as a stepping stone to Medicare Advantage. Stanley says Medicare Advantage plans are appealing to baby boomers, payers, and providers. For the latter, MA is important because benefit design favors in-network utilization where the ROI from provider spending on value-based tactics is clearer than it is with traditional Medicare or many commercial plans.
MA is also growing. Only 17% of Medicare beneficiaries in 2004 chose Medicare Advantage, but 33% did in 2017, which means 19 million people are enrolled in such programs now. And Medicare Advantage spending doubled between 2006 and 2016, while Medicare benefit inpatient spending fell by one-third over the same period.
3. Stop trying to boil the ocean. When it comes to value-based investments, many organizations have made this mistake, Stanley says.
"They've tried to solve for everything, but one tactic is to be very focused on your efforts," he says. "You should focus on the outcome or result and the two or three specific items that will drive those results."
For example, if an ACO that is focused on achieving targets that would provide a bonus through CMS hasn't yet bent the cost curve, Stanley suggests focusing on postacute care. In the Medicare environment, such tactics as managing length of the inpatient stay and developing a preferred postacute network can represent low-hanging fruit for health systems.
"Sometimes this will free up ACOs that may have 20 different initiatives going on and by setting them up with two or three, you can focus on a few areas and drive broad results," he says.
4. Move up the premium chain. Most organizations that dip their toe into shared savings programs quickly realize that in a largely fee-for-service model, when inpatient utilization drops, so does revenue. To change that narrative, and because commercial plans are still ramping up value-based initiatives in many geographic areas, healthcare organizations should try to move up the premium chain, says Stanley.
That can mean employing several tactics, such as taking downside risk with a payer or joint venturing with a payer to tap into a percentage share of the premium or even a capitated rate. Many markets have an insurer, or even state Medicaid, for example, that are willing to enter into a contractual relationship that will share savings or allow the payer to grow its market share, so each side benefits, says Stanley. Maybe your partner won't be the largest payer, but it could be one that wants to offer a more reasonably priced premium in order to grow.
"The feeling two to three years ago was that to do this effectively, you had to have your own provider-sponsored health plan," says Stanley. "Otherwise, you don't have enough leverage. But in 2018, there are other ways to do it beyond owning your own insurance plan."
After starting his career in healthcare "eons" ago, Aaron Martin found himself leading Amazon self-publishing and print on-demand businesses. But he felt like healthcare needed him.
Aaron Martin was a high-level executive at Amazon, who led two startups Amazon had acquired: a self-publishing and print on-demand division.
When a headhunter came calling, Martin wasn't looking to move. But as he heard about a new chief digital/innovation officer position at Providence St. Joseph Health, he was willing to listen. Since joining the health system in early 2014, his responsibilities have grown substantially.
In addition to articulating and executing digital strategy at the 53-hospital health system—which may soon merge with Ascension—Martin is also the managing general partner of Providence Ventures, Providence's $150 million venture fund that focuses on early-stage healthcare technology and medical device investments.
Martin shares his thoughts about how and why he returned to healthcare, and what he sees as Providence's chief mission: fostering a digital connection with patients.
The following transcript has been lightly edited.
HealthLeaders Media: Your career has come full circle, from healthcare to healthcare with lots in between. How did that happen?
Martin: I was in healthcare eons ago. My career started off in manufacturing, then I moved to home health healthcare management in a startup that went public back in the 90s. I went to business school [Wharton] to study healthcare and did consulting with McKinsey. Then I founded a company that developed banking and financial services software and manufacturing software.
Providence called me through a recruiter I knew and I met two leaders, including my boss, [President of Operations] Mike Butler, and they just blew my hair back. These guys think like tech execs in a healthcare perspective. They understand healthcare needs change and if they don't disrupt their own business, someone else will.
HLM: Your primary job is to foster innovation. What does that entail?
Martin: I spend a lot of time thinking about the areas where we're going to work with our business partners. We call these 'journeys,' and each of them takes 5–7 years to complete.
As one example, nonprofits are in the business of subsidizing their mission through commercial insurance, so one journey is how we grow our commercial share. Most commercial customers, who tend to be middle or upper income, are exceptionally online.
To grow commercial share, we're getting our business online so we can serve customers, but we have to earn that right. We have to be 10 times better online than offline to get people to change their behavior. That leads to what Kyruus does.
HLM:Kyruus is a company you've developed through Providence Ventures?
Martin: They're a fundamental underpinning of any attempt to get online with our customers. To put it in Amazon terms, you have to have a catalog; we needed a reliable catalog of our services.
If you talk to other health systems that have implemented Kyruus, they use it as the catalog and checkout. You have to put in basic infrastructure, a catalog, a call center, and transact online, and then you have to create engagement models.
You can't have a situation where you sign up someone for primary care, and then you don't have a convenient way of serving their smaller needs because you're basically giving that customer to other people.
HLM:What are their smaller needs?
Martin: We've built a new technology for arranging episodic, low-acuity care, called Express Care, and we've built 33 clinics—25 of which are Walgreens—with a compelling digital technology that allows you to book an appointment with one click.
That technology also allows you to do telehealth visits and summon [a clinician] to your home, and it's all integrated in my EMR.
One of the last things we've built on this commercial journey is that once you've got people online with you for primary care, you have to keep them online with you. If you don't, it costs a lot of money to acquire them.
So we've built engagement platforms to close that "circle." For instance, we can deliver personalized information to expectant mothers and allow them to engage with us all throughout their pregnancies.
Females in the household are the CMOs and control 90% of the health spend. Now we're extending that through pediatrics, and eventually we'll blow it out to the women's health platform. That way they stay in our ecosystem. Now we have them engaged.
HLM:Technological innovation takes a lot of talent. How do you compete with the Amazons of the world?
Martin: We're a big healthcare system based out of Seattle with $25 billion in revenue, 106,000 employees, and 53 hospitals.
I bring that up because we've made a big investment in digital and where we're located matters—we're in this Goldilocks zone for innovation. So it's not hard to find software engineers.
There are a lot of folks who worked at Amazon or Microsoft who are looking for something to do that has more of a social mission. That's how I came aboard. The team I brought along, that's their goal as well. We're not here because it's easy. They're a great team and they're helping scale what we're doing.
HLM:What's the idea behind Providence Ventures?
Martin: We're delivering tech into what we call the "white space."
If we don't already own a solution to a problem, we look for best-of-breed companies and that's where Providence Ventures gets involved.
Avia is a consortium of 24 health systems that helps us find best-of-breed. But we're not always making an investment in these companies. We've looked at 400 companies and made 10 investments. And if we don't already have it and we can't find it, we'll build a company.
Xealth is an example. We'll only build if we see no one else is solving a problem well. You get no extra points for originality. You get points for solving the problem.
New health system will be one of the largest in the nation, and both CEOs will be retained.
After a year of negotiations, Dignity Health and Catholic Health Initiatives have signed a definitive agreement to merge operations. The new, as-yet unnamed health system will include more than 700 care sites and 139 hospitals, approximately 159,000 employees and more than 25,000 physicians and other advanced practice clinicians.
The organizations are geographically complementary with no overlap across hospital service areas, a factor that may help the deal overcome any antitrust concerns.
"We are joining together to create a new Catholic health system … that is positioned to accelerate the change from sick-care to well-care across the United States,” said Kevin E. Lofton, chief executive officer of CHI, in a press release. “Our new organization will have the talent, depth, breadth, and passion to improve the health of every person and community we serve."
In an unusual power-sharing agreement, both CEOs will continue with that title in the combined entity, with Dignity CEO Lloyd Dean taking responsibility for all of operations, including clinical, financial, and human resources, while CHI CEO Kevin Lofton will take charge of mission, advocacy, sponsorship and governance, system partnerships, and information technology. It is being billed as a merger of equals, with neither organization acquiring the other.
“We foresee an incredible opportunity to expand each organization's best practices to respond to the evolving health care environment and deliver high-quality, cost-effective care,” said Dean, Dignity’s president and CEO.
The new governing board for the organization will include six members from each legacy board and the two CEOs. A new name will be chosen for the health system in the second half of 2018, and its new headquarters will be established in Chicago, far from both current headquarters—CHI is based in Englewood, Colorado, near Denver, and Dignity is based in San Francisco. Meanwhile, local facilities will continue to operate under their current names. Although both headquarters will move, there was no mention of layoffs or reassignments in connection with the merger.
The new 28-state system will incorporate Dignity Health’s operating model which has scaled enterprise-wide initiatives to ensure consistent practices across the system, and is known for its work with innovative, diversified care-delivery partnerships. CHI will contribute its diverse geographic footprint and its clinical service lines arrangement as well as home-health capabilities and partnerships in research and education.
Both leaders have goals for the organization to become a national platform for innovation and research, capitalizing on existing intellectual property and research capabilities that should position the new organization as an attractive partner for other entrepreneurial organizations, referencing established partnerships and affiliations in telehealth, micro-hospitals, and precision medicine.
Key strategic and reinvestment priorities for the new system will include:
The expansion of community-based care, offering access to services in a variety of outpatient and virtual care settings closer to home;
Clinical programs focused on special populations and those suffering from chronic illnesses to keep people and communities healthier for longer; and
Further advancement of digital technologies and innovations like stroke robots and Google Glass, which create a more personalized and efficient care experience.
The merger is the culmination of a process that started in September 2016, with the establishment Precision Medicine Alliance LLC, a joint effort of the two health systems that created one of the largest community-based precision medicine programs in the country. A precision oncology program is currently being implemented in three service areas, and four-to-six more service area launches are planned in the next year. The program’s objective is to be eventually available at nearly 150 CHI and Dignity Health and care centers across the U.S., serving approximately 12 million patients annually.
The deal should close in the second half of 2018 and is subject to federal, state and Catholic church approvals.
Senior healthcare leaders must formulate an action plan for addressing a data breach at their organizations. Knowing how to deal with one could help limit the damage.
With the news out of Michigan this week that the data of 20,000 patients has been compromised because of a breach, it is wise for healthcare leaders to proactively prevent their organizations from becoming part of the misery.
But if you do experience a data breach, it is your responsibility to respond quickly and fully, executing your action plan. Here are the five steps your action plan should include:
1. Determine what happened.
Many organizations have had a data breach and don't even know about it, so finding evidence of the breach is only the first part of figuring out how it happened, says Chris Byers, CEO of Formstack, an Indianapolis-based company that helps companies, including hospitals and physician offices, manage and capture data about their customers. Its healthcare clients typically use its services to acquire data through electronic medical forms.
Most data breaches are born out of personal error, he says, whether through misplacing or losing paper forms or through insecure email communication.
"Plenty of times you have no clue about the original cause as to why data got out, and you only have about a day to figure out what you can learn before addressing the issue publicly," says Byers.
Even if it's an explanation about how you're seeking answers, you need to explain how you think you were breached.
2. Notify the public.
This can be difficult to do when you're still not completely sure what happened short term, but you should notify those whose data may have been compromised, says Byers.
"What happened isn't enough. You want to communicate immediately with customers or patients, and do it quickly and genuinely," he says.
"One of the things most of us do when we go into a practice or hospital is we sign the HIPAA policy," says Byers. "The hospital system should implement some sort of alert in their portal to ensure they're capturing patient email addresses to make sure you can communicate with them."
Also, don't succumb to the temptation of making a public relations statement about the data breach. If it was a mistake, just say so.
3. Conduct a more thorough assessment.
In a longer-term assessment, it's important to know what data has been breached. That's likely to mean a multiweek long project to really understand what happened, says Byers.
Even data management companies such as Formstack build systems that are intended to never be breached, but there could be a hole in the software code or a different kind of accident, Byers says.
"One of the most effective things we use is penetration testing," he says.
That's effectively paying for high-end developers and engineers to break into your system. Those will open the clearest paths to vulnerabilities in the system.
4. Communicate again with customers.
This is where you clearly explain the results of your longer-term investigation, Byers says. That way, you can better communicate what you're going to change going forward to make your data more secure.
Contrary to popular belief, data breaches are usually the result of paper interaction, he says. Medical paperwork could get lost or misplaced. Moving information exclusively to electronic systems can better defend against a breach, ironically.
"People are concerned about malware, but it's still the least used way to steal data," Byers says." A small physician office or medium hospital system is much less likely to be victim of cyberattack."
Email is the second-most likely culprit, including phishing schemes for W-2 information, for example. The most valuable investment healthcare organizations can make in preventing data theft is to store it from creation in an authenticated system.
"Once you log in, the user can be audited in the future, and you can see what they've done," he says. "With user authentication and encryption, the likelihood of someone breaking into that goes way down."
5. Change your processes.
The final step after a breach, of course, includes making changes to your internal processes so it doesn't happen again.
"The big problem we're experiencing in healthcare is that the government helps fund EMRs, but the bad news is that it's about getting your records into place, not that they're secured," Byers says. "It's much more about moving the healthcare world into electronic systems."
Only about 20% of healthcare organizations have a real chance of being breached, Byers says, but it's often impossible to know whether your organization is in that 20% because so many variables contribute to a breach.
"It's such an enormous responsibility that you have to be doing all the work to make sure you handle it right," he says. "You should be concerned at an 80% level that someone's going to try to break into your system."
Physicians have ultimate control over costs and revenue. That's one reason why physician integration, often a goal for intrepid health systems, should start with their participation in the strategic planning process.
This article first appeared in the December 2017 issue of HealthLeaders magazine.
Physician practice acquisition has become a key tactic to help healthcare organizations retain control over market share and extend their control over the care continuum.
But investment in physicians as employees doesn't mean these organizations have necessarily integrated doctors' input into the long-term strategy for growth.
That takes a little more thought and planning. Hospitals and health systems that have not integrated physicians into management through hierarchy or through governance will pay for that inattention over time.
Physicians won't beg to participate; they have to be recruited, encouraged, and even promoted, but smart CEOs make every effort to make their participation critical to the development and execution of the traditional three- to five-year strategic planning process.
Caregivers drive the plan
Atlantic Health System, a six-hospital health system based in Morristown, New Jersey, tries to focus its strategic planning not on the number of hospitals it has or the number of beds, says Brian Gragnolati, its president and CEO.
Instead, he wants strategic planning to focus on the number of the 4.9 million people in its service area with whom AHS interacts—around 750,000.
Planning begins with how the health system, which is broken up into five regions, interacts with those patients through its integrated delivery system, which includes two ACOs, with a third launching this year. About 2,700 physicians are part of those ACOs.
"Once we understand how we're servicing those areas, we develop overall strategies for each of those market areas," he says.
AHS ties those plans to its budget over a five-year period, and adherence to it is reviewed and adjusted every six months. But physicians and other direct caregivers handle the specifics of how to achieve growth and quality goals.
"The most important thing we need to do in leadership is provide guidance and direction, but our direct frontline caregivers and staff populate the approaches or strategies in the different market areas because they best understand the market conditions," Gragnolati says.
The voices of physicians and other caregivers inform and drive those plans through a bottom-up focus that's critically important because the organization will succeed only if it's able to achieve indispensability among those who pay, says Gragnolati, "which includes government and commercial payers but also consumers, because they're no longer insulated from costs of care."
Kevin Vermeer, president and chief executive officer of UnityPoint Health, a four-state, 17-hospital system headquartered in Des Moines, Iowa, also uses a bottom-up planning philosophy as well, not only in strategic planning, but more specifically to help achieve its transition from a holding company to an operating company.
UnityPoint operates in nine geographically diverse regions, and during the past two to three years, has been soliciting frequent input from physicians about regional nuances and incorporating those into a system strategic plan that Vermeer describes as a rolling three-year plan with one-year operating plans underneath, aimed at removing the variation that regional autonomy has incubated.
"Things are changing so rapidly, it seems like we're constantly reprioritizing, and we need to," he says. "The biggest change for us is that we grew up as autonomous from a regional perspective, with individual business units that drove the plan."
At UnityPoint, caregivers and, prominently, physicians through various leadership groups are charged with taking out much of the legacy variation that exists as a legacy of regional autonomy.
Not alignment but inclusion
AHS works intently on getting physicians involved in strategy through their inclusion in planning and feedback. That starts by getting rid of words such as alignment and engagement when discussing physicians, and using words such as inclusion.
"Historically, [alignment and engagement] have been used in an economic context, to coopt physicians to joining health systems," says Steven Sheris, MD, president of the 900-
physician AHS Medical Group.
Executing the system's strategic plan involves decisions that drive outcomes on a small scale individually, and adopting suggestions from people delivering the care on a daily basis is critical to success, says Sheris.
"We've turned the decision-making upside down, essentially," he says.
Through its planning, AHS asks physicians to partner in a data-driven decision-making process by giving them accountability for outcomes. Physicians determine clinical guidelines by evaluating what data is most important in a variety of committees, sometimes organized by specialty.
"Without fail, there's not a physician that I've come across who doesn't want to be involved in planning. Physicians have historically felt removed from the decisions that affect the practice of medicine. When they lose decision-making, that leads to despair," Sheris says.
At least one hundred physicians in the medical group are directly involved in substantive long-term decision-making, he says.
UnityPoint's Vermeer says the health system got much better at bringing clinician leadership into the planning process and strategic initiatives about five years ago out of necessity, with its physician governance council.
"We've gotten to where we're combining them with administrative leaders across the enterprise in combined strategy sessions," he says
At the regional provider council level, input and recommendations are gathered and submitted to the planning agenda for the system clinical leadership group, which is instrumental in setting clinical priorities, driving best practices, reducing variation, and recommending tools and technology that support those imperatives.
"We're about two years into a structure that basically drives protocols and evidence-based practices and IT pieces," Vermeer says. "Underneath are clinical service groups, organized along service lines like cardiology, ambulatory medicine, and orthopedics. Priorities come through the clinical service group and are adopted throughout the organization."
For AHS, another example of physician participation in strategic planning is the work being done in its ACOs.
"I've been stunned by their level of participation," says Gragnolati.
He attributes this to physician participation in strategic priorities as well as compliance with four consecutive years of savings of close to $39 million shared with the 2,700 physicians in
the ACOs.
That shared savings dollars can be a big incentive for active physician participation is no surprise, but Gragnolati attributes the success to starting with a base of independent practice associations to which the physicians in the ACO already belonged.
The ACOs invested in and utilized data analytics to determine how to cut costs of care and improve outcomes.
"We have a great family practice physician who runs analytics, and we're using the data to drive our decisions in these 11 market areas," he says. "They're seeing things they never really had access to or imagined they could see."
The difference in the data, says Sheris, is that it's actionable and has created behavioral change.
"We have access to tons of data, but how is it meaningful?"
For one example, the risk of mortality triples without follow-up after heart attack. The data told physicians that investing in follow-up has a high likelihood of preventing a morbid event, says Sheris.
For his part, Vermeer says the physicians at UnityPoint are also instrumental in forming and executing the broad goal of standardizing best clinical practices across its multiple geographies.
"When physician-driven committees make a recommendation, they put pressure on their peers by providing education on the differences in how they practice medicine," he says.
That removes UnityPoint administrators from dictating practice protocols and puts it into the less contentious territory of providing support to drive those recommendations systemwide, partly through its own ACO.
From a strategic planning standpoint, many activities that engage physicians are foundational, Vermeer says.
For example, with Medicaid, where UnityPoint is moving toward managing a population through a risk-bearing entity, the earlier the administration can engage physicians on eliminating variation, the more they feel aligned, says Vermeer.
"The ACO incentives have also been helpful," he says. "We're better than we used to be, but the biggest challenge is always translating decisions made by the relatively small group that's deeply involved in standardization of practice to the rank-and-file. We're better with the employed physician enterprise, and getting better with the ACO, but a lot of it is that the data analytics tools are getting better able to measure people's performance against the metrics
we've identified."
Not for growth's sake
When Gragnolati and Sheris first started to work together two years ago, before Sheris was president of the medical group, it was going through a period of significant growth.
That growth was occurring largely because of the competitive environment in the state, and without a targeted purpose, says Gragnolati.
When Sheris took on his current role, he agreed to change the conversation with people who wanted be part of the medical group to talk first about quality, and second about that person's ability and willingness to accept the role of value-based payments. Economics was third in the list of priorities.
"By valuing their input ... they can see that it made a difference as it relates to planning, so it's not just checking a box."
"Then we had to create the economic model [through the ACOs]," says Gragnolati. "That shifted the conversation, which then allowed us to create a leadership structure that was more clinically grounded."
Those changes were integral before setting off on a strategic plan, he says, because without those foundational commitments from physicians and the structure in place, AHS would not have been able to scale its plan.
No substitute
There's no substitute for actually building and actively listening to the physician governance groups, says Vermeer, and you likely only get one chance to get it right.
"The best way is by valuing their input so they can see that it made a difference as it relates to planning, so it's not just checking a box," he says. "You have to communicate throughout the year how we're doing on strategy and that we're showing them action from their input."
With several physicians on the system's board of directors, those influential clinicians can see how the organization is focused on things that are important to both providers and to patients, he says.
"They understand exactly what we're doing as they practice at the highest levels, and that information cascades down throughout the enterprise," he says. "They see we're taking the time to put the structure in place to create a great plan with them, rather than creating a plan and handing it to them to execute on. They want to do great things for patients."
One metaphor that helps keep Sheris focused on the intersection of the patient and physician, and making those thousands of interactions efficient and valuable, is the idea of operating a thermostat.
"Our job, partially, is to dial in the correct pace of change," he says. "Systems that can do that with the greatest agility will be successful. We want a systematic approach to decision-making using data, but consistency doesn't mean inflexibility. It's an art."
For his part, Gragnolati sees his role in the simple terms of communication and demonstrating action.
"As CEO, my job is to get out of the way and make sure the right people are doing the things to bring this stuff forward," he says.
He tries to remind himself that strategic planning isn't a one-time exercise that takes place every several years.
"Every day we're tested on whether what we say and what we do are balanced."
