Richard Breon, who has led the Michigan-based health system since 2000, says he will retire, but the board will have more than a year to find his replacement.
Spectrum Health President and CEO Richard C. Breon has announced he will retire from leading the 12-hospital integrated health system after nearly 20 years at the helm. His retirement will be effective Jan. 1, 2019, and the health system will engage a search firm to conduct a national internal and external search for his replacement.
Breon has served as the top leader for Spectrum for the majority of its existence—it was created in 1997 from the merger of two Grand Rapids, Michigan, community hospitals: Butterworth Health Corporation and Blodgett Memorial Medical Center.
The company has grown since then both organically and through mergers with other Michigan community hospitals from 7,500 employees to more than 25,000 employees, 12 hospitals, 180 ambulatory and service sites, and Priority Health, the health system’s proprietary health plan. It’s also grown from $710 million in revenue in 1997 to more than $6 billion in its upcoming fiscal year.
“The commitment and dedication of our employees and physicians have provided Spectrum Health with our most meaningful accomplishments—those that make a significant difference in the lives of our patients, members and families,” said Breon, in a press release. “Our growth has been framed by our mission of improving health in the communities we serve. That has been our compass for making strategic decisions about where to invest in programs and services.”
Achievements during Breon’s tenure include:
Richard DeVos Heart and Lung Transplant Program, the only heart and lung transplant service in West Michigan.
Fred and Lena Meijer Heart Center, West Michigan’s only accredited chest pain center which boasts the state’s highest volume among hospitals that perform open heart surgery.
Helen DeVos Children's Hospital, with 300 pediatric physicians in 50 pediatric specialties and programs.
Lemmen-Holton Cancer Pavilion.
In 2017, Spectrum was named one of the nation’s 15 Top Health Systems by Truven Health Analytics for the sixth time since 2010.
In 2016, Spectrum Health received the American Hospital Association’s Foster G. McGaw Prize for Excellence in Community Service.
Spectrum Health also received AHA’s NOVA Award in 2016 for its work to improve maternal and infant health among African Americans and Latinos in Kent County.
Priority Health HMO was named by the State of Michigan to serve as the essential health benefits benchmark plan for all individual and group HMO plans in the state.
Peter Banko talks about Centura's embrace of virtual medicine the huge revenue opportunity in its active pursuit of payer partnerships and the level of transformation required.
Peter Banko has a grand plan for Colorado's Centura Health System.
Part of it includes encouraging people look at one of the state's biggest health systems as more than the sum of its 17 hospitals.
Banko took the reins of the system serving Colorado and western Kansas from Gary Campbell, who served as president and CEO since 2008.
Campbell will continue to serve as a special adviser to Banko, 50, who arrived as president and chief operating officer 17 months ago from Catholic Health Initiatives, one of Centura's two corporate parents. The other is Adventist Healthcare.
HealthLeaders recently spoke with Banko about his plans for leading the $3.5 billion (operating revenue) health system into the future. Following is a lightly edited transcript of that conversation.
HealthLeaders: Your plan focuses on the importance of aligning physicians, hospitals and payers. That's a common goal, but what does it mean to you?
Banko: In short, it means delivering value. To do that, first we want to achieve cost-consistency across our markets.
It's a delicate dance, but we started that journey over the past year. That way we're making changes before we find ourselves behind the eight-ball.
We'll have a more intense focus on outcomes, service, and clinical variation in my first year. My goal is to do the work before we find ourselves in a financial pickle.
HealthLeaders: Where is Centura in terms of value maturity?
Banko: We're probably at a five or six [out of 10]. We have a lot of things going with Medicaid and Medicare Advantage and value networks with payers.
We're going to drive that to a seven, eight, or nine with payer partners, because we think healthcare is too expensive and too inconsistent even within our system.
For instance, you could pay $53,000 for a knee replacement at one of our locations or $16,000 at another. It's part of our mission to be consistent and do that at lower costs with better outcomes. This is a two- to four-year journey.
HealthLeaders: What are the biggest challenges Centura faces?
Banko: I don't worry about what other systems are trying or doing. We have a really good team here and if we're executing on our four goals, no matter what happens, we'll do well.
Number one, we want to be the go-to brand and health system in Colorado and western Kansas.
Second, we want to be a system of choice for our associates and physicians--where they want to work and where they feel vibrant, youthful and growing.
Third, we want to build our services to the point where people will drive by two competitors to get to Centura.
Fourth, we want to grow health value by partnering with payers to deliver something different in terms of value for consumers.
HealthLeaders: You're interested in the capabilities of virtual medicine and telehealth. How is Centura investing in this trend?
Banko: We've been on the "care everywhere" journey for quite a while, and we recognize that building more buildings isn't the right way to invest. We've developed a lot of pilots. We have a partnership with Walgreens for retail.
Dispatch Health does physician and nurse home visits for us.
We continue to invest in email, text and video care.
My 22-year-old wants to interact with his physician when he needs it, and he doesn't want to drive to a building. He wants video visits. We're going to broaden our capabilities so how you interact with us is based on how youwant to interact with us.
Where we have capabilities we're going to do it ourselves. Where we think others bring skill sets and opportunities we can't, we'll partner.
Frankly, there's not enough dollars for a health system to do everything. Not every physician needs to be employed. We don't need to start a health plan. We don't need to necessarily own other hospitals.
HealthLeaders: Describe Centura's "health neighborhoods" initiative. How has it evolved since being unveiled in 2013?
Banko: We define our markets in terms of neighborhoods. We take a deep look at what's in that neighborhood from an age, race, gender, and income level, gauge what other services are there, and then we build a neighborhood health center that serves the market's needs.
Some may have primary care only. Some may have urgent care, surgery centers, or imaging centers.
As we partner with other systems or hospitals, we have community discussion needs and these are largely built around the primary care development network. It has nothing to do with the hospital at all. An obvious growth opportunity is partnering with physicians to enhance our systems of care around cardio, ortho, neuro, and cancer care to differentiate our product.
HealthLeaders: What's your biggest revenue growth opportunity?
Banko: Payer partnerships. Through alignment with the with health system, physician and payer, we need to offer a different customer experience for employers, brokers and individuals.
That's a billion-dollar revenue opportunity for us, but everyone has to give something up for a new relationship based on value.
We have to give up the tradition of always expecting increases and battling around rates. We have to develop a system of coordinated care.
Payers have to give up their traditional way of operating too. I think we can all be successful in it, but we have to let go of the transactional way in which we deal with one another. Any payer that wants to get out of a transactional relationship, we're interested in talking to.
We meet quarterly with all those partners anyway, and we're always interested in new entrants that want to do things differently.
HealthLeaders: While Centura has been performing well financially, your co-parent, CHI, has not. How do you see the proposed merger between CHI and Dignity Health affecting your system?
Banko: There's no Dignity facilities in our market. I've been affiliated with CHI for 10 years and it's a good way to enhance Catholic health ministry across the country.
I'm of the mind the Catholic systems will eventually boil down to three large systems. If CHI and Dignity can have that discussion first, then better for them.
Catholic healthcare is foundational in our country. It brought healthcare initially to much of the U.S. I'm excited about a larger organization's ability to have a larger impact, and to be a voice of reason. By coming together, they can do that.
The combined nonprofit now has 10 hospitals, more than 40 physician practices and 50 outpatient facilities.
Coral Gables-based Baptist Health South Florida has completed its merger on schedule with Boynton Beach-based Bethesda Health.
Bethesda Health has two hospitals in the Palm Beach County area, where Baptist did not have a presence prior to the merger’s letter of intent, which was announced in 2015. The now-completed merger should provide Bethesda the leverage of a larger health system and allow it to expand in outpatient and urgent care centers, according to goals spelled out during the initial merger announcement.
As value-based care strategies gain more of a foothold, it can be difficult for smaller, standalone health systems to compete, which is also true of traditional, fee-for-service negotiations.
Bethesda consists of two hospitals, 401-bed Bethesda Hospital East and 80-bed Bethesda Hospital West. The two hospitals will retain their names.
“This partnership with Baptist Health gives our community expanded access to healthcare services,” said Roger Kirk, CEO of Bethesda Health.
The completion of the merger, which brings the much smaller Bethesda under the Baptist umbrella, had been dependent on the completion of more than two years of due diligence. The two organizations have been sharing operational expertise and best practices for the past 24 months with an eye toward bringing the organizations together.
“Our organizations share similar values and a steadfast commitment to providing quality healthcare to our patients,” said Brian E. Keeley, president and CEO of Baptist Health. “Together, as not-for-profit mission-driven organizations, we will enhance our capabilities and carry out our common goal of providing compassionate, patient-focused comprehensive care to our community.”
Bethesda Health is the second and far the larger merger Baptist has completed this year. It merged with 25-bed critical access hospital Fishermen’s Community Hospital in the Florida Keys in July.
Baptist Health South Florida has spent 17 years on the Fortune 100 Best Companies to Work For list, coming in at No. 97 in 2017.
Former Senator Bill Frist and former Acting CMS Administrator Andy Slavitt say the best chance at meaningful fixes to Obamacare problems after the failure of Graham-Cassidy depends on the work of Sens. Lamar Alexander and Patty Murray.
The nascent effort to find a limited bipartisan solution to the problems with the Obamacare Exchanges by Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-Tenn.) and ranking member Patty Murray (D-Wash.) is perhaps the last, best chance for stabilizing an individual insurance market.
That market is at risk of imploding in many states with skyrocketing premiums and dwindling health plan options.
Indeed, that bipartisan effort has been renewed with the failure of Republicans to garner enough Senate votes to hold a vote on passage of the Graham-Cassidy bill this week.
Acting CMS Administrator Andy Slavitt and former Sen. Bill Frist discussed the scope of the renewed bipartisan effort by Alexander and Murray, the failure of the Graham-Cassidy Obamacare repeal bill, and the future of value-based care initiatives today at a Nashville Health Care Council breakfast event.
Frist interviewed Slavitt after returning late Thursday from working with the group in Washington on negotiations late Thursday.
“There’s no better partner for Alexander than Murray,” said Slavitt.
The two senators have a great working relationship and the focus on not overcomplicating efforts to stabilize the individual insurance market represents a bipartisan effort to start small, Slavitt said.
Frist said the two senators are close to consensus on five to six recommendations to improve the ACA that would bring down premiums and are budget-friendly, but would likely be too late for the 2018 Obamacare plans, contracts for which were signed just this week.
“The key will be how can they sell that to their caucuses in both houses, but I think if they get through that the President would sign it,” Slavitt said.
Any legislation could be retroactive, but working that out would be difficult given the advanced stage of contracting for the 2018 fiscal year.
“The reason Patty and Lamar are working so hard on it is for these 10 million people,” said Frist. “If you don’t get these subsidies, insurers will leave markets, some counties will be left without coverage and the rates will go up for those who stay. They got sidetracked by Graham-Cassidy.”
A solution is available, but uncertainty has to be reduced to encourage insurers to feel comfortable taking on the risk of the individual market, Slavitt told the audience.
Thanks to uncertainty surrounding federal support for subsidies in the plans, many insurers have either pulled out of states or posted huge premium increases for individuals who don’t get subsidies—largely the middle class. For those people, premium increases for 2018 will be as high as 45% in Florida and 60% in Virginia, Frist said. This is compared to average employer-based insurance increases of around 3% for 2018.
The good news is that in 2017, the medical loss ratio for the individual population is roughly the same as employer-based market, said Slavitt, and claims levels are about the same.
“In a steady-state world, you would see rate increases of 8-9%. So how do you get to such high increases? Insurers say they won’t enforce individual mandate, and they can’t price for uncertainty. The irony is they have to raise rates on the middle class,” which is the population Republicans say they want to help, says Slavitt.
That’s why the negotiations by Alexander and Murray are so important, says Frist.
“If anyone can pull off showing there can be bipartisanship, they will,” Frist said.
Slavitt, who pilloried the most recent partisan effort to repeal Obamacare through a barrage of tweets focusing on its proposed cuts, nevertheless says Republicans seem to have a foundation in the plan they put forward in Graham-Cassidy, but thanks to their effort to pass the bill under reconciliation rules, they ran out of time.
“It’s possible Republicans have now found a foundation,” he said. “Like it or not, there is a coherence to the plan they put forward.”
CMS was slated to release the ratings in October. It is reportedly reviewing its methodology based on public comments.
The Centers for Medicare & Medicaid Services will again delay an update to its overall hospital star ratings system that was scheduled for October, according to the American Hospital Association.
“CMS decided not to proceed with the October update to continue its examination of potential changes to the Star Rating methodology based on public feedback,” the hospital lobbying organization quoted the agency as saying.
In a previous announcement of a delay for an update originally scheduled for July, CMS blamed data issues for not updating its five-star quality ratings, available on the Hospital Compare web site.
The ratings are currently based on a statistical model known as a latent variable model. Seven different latent variable models are used to calculate scores based on 57 quality measures over seven groups, including mortality, patient experience, readmissions, safety of care, care effectiveness, care timeliness and efficient use of medical imaging.
Many hospitals have questioned the model’s methodology, saying it unfairly penalizes some organizations and inappropriately rewards others. Among the arguments:
The current overall star rating methodology does not stratify by type or characteristic of hospitals
Hospitals and health system boards are still looking for strong leaders, but what's changing is the kind of experience you need to elevate to the top job.
So you want to be the CEO of a hospital or a health system.
Here's the first thing to know: Like it or not, the role of acute care is slowly being relegated.
It's still important, and it's still a high-reimbursement area, but specifically because of that, scores of people and companies are trying to figure out how to use it less.
As a result, even in organizations where acute care represents the lion's share of revenue, the competencies of today's successful CEO range far from the acute-centric skills many hospital and health system executives and boards once prized.
All of today's CEO candidates have to understand the critical interactions between the inpatient and outpatient realms, and the fact that delivering value rests on managing those interactions, not from maximizing patient census and inpatient days.
"Running a health system is about trying to provide coordinated care in an environment that's patient- and family-centric," says Jim King, senior partner and chief quality officer with Witt/Kieffer, a healthcare executive search firm.
Given the need to reduce reliance on acute care services, leaders who want to be CEOs have to learn skills applicable to the rest of the patient’s healthcare journey.
1. Ambulatory Experience
Perhaps nothing is more prized in today's CEO as outpatient experience.
This has not always been the case.
Before the advent of value-based care, outpatient experience was a possible warning sign that the candidate had been placed in a managerial backwater.
"Ambulatory is becoming a lot more important, and it's critically important for healthcare CEOs to understand the interactions between the inpatient and outpatient settings," says King.
The ability to do so shows aptitude for handling an integrated care delivery model, toward which many health systems are transitioning.
"Almost all our clients now are looking for that in an ideal candidate," says King. "Some of the more progressive candidates are really seeking [outpatient experience] as they develop their careers."
2. Managing to a Budget
One of King's health system clients is seeking a CEO for one of its regions. It's a job managing multiple sites and the CEO reports to a regional board and the chief operating officer of a bigger health system.
One of the key prerequisites for this client's candidates is extensive experience developing and managing to a budget.
Additional skills include experience with pro forma forecasting "so they really do understand the bigger picture of the financial aspects of the organization," says King.
3. Demonstrate Physician Collaboration
In many cases, provider management comes along with outpatient experience, but sometimes another executive is responsible for managing providers day to day. The best CEO candidates demonstrate the ability to do both at the same time.
"What boards are really looking for in any CEO candidate is a track record of being able to collaborate and partner with physicians," King says.
Part of being able to demonstrate that skill is to provide examples of how you have developed programs within a health system that involve getting physicians to buy in. Examples could be eliminating variation from practice or developing an outpatient facility that involves physician input and collaboration.
What boards are really looking for is the style candidates use to engage physicians in development of these programs.
"It's about trying to provide coordinated care in an environment that's patient- and family-centric," King says. "In the best health systems now, that's the environment that allows them to be successful."
4. Not Necessarily a Physician
A large number of Witt/Kieffer clients are looking specifically for physician candidates in the CEO search, but that's not the key getting hired.
"A lot of clients believe if they had a physician in that role, they'd automatically be a much more collaborative organization, or more patient-centric," says King. "That's not necessarily the case."
For aspiring CEOs without a medical degree, what's more important is to make sure your leadership capabilities stand out regardless. That involves demonstrating that in previous roles, that you have created a vision, and inspired those around you to improve the organization demonstrably.
Overall, choosing a new CEO is about leadership, and most boards will still hire the candidate that best fits its culture, connects well with its values, and brings a proven track record of leadership.
5. Communicate and Execute
This is a bit of an esoteric skill, but the best CEO candidates, regardless of background, have an ability to "be presidential," says King. You must demonstrate your previous experience interacting with boards and in being on boards yourself, in order to appreciate board members' responsibilities and priorities.
"Are you staffing a couple of committees of the board? Are you attending meetings and getting to make presentations before the full board at your current or previous stops?" King asks.
It may not be as important to have moved around a lot in your career, but it is important to gain that governance experience.
"It's also good to have some staying power and show you can come into an organization and over five to seven years move the ball on some significant issues," says King.
The deal will add three hospitals, 60 primary care providers and 246 specialists to Centura’s 220,000-member network.
Banner Network Colorado and Centura Health have signed a deal to enter a provider network agreement that will join BNC’s three hospitals, 60 primary care physicians and 246 specialists with Centura’s clinically integrated network.
Under the deal, Centura, based in Greeley, Colorado, and BNC, based in Centennial, Banner providers can access FullWell, Centura’s collaborative population health resource that provides tools and competencies to CHN network providers.
Centura, which is jointly owned by Catholic Health Initiatives and Adventist Healthcare, has 17 hospitals, 1,400 primary care providers and more than 2,800 specialists who provide care to more than 220,000 lives through its Colorado Health Neighborhoods clinically integrated network.
“We’re excited to welcome Banner Network Colorado to Colorado Health Neighborhoods,” said Peter D. Banko, President and CEO of Centura Health, in a press release. This agreement enhances access to health services along the Front Range for our ACO members, and supports our journey in meeting the needs of the thriving communities we serve.”
Through so-called clinically integrated networks, doctors, health systems and other providers can negotiate jointly with payers on reimbursement arrangements.
They generally provide a framework for streamlining care delivery and making it more efficient, and represent ways for entities with a variety of ownership structures to work together without asset transfer. They must show that they improve quality and efficiency and share patient clinical and financial data.
“We are fortunate to have found a well-aligned partner in value-based care,” said Margo Karsten, Chief Executive Officer for Banner Health in Northern Colorado.
BNC will also work with Centura Health Employer Solutions, which offers direct-to-employer agreements for self-insured employers and has a membership of more than 30,000 covered lives.
An entrepreneurially minded cardiologist who started a heart transplant program against the odds in the early 1990s, shares lessons he's learned along the way.
By 1989, Newark Beth Israel Medical Center had already been dabbling in establishing a heart transplant program for about three years.
But the program at the flagship hospital of RWJ Barnabas Health in northern New Jersey didn't really take off until the arrival of cardiologist Mark J. Zucker, MD, in 1989.
Even though it was located only a few miles from Manhattan and its major academic medical centers with competing transplant programs, Zucker saw the service line as a "natural extension" for the inner city hospital.
The program he envisioned would be integral in making sure Beth Israel thrived in an area with a poor reimbursement mix and other serious challenges.
This summer, on the cusp of performing its 1,000th heart transplant, Zucker spoke with HealthLeaders about the journey and what he's learned. The following is a lightly edited transcript of that conversation.
HealthLeaders: Why was developing a heart transplant program so important to Beth Israel?
Zucker: The hospital had already performed the first heart transplant in New Jersey in 1986, before I got here [in 1989]. We saw transplantation as one of those natural extensions to provide a full scope of services at a major academic medical center.
But the early barriers were that there were very few people with skills and knowledge about heart transplantation. The number of transplant cardiologists probably didn't break into three digits.
HealthLeaders: What were the biggest challenges to the development of this service line?
Zucker: Recruitment of surgeons and cardiologists was the first hurdle, but there were also the unique hurdles of Newark Beth Israel. We're no more than 20 miles from New York and no more than 80 miles from Philly. So there were geographic considerations with major academic medical centers on both sides.
The unspoken reality was that Newark had its own issues as a city.
HealthLeaders: Was there an entrepreneurial angle to developing the program?
Zucker: If we talk about it as a business, the reality was that the competition in the New Jersey market was increasing. We started the program in 1990 and the number of surgical centers doing angioplasty and other heart procedures was growing.
What's common for most academic medical centers is that you train physicians and then they leave the inner cities and go to the suburbs, [which] surround the places where they learned, and compete.
So you find yourself in an awkward spot. The more people you train, the more they compete and take away patients. By doing transplantation, it helps the institution have a patient base that the surrounding facilities can't provide.
That's a compelling business argument. The other aspect about this is that transplant programs spin off a variety of other programs like TV shows spin off sequels.
Through the transplant program, we could develop end-stage heart failure programs, pulmonary heart programs, and stem cell and amyloid programs. These are spokes of the central hub of a heart transplant program.
HealthLeaders: Does healthcare need more of transplant programs?
Zucker: Transplant programs get complicated, because they are limited by the number of donors. Transplant is a zero-sum game.
If there are 150 transplants done by four centers and you double that to eight centers, it won't double the number of transplants.
I would argue that we don't need more centers, but I recognize I am part of the haves.
Frankly, I don't want competition for a different reason: If we did only 20 a year instead of 50 to 60, I don't think we could do it with the same quality. And costs will go up because we still need the same number of workers and talent doing 20 as we do 50.
HealthLeaders: High-end programs have been suggested as ways for hospitals to diversify income streams in areas that aren't commoditized. What lessons does your experience provide on that front?
Zucker: Transplant actually doesn't turn out to be all that profitable. The reality is that the majority of transplantations are covered under Medicare, so there's a fixed amount of money.
Some of them cost the hospital money.
If one wants to get into this to improve revenue and the bottom line, there's some truth to that, but you could hurt yourself badly with a couple of complicated procedures.
Also, many patients going for transplants are waiting in the hospital for long periods of time for the transplant. The hospital may make money if they go home in 15 days. But sometimes they wait for a month and half for that transplant.
And if that bed has been occupied for 40 days for one patient and it's the same DRG for that patient as one who comes in with acute MI, you might have lost eight other admissions while you've maintained this one.
HealthLeaders: What have you learned that's transferrable for hospitals and health systems that are trying to build new service lines?
Zucker: I was walking down street at the University of Pennsylvania, and on the ground was a message that success doesn't happen from luck. For me, that was a message from God.
Success happens from commitment and longevity.
Here, there hasn't been a lot of turnover at the senior level. We've had the same names since 1990.
And nothing beats communication with the people who send you work. While patients are referred to us for transplant, they were someone else's patient initially, and they sent them to us somewhat reluctantly for the next level of medical care.
So you have to maintain that dialog with the referring doctor. Sometimes it's as simple as telling them that the patient is doing well after transplant.
Last thing is that you have to keep an open mind. There are many ways to practice medicine, and people can teach you in different ways.
You make the work environment fun and enjoyable. You identify people who live and breathe transplant. We're committed to these patients for rest of their lives, so the people you work with have to have the right personalities.
Many healthcare industry groups are also making their positions known.
On Thursday, the National Association of Medicaid Directors released a media statement urging Congress to "revisit the topic of comprehensive Medicaid reform when it can be addressed with the careful consideration merited by such a complex undertaking."
The CEO of the Robert Wood Johnson Foundation condemned the Graham-Cassidy proposal in a statement using these words: "This is not the right future for our country."
AHIP In a letter to senate leaders, says the legislation would further destabilize the individual market and be a detriment to individuals with pre-existing conditions. " No one should be denied or priced out of affordable coverage because of their health status," the letter says.
America’s Essential Hospitals, the trade group that represents safety net systems, says Graham-Cassidy provides "no meaningful relief from looming cuts to Medicaid disproportionate share hospital (DSH) payments."
The Blue Cross Blue Shield Association opposes the bill because it says it would allow states towaive key consumer protections, as well as undermine safeguards for those with pre-existing medical conditions.
An analysis by Avalere Health, a consulting firm, concludes that the proposal would cut federal healthcare funding to states overall by $215 billion through 2016 and by $4 trillion over 20-years, compared to current law.