Translating big-picture long-term strategies into day-to-day processes that point toward success requires CEOs who recognize the humanity of the workforces they lead.
This article appears in the July/August 2019 edition of HealthLeaders magazine.
How a CEO handles the tension between long-term strategies and nearer-term needs will determine whether that CEO succeeds in implementing solutions that stick.
Those who stare too intently at the horizon may lose their footing as the landscape shifts. Those who focus exclusively on day-to-day tasks risk having their accomplishments rendered obsolete by the industry's constant churn. The CEO with staying power, however, imagines a future that might be, enacts a concrete plan to get there, and readjusts as circumstances change.
That means defining an inspiring big-picture strategy, one that's rooted in the healthcare industry's present realities but anticipates what's to come. It means driving missional alignment around that strategy, so the people and processes at every level of the organization are oriented around the vision. And it means investing in the organization's culture, so stakeholders know their contributions are valued.
One executive who is well-acquainted with this complex balancing act has been a familiar face at Yale New Haven Health in Connecticut for the past four decades. Marna P. Borgstrom, MPH, joined the organization in 1979 as a junior administrator for Yale New Haven Hospital, climbing the ranks from a post-graduate fellowship through staff and management posts that led her ultimately to the C-suite overseeing an academic health system with more than $5 billion in annual revenue. Borgstrom has been CEO of both the hospital and health system since 2005.
Rising to the top executive spot from within an organization means the people you work with will remember your successes and shortcomings alike. But internal promotion also comes with a more intimate appreciation for how the C-suite's edicts ripple from top to bottom through an organization, Borgstrom says.
"It's really one thing to come up with an idea and a plan, and it's another to understand what it takes to execute it … especially in a large complex organization," she says. That's why the fundamental task of a CEO with staying power is to muster a team and set a direction.
"It helps immensely if you can get people to share your vision and to want to support it. Then you can do almost anything," Borgstrom says. "But if you haven't treated people well or you haven't engaged them, they can throw as much sand in the gears as they want and make it very difficult to do what you need to do."
Strategizing amid uncertainty
Yale New Haven Health announced a partnership five years ago with Dallas-based for-profit hospital operator Tenet Healthcare. The organizations said they would remain independent from one another but establish a comprehensive delivery network within Connecticut, with plans to expand regionally.
When she first suggested that such an esteemed nonprofit consider collaborating with a for-profit company, Borgstrom says she half-expected board members to balk.
"I was somewhat thinking that they might drum me out of the room and say, 'Have you lost your mind?' " she says. "They didn't do that."
As they talked through each organization's values and objectives, it became clear that Yale New Haven Health and Tenet had a lot in common, that the strategy made sense, and that their arrangement could enable the academic nonprofit to expand its influence without having to go on an extensive buying spree, Borgstrom says.
"You don't have to own everything to create a broader geographic footprint," she says.
Borgstrom rallied the board's support. But the proposed collaboration fell through anyway. Tenet backed out in 2015 under pressure from the demands of state officials.
"What got in the way were largely politics and regulatory overreach in the state of Connecticut," Borgstrom says. "We worked really hard on that for a year and a half or more, and the state just overreached—and Tenet did what they should have done, which is to say, 'Look, this could have been a great collaboration, but we're walking away.' "
Leading amid uncertainty requires a deep sense of humility
Had she pushed for the Tenet deal with absolute confidence and demanded there be no doubt in it as Yale New Haven Health's strategic path forward, then running into a dead end might have spelled trouble for Borgstrom's leadership standing within the organization.
By explicitly acknowledging her own limitations, however, Borgstrom leaves room to redirect and recalibrate as needed. After all, the CEO with staying power leads competently and confidently while tempering their messaging with a humble recognition that their capabilities and knowledge are finite.
"When I go out and share something, I share it with as much confidence as I can, but I also acknowledge that we're going to be right on some of it, and we're going to be wrong on some of it," she says. "The real power of leadership is the ability to be introspective and flexible enough to go back and correct what's not on track and to ask for help."
That's not just true on a deal-by-deal basis. It's true for the healthcare industry as a whole, which is transforming through a combination of market dynamics and regulation into an end product that is not yet clear, Borgstrom says.
"What's really hard for all of us right now is to develop plans and strategies to go where we think healthcare should go but to recognize that we have to do that successfully in the context of the current business model," she says.
Although it remains unclear precisely how Yale New Haven Health will be paid five years from now, Borgstrom says the organization is guided by a value strategy that expects to succeed based on improving quality, safety, and patient experience, plus increasing efficiency.
Steve Narang, MD, CEO of Banner–University Medical Center in Phoenix, says tolerating failure and maintaining high standards are not mutually exclusive. The two ideals must be modeled, he says, from the top of the organization. That means CEOs must remain vulnerable and acknowledge their mistakes. (Update: Narang became president of Inova Fairfax Medical Campus in Falls Church, Virginia, in July.)
"Frankly, there's strength in being wrong," Narang says, "because that is probably going to spark questions that will get us to a right answer."
Leading amid uncertainty requires constant cross-silo communication
Before taking the CEO job at Banner–UMC in 2013, Narang was chief medical officer for a children's hospital in the Banner Health system. Narang says his job as CMO was to translate clinical care needs for his nonclinician colleagues in the C-suite.
"One of the reasons I took the leap from the bedside to leadership was I was very passionately focused on finding value at the intersection of clinical care, finance, and operations," he says. "I felt like healthcare had created artificial siloes."
"My focus wasn't to stay in one swim lane," he adds. "I felt like, as chief medical officer, my job was to navigate those three swim lanes, so the patients experienced high-value and compassionate care."
His paradigm as a CEO has been essentially the same as it was when he was CMO, he says.
"I don't look at it as a different title," he says. "That's what I do every day."
In this sense, the CEO with staying power constantly communicates each stakeholder group's evolving needs and expectations to the other groups, so everyone can see how their work intersects with the overarching strategy.
To keep himself focused on long-term strategic goals without losing sight of more immediate needs, Narang adopted what he calls "a 5:2 model," which he picked up decades ago from a fellow physician leader. The tactic calls for Narang to identify five longer-term "transformational" objectives for the coming one to three years and two shorter-term objectives to tackle in the next one to three months. He posts them on his desk, where he and his close team members see them every day.
"This 5:2 mantra, I think, keeps my team balanced and, personally for me, it keeps me specifically focusing on what I can control," Narang says.
Leading amid uncertainty requires a value-based compass
While other markets may be farther along the road to value-based care, Narang says providers in the Phoenix market are still generally competing for inpatient commercial volumes in a decidedly fee-for-service model.
"I call that a 'red ocean,' " he says, likening healthcare providers to sharks that circle when there's blood in the water.
"When you really think about it, what's the value equation in that model?" he adds. "Who's actually winning in that model?"
Narang says he and Banner Health—which enjoys about 40% of the inpatient market share in Arizona's most populous area, Maricopa County—are not terribly fond of this "red ocean" approach to competition. They would much prefer to navigate toward a "blue ocean" strategy that delivers greater value at a lower cost by coordinating care among hospitals and other care sites, with the helpful influence of academic medicine, he says. (The metaphorical ocean is blue in this case, Narang says, because there's not really anyone there yet, since there isn't a reliable source of value-based payment.)
"The only way to do that is to invest in infrastructure that today may not bring more market share or '
margin,' " Narang says.
If healthcare organizations are like ships at sea, then the CEO with staying power is one who steers confidently toward a destination port that's still under construction, relying on a value-based compass to guide every course correction even before a return on investment is proven.
That's why Banner partnered with the University of Arizona to restructure around its value-based mission. Rather than clustering around physician specialties, in 2015 the organization began rolling out institutes that specialize in particular conditions, such as diabetes. Thirteen such institutes have been launched thus far, says Narang, likening the structure to a complex startup environment.
"The institute structure essentially says we're going to organize our care around the condition of patients, not around the physician specialty, not providers, not insurance companies, but around patient conditions," he says. "And we're going to attract anybody who's excited about improving value for that condition to participate in the institute. You can be a physician. You can be a therapist. You can be a nurse. You can be someone in finance. But your focus is to improve value for that condition."
Partnering with key system leaders to integrate Banner's institutes with service lines across Maricopa County is one of the five longer-term objectives on Narang's 5:2 list.
Top-to-bottom alignment
John Nguyen, chief marketing officer for St. Louis–based SSM Health, hailed a taxi on his way home from the airport, making conversation with the driver, who asked where he worked.
"SSM Health," Nguyen told the driver.
"Oh, you're the guys that are buying up everything around town," the driver replied.
"No, we're not buying anything," Nguyen said, laughing as he recalls the conversation. "It's just the new signs."
Driving around the St. Louis area, it's increasingly tough to miss SSM Health's physical presence. The number of facilities prominently featuring the Catholic health system's name and logo has risen in the past few years, as part of a coordinated rebranding effort to make the organization's footprint in the community more consistent and apparent.
While there had been some merger and acquisition activity over the years contributing to the patchwork of brands belonging to SSM Health, most of those brands stemmed from the way the ministry was founded, Nguyen says. The Franciscan Sisters of Mary were itinerants who traveled wherever they saw a need, opened a new healthcare facility, and named it after significant historical figures, such as St. Francis or St. Mary.
With care delivery sites scattered across four states, SSM Health's various regions often acted independently of one another. That was the case until about five years ago, anyway, when the system's leaders decided to reconfigure it from a holding company to an operating company and realign each of the regions to report directly to SSM Health's centralized office as part of an effort to increase effectiveness and reduce waste, variation, and unnecessary duplication, Nguyen says.
"That was a very big change for the organization," he says, "and I'd be lying if I didn't say we're still on that path today."
The marketing and communications team consolidated its market research functions, condensed 70 separate websites into two, and brought about 300 distinct brands under the single SSM Health umbrella, Nguyen says. As the system linked its disparate components together in the minds of consumers, the public's unaided awareness of SSM Health's brand rose 34%, he says, citing custom research conducted by a third party.
This metric of unaided or "raw" awareness—in which respondents are presented with an open-ended prompt to name a health system and researchers count the number of times SSM Health is mentioned—is a good starting point for the system to track its progress. The next step, Nguyen says, is tracking how well that brand resonates with the public.
Missional alignment is a two-sided endeavor
Consistency in external brand identity clearly isn't the only type of alignment CEOs with staying power need. Internal consistency of process and mission are just as important. These external and internal initiatives can be two sides of the same coin, Nguyen says.
"A brand, more than just a campaign, is how we galvanize ourselves to that [mission] internally as well as externally and make sure that the experience is hardwired into the services we provide and to how our employees are positioned to do the work," he says.
As SSM Health conducted market research with the public, it asked its own employees what sets the system apart from others. Nguyen says researchers tested a variety of positioning statements both externally and internally and found one sentence, in particular, was positively received all around: "We get to know you better as a person, so we can treat you better as a patient."
That research, combined with a reflection on SSM Health's heritage and mission statement, led Nguyen's team to develop "The Healing Power of Presence," a unifying campaign designed to articulate and reinforce SSM Health's identity for employees and the public alike.
At its core, this type of messaging is about talking to people, understanding their lives and what they are trying to achieve, then boiling that down in a way that resonates with individuals, Nguyen says. If it doesn't reflect the reality of the health system, then it's meaningless, he notes.
"I can make a great campaign and put it out there, but unless there's some passion around that as an organization, that really doesn't mean anything," he says.
If you hope to align a large or complex organization with senior leadership's strategic vision, then you must communicate in a way that empowers managers to act as surrogates for the message. That's why SSM Health published a booklet by CEO Laura Kaiser outlining her vision, then followed it up with weekly communications from her reinforcing that strategy, Nguyen says.
SSM Health also rolled out a formal communications training module for all managers in 2017. The training teaches how communications flow through the health system, what the manager's role is in relaying messages to his or her team, and how to facilitate discussion and feedback, Nguyen says. The training includes a practicum component, so all managers know not only what tools are available but also how to use them.
There will always be some level of variation in a health system as big as SSM Health. The goal in communicating and reinforcing strategy throughout an organization is to get the big things right, so all team members can orient themselves around those priorities, Nguyen says.
"When it comes to communications, it's not the same as clinical practice," he says. "If there's a little gray area in the details, that's OK. We have to make sure the core messaging is right: How is this attached to our mission? Why are we doing this? Why is this better for people? Why is this better for the communities we serve? Why is this better for our organization?"
Alignment isn't just for large organizations
The need for missional alignment isn't unique to large health systems. Individual hospitals, too, can benefit from leaders who keep stakeholders laser-focused on big-picture long-term goals while they handle the day-to-day operations more quietly.
Lee Domanico is CEO of MarinHealth, which includes MarinHealth Medical Center (known until recently as Marin General Hospital) in Greenbrae, California. The hospital opened more than 60 years ago, then became part of a health system in the 1980s that merged in the 1990s with Sacramento-based Sutter Health. After years of controversy over who should pay to renovate the aging facility, Marin General Hospital regained its independence from Sutter in 2010.
The newly independent hospital needed to supplant the operations systems that Sutter had provided, and it had only about a week's worth of operating cash on hand when it broke off, so Domanico and his team spent nearly three years building public confidence in their mission, ultimately persuading taxpayers to pass a bond measure to pay for the new hospital.
"While we were improving finances, stabilizing the organization, we had our eye on the long-term prize for us, which is opening a new hospital," Domanico says. "To do that, we not only had to stabilize financial performance because we were ultimately going to have to borrow for the long-term debt. We had to build public confidence because most stakeholders felt we weren't going to make it."
The key to building trust, both within an organization and with the public, is relatively straightforward, Domanico says.
"You tell people what you're going to do, and then you do it," he says. "Then you tell them again what you're going to do, and you're going to do it. And each time when you do what you said, a few more people will sort of believe, 'Well, OK, maybe this could really happen.' "
Cultivating a conducive culture
About a decade before his move to Marin General Hospital, Domanico took the reins at the Allegheny Health, Education, and Research Foundation (AHERF) in Philadelphia, which was trying to emerge from its $1.3 billion bankruptcy, one of the largest failures in nonprofit healthcare history.
Domanico knew when he arrived that AHERF personnel had taken pay cuts, that physicians had lost their research funds, and that the organization had been barraged with negative publicity. "And that all takes a toll on the psyche of the stakeholders, the physicians, the employees," he says.
"While we went through every line of the profit-and-loss statement to turn it around, what was needed was empathy and a recognition of what the people had been through," he adds. "We adopted a theme of 'Let the healing begin.' "
The CEO with staying power knows that even the most carefully crafted strategies with the proper processes in place will fail if the organizational culture has soured. That's why Domanico and his team fought on two fronts, both correcting the errors of their predecessors and absorbing the frustrations of those whom their predecessors harmed.
"While we were working on cutting overhead and all the technical aspects, we really had to give people a chance to vent—there was anger about what had happened—and really allow for the healing process culturally while we were technically doing what we needed to do to right the ship," he says.
Making a financial turnaround permanent requires that leaders identify and capitalize upon the organization's intrinsic advantage, Domanico says. But equally important is the need to build confidence among the organization's stakeholders and reinvigorate their belief in a better future.
"That's very nuanced and certainly very different from one organization to another," he says.
Beyond making stakeholders feel heard, leaders need to actually hear them. That's why Domanico's team rolled out a Studer Group–inspired assessment to track employee sentiment quantitatively over time. Tenet Healthcare acquired AHERF's entire Philadelphia operations in 1998. At first, the organization ranked near the bottom of Tenet's 11 regions, but it climbed toward the top within about two years, as stakeholders increasingly believed a turnaround was underway, Domanico says.
"While we were improving finances, stabilizing the organization, we had our eye on the long-term prize for us, which is opening a new hospital."
—Lee Domanico
Narang, at Banner–UMC, says his team asks employees six to eight questions on organizational culture in a survey every six months, such as "Do you feel inspired to work every day?" "Does your leader inspire you?" and "Does the culture make you want to work here a long time?" The hospital generally sees a response rate above 85%, he says.
Borgstrom says Yale New Haven Health similarly conducts a biannual employee engagement survey through Press Ganey, plus occasional "pulse surveys" in between.
Don't neglect qualitative feedback
While aligning team members around your strategy generally means communicating your vision to them, fostering a conducive culture should also entail soliciting stories from them.
The CEO with staying power doesn't settle for quantitative feedback alone but listens to employees' qualitative feedback as well. That can help to spark a problem-solving culture not only within the C-suite but at all levels of the organization. It tells stakeholders that their input is valuable and encourages them to identify shortcomings and propose solutions that might otherwise be tucked outside the CEO's line of sight. Borgstrom says Yale New Haven Health's hospitals and physician practice foundation host regular open forums. While workers might be a bit reserved at their first or second forum, she says they tend to open up more as the events become routine.
"Stories are very powerful," Borgstrom says. "When somebody is willing to speak up and describe something that was an issue or problematic for them or share [a success story], that's really powerful."
Yale New Haven Health has participated, furthermore, in a Barrett Values Centre survey of health system employees, as well as full-time faculty and community-based medical staff, says Borgstrom. The survey asked people about their own individual motivations, how well the organization aligns with the individual's values, what an organization would look like if it aligned with the individual's values, and what the gap looks like between Yale New Haven Health and that ideal system.
Researchers used the responses to give the C-suite a better sense for how well the status quo matches the workforce's values and how leaders might chart a path forward, a useful tool for healthcare executives seeking to lead through uncertainty. The fundamental task of a CEO with staying power, after all, is to muster a team and set a direction.
"If people's values are intuitively aligned with the organization's," Borgstrom says, "you're going to get more engagement, you're going to get more participation, you're going to get more innovation."
Although its Aetna acquisition still awaits final approval from a judge, CVS Health cited it and other positive developments for the strong numbers.
Woonsocket, Rhode Island–based CVS Health posted strong second-quarter financials Wednesday, reporting $63.43 billion in adjusted revenues for the three months ended June 30, up from the $46.92 billion it reported the same period a year prior, an increase of more than 35%.
That translated to adjusted earnings per share of $1.89, which was 20 cents higher than the $1.69 reported a year prior and 17 cents above the high end of the company's guidance, according to a presentation released with the Q2 numbers.
CVS Health's leaders pointed to the company's nearly $70 billion Aetna acquisition—which is still waiting for a federal judge's final stamp of approval—as the primary driver of its revenue growth. But increases in volume and brand-name drug prices in both the pharmacy services and retail/long-term care segments contributed as well, according to the earnings report.
Related: In First Quarter of Combined Operations with Aetna, CVS Revenues Jump 35%
The company was similarly encouraged by recent policy developments, including the Trump administration's decision to abandon its drug rebate rule, according to the presentation. Withdrawing that proposed rule recognizes that pharmacy benefic management (PBM) firms add value to the marketplace and help to keep costs in check for Medicare Part D beneficiaries, the presentation states.
C-suite Perspective:
"We posted strong second quarter results, with all of our businesses performing at or above expectations. These results demonstrate our ability to execute on our strategic priorities to accelerate enterprise growth as we seek to fundamentally transform the consumer health experience."
—Larry Merlo, president and CEO
Additional CVS Q2 Highlights
CVS Health's stock price was up more than 4% during early morning trading.
The company's healthcare benefits segment saw Q2 revenues rise more than $16 billion over last year.
The disagreement centered on whether Mayo Clinic qualifies as an 'educational organization' for tax purposes.
A federal judge on Tuesday sided with Mayo Clinic in a dispute over $11.5 million in tax refunds, which the Rochester, Minnesota–based nonprofit claimed it was owed.
The government had argued that Mayo isn't entitled to the funds because it didn't qualify as "an educational organization" during the seven relevant tax years that fall between 2003 and 2012.
Judge Eric C. Tostrud in the U.S. District Court for the District of Minnesota granted summary judgment for Mayo and denied the government's competing motion for summary judgment.
The new hire, who has been working in Geisinger's C-suite for five years, says the system needs to nurture its nursing workforce.
Janet Tomcavage, MSN, RN, took over this month as chief nursing executive at Geisinger, based in Danville, Pennsylvania, the 13-hospital health system announced Monday.
Tomcavage is a familiar face at the organization, where she has served as chief population officer for about five years. She has led programs that aim to improve quality and affordability, recently launched a home-based care model for medically complex patients, and served as chief administrative officer for Geisinger Health Plan, according to the announcement.
Tomcavage is also a recognized leader in the broader community, having won the Pennsylvania Nightingale Award for clinical excellence in an advanced nursing role.
"I became a nurse and went into healthcare because I wanted to help people in need," Tomcavage said in a statement. "Nurses serve in some of the most important roles in healthcare and make a difference every day in the lives of our patients."
"I'm excited to take the lessons I've learned along my journey from bedside nurse to educator to leader and help position Geisinger's more than 6,500 nurses—in all positions, from LPNs to RNs to advanced practice nurses—for their own future successes," Tomcavage said.
Geisinger needs to grow, recruit, and nurture its nursing workforce in order to live up to its potential in solving healthcare's biggest challenging, which include management of chronic disease and addressing social determinants of health, she said.
Geisinger President and CEO Jaewon Ryu, MD, JD, said in the statement that the creation of Tomcavage's new role demonstrates the organization's priorities.
"Nurses make a huge difference every day in the lives of our patients, and this new position reflects our ongoing commitment to nurses and to their professional growth," Ryu said in the statement. "Janet brings outstanding experience in the full scope of nursing and all aspects of inpatient and outpatient care, and I'm excited for her and for all our nurses as she transitions into her new leadership role."
Correction: An earlier version of this article misstated the date on which Tomcavage's new job began. She took over as chief nursing executive effective August 1, which was this month, not this week.
The AHA 'will remain an engaged partner in both caring for and keeping our communities safe' in the face of this and 'any other public health challenge,' says the group's leader.
The American Hospital Association joined the chorus of groups expressing grief Monday, as the death toll from two separate mass shootings that gripped the U.S. over the weekend rose to 31.
Twenty-two people died as a result of a shooting Saturday in El Paso, Texas, and nine were killed early Sunday in Dayton, Ohio. The violence prompted President Donald Trump to condemn white supremacist ideas—which authorities say appear to have motivated at least one of the shooters—in a speech Monday morning.
AHA President and CEO Rick Pollack similarly condemned bigotry, and he affirmed the role hospitals and health systems play in their respective communities.
"Our nation is once again mourning innocent lives lost to the tragedy of mass violence. We grieve with the families of the victims and express our condolences to the communities of El Paso and Dayton," Pollack said in a statement.
"Hate and violence have no place in our society. And respect for diversity must be a core value for our nation and viewed as a strength for our society," Pollack said. "While we are devastated by this weekend's events, we can be encouraged by the number of our fellow citizens who came together to help one another in El Paso and Dayton.
"The role of hospitals and health systems in times of tragedy is clear: respond, care and be a force for good," he said. "We thank all the law enforcement community, and other first responders, caregivers, physicians and nurses for their efforts to save and protect lives. In the middle of chaos and during tragic times, they stand as beacons of hope and an inspiration to all—always ready to respond, care and help their communities heal.
"Like our nation, hospitals and health systems are increasingly looking for new ways to address the wave of violence that we are seeing," he added. "As with any other public health challenge, we will remain an engaged partner in both caring for and keeping our communities safe."
After a delay, the deadline marks a moment of truth for a CMS payment model that some have heralded as potentially transformative.
Organizations may formally express interest in the Centers for Medicare & Medicaid Services Direct Contracting Model, for 2020 and 2021, until 11:59 p.m. Monday.
The deadline, which CMS postponed three days due to technical difficulties, marks a moment of truth for an initiative that some industry stakeholders have said could kickstart value-based primary care.
The agency is likely to receive a high number of non-binding letters of intent (LOI), many from organizations that will decide not to complete full applications, says Ashley Ridlon, policy leader at Evolent Health, which submitted an LOI "just in case."
Many details, including the benchmark methodology, risk adjustment approach, and capitated payment rate, have yet to be determined, as interested parties await a formal Request for Applications (RFA), Ridlon says.
"When you talk to some of the stakeholders who this model was supposedly designed for, you get some surprisingly tepid responses," she says. "One recently made a comment about not knowing if they are even eligible, given they don't currently have Medicare fee-for-service beneficiaries."
The first performance year, 2020, is intended for entities like that to enroll 5,000 or more Medicare beneficiaries, Ridlon says.
"The question may be more, do they really want to do all that enrollment work and make significant investments for a fee-for-service Medicare beneficiary population when they can get a patient panel handed to them much more easily and at lower expense through a private payer partnership?" she adds.
Organizations that don't submit an LOI by the deadline won't be allowed to complete applications, according to the CMS website.
The settlement marks what may be the end of an unsettling period in the system's history.
Pauline Grant stepped into the CEO role at Broward Health, based in Fort Lauderdale, Florida, following the suicide death of her predecessor, Nabil El Sanadi, MD, in 2016. By the end of that year, however, the board turned on Grant and fired her abruptly, based on allegations that she participated in a kickback scheme.
Now the health system's board has agreed to pay $975,000 to Grant to settle a lawsuit she filed shortly after her firing, as the South Florida Sun Sentinel's Cindy Krischner Goodman reported. The settlement marks what may be the end of an unsettling period in the system's history, which has included a high rate of leadership turnover and criminal charges that have since been dropped.
The allegations against Grant stemmed from an investigation steered by general counsel Lynn Barrett, who had clashed with Grant, as the Sun Sentinel reported. Barrett was fired last fall after being accused of creating a toxic work environment.
The waiver authorizes a program that other states have successfully used to lower insurance premiums.
The Centers for Medicare & Medicaid Services signed off Wednesday on Colorado's request for a waiver to run a reinsurance program.
The decision means Colorado has the federal government's approval to run the program for two years, beginning January 1, 2020. The approval was granted under Section 1332 of the Affordable Care Act.
Colorado is the ninth state to secure such a waiver for a state-run reinsurance program since 2017, and several other states have applications pending, according to the Kaiser Family Foundation.
The reinsurance programs have been shown to effectively lower health insurance premiums in Alaska, Minnesota, and Oregon.
The new rules add administrative hurdles to the process by which hospital owners can close facilities or reduce services.
A law that took effect in Illinois this month makes it more challenging to shutter hospitals and other healthcare facilities in the state.
The law, which Gov. J.B. Pritzker signed July 15, requires that owners secure a permit from the Illinois Health Facilities and Services Review Board before they can close a hospital, ambulatory surgical center, nursing home, or other healthcare facility. It also limits how often owners can apply to discontinue a service line to no more than once every six months.
The measure was born out of a controversy involving Los Angeles–based Pipeline Health's purchase of Westlake Hospital, a 230-bed facility in the Chicago suburb Melrose Park, as Peter Hancock reported for Capitol News Illinois.
When it bought the hospital, along with two others, from Tenet Healthcare Corp. in January, Pipeline Health indicated plans to keep the hospital open, saying it has "a proven model for saving and sustaining smaller hospitals that are cornerstones of the communities" in which the company operates. But the company reversed course within a few weeks and announced plans to close Westlake Hospital, which serves a sizable low-income population, as Hancock reported.
It's unclear whether the new law, which took effect immediately, will affect Pipeline's planned closure of Westlake Hospital.
A major insurer, once the largest in Minnesota, is 'co-creating' a provider group with a health system, while they hasten healthcare's reinvention.
Blue Cross Blue Shield of Minnesota President and CEO Craig E. Samitt, MD, MBA, doesn't think vertical integration will solve the healthcare industry's problems.
Samitt's take is an interesting one, especially for someone who spent seven years at the helm of the vertically integrated Dean Health System. It's an interesting take also for someone who's currently the top executive of a payer organization that's making a major investment in a provider.
BCBS of Minnesota announced a strategic investment last month in 20 primary care and specialty clinics. But the transaction isn't a merger or acquisition. The health system's investment is buying just a minority stake in the clinics, which will continue to be majority-owned by North Memorial Health, a two-hospital system based in Minneapolis–St. Paul, Minnesota.
The health plan isn't getting into the hospital business, and the health system isn't getting into the insurance business, Samitt tells HealthLeaders. Instead, the two organizations are working together to establish a joint venture with its own leadership and the freedom to innovate as it sees fit, to align its entire strategy around the consumer, he says.
"We as partners are co-creating what we believe the future of care delivery will look like, should look like, can look like, not what it's just historically been," Samitt says.
One major metric by which the health plan and health system will track the success of their venture is the cost of care, which they aim to reduce by up to 20% over five years through value-based care principles.
The move comes as insurers look for ways to more directly influence the care their beneficiaries receive. That has prompted some to take a hands-on approach to clinics and physician groups. Blue Cross and Blue Shield of Texas, for example, announced a partnership last spring to open 10 advanced primary care clinics in Dallas and Houston in collaboration with Sanitas USA, which already had clinics with Blues plans in Florida and New Jersey.
The trend toward vertical integration among health plans and providers follows the success of UnitedHealth Group's Optum, which has been modeled by other major insurers. It comes also as CVS Health awaits a judge's final approval for its Aetna acquisition.
But, again, this joint venture in Minnesota isn't a merger or acquisition.
'Vertical Integration Isn't the Way'
The main reason why BCBS of Minnesota isn't pursuing a full-scale acquisition of North Memorial's clinics, Samitt says, is because the relationship between payers and providers should be collaborative.
"We see a lot of vertical integration: hospitals employing physicians, health plans buying medical groups, pharmacy companies buying health plans," he says. "But the reality is that, at least in my experience, acquisitions don't necessarily lead to—and frankly often have not led to—what we want to see, which is enhanced outcomes, greater affordability, better service."
Samitt says his views on this topic were shaped largely by his experience at Dean Health System, which SSM Health acquired in 2013. As a result, he hasn't been an advocate for vertical integration, even as a wave of consolidation has rippled across the U.S. healthcare landscape in recent years.
"Our industry has always approached improvement with the philosophy that bigger is better. And the reality is bigger is often not better. Better is better," he says. "Our industry can't continue to seek to solve its problems by merging, acquiring, or controlling another sector of the industry."
Instead, industry leaders should focus their energy on reinvention and improving quality, service, and affordability—tasks done best with a "shoulder-to-shoulder" approach, he says.
"Vertical integration isn't the way, partnership is the way," he adds.
Noting that he leads a nonprofit organization, Samitt says the collaboration between BCBS of Minnesota and North Memorial is about mission over margin.
"Our goal is to be a better system and to have a better organization," he says. "If we become bigger as a side effect, that is great. But that is not our primary intent."
'An Ounce of Prevention'
Samitt says he's worried about the trajectory of U.S. healthcare. If incumbent organizations don't reinvent themselves, he says, then the likes of Amazon, Google, Walmart, and Target will "reinvent it from the outside."
The cause is especially pressing, he says, as healthcare costs continue to rise at an unsustainable rate. Rather than fighting with each other, the industry's experts should focus on aligning their interests around ways that improve health outcomes and lower cost.
"We use the expression that 'an ounce of prevention is worth a pound of cure.' But that's not how our industry works," Samitt says. "For me, primary care is in the ounce."
The healthcare industry hasn't invested effectively in primary care and other types of "upstream care," which includes wellness and prevention strategies, social determinants of health, and other factors that can mitigate a population's need for higher-acuity care, Samitt says.
That's the idea behind the health plans investment in primary care.
"The reality is that if we address all the upstream drivers of health, even the demand for traditional primary care services diminishes because we're just a generally healthier community," he says, "and I think the future will be very much about investing much more deeply in upstream care and services."
BCBS of Minnesota and North Memorial said their shared ownership of the clinics will begin in January, but they hinted also that there may be more to come, describing the venture as "just the beginning of their relationship" and "an important first step in revolutionizing" care delivery in Minnesota.