The Academy Table with Renee DeSilva

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In this episode, Robin Brand and Naj Khan discuss the pressing workforce challenges facing health systems, particularly the clinician shortages and rising costs. They explore how technology and AI are being adopted to address these issues, revealing a gap between interest and implementation. The conversation also covers staffing strategies, care model redesigns, and the importance of tailoring solutions to meet the specific needs of different clinical roles and settings.

Welcome to the Health System CXO Podcast, sponsored by The Health Management Academy, featuring content designed for Health System Nurse Executives, Health Equity Officers and Strategy Executives provided by our company SME's - Anne Herleth, Jasmaine McClain, Ph.D. and Jackie Kimmell.

Subscribe today and receive the latest insights from the country's leading Health System CXO experts regularly, helping you remain current and guide your health system strategy with thought leadership and success.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

About The Health Management Academy:Since 1998, The Health Management Academy has cultivated the premier community of healthcare's most influential changemakers from the top U.S. health systems and innovative industry partners. We power more than 2,000 health system senior executives and 200 industry organizations through exceptional peer groups, original market insights, world-class leadership development programs and novel member alliances. Our industry-leading programs and solutions enable members to facilitate meaningful relationships, navigate strategic transformation and address critical industry issues. To learn more, visit hmacademy.com and follow The Health Management Academy on ...

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In this episode of the Health Systems CXO podcast, Brian Contos discusses the current challenges facing health systems, including financial pressures and policy changes. He emphasizes the need for health systems to rethink their growth strategies, focusing on operational scale through AI and site of service optimization.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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In this conversation, Anne Herleth discusses the critical importance of governance in healthcare AI, emphasizing the need for practical rules to manage AI effectively. She introduces four key rules: the 50-50 rule for balancing quick wins with long-term transformation, the 80% rule for choosing good enough solutions, the one-in-two-out rule for managing vendor relationships, and the 12-month rule for adapting to rapid changes in technology.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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In this episode of the Health System CXO podcast, Robin Brand interviews Nick Bartz, co-founder and CEO of Kairon Health. This conversation covers the importance of understanding the operational realities of healthcare, the role of technology in facilitating change, and the challenges of implementing value-based care.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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In this episode, Jess discusses the strategic communication necessary for healthcare leaders to advance health equity amidst changing legislation. The conversation emphasizes the importance of aligning health equity initiatives with organizational priorities, understanding stakeholder needs, and the role of influence in driving change. Jess highlights the significance of executive buy-in while cautioning against relying solely on it, and stresses the need for a robust communication strategy to effectively convey the importance of health equity in healthcare systems.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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This conversation explores the impact of AI on nursing care delivery, focusing on the challenges of nursing workload and labor costs. Anne Herleth discusses various AI pilot projects that aim to improve patient safety and nursing education, highlighting successful outcomes and the importance of nurse involvement in AI implementation.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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In this conversation, Felicity Yost, co-founder and CEO of TIA, discusses the evolution of women's healthcare through the lens of her company, TIA. Starting as a health information app, TIA has transformed into a full-service clinic model that emphasizes holistic care, patient relationships, and innovative solutions to address the unique needs of women. Felicity shares insights on the challenges of traditional healthcare models, the importance of technology in operations, and the need for a more integrated approach to women's health. She also highlights the significance of patient experience and the potential for partnerships with health systems to improve access and quality of care.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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This conversation explores the rise and fall of Walgreens, focusing on its healthcare strategy and the challenges it faced in the retail pharmacy market. The discussion highlights key events, including the merger with Alliance Boots, the impact of online competition, and the company's attempts to diversify into healthcare delivery. It also examines the lessons learned from Walgreens' struggles, particularly the importance of having a pharmacy benefit manager (PBM) and the difficulties of transforming a legacy business in a complex regulatory environment.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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In this episode, Jess Evara discusses the transformative potential of artificial

intelligence (AI) in healthcare, particularly focusing on ambient listening

technology. The conversation explores how AI can enhance health equity, improve

accountability, and address disparities in health outcomes. Key insights include

the benefits of ambient listening in fostering deeper patient-provider connections,

improving documentation accuracy, and the overall positive reception from both

providers and patients. The episode also highlights the broader implications of AI

in healthcare accountability and the importance of securing buy-in from

stakeholders for successful implementation.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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In this conversation, Anne Herleth and Nadia Critchley discuss the critical need for investment in nurse manager development. They explore the challenges faced by nurse managers, the importance of change leadership over change management, and the tangible impacts of leadership development programs on healthcare systems. The discussion emphasizes the necessity of equipping nurse managers with the skills to lead effectively in complex environments, ultimately driving better patient care and organizational outcomes.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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In this conversation, Anne Herleth discusses the critical role of nurse managers in healthcare and how health systems are failing to support them. She highlights the increasing responsibilities of nurse managers, the challenges they face with workload and burnout, and the need for strategic initiatives to improve their working conditions. The conversation emphasizes the importance of understanding nurse manager workload, the implications of overwork on health systems, and the necessity for organizational support and leadership development.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Dan Lilienquist, Chief Strategy Officer at Intermountain Health, joins Health Systems CXO to discuss rural healthcare challenges and how the hub-and-spoke model and virtual hospitals are reshaping care delivery. From advocacy to innovation, this episode highlights scalable solutions to improve clinical outcomes and bridge healthcare disparities.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Your Health System CXO podcast host Jasmaine McClain & David Zuckerman, president and founder of the Healthcare Anchor Network, discuss the transformative potential of health systems as anchor institutions in addressing community disinvestment and economic insecurity. Together they emphasizes the importance of leveraging hiring, purchasing, and investing practices to create equitable local economies.

Key Takeaways
1.Health systems can leverage their resources to address economic inequities.
2.The Healthcare Anchor Network aims to create racially equitable local economies.
3. Impact investing can yield both financial and social returns.
4. Aligning health system goals with community needs can enhance impact.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Anne Herleth, your Health System CXO Podcast host discusses the critical role of nurse managers in healthcare and how health systems are failing to support them. Anne highlights the increasing responsibilities of nurse managers, the challenges they face with workload and burnout, and the need for strategic initiatives to improve their working conditions.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Your Health System CXO podcast host Jasmaine McClain has special guest Rachel Thornton join her to discuss health equity. Rachel, pediatrician and healthcare executive at Nemours Children's Health, discusses her journey in healthcare leadership and the importance of health equity.

Key Takeaways
1.Health equity is a core focus at Nemours Children's Health.

2.Investing in children's health yields long-term societal benefits.

3.Collaboration across teams is essential for health equity initiatives.

4.Listening to frontline staff enhances understanding of patient needs.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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This week on the Health System CXO Podcast your host Anne Herleth discusses the perspectives of frontline nurses, focusing on their information sources, trust issues with leadership, and the importance of effective communication.

Key Takeaways

1.Frontline nurses need more information about emerging innovations.

2.Peer influence is significant during periods of change or stress.

3.Less than half of nurses look to their direct manager for information.

4.Social media is not a primary source of information for nurses.

5.There is a communication gap between executives and frontline nurses.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Join your Health System CXO Podcast host Jackie Kimmell as she discusses the critical topic of site neutrality in healthcare payments, exploring its implications for health systems and the evolving legislative landscape. She highlights the bipartisan momentum towards site neutral payments, the potential cost savings for Medicare, and the importance of understanding these changes for healthcare executives.

Key Takeaways
1.Site neutrality is a growing concern for healthcare leaders.

2.Bipartisan momentum is shifting towards site neutrality in legislation.

3.MedPAC has consistently advocated for site neutral payments.

4.Potential savings from site neutrality could be significant for Medicare.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Your Health System CXO Podcast host Jasmaine McClain discusses the challenges health equity leaders face in driving real change despite having leadership buy-in. Jasmaine emphasizes that buy-in is not enough and outlines three key factors for success: clear internal alignment, translation of system priorities into executive priorities, and demonstrating the value of health equity investments. McClain shares examples from health systems that effectively integrate health equity into their missions, cultures, governance, and strategies, providing actionable steps for leaders to create champions for health equity within their organizations.

Key Takeaways:
1.Leadership buy-in is necessary but not sufficient for health equity.

2.Health equity should be integrated into all operations.

3.Successful health systems align their missions with health equity goals.

4.Clear governance is essential for prioritizing health equity.

5.Health equity can drive strategic growth and consumer experience.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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**Your Health System CXO podcast host Anne Herleth and Lauren Rewers discuss the findings from a research study on frontline nurses' perceptions regarding safe staffing and the use of AI in healthcare. They explore the low confidence levels among nurses about their organizations' commitment to safe staffing, the preference for human-centered solutions, and the significant communication gaps that exist.

Key Takeaways
1.Frontline nurses have low confidence in safe staffing.

2.There is a divide between frontline nurses and administrators.

3.Human-centered solutions are preferred over technology.

4.Nurses prioritize patient outcomes over technology adoption.

5.Effective communication is crucial for nursing transformation.**

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Summary

Your CXO host Jackie Kimmell discusses three significant developments in the healthcare sector that highlight innovative approaches to value-based care and investment. The first topic covers the surprising acquisition of Summa Health by General Catalyst, exploring the implications of this investment for healthcare systems. The second segment focuses on Longitude Health, a new collaborative initiative among several health systems aimed at driving innovation and efficiency in value-based care. Finally, Jackie delves into Risen Health, a consortium that aims to transform healthcare delivery through technology and shared resources, featuring insights from Chris Cornue on the motivations behind these partnerships.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Our Health System CXO podcast host, Jasmaine McClain interviews Mikelle Moore, a seasoned healthcare executive with over 25 years of experience. Together they discuss the challenges of healthcare leadership, the importance of health equity, and the role of impact investing in addressing social determinants of health.

Key Takeaways:
1. Healthcare is challenging, and leaders must prioritize self-care.

Success in healthcare comes from collaboration and shared visions
Leaders should not fear admitting mistakes and redirecting efforts.
Health equity should be embedded in all aspects of healthcare.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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**Anne Herleth, your Health System CXO podcast host, discusses the perspectives of frontline nurses regarding AI in healthcare. Anne highlights the misconceptions surrounding nurses' opposition to AI, presenting data that shows a more nuanced view. Anne also emphasizes the need for understanding and collaboration between nurses and AI to improve healthcare delivery.

Key Takeaways
1. Understanding the perspective of the frontline nurse is crucial.**

2. Nurses are not universally opposed to AI; they are ambivalent.

3. AI can help nurses do their job better and spend more time with patients.

4. Job security isn't the top concern for nurses; patient care is.

5. Data integrity and reliability are major concerns for nurses.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Jackie Kimmell, your Health System CXO host discusses the emerging trend of cost transparency in healthcare, focusing on the rise of companies like Surest that offer innovative insurance models aimed at reducing out-of-pocket costs for patients. Jackie highlights significant data points indicating a shift in employer-sponsored insurance offerings and the implications of rising healthcare costs for employers and health systems.

1.The growth of Surest indicates a significant change in employer-sponsored insurance offerings.

2.Cost transparency disruptors are changing how patients make healthcare decisions.

3.Employers are facing unprecedented increases in healthcare costs, projected at 8-9% for 2025.

4.Health systems may need to adapt their strategies in response to these disruptors.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Your Health Systems CXO Podcast host Jasmaine McClain focuses on the intersection of health equity and healthcare quality, highlighting how health systems are integrating these two vital areas. Jasmaine also explores the growing trend of health equity teams reporting through quality leadership. She also touches on the challenges health systems face, such as administrative burdens in quality reporting and the nascent development of health equity strategies.

Key Takeaways:
1.Integration of Health Equity and Quality: Health systems are increasingly integrating health equity into their quality work, with many equity teams now reporting through quality leadership—a significant shift toward addressing health disparities.

2.Challenges in Quality Reporting: Administrative burdens remain a challenge for health systems, with immense resources required to meet quality reporting demands, as evidenced by research showing it can take over 100,000 person-hours for a single hospital to report on quality metrics.

3.Evolving Health Equity Strategies: Health equity is still an emerging focus, with most health equity executives in place for three years or less. Building the capacity and infrastructure to tackle equity challenges is still in its early stages.

4.Leading Examples in Health Equity: Organizations like Novant Health and NYC Health and Hospitals are leading the way by integrating equity into their strategies and operations, utilizing innovative approaches like trans-cultural health managers and diverse board leadership to drive progress.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Your Health System CXO Podcast host Anne Herleth brings a very special episode about Virtual Nursing. Virtual nursing is a solution that is gaining popularity in the healthcare industry. It involves a virtual nurse overseeing or supporting care delivery by a bedside team. Virtual nursing is not outpatient telehealth or behavioral coaching, but rather a way to enhance the work of bedside nurses. It can improve nurse satisfaction, patient experience, care quality, and care efficiency. However, to achieve the best ROI, virtual nursing needs to be integrated into the core care model and not just used as a tool.

Key Takeaways:
-Virtual nursing is a promising solution for healthcare organizations facing workforce and financial challenges.

-Virtual nursing can improve nurse satisfaction, patient experience, care quality, and care efficiency.

-To achieve the best ROI, virtual nursing should be integrated into the core care model.

-Scaling virtual nursing pilots requires careful planning and frontline involvement.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Jackie Kimmel, your Health Systems CXO Podcast host for Strategy Executives, discusses the challenges and trends in Medicare Advantage (MA) contract management. Jackie highlights the declining yield from MA contracts and the negative impact on health system financial sustainability. The increasing number of audits, denials, and prior authorizations from MA payers is also a major pain point for health systems. Contract terminations are becoming more common, with many health system executives considering terminating at least one major plan in the next year. The viability of provider-sponsored health plans in MA is also discussed, with some systems slowing down growth while others see it as a leverage point in negotiations.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Our CXO Podcast host Jasmaine McClain brings on special guest Dr. Joseph Betancourt, President of the Commonwealth Fund, to discuss health equity and the work being done to improve healthcare for diverse populations. Dr. Betancourt highlights the role of the Commonwealth Fund in advancing health equity and emphasizes the importance of addressing issues such as primary care, Medicaid payment and reimbursement, and the social drivers of health.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Nurse Executives this episode is FOR YOU! The Health System CXO Podcast host Anne Herleth discusses the challenges and solutions in the nursing workforce. Anne highlights the financial aspect of health systems and the need to think differently about workforce costs. She also addresses the issues of turnover, shortages, workload, and clinical competence in the nursing profession. Anne emphasizes the importance of transforming the care delivery model to address these challenges.

Key Takeaways:
-Health systems need to think differently about workforce costs and find new solutions.

-Turnover, workload, and clinical competence are major challenges in the nursing profession.

-Shortages in the nursing workforce vary by region and can have different impacts.

-Transforming the care delivery model is crucial to addressing the challenges in the nursing workforce.

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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**On this episode of The Health System CXO Podcast, Jackie Kimmell, Sr. Director - Member Insights at The Health Management Academy, discusses Medicare Advantage (MA) and its impact on health system executives.

She also discusses the growth and significance of MA in the healthcare industry, the profitability for payers, the benefits and challenges for beneficiaries, and the struggles health systems face. She also highlights the regulatory changes and headwinds that have affected the profitability of MA plans, leading to decreased margins for payers and lower yields for health systems.

Lastly - she shares the insights Strategy Executives need to know regarding the variations in MA penetration across different markets and the importance of understanding the MA landscape for healthcare executives.

Key Takeaways
-Medicare Advantage (MA) is a major topic of concern for health system executives due to its significant impact on the healthcare industry.**

-Payers have prioritized MA and have seen high profit margins, but regulatory changes and headwinds have affected their profitability.

-MA offers benefits such as low premiums and supplemental benefits, but there may be hidden downsides and challenges for beneficiaries.

-Health systems have contracted with MA plans to benefit from higher reimbursement rates, but they face challenges such as claims denials and lower yields.

-**Understanding the MA landscape is crucial for healthcare executives to navigate the changing market and ensure financial sustainability.

Chapters
00:00 Introduction and Podcast Evolution**

00:27 The Significance of Medicare Advantage for Health System Executives

03:02 Medicare Advantage: Profitability and Challenges

07:38 Regulatory Changes and Headwinds in Medicare Advantage

09:31 Variations in Medicare Advantage Penetration Across Markets

12:23 Challenges Faced by Health Systems in Medicare Advantage Contracts

17:21 Navigating the Medicare Advantage Landscape as a Healthcare Executive

The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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**This Podcast with CXO host Jasmaine discusses how health systems can effectively address health disparities by embedding equity into every aspect of their operations. Jasmaine outlines five key hallmarks of committed health systems: 1) having a community-oriented board, 2) ensuring public-facing accountability, 3) fostering a "C-suite Justice League" for collaborative leadership, 4) having a CEO who openly learns and grows, and 5) avoiding the "smart talk trap," focusing on actionable change rather than just talking about it. Our THMA host also highlights examples of organizations successfully implementing these practices.

Key Takeaways:**

Community-Oriented Board: Effective health systems engage community leaders to ensure their priorities align with the communities they serve.
Public Accountability: Transparency in progress and financial commitments is crucial, exemplified by Providence's public health equity report.
Collaborative Leadership: Health equity requires a team effort from the entire leadership, not just a single leader or department.
CEO's Public Learning: CEOs should embrace public learning, fostering a culture of continuous improvement.

Action Over Talk: Organizations should prioritize meaningful actions over merely discussing health equity.

Welcome to the Health System CXO Podcast, sponsored by The Health Management Academy. We're introducing three new streams of content designed for Health System CXOs AND hosted by The Health Management Academy's subject matter experts for Health System Nurse Executives, Health Equity Officers and Strategy Executives - Anne Herleth, Jasmaine McClain and Jackie Kimmell. The Health System CXO Podcast activates health system leaders towards outcomes and scalable solutions you can implement now.

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Welcome back to The Table Podcast with Renee DeSilva, where she and Diana Nole, CVP, Health & Life Sciences, Microsoft, explore the ever-evolving landscape of artificial intelligence and its profound impact on healthcare.

AI has taken incredible strides over the past five to 10 years, and Renee and Diana delve into Gen AI, the fastest-growing consumer software application in history. From its scalable human likeness to exploring its threefold impact on insight extraction, user interaction, AI is already projecting far-reaching effects in healthcare.

Diana's passion for problem-solving and her early curiosity for technology paved the way for a dual degree in computer science and math. She shares how embracing curiosity and recognizing technology's omnipresence equipped her to engage in pivotal conversations. A dedicated advocate for diversity, equity, and inclusion, Diana's personal mission is to inspire young girls during their formative years to pursue fields in math, science, and technology.

As our conversation unfolds, Diana circles back to the essence of successful partnerships. She unravels the hallmarks of a good partnership, emphasizing the importance of creating a win-win for all parties involved and stresses the significance of understanding mutual benefits and fostering honesty about each party's capabilities. According to Diana, finding equilibrium among stakeholders is a delicate yet crucial process.

The Table Podcast, hosted by Renee DeSilva, CEO of The Health Management Academy, amplifies real conversations about the healthcare issues that matter. Renee DeSilva, a highly experienced professional in the healthcare industry for over two decades, is widely recognized as a sought-after speaker, moderator, panelist, and host. Her expertise is informed by The Health Management Academy's extensive portfolio of over 65 annual events, where she engages with C-Suite healthcare decision-makers and innovators. This exposure gives her a unique and valuable perspective on the industry's challenges and opportunities.

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On today's episode of The Table Podcast, Renee DeSilva - CEO of The Health Management Academy - sat down for a conversation with Dr. Janice Nevin, the President and CEO of ChristianaCare, who brings over 21 years of dedication to the mission of service.

In this episode, Renee explores Dr. Nevin's unwavering commitment to ChristianaCare's mission, delving into her perspective on cultivating a culture at scale and activating for the love of health. Driven by the core values of courage and resilience, she shares insights into how organizations thrive during turbulent times through a strong connection to their mission.

Learn how leaders can shape the culture that drives success by prioritizing communication, engagement, and a deep understanding of core values while leveraging technology including generative AI. Also discussed is ChristianaCare's approach to care delivery and innovation, where Dr. Nevin emphasizes the human aspect of healthcare. Discover how innovation can enhance both provider efficiency and the patient experience, creating a healthcare environment that is personalized, accessible, and focused on continuous relationships.

As the conversation unfolds, Renee and Dr. Nevin circle back to developing mission-driven goals, exploring ChristianaCare's commitment to zero disparities. Dr. Nevin shares how this aspiration is not just a strategic plan but an integral part of the organization's DNA, influencing every aspect of their work.

Join us at The Table for an insightful conversation with Dr. Janice Nevin, where leadership insights, mission-driven strategies, and the love of health take center stage.

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Welcome to The Table podcast, where we gather the most insightful voices in healthcare to discuss the pressing issues and innovations shaping the industry.

In this episode, The Health Management Academy's CEO and host of The Table Podcast, Renee DeSilva, sat down with Tammy Daniel, the Senior Vice President and Chief Nursing Officer at Baptist Health Florida. Tammy shared her invaluable insights on how to support existing nurses on their professional and leadership journeys, as well as exploring innovative strategies to cultivate the nursing pipeline.

Under Tammy's leadership, Baptist Health Florida has taken a deliberate approach to early-career leadership development. They've implemented programs like an internal nurse manager academy and upskilling initiatives to prepare existing talent for specialized, technical roles. This forward-thinking approach recognizes the need for creativity and innovation in addressing the complex challenges of the nursing workforce.

Tammy also shared her insights on the role of mentors in identifying strengths and helping individuals recognize their blind spots—a powerful aspect she aptly calls "the power of the nudge" and explored the importance of adapting management and communication styles based on the audience and responsibilities at hand, emphasizing that effective leaders must be flexible and adaptive.

Join us at The Table, where we engage in thought-provoking discussions with healthcare leaders who are pioneering change, addressing critical issues, and shaping the future of healthcare. Tune in to gain fresh perspectives and valuable insights on the dynamic world of healthcare leadership.

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The Health Management Academy's Table Podcast welcomes David Feinberg, M.D., MBA to the table with our host and CEO, Renee DeSilva, for an enlightening discussion AI and the impact to healthcare, as well as Oracle's vision and priorities in healthcare.

As the Chairman of Oracle Health, David leads the vision and strategy of Oracle's healthcare division, leveraging over 25+ years of experience in the field. He joined Oracle in October 2022, after serving as the CEO of Cerner Corporation, one of the largest healthcare IT companies in the world. In this role, David is driven by the mission of improving the health and well-being of people and communities, and he is firmly committed to advancing the state of the art in healthcare through Oracle's products and services.

Renee and David discuss Oracle’s global perspective, attained from serving a diverse array of clients worldwide. David takes us through how tech and data is leveraged differently outside the US, from prescribing operas in Egypt to building interoperability with 14 million daily records at the UK’s National Health Service.

Finally, Renee and David discussed the pace of AI change and how to ensure it does more than just complicate existing problems. Renee's favorite quote from David during the conversation? AI won’t replace doctors, but it will replace those who don’t use it.

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Welcome to another episode of The Health Management Academy's The Table Podcast. In this conversation, our host and CEO Renee DeSilva, engages in a thought-provoking dialogue with Dr. Angela A. Shippy, MD, FACP, FHM, Senior Physician Executive, Nonprofit Healthcare at Amazon Web Services (AWS).

Listen in as Renee and Dr. Shippy delve into the heart of The Health Management Academy's AWS Technology Fellows program—an initiative that unites promising technology leaders. Together, they explore how this program empowers these leaders with a blend of essential skills: from honing their leadership capabilities to enriching their business acumen and deepening their technical healthcare expertise. The overarching goal? Equipping them to spearhead their organizations into a future characterized by innovation and progress.

The conversation takes an enlightening turn as they traverse the dynamic landscape of healthcare's current evolution. Amidst transformative times, all stakeholders are rallying for a fresh approach to care delivery. The imperative to reimagine the healthcare landscape has never been stronger.

Naturally, the conversation turns to AWS's unwavering customer-centric ethos. Driven by an obsession with customer satisfaction, AWS is attuned to the resounding chorus of health systems across the nation. These institutions are voicing the desire for their leaders to possess unparalleled expertise in the realm of technology. As Renee and Dr. Shippy delve into this aspect, they reveal how AWS is responding to this demand. The conversation also navigates towards sculpting these high-potential technology leaders into future executives who will command and orchestrate the ongoing technological transformation.

Join us in this illuminating episode as we uncover the intricacies of leadership, technology, and the future of healthcare—all from the vantage point of industry visionaries.

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The Health Management Academy's Table Podcast welcomes Tina Freese Decker to the table for a transparent discussion with our host and CEO, Renee DeSilva. As President & CEO of Corewell Health, Tina is leading the way for Michigan's largest health system. With over 13 billion in revenue, 22 hospitals, and 60k team members, Corewell is making a huge impact, covering 1.2 million lives under its health plan.

One of the key takeaways from Renee's conversation with Tina is her belief in 'systemness' - finding the perfect balance between shared, systemwide goals and honoring local environments. It's incredible to witness how this vision is coming to life at Corewell, nearly eighteen months after the integration.

Renee and Tina also delved into Corewell's health equity initiatives, where they've made strides in vital areas like infant mortality and youth suicide prevention. Led by Dr. Lynn Todman, their dedication to engaging with local communities and building trust is truly inspiring.

Tina's reflections on her leadership philosophy were equally captivating, especially as she shared how it evolved over the years. Her emphasis on over communicating and over listening was a standout - a true testament to her commitment to fostering a thriving and united organization.

We look forward to witnessing Corewell Health's continued success and positive impact on the lives of so many.

Listen to more episodes: https://hmacademy.com/table-podcast/

The Table Podcast, hosted by Renee DeSilva, CEO of The Health Management Academy, amplifies real conversations about the healthcare issues that matter.Renee DeSilva, a highly experienced professional in the healthcare industry for over two decades, is widely recognized as a sought-after speaker, moderator, panelist, and host. Her expertise is informed by The Health Management Academy's extensive portfolio of over 65 annual events, where she engages with C-Suite healthcare decision-makers and innovators. This exposure gives her a unique and valuable perspective on the industry's challenges and opportunities.

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We look forward to witnessing Corewell Health's continued success and positive impact on the lives of so many.

Listen to more episodes: https://hmacademy.com/table-podcast/

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In this episode, Renee DeSilva is joined by Randy Haffner, Ph.D. the President & CEO of AdventHealth Florida. Together, they explore what it means to be a values-driven leader in a healthcare setting, as well as how values and mission as a faith based organization connect to consumer experience goals and service standards.

Highlights from the conversation:

• AdventHealth's consumer experience journey since 2019 (4:00)

• The distinction between consumers and patients (7:34)

• AdventHealth's service standards of love, safety, and simplicity (11:11)

• How Advent's care advocate program is improving care navigation (14:26)

• Why Randy believes leadership has to be a team sport (22:46)

• The concept that any organization is one generation away from losing its link to values (24:08)

• Why Randy would invite Nelson Mandela to his Table (33:15)

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In this episode, Renee DeSilva sits down with Liz Bickley, the COO of Korn Ferry Health, to discuss how to empower the next generation of women leaders in healthcare. Liz walks us through the findings of their latest ‘Women CEOs Speak’ report, including progress towards representation goals for 2025 and the variety of career paths and experiences for today’s women CEOs. In addition, they cover the evolving skillsets for the CEO of the future, and what organizations need to do today to support their high potentials.

Highlights from the conversation:

Liz’s background and the context of today’s talent challenges (2:50)
A breakdown of the Women CEOs Speak report (8:40)
The structural barriers that restrict opportunities and the talent pipeline (12:55)
Why tomorrow’s successful CEOs need to transform and perform (16:05)
Charting the non-linear career paths to the CEO position (20:20)
Organizational responsibilities for ensuring advancement opportunities (24:50)
Liz’s advice for women aspiring to become CEOs (24:40)
Why Liz would invite Jacinda Ardern and Queen Elizabeth II to her table (29:50)

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Renee DeSilva invites you to The Table, a podcast brought to you by The Health Management Academy. Twice a month, we’ll serve up new perspectives on the key issues in healthcare, featuring innovators from across the industry. We believe if the right leaders have a seat at The Table, relationships thrive, and real change is possible.

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Highlights from the conversation:

How Sage’s clinical and social training work influenced her current role (2:37)
Facing the challenges of philanthropy work in health systems (7:16)
Playing the long game in fundraising (11:06)
Using the power of storytelling (15:03)
Addressing the challenges of generational differences in giving (18:17)
How to engage the CEO and health boards around the philanthropy mission? (24:02)
Sage’s dream table and concluding thoughts (30:05)

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Highlights from the conversation:

Growing up in Nigeria and seeing firsthand the role of government (2:25)
The state of health care policy today (6:18)
Advice to policy makers on how to build effective messaging for their position (14:44)
Adaeze’s move to a private equity firm (WCAS) (17:50)
Opportunities to create value in healthcare (22:20)
What challenges are healthcare boards facing today? (25:18)
Leading as a woman of color on a board (32:11)
Adaeze’s dream table and concluding thoughts (34:25)

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Highlights from the conversation:

Nursing workforce challenges (2:37)
Bringing joy and meaning back into work (9:13)
Working with your executive teams (16:24)
Transforming the nursing workforce (20:56)
Mary Ann’s dream table (23:49)

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Highlights from the conversation:

Introduction to today’s guest, Dr. Cheryl Pegase. (0:07)
How does Walmart’s vision for healthcare work. (2:33)
What has science taught us about well being. (5:36)
Walmart’s take on the access barriers in healthcare. (11:01)
The power of an organization with roots in retail applying zip code-level insight to the healthcare challenge (15:51)
How do you move with greater speed and intention and decision-making? (21:01)
When I started, we needed to connect all of our assets to one platform (23:59)
How does Cheryl’s personal experience show up in her leadership and identity? (30:36)
Lean into the people who want to support you and say no to those who do not. (34:52)
How do we improve care? How do we get people to participate in clinical studies? (40:14)

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Highlights from the conversation:

Pete’s background and career journey (2:25)
Channeling AI from other industries (4:40)
The landscape of AI in healthcare today (6:18)
Defining “artificial intelligence” (8:34)
Maturity on the common use cases (10:04)
Implementing AI for greater team member efficiency (18:46)
Measuring ROI (25:44)
What success looks like in an ever-evolving future (29:45)
Advice for board members (38:29)
Microsoft and Nuance partnership (41:50)
Pete’s dream table (46:44)

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Highlights from the conversation:

Maxine’s background and career journey (3:13)
The opportunity of “the great resignation” (7:35)
Reimagining the employee experience (12:50)
Building from non-traditional backgrounds (17:41)
Incorporating values into day-to-day work (24:12)
Why equity and inclusion matters (28:22)
Maxine’s dream table (35:29)

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Highlights from the conversation:

Cindy’s early shaping influences (3:32)
The deeply emotional Pyx origin story (5:24)
Defining loneliness (7:56)
Resolving loneliness (10:22)
Technology with compassion (15:20)
Highlights of the Thrive program (18:10)
Starting with government-insured populations (20:28)
Future partnerships and growth (23:27)
Navigating a deeply emotional origin story (26:46)
Being the only _____ in a room (30:00)
Cindy’s dream table (32:51)

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Highlights from the conversation:

Roxanna’s background and career journey (2:31)
About WellSpan Health (5:59)
Reimagining the patient experience (7:20)
Using technology to further a mission (10:39)
Partnership as a key part to strategy achievement (14:49)
CEOs coming from a nursing background (18:10)
Building pathways to executive leadership (21:54)
Roxanna’s dream table (24:30)

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Highlights from the conversation:

About Healthcare Climate ActionWorks (3:06)
Neal’s background and career journey (4:10)
Why the climate crisis is a healthcare crisis (6:22)
Taking the steps required to move forward (8:50)
Defining “net zero commitments” and “ESG” (10:49)
Good examples of change makers moving forward (15:17)
Thinking about governance and decision making (18:19)
The state of our progress today (21:06)
How to lead on climate action (25:26)
Neal’s previous books (29:49)
How to get started writing a book (31:29)
Neal’s dream table (33:45)

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Highlights from the conversation:

Daryl’s background and career journey (3:13)
Daryl’s personal experience with anxiety (5:30)
Managing the communication process with colleagues (9:34)
Caring about folks in the workplace (12:59)
The draw and mission of One Mind (14:47)
Getting behind the movement (18:40)
The importance yet insufficiency of resilience (21:17)
Foundational elements leaders need (23:57)
What it means to be mental health certified (26:01)
How to meet team members where they are (27:52)
5-year conversation target (30:22)
How to approach personal wellbeing (36:27)
Daryl’s dream table (39:49)

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Highlights from the conversation:

Pete’s background and career journey (2:17)
External versus internal C suite hires (6:34)
What’s different about the CEO position (8:46)
BSW’s new strategic direction (10:48)
How the pandemic has affected health care leadership (14:30)
BSW’s 10-year mission (22:45)
Succession planning (24:20)
Pete’s dream table (34:00)

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Highlights from the conversation:

Angela’s role and how she got there (0:30)
Key factors that shortened the time frame of creating the vaccine (9:44)
Global collaboration across the scientific community (14:29)
Moving forward with the lessons gleaned (18:48)
The behavioral side of light speed (24:51)
How to think about well-being in a stressed workforce (30:59)
Anegla’s personal background (36:15)
Angela’s dream table (44:28)

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Highlights from the conversation:

Heather’s background and career journey (2:38)
Defining “well-being” (7:51)
How ChristianaCare brought joy back to work (9:27)
Orchestrating strategy as a chief wellness officer (11:42)
What constitutes an organizational culture of well-being (13:40)
Bottoms-up things that have worked in a local environment (17:58)
Curating well-being based on gender and ethnic diversity (22:21)
The healthcare workforce rescue package (25:30)
What success looks like (28:49)
How to unplug and keep yourself grounded (32:00)
Heather’s ideal table (34:32)

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Topics in this conversation include:

The early forces that impacted Tom’s interest in healthcare (2:49)
Primary factors influencing healthcare workers to remain with an organization (6:16)
The power of a nudge to momentum building career roles (12:11)
Why women physicians are burning out at higher rates than their male counterparts (13:55)
Defining trust and how to cultivate it with patients and employees (19:35)
How to effectively provide transparent and curated patient feedback data (27:55)
The two people Dr. Tom Lee would invite for a conversation at his table (32:12)

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Highlights from the conversation:

Mia’s career journey (2:50)
Building a diverse board (7:32)
The Break into the Boardroom program (12:39)
The power of cultivating talent in rising leaders (15:08)
In-demand qualities for executive leaders (21:49)
Retaining talent in “the great resignation” (27:10)
Mia’s ideal table (32:50)

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Highlights from the conversation:

Dan’s background and career journey (3:35)
Managing benefits from an employee perspective (10:13)
Allocating Avalere Health’s first investment (12:13)
How Dan shapes his core team (14:34)
Avalere’s current undertakings (18:00)
The Kaiser partnership (22:11)
Adopting models you're not directly involved in (25:12)
Success measuring metric (27:26)
Patient affordability (28:43)
Passing on leadership lessons (30:53)
Staying grounded at a frenetic pace (34:29)
Dream conversation partners (37:11)

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In this year-end recap, Renee DeSilva highlights some of the key topics of The Table throughout 2021 as well as where episodes will focus in 2022. Health equity, the current challenges of health systems, and leadership characteristics were all themes this past year and Renee looks forward to discussing these topics further along with practical steps that health systems can take to make progress in these areas over the coming year. Renee wraps up this episode with sharing her personal and professional answer to the question she asks each guest -- who would they invite to their personally curated table for conversation and why.

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Topics in this conversation include:

Andrew shares successful methods from non-healthcare boards as they search for new members for their board with the goal of creating diverse, functional, effective boards. 3:44
Organizations are focusing on board diversity but in order to create this type of diversity, organizations will have to change how and where they look for board members. 12:09
Andrew discusses several tips for individuals looking to serve on boards, including preparing a board bio and questions the individual should ask a board before committing. 17:28
The commitment of being on a board should not be underestimated, specifically in regard to time, with around 8 hours of time being spent outside of board meetings for every hour spent in board meetings. 21:02
Andrew and Renee look at the workforce challenges facing the current healthcare industry and share thoughts about how this issue might be resolved in the next 3-5 years. 27:07

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Highlights from this episode include:

Anjali shares about her experience working with the Obama administration as an Entrepreneur in Residence with the FDA doing several 6-month appointments as well as serving as a Senior Technology Advisor. 2:00
Customer Relationship Management (CRM) is a tool that has widely been used for marketing strategies, but Anjeli shows how Mytonomy has expanded the use case of CRM so that healthcare patients can effectively and engagingly receive education. 9:05
Anjali discusses how quality, diverse video content engages patients more effectively than verbal or written instruction and how they are seeing better outcomes as a result of the information and education that they are providing. 13:55
Mytonomy is not only engaging patients, but also lightening the workload for doctors and nurses by taking over the education portion of their jobs, allowing them to focus on other imperatives. 17:16
Anjali looks at some of the challenges, opportunities, and influences of leadership, especially during the COVID-19 pandemic, giving the advice to focus on two things you can control, your own effort and attitude. 24:21

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Highlights in this conversation include:

Mike shares about his past successes and what brought him into the healthcare arena. 1:40
Mike provides insight into the process of coming up with Xealth and the trials and struggles they worked through to bring Xealth to the market. 3:07
The use of Xealth is already making an impact on people's lives and Mike shares positive outcomes that are being seen as a result. 11:12
The trust of a patient in their clinician and having clinicians recommend Xealth enables Xealth to be successful. 14:24
Xealth just completed a Series B funding that was completely from health systems and Mike discusses his philosophy on procuring funding from investors who have a vested interest in the outcome of the company. 18:22

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Highlights from the conversation include:

Sarah explains why she chose to focus on mental health, diversity and inclusion, advocacy, and philanthropy as key focuses when she became CEO of Sutter Health. 5:31
Sarah discusses how health equity is not treating everyone the same, but focusing on producing the same, equitable outcomes for every person. 12:25
California was able to greatly improve its maternal mortality rate due to focusing on equitable outcomes and not equitable care. 15:32
Sarah delves into the advantages of being an integrated delivery network and the positives that bring to the communities and patients. 23:58
Sarah shares her thoughts on the future of healthcare and the changes that need to be made to make healthcare more efficient. 29:20

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Topics in this conversation include:

Aneesh explains why he was chosen by President Obama to be the first Chief Technology officer and the goals that he had while in that position. 5:27
Aneesh discusses how transitioning to value-based care will drive interoperability among healthcare systems, providing higher quality, more connected care for patients. 16:00
There are handshakes and handoffs between the public and private sector that can occur to encourage the transition to value-based care. 25:28
Aneesh shares the sobering findings that Care Journey has uncovered in relation to health equity and ACOs. 30:20

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Highlights of this conversation:

Judy shares her predictions for the future of healthcare, incorporating the electronic health record into how doctors will make patient-facing decisions based on actual, current data. 2:01
Judy discusses the ways that Epic's Cosmos can benefit both clinicians and patients in the care that they provide and receive, specifically sharing examples that occurred during the COVID-19 pandemic as well as how their new version of peer review is impacting research publication. 6:01
Epic is privately owned and Judy provides insight into why this has been an important standing ground for her throughout Epic's history. 11:15
Vision casting 25 to 50 years into the future for Epic is a determining factor for Judy as she makes decisions on the behalf of the company. 13:13
Judy discusses leadership and how distribution of ownership plays a large role in the decision-making processes of Epic. 14:55
The culture at Epic has been designed to engage employees in ways that benefit the employee which in turn boosts productivity, benefitting both the employees and Epic. 17:30

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Topics in this conversation include:

While burnout is a common phrase even among healthcare students, organizations can design their culture for joy, healing, and passion in caring for others. 8:57
Sonia shares about the "Big E Experience" which involves designing experiences for everyone within an organization, starting with those who work for the organization as that is where true change and transformation begin. 11:19
Leading, looking, living, and loving are four guiding themes that guide Sonia and The Experience Lab in casting a vision and designing experiences for organizations. 16:28
Sonia discusses looking outside of the industry for inspiration, taking principles from many places and incorporating the feeling of personalization into many aspects of care within healthcare. 22:24
Diversity, equity, and inclusion has been a key area of focus for The Experience Lab over the past 18 months and Sonia shares how they are incorporating this into every aspect of their culture. 28:47

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Topics in this conversation include:

Healthcare has been stuck in a system of record transaction model during episodes of care versus more of a system of engagement model that is continuous. 2:00
Mike describes League and the platform solution that they bring to the healthcare space, bringing consumer-centric digital transformation to the industry. 8:38
Mike shares about his background, including working with Elon and Kimbal Musk, as well as how he is continually inspired by solving big problems that impact many people. 15:16
A mission-oriented team of generalists who know that failure is not an option brings value to an organization as they seek to solve problems and create effective solutions. 18:44
Mike discusses how power in platforms and ecosystems was a lesson learned from creating the Kobo eReader in competition with Amazon's Kindle and how fear as a motivator can create powerful change, continuing with how healthcare can benefit from the motivation of big tech taking over healthcare. 20:59

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Topics in this conversation include:

Stephen explains Inova's focus on people, excellence, and becoming a true system and how they will continue to focus all of their future transformation on these three key areas. 4:22
Inova is investing in physical infrastructure as well as virtual capabilities, making accommodations that will help them succeed in world-class, flexible care which will allow them to succeed regardless of the direction that healthcare goes over the next 20-30 years. 6:38
Stephen explains his science-based and people-based reasoning for moving forward with a COVID vaccine requirement for employment at Inova. 9:36
The leadership triad of a physician, nurse, and operations person within all of Inova's clinical service sites and major locations has allowed for quicker decision-making and more effective leadership. 11:53
The values of Inova drive all decision making allowing them to focus on the basics of providing world-class care and caring for the well-being of their employees in practical ways. 14:16
Stephen explains how their focus on both world-class care and patient focus has impacted their research department, focusing on practical solutions that can impact the patients currently in their care. 21:34

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Topics in this conversation include:

Florian discusses his international background and experience with healthcare and cost which has impacted his vision and philosophy for Cedar, describes Cedar as a company to those who come from the international world with no understanding of the US healthcare payment model, and shares the experience for his wife that launched his vision for Cedar. 1:58
Price transparency is more of a technology issue and communication problem than a willingness issue or data problem. 13:13
Florian shares several practical steps that Cedar is taking to improve the patient experience in regards to billing. 18:24
Improving the patient experience from start to finish, including the billing experience, improves overall patient satisfaction which in turn increases the payment collection rate as well as the speed in which payments are received. 21:19
Florian speaks about the importance of knowing yourself, your values, and your mission as a leader and as a company so that you can speak out about what is important to you as a person and a company without following every political or popular trend. 23:59

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Highlights in this conversation include:

Gene tells of personal experiences from his childhood with the best and worst of healthcare as well as how accidentally sitting in on an orientation for hospital management impacted his career in healthcare. 2:08
Geo-mapping allowed Atrium to specifically help not only zip codes but areas within zip codes that were being most affected by COVID and eliminate disparities as a result. 9:45
Rural and urban areas often struggle with similar disparities and access to care and how hospital at home has allowed Atrium to meet needs in both of these areas. 14:30
Sustainable change in the areas of diversity and inclusion must start at the board level having conversations, setting the tone, and initiating action. 20:07
Leading with vulnerability about personal experiences allows teammates to relate to you as a leader more personally and gives greater impact, affecting great change within the organization. 22:40
Gene is on the board of Best Buy and shares lessons he is learning on omnichannel approach, journey mapping customer experience, and impact on the community. 28:25

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In this episode, Erickajoy Daniels, SVP and Chief DE&I Officer, Advocate Aurora Health, joins Renee at The Table. They explore how Advocate Aurora has made an organization-wide commitment to equity-like leveraging its spending power through supplier diversity to benefit the community and engaging all team members, from providers to the executive suite.

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Highlights in this conversation include:

Brian discusses why tremendous growth is occurring in private equity (PE) investments as well as how this is impacting healthcare, specifically investments into pharma-related and specialized services. 2:19
Successful partnerships often focus on alignment of values, vision, strategy, and process. 9:24
A CEO's success is determined by the team that they build along with being able to execute strategic plans, having high EQ, and focusing on results. 22:27
Organizations must differentiate by focusing on doing a handful of things extremely well as well as focusing on what not to do so that they are not distracted from their main goals. 26:35
Brian describes how diversity is not only necessary socially and morally, but how it also is imperative for the success of businesses. 29:27

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Later, they discuss Dr. Ryu's evolving journey as a leader and how his unique intersection of identities – Gen X, Asian American, from a multigenerational household – impact his approach.

Dr. Ryu explains his nonlinear career path and how being exposed to communities different than his suburban upbringing impacted his career and his desire to bring better value and health to the communities that he serves. 3:02
As Geisinger considers their diverse patient mix, they are intentionally creating programs that provide proactive care for the people that they serve - 65 Forward senior care, a genomics program, Geisinger at Home, their Fresh Food Pharmacy, and more. 13:14
The measures that Geisinger is taking to provide proactive care is resulting in higher patient satisfaction rates, increased positive outcomes due to preventative measures being taken, lower ER and hospitalization utilization rates, and improved relationships with patients. 17:39
Geisinger is investing in the future of their community through the Abigail Geisinger Scholars Program which provides free tuition and a living stipend to medical students who commit to Geisinger in the areas of primary care and behavioral health. 23:12
Taking away the cost barrier for training of a diverse workforce is being utilized so that Geisinger can better serve a diverse population and bring equity to their service areas. 26:02

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Carl Armato, CEO of Novant Health in Winston-Salem is our guest in this episode of The Academy Table. Carl shares his journey into healthcare and details how he has created a culture of equity, diversity, and inclusion at Novant Health. We discuss how Carl embeds this focus into every aspect of their organization and how this has allowed them to improve overall health outcomes across the board.

Carl's family background, journey with Type 1 diabetes, career as a CPA, and path into healthcare 3:20
The role that the White Men's Caucus played in implementing equity, inclusion, and diversity and Carl's desire to have the entire organization transformed to include this focus 9:23
The impact focusing on equity, inclusion, and diversity has had within Novant and within their area of service as well as how Business Resource Groups have played a role 16:23
Improvements in health outcomes to all of the community due to the role of Business Resource Groups engaging within the community 19:53
Strategic initiatives within Novant and creating a change-ready, resilient team 23:43

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Terry Myerson shares about his introduction to technology, the internet, and Microsoft (2:25)
The three-dimensional filter Terry uses for evaluating and filtering data importance (5:46)
Why vision is key for dealing with competition and leading a team (7:11)
Terry describes how he began with Truveta and the company vision (9:07)
Input on why the healthcare industry has been behind the curve with technology transformation and how Truveta will take this into account while making an impact (12:55)
Privacy, ethics, and security are areas of top importance to Truveta (20:27)

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In this first episode of The Academy Table, host Renee DeSilva interviews Dr. Mary Jo Cagle, chief operating officer of Cone Health in Greensboro, NC. Together, they delve into the topics of diversity, women in the workplace, healing from discrimination, and Dr. Cagle's future.

Dr. Cagle's transition from owning her own practice to administrative leadership medicine (4:54)
Work-life balance as a woman leader and how leadership can encourage this balance within their team (8:23)
Creating intentionally diverse teams (11:21)
Explanation of and healing from the Simpkins versus Moses H. Cone Hospital case, a case pertaining the Equal Protection Clause (14:51)
The merger between Cone Health and Sentara Healthcare and the role Dr. Cagle will play moving forward (18:21)

Dr. Cagle shares from the heart with warmth and intelligence as we begin this new season of The Academy Table.

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The Academy Table is a podcast that serves up real conversations and an occasional good debate on issues impacting healthcare. The Table will feature the best healthcare leaders and thinkers – many of whom you will know, and some who we will introduce you to for the first time.

Our intention is to broaden who is at the table, to amplify important voices and perspectives with the potential to move the industry forward.

Our topics will be broad, but with a focus on the future of health, disruption, transformation, and the leadership lessons that endure.

I hope you will join us at The Table – subscribe now at the podcast platform of your choice.

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In this final episode of Fireside Chat, we sit down with Renee DeSilva, CEO, The Health Management Academy, to review top characteristics of health system CEOs and other leaders during the COVID crisis. Renee shared plans for Season 2 of The Academy podcast, called The Academy Table, what the name represents and how it will enhance The Academy experience.

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In this episode of Fireside Chat, we invited six CEOs, all of whom have appeared previously on the show to explore leadership beyond the crisis. We spoke about the lessons learned during the pandemic and how this crisis will shape healthcare and its leaders in the years ahead.

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In this episode of Fireside Chat, we sit down with Joseph Impicciche, President and CEO, Ascension, to talk about the explosion of telemedicine and virtual care among health systems. We also talked about the next generation of healthcare CEO's and how the COVID crisis will impact that generation in leadership.

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In this episode of Fireside Chat, we sit down with Lydia Jumonville, President and CEO, SCL Health to talk about the necessity of transforming care to become increasingly integrated and less expensive. We also discussed lessons learned for SCL in the COVID crisis and the importance of being transparent and clear in communication as a leader.

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In this episode of Fireside Chat, we sit down with Sandra Fenwick, President and CEO, Boston Children’s Hospital, to talk about the high level of Medicaid patients in children's hospitals and the need for more governmental support. We also discussed major trends in children's hospitals and outlined the successes and challenges that are inherent in leading a children's hospital.

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In this episode of Fireside Chat, we sit down with Marna Borgstrom, President, and CEO, Yale New Haven Health System, to discuss the growth of regional health networks, the threat to academic medical centers posed by the payment system, telemedicine, the likelihood of M&A caused by the coronavirus pandemic, and the role that health systems are playing to support the public health infrastructure.

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In this episode of Fireside Chat, we sit down with Pete McCanna, President, Baylor Scott & White Health to discuss lessons learned through COVID including the issue of large health systems planning for flex capacity as a contingency for future crisis. We also talked about vaccine distribution and Baylor's priorities for 2021.

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In this episode of Fireside Chat, we sit down with Michael Mussallem, Chairman and CEO, Edwards Lifesciences, to discuss the effects of the COVID crisis on healthcare and the key characteristics of a leader during a crisis. We also explore Mike's background and how he has helped Edwards become a global leader in the industry.

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In this special episode of Fireside Chat, we sit down with Tommy Inzina, President and CEO, BayCare Health System, to talk about opportunities for healthcare workers to attend the upcoming Super Bowl. We also discussed into issues of scale and the value of regional health networks in the future.

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In this episode of Fireside Chat, welcome back James Hereford, President and CEO, Fairview, to discuss how the system has dealt with the COVID crisis and lessons learned in dealing with the surge. We also talked about changes in financing and delivery, and what the next generation of health system CEOs will look like in the future.

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In this episode of Fireside Chat, we welcome back Tina Freese Decker, President and CEO, Spectrum Health, to discuss the effects of COVID on empowering consumers to change their demand profile which will cause health systems to move faster and in new ways. We also talked about vaccine distribution and the importance of the affordability issue to consumers.

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In this episode of Fireside Chat, we sit down with Todd Latz, CEO, GoHealth, to talk about the opportunity for improving quality and performance in sharing best practices across GoHealth national leading health system partners. We also discussed the necessary principles underlying what makes a partnership work well and how the system has responded to the COVID crisis.

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In this episode of Fireside Chat, we sit down with Warner Thomas, President and CEO, Ochsner Health System to discuss how a greater organizational scale allowed a more efficient response to COVID and the continued growth and development of regional health systems. We also talked about key issues in healthcare like affordability, the next generation leaders of health systems, and the importance of digitization and scientific innovation for the future.

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In this episode of Fireside Chat, we sit down with Kevin Tabb, M.D., President and CEO, Beth Israel Lahey Health, to discuss the current COVID surge and how caregivers are handling the steady pressure. We also discussed the role out of the COVID vaccine and how the pandemic has changed the role of c-suite leaders.

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In this episode of Fireside Chat, we learn more about the Yale Cultural Ambassador Program and its success in accelerating minority participation in the Yale School of Medicine’s clinical research.

The background, of course, is that minority participation in clinical trials is a long-standing, national challenge. Minority communities are distrustful of clinical research due, in part, through misguided past research trials such as the Tuskegee Syphilis Study. Further, communication with minority communities about science and research has been sparse and not generally creative or thoughtful.

The Yale Cultural Ambassador Program was designed to increase minority participation in clinical trials, which it has accomplished beyond expectations. Furthermore, it has bridged the minority and scientific communities and there are open lines of communication about COVID, vaccines, and youth exposure to science and medicine.

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In this episode of Fireside Chat, we welcome four CEO's who have been previous guests on the show to talk about what they have learned during the COVID crisis and look ahead to priorities in 2021.

We're pleased to welcome Dr. Craig Samitt, President and CEO, Blue Cross Blue Shield of Minnesota; Dennis Murphy, President and CEO, Indiana University Health; Ken Paulus, President and CEO, Prime Therapeutics; and Dr. Janice Nevin, President and CEO, Christiana Care Health System

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In this special holiday episode of Fireside Chat, we’ve asked five CEOs, all of whom have appeared previously on this show, to share with us what they believe to be the most important attributes of a leader during a crisis.

Across these conversations, there was a clear consensus that over-weighting communication, embracing the organization’s culture, sharing the truth, being visible, and conveying a positive attitude were essential attributes of crisis leadership.

Joining us on the show were Dennis Pullin, President and CEO at Virtua Health; Redonda Miller, M.D., President, The Johns Hopkins Hospital; Steve Corwin, M.D., President and CEO, NewYork-Presbyterian; Peter Fine, President and CEO, Banner Health; and Russ Cox, CEO of Norton Healthcare.

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In this episode of Fireside Chat, we sit down with Kevin B. Mahoney, CEO, University of Pennsylvania Health System to talk about how healthcare systems impact the economies around them and the need for systems to lower costs in the future. We also discussed how the COVID crisis has reawakened the realization that public health is important to good personal health for many and it contributes to a healthy economy.

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In this episode of Fireside Chat, we sit down with Dr. Harold Paz, EVP and Chancellor for Health Affairs, The Ohio State University, and CEO, The Ohio State University Wexner Medical Center to discuss social determinants of health and transforming a health system to a health platform. We also talk about key characteristics of a leader in a crisis and new health strategies in the COVID era.

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In this episode of Fireside Chat, we sit down with Dr. Nancy Brown, Dean, Yale School of Medicine, to discuss her impressive background and successes in medicine and research. We also talked about her priorities developed during her first 10 months at the School of Medicine and the Yale Cultural Ambassadors Program along with the major successes it has had in increasing diversity enrollment in Yale clinical trials.

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In this episode of Fireside Chat, we catch up with some former guests of the show to find out what they are most thankful for personally and professionally this Thanksgiving season.

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In this episode of Fireside Chat, we sit down with William Zollars, former Chairman and CEO, YRC Worldwide and a former Kodak executive to talk about the primary reason for Kodak falling from the number three brand name in the world to bankruptcy. We also discussed key leadership lessons that William learned through his time at Kodak which impact his leading other companies.

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In this episode of Fireside Chat, we sit down with Jeff Goldsmith, Ph.D., President, Health Futures, Inc. to discuss healthcare payment models and the need for commercial companies, providers, and the government to lower the administrative burdens on providers to increase usability. We also talked about the contrast of the U.S. fee for service payment model with other western countries to which the U.S. is frequently compared.

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In this episode of Fireside Chat, we sit down with Dr. Marschall Runge, CEO Michigan Medicine and Dean, University of Michigan Medical School to talk about the opportunities of being a leader and the importance of being humble. We also discussed how the COVID crisis has impacted the University of Michigan's finances and in terms of research, delivery of medical care and the workforce.

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In this episode of Fireside Chat, we sit down with Dennis Pullin, President and CEO, Virtua Health to discuss the acceleration of certain strategies as a response to COVID. We also discussed innovations in technology that will continue to add efficiencies and improve the practice and delivery of medical care, using telehealth as a prime example. We also talked about remote working and the need to address social determinants of health.

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In this episode of Fireside Chat, we sit down with Robert W. Roth, President and CEO, RoMan Manufacturing and Board Chair, Spectrum Health to discuss the responsibilities of the board chair and the importance of a clear and positive relationship with the CEO. We also discussed the role a board plays during a crisis and the key characteristics of a leader in the midst of a crisis.

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Transcription:

David S. Chernow 0:03
We made a decision to take on all COVID patients immediately. And we worked with our partners and dedicated units and one of our four key results, my five plus six equals for is bad math. Our four key results are to keep our patients and each other safe, to create an exceptional patient experience, to create an exceptional employee experience, and then and only then to meet our annual business plan.

Gary Bisbee 0:30
That was David Chernow, President and CEO, Select Medical, discussing how Select's decision to accept all COVID patients was pre-determined by their corporate strategy. I'm Gary Bisbee, and this is Fireside Chat. As David described Select Medical, he provided an excellent outline of the post-acute care business, as well as the rationale for expanding into homecare, Select medical operates nationally, and David provides color on growing a large and diverse business. He spoke about where scale matters in the post-acute care business, what are the keys to successful partnerships and where solid operations make a difference. Let's listen to David respond to a question about characteristics of a leader during a crisis.

David S. Chernow 1:13
Everybody's relying on you. They're looking to see how you respond and how you respond will help others respond accordingly. I'm a big believer in servant leadership. I believe that making other people successful, having them be successful will drive the success of your organization.

Gary Bisbee 1:30
David has a fascinating personal background. Spoiler alert, he was a ball boy at UCLA and one of the great John Wooden's basketball teams. Don't miss David sharing his favorite John Wooden story. delighted to welcome David Chernow to the microphone. Well, good morning, David. And welcome.

David S. Chernow 1:51
Thank you, Gary. And I'm very pleased to be here and I appreciate the time.

Gary Bisbee 1:55
We're pleased to have you at the microphone for sure. Let's kick right off here. Some of us are more familiar with Select Medical than others? Could you please describe Select Medical for us, David?

David S. Chernow 2:05
Sure. Select medical is a post-acute care provider to companies. Now it's grown quite a bit over the last 10 years in particular, although we're 22 years since our founding by Bob and Rocky Ortenzio. When I say post-acute, we provide four levels of services in the post-acute arena. One, we're a provider of what we call critical illness recovery hospitals or long term. Most people know them as long term acute care hospitals. We actually have 101 of those hospitals around the country in 28 states. We're also a large provider, I think we're the second largest provider of inpatient rehab hospitals, where currently we have 29 of those specialty hospitals operating in 12 states and we have 17 partnerships, which I think we'll talk about later on in our podcast here. We're also a provider of outpatient services, physical therapy, occupational therapy and speech, and we have 1750 locations around the United States in 37 states in the District of Columbia. And then we're also providers of occupational medicine, with Concentra and more recently, the acquisition of US Health Works. We have approximately 525 centers in 41 states so that rounds out sort of our post-acute services I will say also, some people ask us if we're in the skilled nursing facility business, we are not, but we are in just venturing into the home health business in a partnership with a entity called A.S.H.N. which is alternate solution Health Network, a terrific provider of home health, who shares our mission, vision and values.

Gary Bisbee 4:02
So quite an extensive operation. Why did Select Medical choose to focus on post-acute care, David?

David S. Chernow 4:09
It's interesting, Rocky or Rocco Ortenzio, who's really one of the great pioneers of inpatient rehab has had four companies over the span of close to 50 years and his son, Bob, or Ortenzio, who's been in the business close to 40 years with him. They were really rehab guys. Started out in the rehab business and through merger, consolidation and the like, over 20 years ago, decided to start Select Medical, that's really their background, but the quiet corner of healthcare was nobody really knew about long term acute care, although it was similar, not exactly the same as inpatient rehab, and ironically, I think there was probably a non-compete way back when and they ended up going into long term acute care, but their real background/passion was inpatient rehab. So I think once the non-compete went away, they started getting into the other areas of post-acute including inpatient rehab and outpatient. Ironically, Rocco is a PT by background. So it's really his first love, and we started venturing into the - not only LTAC, but inpatient rehab, but getting into outpatient and I believe it was in 2003. We got into the outpatient business with the acquisition of Nova Care, which you may know about in the Philadelphia market and then really have expanded the services there. So post-acute has always been our laser like focus. And as you know, Gary, it hasn't been the focus until more recently, of a lot of health systems

Gary Bisbee 5:49
For sure. Actually, quick story on Rocky, when I was at Kidder, Peabody investment banker at Kidder. Rocky came in and we were talking about possibly doing a deal with what I think was probably his first company at that point. And we covered the post-acute business on the research side and Rocky spoke at several of our meetings, so small world. But back to your point about post-acute care. What's your thought about that? It has never been the darling of healthcare. In fact, you could argue that it really has been under resourced. What do you think about that? And why is that? And how's that changing, David?

David S. Chernow 6:29
Yeah, it's a great question. And I would tell you, I've been here 10 years now, and things have changed over the last 10 years, even though the company's 22 years old. I think, with the evolution of healthcare, where, as you know, a lot of the health systems are trying to get away from hospitalization, which is the highest cost service in the healthcare continuum, of course, post-acute getting patients out of the hospital sooner. Hopefully getting them home and healthy, but having specialized services has really become the priority. And so most health systems who are trying to deliver high quality cost effective care, there really hasn't been that focus once they get discharged, how do we treat those patients in a cost effective and a high quality way? So I think now, with the whole look towards value based purchasing, and the like, the opportunity to really explore how we can provide all those services. You know, I'm an old healthcare guy, where it always used to be the focus was oncology, orthopedics and cardiology in the service world. Now, as you know, what's happened is, I think post-acute has become a very high priority for most of the systems, especially as they're trying to figure out how to manage the patient population in our population health strategies that most health systems have today.

Gary Bisbee 7:59
I'll be interested to follow your home healthcare initiative because it strikes me that it's a terrific addition just when you think about the continuum of care.

David S. Chernow 8:09
While we're on the topic, let me just share with you you know, since I've been here, and I've learned a lot since I've been here, I was a board member for seven years prior to joining in leadership back in 2010. But ever since I came here, I know Bob and Rocky, were always talking about our goal would be to get people home and healthy. And it was a missing piece, and of course like every health system, there's always the challenge of how do you develop that service line. We stick to our knitting, we know what we're good at, and we know what we're not necessarily good at, and we've been laser like focused with long term acute care critical illness that we call inpatient, rehab and outpatient, but all of our partners have been asking us: "if you're a post-acute preferred partner, why aren't you in home health?". And so for several years we've been looking at: Okay, do you build it? Do you buy it? Or do you partner? And we made a strategic decision with the input of many people who, you know, on our board, they gave us the advice and counsel that we need to figure out a way to get in that business. And so we literally went down the road of evaluating, do we build it? No, really hard to develop. Do we buy it? As you know, there's a lot of good players out there, but it's difficult to buy in the prices that were out there, it was potentially risky to purchase. And then we decided, let's find somebody who has the same culture, the same values and the same business model. And that's what we did. And so we were fortunate enough to partner with A.S.H.N., Alternate Solution Health Network out of Dayton. And literally, they have the same operating, centralized operating model, high quality provider, already existing partnerships. And so we're trying to leverage that relationship and bring that to the benefit of our partners in local markets.

Gary Bisbee 10:05
That sounds terrific. Another question, David. So how to Select medical work with physicians?

David S. Chernow 10:11
So unlike other organizations, we do employ in some markets, but it's a small amount. But what we do do is we have about 130 specialty hospitals. 130 of them. In each one of those hospitals. We have medical directorships. We have affiliations with directors of quality, directors of wound care. We have medical directors, typically in pulmonary critical care, a lot of specialties PM&R physicians - physical medicine and rehabilitation. So we have relationships where we engage the physician community to provide high level services, and we work very collaboratively with them and develop standards of care and make sure that we're operating at the highest quality. So, physicians are critical to our delivery of our services in the post-acute. It's just that it's more of a, if you will, arm's length and it's not an employed, perfectly employed model like some healthcare systems.

Gary Bisbee 11:15
You made reference to Select Medical growing through the years, particularly the last 10 years. Where does scale matter in the post-acute business, David?

David S. Chernow 11:24
I would tell you, just to give you sort of a sense of things when I came aboard, we were about at 20,000 employees, and about $2 billion dollars in revenue. Currently, today we're over 55,000 employees, and approximately five to five and a half billion of revenue. I will tell you and it sort of goes maybe to some future questions that you may have. Bob and Rocky have developed over the years a great centralized business model that allows us to scale, quickly. And as you know, one's ability to scale, a business is based on leadership, and having a strong bench and having a really great strong mission and vision and values and a great culture. And so, scale does matter to us because our ability to leverage our infrastructure, from an IT perspective, from a billing and collecting perspective, from a procurement perspective, all the things that drive efficiency and healthcare, we've been able, fortunately to do a really good job. We are operators by heart. That's really who we are. And I remember early in my career, Pricewaterhouse was always doing things on how you integrate in scale. There was “Five Frogs on a Log”. I don't know if you remember the book, but execution is the key to success in business, in general and in healthcare, in particular. And I think we've been honestly pretty darn good. Even when I was a board member, they were always doing great jobs of integrating new businesses, new services, and new partnerships. And so, scale does matter. Not that bigger is better. But I'm proud to say that we've delivered a high quality service line in all of our four business lines or service lines. And we've been able to do it efficiently because of our centralized business model.

Gary Bisbee 13:27
The scale question might lead us into the next section, which would be the COVID crisis. And of course, that's hit all providers. What did the COVID crisis present for Select Medical either in terms of challenges or opportunities, David?

David S. Chernow 13:41
With COVID, I will tell you, I joke about this, Gary, and it's not really proper math, and some people say it's probably stupid math, but I talked about how five plus six equals four. And people will say, what does that mean? And I said, Well, I know it's not very good math, but what it does mean is that our five core values, plus our six cultural behaviors equal our four key results and why I bring that up in COVID is our five core values are delivering superior quality and all that we do, treating others as they would want to be treated, and being results oriented and being team players, but most importantly, especially in this environment of the pandemic COVID-19 is we're resourceful in overcoming obstacles. And we've been challenged like we've never been challenged in the history of the company. And it has provided us with not only enormous challenges, but enormous opportunities. The major challenge for Select was, how do we take on that patient population, the COVID-19 patients and every health system had a decision to make, do we take them on? Where do we put them? How do we tackle the problem? We have a terrific chief medical officer and chief quality officer Dr. Hammerman, who happens to be a critical care and pulmonologist who helped us define the standards by which - obviously following CDC and other things, but we made a decision to take on all COVID patients immediately. And we worked with our partners and dedicated units. And one of our four key results, my five plus six equals four is bad math. Our four key results are to keep our patients in each other safe, to create an exceptional patient experience, to create an exceptional employee experience, and then and only then to meet our annual business plan. Well, that first key result, which is to keep our patients and each other safe, has been the complete focus of our company for the last four months during COVID. And I'm happy to say that with that challenge was an enormous opportunity. I think I mentioned we're in 28 states with our critical illness recovery hospitals. We've been asked by partners and non-partners to stand up units in local markets to be able to address the problem. I interviewed Bob Ortenzio on our own podcast, our executive chairman, and he reiterated which I will reiterate to you. We've never been more proud as a company in our ability to treat patients and deliver on our mission and our vision relating to this COVID pandemic. So it's been a great challenge, but I will tell you, some of the other things that have happened in major cities in this country, not only have health systems come to us, but state health departments have come to us and said, “Can you help us?”, because I think I mentioned this to you before, we're one of the largest providers of ventilator care in this country. And so while people didn't really understand what ventilators meant, or what intubation meant, I think everybody now understands what that means. And so we've been very fortunate to be able to step up, and be a solution provider to be a problem solver in many of the markets around this country, providing the level of care that gets us up each and every day and makes us excited to be part of the solution in this country of providing good care to the patients who need us the most.

Gary Bisbee 17:17
David, how did the PPE supply chain hold up?

David S. Chernow 17:20
Again, we were pretty fortunate. I mentioned to you our business model of centralized procurement, because we have over 100 long term acute care or critical illness recovery hospitals. We had a pretty strong supply of ventilators in the normal course of our business. And when we started hearing about some of the things going on, we were relatively proactive in making sure that we had not only surgical gowns and masks, but maintained our high level of ventilators. So we've never been, if you will, caught with a delay, and of course, keeping our patients and each other safe is critical. So Having the PPE was critical to our success of being able to not only address the issue and to treat the COVID positive patients, but also to keep our employees happy or safe in this environment.

Gary Bisbee 18:15
What was the policy for relatives and visitors?

David S. Chernow 18:18
It's a great question, Gary. We had a no visitation policy. We followed CDC guidelines, we were pretty conservative on our approach. I will tell you we also, just like any good partner, in any good partnership, we're also in a lot of host hospitals. Of those hundred and one hospitals, over 80% of those hospitals are “HIHs” or hospitals within a hospital. And we got partners in many of our hospitals who we were following their guidelines, which may have been a little inconsistent with our standard policy. So if you can imagine if a post hospital has no visitation or has visitation and we have no visitation, there'd be a bit of a conflict. So we just worked through in every one of our relationships. We took a policy of no visitation and where there was, quote, unquote, a difference of approach. We work with our host hospital or our partners and make sure that we are consistent with what was going on in the local market. By and large, though, there was mostly no visitation initially.

Gary Bisbee 19:26
Well, that's a good lead into partnerships, which are hard work in the best of circumstances and Select medical has been quite successful at them, what are the key principles that make a partnership work for both sides, David?

David S. Chernow 19:41
I don't mean to make light of this, and Gary, I think you know this. I've been blessed and personally, I've been very fortunate that Bob and Rocky are vice chairman and executive chairman and co-founders and have allowed me the opportunity to be front and center of most of these partnerships in the negotiation. And I've been able to work with my contemporaries, fellow CEOs and health systems to help drive the post-acute strategies of these partnerships. And what I would tell you is I tell every one of them that the best advice I ever got was from my mother-in-law, who before I got married, she said, the key to a great marriage is three C's. And I said, What are you talking about? And this is before we got married, she said, Well, if you practice the three C's, you will have a great marriage. And I sort of look at marriage like partnerships, by the way the three C's are, and we've extended it to the four C's, but the three C's were compassion, communication, and compromise. And we added a fourth which was collaboration, but I will tell you in each and every one of our partnerships, there's trust, there's confidence and there's the four C's. There's A great deal of communication. There's a great deal of compassion and understanding of what the needs are of our partner. There's an enormous amount of compromise in my definition. I don't know about yours, Gary, my definition of compromises that nobody's happy. But the truth of the matter is with those four C's, and of course, there's collaboration, you're never going to face a problem you can’t handle. And I will tell you that some people have asked the question, have you ever walked away from a partnership? We do believe in the sanctity of partnerships. And I will tell you that it has to have a basic fundamental concept to make the partnership work, and that is that we have common values and a common culture. And by the way, this is not a criticism in any stretch of the imagination, but we as an organization, really look at that first and foremost and say: Do they believe in the things we believe in. I told you about the five plus six equals four - are their values - do they believe in delivering superior quality in everything they do? Do they want to treat others as others would like to be treated? Are they results oriented? Do they believe in results? Do they believe in team play? Do they want to overcome obstacles? And the answer, invariably, with all these great institutions, most of them, are is they're exactly like us. And I think that's what's made us successful. We've never had a problem. We always can work through the issues. And I will tell you that the reason the partnerships work is I think we're solving a problem or have laser-like focus in a particular area that our partner maybe did not. And that's what makes for really good partnerships is that we're able to have shared culture and values and we're able to deliver a service that maybe is not their priority, but now is.

Gary Bisbee 22:56
So I was going to ask what are the reasons a large health system pursues a partnership and you pretty much answered that. Let me ask a different way, which is how do you connect with these large systems? Do they reach out to you? Or do you reach out to them?

David S. Chernow 23:09
I will tell you that, like everything in life, it's just relationships and people we know. But I will say that more recently, with the change in sort of strategy and population health, value based purchasing, getting people out of hospitals, I think the changing healthcare environment has really pushed many health system leaders to look at post-acute in a different way. And I think most of them have had the challenge of saying, I want to get people home and healthy, and I can't send them home. And I'm not delivering and not focused on these post-acute services. How do I get into that? How do I deliver that service which is so well needed in my community? And they either have to make the decision or I'll build it on my own. Maybe I'll buy it in service. And ironically, Gary, most of our partnerships are with not-for-profits. So a lot of them may need capital. A lot of partners come to us and they say, I currently have a small unit or rehab unit or an LTAC unit. But I need my beds for inpatient medical surgical, can you help me deliver that service outside my hospital, so I can free up those beds. And by the way, I need capital. And I need a real high quality provider to provide the service and do it in a way that we're accustomed with high quality and cost effective care. So they're looking for someone who shares the mission, vision and values but can also provide that level of service with a laser-like focus that they'll be proud of, and that's sort of what we've been fortunate to do. I will say that I'm pretty involved like you in VHA and we're with Cleveland Clinic and UCLA and Cedars, and I think sometimes word of mouth helps, right if we've done a good job with Emory. And they'll say, they've delivered the service and they've done what they said they're going to do. So that always helps. But we also identify which markets may have a need for post-acute services that's underserved. And we may go out and approach a health system that says they're not delivering the service that needs to be done in that market, and we'd love to figure out a way to partner. We're not a greenfield go in, establish a foothold and do something independent. We do love partnering. It's really who we are.

Gary Bisbee 25:38
Let's turn to your personal background, which is quite interesting. And it's always fun to learn about a CEOs background. You graduated from UCLA, graduate degree from Pepperdine. Did you grow up in California?

David S. Chernow 25:50
I joke about it. My father went to UCLA. I'm a twin. So my twin brother and I both attended UCLA. Little known fact about me: I did grow up in California, I've always been a UCLA Bruin supporter. My only claim to fame, Gary, is that I'm actually looking at the picture. I was a ball boy, John Wooden. You're talking about leadership, so he inspired me when I was 13-years-old — There's a famous picture. I joke with everybody. It's a famous picture of Bill Walton, who's above the square fly swatting a ball out to his point guard, to lead a fast break, and everybody looks at the picture and says, oh, wow, that's great. Who's that? Says Bill Walton. I tell them they're not looking at the right person, because underneath his foot is a kid who's ready to dry up the sweat off the floor. I grew up there. I went to law school. My dad was a lawyer, worker's comp lawyer, my twin brother's a lawyer, but he sort of followed the family footsteps and not to get too personal but at a very young age right after graduate law school, I ended up getting cancer. And that's what actually pushed me into the healthcare world and I got treated, ironically, as I told the CEOs of both UCLA and Cedar Sinai. I've been in all their hospitals and been treated. And it was destiny that we were going to do something together. But thankfully, I had great care. And it got me into the oncology world where I started my career in helping put together what later became US Oncology, but I loved UCLA. I grew up in California and my own health issues when I was 23. And going through some struggles, is what prompted me to get into healthcare.

Gary Bisbee 27:41
Well, I've got to ask this story, David. So what's your favorite John Wooden story?

David S. Chernow 27:46
My favorite John Wooden story is - and by the way, I think I have every one of his books and I believe in his pyramid of success and leadership. Interestingly enough Bill Walton, many of your listeners may know who was a pretty Radical young man - superior athlete. One day he went up to John Wooden. And he said, sir, I believe in freedom of speech, I believe in freedom of expression. I know you have a policy of no facial hair, and I believe that I should have the ability to express myself and be able to grow a beard and do what I need to do. And John Wooden looked at him and he said, I agree with you, you should have the right to express yourself and you should have the right to look the way you want to look. And Bill it was a pleasure having you on our team. Obviously he shaved his beard and was national Player of the Year but Wooden is an idol of mine and a mentor. I have two great mentors. Rocky Ortenzio is a great mentor of mine and John Wooden is more of a leadership mentor to me.

Gary Bisbee 28:50
That's an absolutely terrific story and both those gentlemen are top notch for sure. Looking at your professional background, you could be viewed as an entrepreneur. Or an operator? How do you view yourself David?

David S. Chernow 29:03
Interestingly enough, Gary, in my background - I always thought - I was a tennis player. By the way, when I went to UCLA, I played tennis there for my first year, and then had Tommy John surgery ironically. So my career ended quickly. And I always thought I'd want to be a sports agent. I grew up, dreaming of that. And ironically, I ended up being in the healthcare world, professional services working with physicians through most of my career. And so I found it to be an interesting similarity of representing and working with highly professional, highly talented individuals, which sort of marked my career but I've been fortunate that I've had some entrepreneurial ventures and ironically I talked to you about Rocky and Bob Ortenzio. They actually gave me my first start, I came up with an idea way back when in the late 80s that I thought we could develop a physician practice model in oncology and build cancer centers. And they gave me the original money with Russ Carson to start what later became US Oncology. Honestly, this isn't false modesty, I didn't really know what I was doing. But sort of learned along the way, but had great mentors and people like Ross Carson, and Rocco, and Bob, who believed enough in me to do something. So I would have to say I'm a bit entrepreneurial. Although I've learned to become an operator, I'm more of a development entrepreneurial type of guy. I will tell you that all kidding aside, you know, the joke is that David can't keep a job because he's had about four different careers. But this may get into our leadership discussion, but I had one of the great jobs ever in the world, if you will, when I was recruited to run Junior Achievement in the United States as the CEO and then I became the head of JA worldwide, but I did that for about six years, which was to educate and inspire young people to be successful in life through free enterprise education, involving entrepreneurship, financial literacy and workforce readiness. So I've seen the great side of people, and had one of the great jobs in America and worldwide, which was educating and inspiring young people around our great democratic and American free enterprise system.

Gary Bisbee 31:26
You've had an interesting background. This has been a terrific interview, let's move to leadership to wrap up. What do you think the characteristics of a leader during a major crisis are?

David S. Chernow 31:36
I think the ability to maintain a coolness calmness, a rational approach to things to not get too high, not get too low is critical, I have to say is I had this fantastic father, who was just a brilliant guy and just seemed to have that calmness that steadiness that is required in adverse situations. One of our core values is being resourceful and overcoming obstacles. And I will say two more personalize this. When you've had some really difficult things happen in your life, and one of mine was losing my father at a young age and also having cancer at a young age. I think you build up this sort of strength and this resolve to be able to deal with problems and adversity. And so I know that Bob Ortenzio and Rocco have these great qualities and I try to be the same, which is, keep a level head, be calm, and make sure that you're addressing the problem. You're not getting too worked up over things because everybody's relying on you. They're looking to see how you respond and how you respond will help others respond accordingly. I'm a big believer in servant leadership. I believe that making other people successful, having them be successful will drive the success of your organization. While I have a great title and a great responsibility. It's really not about me. And one of the great things I love about Select and most of our partners know this, is that there's a humility and humbleness that emanates from Rocky and Bob and throughout the organization. And I'm proud to be part of that in part of a humble servant type organization that our whole goal is to make others successful.

Gary Bisbee 33:26
Great point of view, and you do it very nicely. I'd like to wrap up with a final question if I could. You made the point that you've learned to be an operator, what lessons did you learn that make you a good operator, David?

David S. Chernow 33:41
It's interesting for me, because I'm more of a development, maybe try and be strategic, try and be a bigger thinker. On the one hand, on the other hand, Select has always been an operating company who's delivered results. And the thing that I've learned is that not one week, not one month, not one quarter necessarily dictates how good an operation can be, you got to have the long term view. And the key to being good operators is to treat people well. And to make sure that you educate, inspire and motivate your workforce to deliver the four key results, which again, are keeping our patients and each other safe, delivering exceptional patient experience, delivering employee experience, because if you don't have happy employees, you're never going to deliver a great patient experience. And then and only then, and remember, there's four key results, but then and only then can you deliver on your business plan. And I will tell you that delivering on the business plan, you have to have those other three elements - those other three key action items, and what we've learned being operators is that we have to be sensitive to other people and every market is different, and you can't just make a blanket statement as to why things are happening. You have to really dig deep into the reasons why things aren't happening and be willing to make corrections and be a good listener to your employees. That's what I learned is being an operator.

Gary Bisbee 35:19
David, thank you so much for the time today. Just a terrific interview and continued success at Select Medical.

David S. Chernow 35:28
Thank you, Gary. It's a pleasure and stay safe and stay healthy.

Gary Bisbee 35:32
This episode of Fireside Chat is produced by Strafire. Please subscribe to fireside chat on Apple podcasts or wherever you're listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating we have found that podcasts are known through word of mouth. We appreciate you spreading the word to friends or those who might be interested in. Fireside Chat is brought to you from our nation's capital in Washington DC, where we explore the intersection of healthcare politics, financing and delivery. For additional perspectives on health policy and leadership, read my weekly blog Bisby's Brief. For questions and suggestions about Fireside Chat. Contact me through our website, Firesidechatpodcast.com or Gary@hmacademy.com. Thanks for listening.

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In this episode of Fireside Chat, we sit down with Chris Howard, President and CEO, Sharp HealthCare to discuss the breakdown of Sharp’s capitated and fee-for-service revenues and how capitated revenue provides a more stable revenue base. We also spoke about the new core competency of scaling up and scaling down developed in response to the crisis, and lessons learned during the COVID pandemic that are contributing to the new normal in healthcare.

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Transcription:

Redonda Miller 0:03
We have this playbook of physical capacity staffing policies. I'm thinking about all the thought that went into standing up a visitor policy or a masking policy or a travel policy. Now we can turn those on and off as needed.

Gary Bisbee 0:20
That was Dr. Redonda Miller. President at Johns Hopkins Hospital, speaking about the core competency of scaling up and scaling down, developed to respond to the COVID crisis. I'm Gary Bisbee. And this is Fireside Chat. Dr. Miller outlines the top three priorities of the Johns Hopkins Hospital and she speaks about the benefits and challenges of the Maryland all-payer model. Let's listen to Dr. Miller respond to the question of how the COVID crisis changed her as a community member.

Redonda Miller 0:50
As a community member Gary, I think this was probably the most impactful and humbled every day by the incredible appreciation from the community, the number of ways they stepped up. Whether it was school kids making cards for the healthcare workers here. Whether it was the donations of homemade masks, businesses sending food to the front line. I really feel a part of the community here in Baltimore like I've never felt before.

Gary Bisbee 1:20
Our conversation includes Dr. Miller's view of the need for a reliable PPE supply chain and the necessity of governmental stockpiles, how telemedicine visits grew overnight from 35 to 20,000 per week, the strategy for educating the community to return for necessary surgery and treatments, and the top characteristics of a leader in a crisis. I'm delighted to welcome Dr. Redonda Miller to the microphone. Good morning, Redonda, and welcome.

Redonda Miller 1:52
Good morning, Gary. It's such a pleasure to be here virtually so to speak.

Gary Bisbee 1:56
Exactly. We're pleased to have you at the microphone. Let's begin with learning a little bit more about you – start out at the very beginning. Where did you grow up?

Redonda Miller 2:06
Well, I actually grew up in southern Ohio, very rural area near Kentucky and West Virginia, where my parents still live. And in a desperate attempt to escape, so to speak, I ended up at Ohio State for college, and then here in Baltimore for medical school at Johns Hopkins, and I've been here ever since.

Gary Bisbee 2:27
What have you found that you liked the most about Hopkins? What's the culture of Hopkins like?

Redonda Miller 2:32
When I came to interview for medical school, I had this mental notion in my mind of very smart people, serious scholars, discoverers and sure, that is all true. It is. But what I found 31 years ago was this incredible warmth, and humanity and kindness and esprit de corps. And honestly, that is what has kept me here for 31 years. There is a drive toward excellence. Everyone wants to be the best. They want to be on the cutting edge, but at the same time, a sense of collegiality and family that it's really a powerful combination.

Gary Bisbee 3:13
Let's drop back a bit. At what point did you decide on medicine, Redonda?

Redonda Miller 3:17
It's an interesting story. I am a lover of math and physics and economics and finance. And I started my college career, wanting to be an engineer, an aeronautical engineer. But I quickly learned that there was a human side to what I wanted to do, probably stemmed from in high school, my parents, who my dad, in particular avid gardener, they were both school teachers. But he was an avid gardener on the side. And one evening, after dinner, they became very ill very quickly and within 15-20 minutes, were both passed out. I called 911. I was a freshman in high school, the oldest of four children. I remember vividly the sight of the paramedics doing CPR on my dad as they wheeled my mom and dad out of the house to the local hospital. And I will tell you, the paramedics, the nurses, the doctors at that local rural hospital saved my parents. And it turns out they had organophosphate poisoning, which was very common, you know, it's from insecticides that have since been banned. My parents are fine today alive and well. But I always remembered how those healthcare workers saved their lives. And it really influenced my choice later on.

Gary Bisbee 4:33
Sure. The fact that they were teachers, do you think that cultivated your sense of learning and excellence?

Redonda Miller 4:39
I do. You know, in pure teacher form they had high expectations for the children to pursue something they loved and to give it our all. So yes, and in fact, I started out my career here at Hopkins after I finished training as a clinician-educator, there's some of that love of teaching hidden inside of me.

Gary Bisbee 4:58
At what point did you decide then to pursue your MBA?

Redonda Miller 5:01
I was probably mid-career in my 30s had been doing very well. I had a typical traditional faculty role as a clinician-educator focusing on women's health but became frustrated with how we delivered care. This was back 15-20 years ago, and we were not as patient-centered as I thought we could be. We were not as efficient as I thought we could be. At some point, you either just whine or you become part of the solution. And it also provided this opportunity to enjoy some of the other subjects that I'd always liked, like economics and finance and math. So I decided I wanted to retool my career and work on clinical operations. I didn't have the right tools. So it prompted me to go back to business school and pursue an MBA. So I at least had some foundational knowledge of operations and healthcare delivery that would hopefully serve me well.

Gary Bisbee 5:59
I believe you're still practicing. Is that right?

Redonda Miller 6:01
I do. I do. I'm a general internist. And I love still practicing. Many of my patients I've known for 20 years. I have a clinic once a week. And that of course is all of the physicians who are listening might know your practice doesn't end just because the clinic door closed, so I field phone calls all week long. But it has been invaluable. To live firsthand some of the initiatives we roll out as a hospital, I have to take the same epic training, I see what it's like to care for a patient who may be PUI for COVID and wear a face mask. I also now have a cadre of secret shoppers. My patients are the first to call me with Redonda, "Did you know this happened during check-in?" or "I was in the hospital and this happened or did you realize this?" And so it's been so valuable in many ways.

Gary Bisbee 6:54
Unintended benefit of practice. Do you find as a leader at an academic medical center that it gives you more credibility with those you're leading that you're still practicing?

Redonda Miller 7:06
I think it does, because once again, anything that you say we have to do, I'm going to do it as well. And so I do understand the frustrations of clicking in an electronic medical record. I can empathize more, and hopefully, it informs decision making a little better.

Gary Bisbee 7:23
In terms of leadership, what drew you to leadership?

Redonda Miller 7:28
I'm not for sure I was drawn to leadership per se. In fact, I think more what I was drawn to was this notion of fixing things. As a true general internist, I like variety, I like diagnosing, and I like trying to fix things. And so what I liked about hospital administration is those same principles applied. Your day consists of a myriad of different problems that hit your desk, and you pull the right teams together, diagnose the situation, and try to fix it. The leadership part, I think was sort of an accidental outcome of that, that perhaps my mentors hopefully acknowledged somehow that okay, I could execute on what we designed. And then that led to greater responsibility. But I didn't necessarily go into this hospital administration route thinking I wanted to be a leader.

Gary Bisbee 8:21
Right. Sometimes it's referred to as an accidental leader, but you're doing a terrific job. Why don't we turn to Johns Hopkins Hospital? You've been president now I believe for four years. Will you describe Johns Hopkins Hospital for us?

Redonda Miller 8:36
Sure. The Johns Hopkins Hospital is a 1,000-bed hospital, roughly, with revenue of around 2.6 billion. We have about 11,000 employees, about 2,500 medical staff, and then 1,300 residents and fellows. We have the usual typical designations level one trauma center, comprehensive transplant, NCI-Designated Cancer Center, but we're part of a larger health system. And our larger health system is comprised of six hospitals – five in the Mid-Atlantic and one in Florida. We have a payer arm, we have a home care group, we have a community physician network. So that's a little bit about the hospital and how we fit into the health system.

Gary Bisbee 9:17
How do you relate to these other hospitals? Do you draw from them? Or do they draw from you? How do you think about that?

Redonda Miller 9:23
Oh, it's very commensal. And I would say that's something we've struggled with over the last decade becoming a system. But over the last couple of years, and particularly with the crisis of COVID-19, we have really done wonders to become functioning more like a system. I will tell you, I learned things all the time from my community hospital colleagues, the presidents of our community hospitals. Hopefully, they would say the same thing about the academic medical center, but it's been a great partnership.

Gary Bisbee 9:55
What are your main priorities at JHH?

Redonda Miller 9:56
I would be remiss, Gary, if I didn't tell you COVID-19 rose to the top three months ago. And for the next year or two, it will continue to be right at the top. And it's interesting how the focus has changed from “Oh my, how are we going to deal with that initial surge” to now the focus of how do we conduct our usual business and as an academic medical center, there are patients that we really specialize in and have expertise. So how do we care for those patients, in addition to caring for COVID-19? So that's priority number one. I think priority number two, we had started all kinds of good work on high-value care. In the era of patients paying more out of pocket for their health care, they are going to want to choose wisely. And so we have to hold ourselves accountable to being high value. How do we deliver high-quality care, but at a price that is appropriate? So that would be our second priority. And then interestingly, we have really shifted a lot, without losing our emphasis on discovery and innovation. We at the Johns Hopkins Hospital can never lose that. But thinking more about population health and community care, and what it means to serve East Baltimore. Historically, obviously, we focused on transitions out of the hospital, care coordination, disease management, but we've taken that to a different level. And how do we tackle the social determinants of health? We've done work on jobs and hiring. More recently, we partnered with the other city hospitals, health care for the homeless and the city to house 200 individuals experiencing homelessness, and we decided we were going to build and renovate houses, but go beyond that and provide all the supportive care one needs. Job counseling, treatment for chronic diseases, help getting to and from the grocery store. So those are really our priorities high-value care, community care, and of course COVID-19.

Gary Bisbee 12:06
What percentage of patients come from Baltimore and surrounding communities?

Redonda Miller 12:10
Right now about two-thirds of our 50,000 discharges derive from Central Maryland, and about one-third from Baltimore city itself. And then of course, the final third, given some of our areas of expertise draw from states far away and internationally.

Gary Bisbee 12:28
Why don't we go to the Maryland all-payer model for lessons learned there? Could you describe that for us, Redonda?

Redonda Miller 12:36
Oh, sure. We've had the all-payer model here in Maryland since 1977. And it was initially designed and still is today. It functions as all-payer in the sense that everyone pays the same for care delivered in Maryland hospitals, and by everyone I mean, commercials, Medicare, Medicaid. We love that about the model, it takes away any kind of gamesmanship or trying to attract a certain patient over another, everyone pays the same and the rates that hospitals are allowed to charge are set by a commission. In 2014, there was another unique component to our model that was added, hospitals were now going to be reimbursed via global budget revenue. So each hospital in Maryland knew its revenue for the next fiscal year out of the gate. And then year after year, that revenue would be tweaked, based upon volume shifts, market shifts, demographics, and so forth. So I know going into FY 21, what my revenue will be. That's been our model to date. It's highly regulated, and year to year, you're not going to have huge operating margins as a hospital in Maryland. But I will tell you during bad times, and we've looked at over the last three or four months, that model can be protective. Well, because the volumes dropped so precipitously, none of us could charge up to our full GBR. We did have some increased charging authority that provided the cash flow and liquidity we needed to survive the pandemic.

Gary Bisbee 14:13
As a result of COVID, one imagines that legislators in Washington DC are going to be thinking about some kind of model like the Maryland all-payer model. So we may end up with something more like it at the national level, who knows. What's the payer mix? If I could ask, what's the current payer mix?

Redonda Miller 14:32
Here at the hospital, government payers are about 48%, 19% for Medicaid, about 29% for Medicare. And then commercial, we are about 49%. And then self-pay about three.

Gary Bisbee 14:46
So that would be among a lot of health systems that country pretty favorable payer mix, actually. Why don't we turn to COVID you brought that up, and I think we all agree a crisis accelerates existing trends, but thinking about capacity, PPE and so on, how did that fare at JHH?

Redonda Miller 15:06
We did okay with PPE, but we have the luxury here in Maryland of learning from Seattle, learning from Italy and learning from New York. So we knew right away that we had to start conserving. We focused meticulous attention on PPE conservation. We also had help from partners. Local industry stepped up to help us. Sagamore Spirit made hand sanitizer. Under Armour made masks. Many volunteers went to our central distribution center, and we crafted our own face masks. So we really and then of course, other businesses donated N95s. So we were okay. But it wasn't without a struggle. And I will tell you we're still not where we need to be as far as PPE, but we're working on it.

Gary Bisbee 15:53
If you formulated a point of view, Redonda, about the reliability of supply chain, do you think we need to do something nationally about that? What's your thought?

Redonda Miller 16:03
Oh, of course, absolutely we do. I think we've learned about when you have a sole producer in the market or one country dominating the manufacturer of a good bet is a common good, you run into trouble. I think we saw this in the pharmaceutical industry somewhat. And we talked about the escalation in drug prices a couple of years ago, where market economics resulted in a sole source provider of certain generics that have been around forever and the ramifications. I think we see that with PPE. We need to make sure that we have the right supply chain that is diversified. I also think we need to take a look at our stockpile and rethink exactly what numbers are appropriate. And the conversation about do we do that as a nation or by individual states, we need to fine-tune that conversation and make some decisions.

Gary Bisbee 16:54
That's definitely being discussed around the circuit. There's no question about that. How did your ICU capacity hold up?

Redonda Miller 17:02
That was, even to this day, everyone here will tell you that is our major factor. We were incredibly lucky. When the COVID pandemic first hit, we decided as Johns Hopkins Health System that we would transfer the initial code of patients here, particularly those that were critically ill. So we were taking a lot of patients from the National Capital Region, Gumby county where they were very hard hit Howard County and bringing them to the Johns Hopkins Hospital. And we did that predominantly for two reasons one had to do with our physical capacity. We have new patient towers that we were able to flip unit by unit to negative pressure and keep staff and patient safe. We had the luxury of having a lot of ICU. So we had staff expertise who were gifted at critical care, nurses, doctors, anesthesiologist, so ICU capacity we did okay.

Gary Bisbee 18:08
It seems to lead to a new competency, maybe even a core competency to scale up and scale down quickly. Do you think about it that way?

Redonda Miller 18:19
What we do every day, we call it our playbook, our pandemic playbook. And honestly, I think it could be used for other global health crises or even any crisis. But so much of our initial time was spent trying to figure out which units could be converted. How are we going to redeploy staff and leverage expertise? We have very highly specialized staff at AMC, so retraining people to go back to their roots in their core competencies. So we have this playbook of physical capacity staffing policies are in the playbook. I'm thinking about all the thought that went into standing up a visitor policy or a masking policy or a travel policy. Now we can turn those on and off as needed. And some of the models of care. Thinking about testing, we know how to do community testing now and how to stand up tents. We know how to compile a Go team that will help go into nursing homes and do testing and risk mitigation at potential hotspots. So yes, I do think this has taught us that five years from now two years from now, who knows when the next issue hits, we will have processes in place that we can roll out much more easily.

Gary Bisbee 19:37
Terrific. What about tele-visits? Most of the health systems saw dramatic, even exponential increase in tele-visits, how about you?

Redonda Miller 19:46
I laugh because telemedicine was sort of on our three to five-year goal, of okay, we’re really going to roll this out. And then overnight, I mean, literally Gary, overnight. We went from around 35 tele-visits per week across our health system to 20,000 per week, overnight. So here at the hospital, we're doing 5,000 telemedicine visits a day. It's about two-thirds of our ambulatory visit volume. And I have to say it's going well. Patients like them and you know, I can tell you that firsthand. My own practice. I have patients who will say, "I was reticent to do this, this high tech stuff Redonda. I don't know about this." They love telemedicine visits, they don't have to drive into East Baltimore. They don't have to pay for parking. They can do it from their own home. I think telemedicine is here to stay.

Gary Bisbee 20:38
Do you think that the older generation will adapt to it?

Redonda Miller 20:52
That was the first thing that went through my mind is how is the older generation going to handle this? They are fine. I have patients that are in their 90s. They're doing just fine with it. I think the big challenge will be wrestling with the reimbursement. Here at hospital-based clinics, if we just reimburse only the profit part, I don't think that's going to do justice to all the infrastructure needed to conduct an efficient telemedicine visit. You still need staff to virtually room the patient and make sure that the med reconciliation has been done and all that pre-visit work, you're still going to need staff to do the follow-up and schedule appointments and tests. So I think we have to give some serious consideration about the appropriate reimbursement model.

Gary Bisbee 21:38
The CMS waivers on payment and physician licensure across states, no doubt were important. Do you have a feel for how important they were to accelerate the visits?

Redonda Miller 21:49
Very important. We still struggle because there's not complete reciprocity and licensing. So we still struggle with sometimes delivering out of state care, but hopefully, we'll get there.

Gary Bisbee 22:00
How did you ramp up to 20,000 visits? I mean, did you employ just a whole bunch of your doctors and nurses, or how did that work?

Redonda Miller 22:08
We have an amazing telemedicine team and an amazing ambulatory team. You asked me, What do I like about Hopkins? Well, people just they rally and they get it done. So everyone did their virtual online training so that they would understand how to use it. We redeployed our staff, so they can handle the volume. I don't think there was any magic bullet. I think it was just a culmination of group effort.

Gary Bisbee 22:35
Terrific. Well, why don't we turn to elective surgery assuming that you had to lock down and discontinue that for awhile. Have you restarted?

Redonda Miller 22:43
Yes, we did restart our elective surgeries. On May 18, we opened up for our ASC. And then this past Monday, we started hospital-based elective surgery. The biggest limiting factor for us is just getting our ICUs back online. We still have a decent amount of COVID-19 patients here that are critically ill. So bed capacity is our biggest limiter.

Gary Bisbee 23:09
How have patients responded?

Redonda Miller 23:12
Initially, we were worried that people would be hesitant to come back to the hospital and I think there's still some fear. But every time we've opened our schedule, we've been able to fill it. The pent up demand is so great that we've not had difficulty filling our OR schedules. Now some of this could also be due to an aggressive campaign we've launched encouraging patients to return to hospitals who've been very worried about some of the statistics in the literature about people putting off care and having heart attacks at home. And we saw it here at the Johns Hopkins Hospital. Our ED visits fell to a third of normal. We knew that patients were out there and bad things could be happening. So we did launch an aggressive campaign both here at our own institution via messaging through MyChart and Epic and text messages and articles and videos and graphics. But we also partnered with the Maryland Hospital Association, who launched a broad sweeping campaign in Maryland, billboards, TV, radio, encouraging people to really seek necessary care.

Gary Bisbee 24:19
Why don’t we turn to economics, which is not a pretty picture for any of our health systems. How was JHH affected by the whole COVID crisis in terms of your financials?

Redonda Miller 24:30
As I mentioned a bit earlier, our GBR here under the Maryland payment system did protect us to some degree, I mean, we will experience losses, and I think that's to be expected. Anytime you lose that kind of volume, you're going to suffer, but we've managed okay to be honest. Capital, we had to reduce our capital expenditure and delay some of it so we took a really close look at what our plans were for capital expenditure. And what did we absolutely have to do in the name of patient safety and quality? And then put other things on hold. We're hoping to revisit that. And of course, a lot of our strategic capital plans we had to put on hold some of our larger projects. Hopefully, the numbers will continue to go down. I'm going to be an optimist. Gary, I am. I think we will have a surge in the fall. But hopefully, we can contain it and manage it and we can get back on track for some of our strategic priorities.

Gary Bisbee 25:28
With your optimistic hat on what are you thinking about 2021 Redonda? Will you be able to get back to "normal" by then, do you think, financially?

Redonda Miller 25:37
Our goal here is to really be able to resume all the essential care we did. I think about care here at the hospital, transplants, high-end surgeries, all of that work that really we rely on our AMCs to do as we don't often have that kind of expertise and community hospitals. I view we owe it to the local Maryland community toet back in that business right away. And so our goal is to really figure out how we're going to ramp up all of our usual book of business, and then still take care of COVID on top of that. That's going to be meaning adding or renovating physical capacity that's going to be looking at staffing plans. And can we bring on staff to do that to get us through the next year? Just like all of my colleagues across the country, we're looking at, you know, people who've retired do they want to come back for a year. We have some fellows who are graduating, who are worried about the job market, and they want to spend time next year being COVID hospitalists and really take a year-long break. And so we think that's going to help us on the provider front. But our goal is to try to get back to do all of our usual work and take exquisite care of COVID-19 patients.

Gary Bisbee 26:49
Leadership's always important, particularly magnified, probably in a crisis. When you first became aware that the COVID crisis was gonna strike, what was your first thought?

Redonda Miller 27:00
I think that was probably like most people. Your first thought out of the gate is, oh my, we have never faced anything like this before. This is going to be a long three months. But I have to say it was quickly followed by a little notion of, we've got this. We had already practiced. We're one of the regional centers for biocontainment. And we stepped up after Ebola to become a center of expertise. So we've already been training on a continual basis. Staff, nurses, doctors, pharmacists, respiratory therapists, you name it, who knew what it was like to step into a pandemic, and they were able to train others pretty quickly. So I figured, we'll be okay. We will manage this. And luckily, that has been the case.

Gary Bisbee 27:46
What is one of the most important characteristics of a leader during a crisis like this, do you think?

Redonda Miller 27:51
I think some of the most important characteristics are, number one, being able to pull groups of experts together and then just trusting those experts to manage. This notion that we're all in this together and having the right people around the table because no one has complete mastery of a pandemic like this. No one does. So it really was this getting the team together and building our plans in unison. And then I think, honestly, for leaders, you have to be the person who is positive. And explaining that, yes, we can do this. Yes, we're going to make decisions that we will have to rethink and maybe pivot in a different direction. And that's okay. But we will get through this. So the leader has to have some element of positivity.

Gary Bisbee 28:42
This has been a terrific interview, Redonda, I have one last question if I could, and that is how does the COVID experience change you as a leader and as a family member?

Redonda Miller 28:54
As a leader, I'm not sure it's so much has changed me as reminded me of all that is great in health care. As a physician, I trained in crisis mode. A patient would code on the unit and you stepped into action quickly and you were the leader of a team who did the CPR and the resuscitation. And so that muscle memory came back. And what I like about it as a place like Hopkins, it reminded me how every single person on the team stepped up in just that fashion. There was no wailing and whining, and it was all about, we can do this. So I think it was very refreshing to be reminded of how incredible my colleagues are. As a family member, boy, it changed me a lot. I have two daughters. They are ages 15 and 11. My husband is a pulmonary physician, who helps take care of COVID-19 patients at a different hospital here in Baltimore. So my poor little daughters became orphans overnight. They got themselves up, made breakfast, did their online school work. So I told them it was good practice for college and being on their own. But it did change me. And I realized that my daughters are growing up and they can be self-sufficient. And then as a community member, Gary, I think this was probably the most impactful, humbled every day, by the incredible appreciation from the community, the number of ways they stepped up, whether it was school kids making cards for the healthcare workers here, whether it was the donations of homemade mass businesses sending food to the front line. I really feel a part of the community here in Baltimore like I've never felt before, and I think all of them for their kind gestures and donations to support our healthcare frontline.

Gary Bisbee 30:52
Well, we appreciate your thoughts, Redonda. This has been a terrific interview. Thank you very much for being with us, and good luck to you and everybody else at Johns Hopkins.

Redonda Miller 31:01
Thank you, it was a real pleasure.

Gary Bisbee 31:04
This episode of Fireside Chat is produced by Strafire. Please subscribe to Fireside Chat on Apple Podcasts or wherever you're listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested. Fireside Chat is brought to you from our nation's capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisbee's Brief. For questions and suggestions about Fireside Chat, contact me through our website, firesidechatpodcast.com, or gary@hmacademy.com. Thanks for listening.

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Transcription:

Ken Paulus 0:03
Caregivers will be put back in a position to drive these big complicated specialty treatments instead of throwing these patients over the wall to us. And I think pharma will move from a sales model to a knowledge model where their job is to put information in the hands of caregivers, health plans, and members to make the right decisions at the right time in the right place

Gary Bisbee 0:28
That was Ken Paulus, President and CEO Prime Therapeutics, discussing the fragmented nature of today's healthcare system. I'm Gary Bisbee and this is fireside chat. Ken has been a health plan and large IDN CEO and now leads a pharmacy benefit manager with 30 million lives. He's in a unique position to comment on integration between pharma health plans and providers. Let's listen to Ken express the need for an air traffic controller to manage care for the patient

Ken Paulus 0:57
I'm most concerned about fact that today, for any given American, there's really no captain of the ship. There's really no clear advocate or some person, entity-relationship that is air traffic control for a patient in need.

Gary Bisbee 1:17
Our conversation includes Ken describing the role of the PBM. And its value equation, barriers to quality and outcomes confronting caregivers, the need for physicians to be in charge complicated care paradigms, how Prime Therapeutics work with the federal government to ensure specialized drugs remain available during the COVID crisis, and the importance of developing a long term relationship with the patient. Let's listen

Ken Paulus 1:42
COVID has shown us that we need somebody to focus on that long term relationship and it's just not happening today. Again, with great challenges come great opportunities now that's a big one. And if I was running a health plan business or an IDN right now I’d be running like heck, to solve that problem and fill that void. Our nation needs it now.

Gary Bisbee 2:05
I'm delighted to welcome Ken Paulus to the microphone. Well, good afternoon, Ken, and welcome.

Ken Paulus 2:16
Gary, Thanks for the invite. And I really look forward to talking to you today.

Gary Bisbee 2:20
I've interviewed you in person a couple of times with live audiences. So we're delighted to have you at the microphone. Let's get right into your background if we could. I know you grew up in the Chicago area. What was it like growing up? You had five siblings, six of you in the family? What was it like growing up with that group?

Ken Paulus 2:38
It was a very special upbringing, in a way. I'm from a middle-class family. My dad was a grocery store manager. My mom ultimately was a homemaker became a teacher, but neither one of them finished college. Kind of a classic Catholic family where they started having a family early both of them had to quit and basically raised the family. It was kind of a values-based upbringing. In even though we didn't have a lot, it was rich and full and positive and supportive and ended up being what gave me a lot of my resilience and in a lot of ways, feeling supported regardless of the circumstances. It's all good. I mean, I say I had a very good upbringing and nothing I look back on in a negative sense, other than maybe I was a little bit of a rebel and got myself into a little bit of trouble as a teenager.

Gary Bisbee 3:25
Well, there's learning there as well.

Ken Paulus 3:28
Yes, there is. I have some scar tissue from those days. But I was blessed in so many ways.

Gary Bisbee 3:32
Right. We were talking before and you indicated you basically worked your way right from the very early days right through school, that that turned out to be a good experience, any lessons learned there?

Ken Paulus 3:43
It was interesting. My parents didn't finish college. So it was very clear with them that we were all going to college and there is an expectation you go to college and you go to grad school or medical school or law school, so you're not stopping at a four-year degree and I'm thinking, well, who's paying for that? And the answer was you are. And the only way to pay for it was to work basically every free moment. So I had a paper route until I was 13 or 14 and then I became a busboy at an Italian restaurant and believe it or not, was owned by the mafia, and worked there for two or three years. And then when I was old enough to get a real job, I became various jobs within the grocery business because my dad had friends that could give me jobs. And I did everything. I was literally a night crew worker. I was an apprentice meat cutter a couple of summers, I did it all. And I learned a ton the learnings from how and when you saw good management was fairly readily observed if you were willing to observe us and I have to say I learned a lot about management from all of those crazy jobs. It's a good experience.

Gary Bisbee 4:52
Six siblings in the family. You're all in healthcare. How did that work out?

Ken Paulus 4:57
Well, it was interesting. My mom in particular had three things that she expected of us and I'll never forget it. And it really rang true for all of us. One was going to college, as I mentioned, the second one was critical. And she said, and both of them actually did this. They said, You really have to do something where you're making a difference. And then the third one was just an oddball thing. They're both smokers. They both quit in their middle-age years. And the third thing was don't smoke, please. And if you don't smoke by the time you hit 21, you get $100. So, I'm like wow, okay, well, that's worth it. And I never got my hundred dollars, but I never smoked so that was good. So this making a difference. Standard and expectation are what I think led us all into the helping profession of healthcare and it's been exceedingly rewarding and I'm so happy I'm in this business. I really love it.

Gary Bisbee 5:46
Well, after college at Augustana in Illinois, off to the University of Minnesota, the MHA program was the leading MHA program at that time, what got you to the Minnesota MHA program?

Ken Paulus 6:01
Gary, it was mostly that it was that they were the best in the nation at the time. I think they're still probably top five or so. And I was a science major. I was a human physiology major. But I have an entrepreneurial business streak in me. And I was literally trying to find an industry that married science with business. And healthcare is really the perfect combination away for me. Once I figured out that that's what I wanted to do, and I wanted to work in the nonprofit side of things. Then I just went on the search for the best program and this program in Minnesota was the best program and I have to say, it was an eye-opener and a critical event in my life to open my eyes to a much bigger opportunity set. It really was very possible.

Gary Bisbee 6:47
What was your first job then out of the MHA program?

Ken Paulus 6:50
So this 21 or 22-year-old kid, having never stepped foot in a hospital before this point in time has only worked in grocery stores and restaurants. I literally stepped foot into this hospital as a fellow post-graduate school and became an assistant vice president of a hospital that's part of Catholic healthcare West in Los Angeles. And it was quite the experience. I literally remember the first day on the job, the CEO said, Well, Ken all of your direct reports are waiting for you up in the conference room on the seventh floor. Introduce yourself. I said, Okay. I walked into the meeting. There were 10 folks around the table all roughly in the 40s and 50s. mostly women, as it turns out, running departments like occupational therapy and PT and nursing leaders. And I sat down at the head table and they looked at me and the first woman said, well, who are you? And I said, Well, I think I might be in charge of all these departments and they laughed out loud. No, like They laughed and they said, Are you kidding me? They all had 20 years on me. But I will say, Gary, I made one critical move that was probably saved my career. I just said, Hey, listen, I don't know anything about management and leadership. I've really never done it before. So if you all are willing to teach me, I'm willing to learn and I will try not to annoy. And they became just stunningly good leadership group. And they taught me management and leadership, these middle-aged men and women, mostly women and healthcare, taught me how to lead and forever I will be thankful and in gratitude for that experience, it was really special.

Gary Bisbee 8:40
What took you from that start to Partners Community Healthcare in Boston.

Ken Paulus 8:44
I had worked in California for the better part of probably a decade or more. And actually, my boss, the CEO, was pinged by a recruiter to come out to Partners Healthcare System, which is a brand new system that was just been formed. And they wanted him to lead the creating the risk-bearing entity partners called Partners Community Healthcare, Inc. and he declined. And he's a California guy, he's not leaving the state. And in an incredible show of support of me, he said, Ken, I hate to even bring this up to you because you are like, my number two, go-to guy. But I actually think this might be a really great job for you. And I don't want you to go I don't want you to take this wrong. I just want you to know that I'm a mentor, and I'm your friend. I think you should at least have a conversation if you can work for the mass general of Brigham in Harvard Medical School and have that on your CV it's probably gonna change your life. I said, Really? You're telling me you think it's a good idea? He said I don't want you to leave. But I think I owe it to you to take a look at it. So I did and next thing you know, I was In my car driving cross country and working at Partners. As probably the fourth or fifth employee hired post-merger, the Brigham in general.

Gary Bisbee 10:07
Wow, that was a terrific opportunity. What did you learn about managing risk there?

Ken Paulus 10:12
Oh, gosh, scary. I have so much scar tissue from those days. We built this risk network, this group of physicians and acquired a number of primary care practices, married them in our network to all the specialists of the Brigham and the general and then took full risk, full capitation risk, but with Blue Cross of Massachusetts. And we proceeded to get our hats handed to us. We just got crushed. We lost so much money so fast that we literally had to go to Blue Cross, we said that we just have to tear up this contract. We can't, we can't do it. And we did. They agreed, thankfully, to tear up the contract and start over. And what I learned was we were ill-equipped to take full risk. We've had no data. I had no systems to manage risk. No way to track patients and patient care. The incentives are completely wrong. Our teaching hospitals nationally Brigham wanted to bring everybody into a tertiary center. And that's just doesn't work with a risk insurance business. So we were just upside down in terms of our ability to take on risk and we lost a lot of money. It was quite a learning experience. I never want to repeat it. But again, that scar tissue is invaluable. And there's so much to be learned from the process.

Gary Bisbee 11:28
Great foundation, though, ultimately, you made your way to become the CEO at Allina in Minneapolis, what caused you to want to tackle a leading health system?

Ken Paulus 11:38
It had been on my mind Gary for a while that I was looking for a place where the physicians, the hospitals, and all the ancillary services of pharmacy and lab and home care and hospice and all that could all reside under the same roof. And if I had a chance to run a company that had all those pieces in one place, could I do something different and special to really put a dent in what I think are many intractable problems in healthcare. So that's what attracted me. And I think secondly, I'm from the Midwest, I had always wanted to come back to the Midwest at some point. But it was mostly this engaging opportunity of having all the pieces in one place. And it was quite a good ride. It was there for just under a decade, and I really, really liked it. It was good fun. And I think we made a ton of progress.

Gary Bisbee 12:26
If you could identify one main lesson that you learn to lead a large health system, what would it be Ken?

Ken Paulus 12:32
It was plus-minus Gary, On the plus side. I think having the physicians as part of the health system was crucial. I can't imagine a day where we'd ever go back or the caregivers, not just doctors, but doctors and nurse practitioners and all the people that take care of patients every day, day in and day out. Having them on the team was critical and crucial. And I think that allowed us to do some things that we wouldn't have been able to do otherwise, I think the negative or the downside of at least our idea was we were still so acute care centric, that limited our ability to innovate. And we were hooked on the drug of fee for service medicine. And because of that, all of our profits came from our hospitals. And the more acute, the more complex, the more of a specialty nature of treatment. The more we did, the more we made. And we could not get off that treadmill. And I gotta tell you, I'm a fairly transformative thinker. And I like to find ways to disrupt healthcare. I put my shoulder to that wheel, and I made some progress, but not a lot. And it's just part of how healthcare is delivered that acute care was the center of the universe. That's where all the money was. And it was hard to ever leave that and we didn't really make much progress against that. Unfortunately, you know, for that I'll forever have some regrets.

Gary Bisbee 13:59
You've got an interesting background and just regionally, Los Angeles, Boston, Minneapolis Midwest, and you had some unrest there in Minneapolis. How do you kind of think about the balance between management outcomes, maybe unions, how would you factor all that in with what happened there in Minneapolis?

Ken Paulus 14:20
Well, it's interesting in all of the markets have worked in, they've all been very high concentrations of union activity. And I'm very neutral on unions. I think they play an important role in some ways. And I'm not anti-union. I'm not pro-union. I think it's part of the system and it can work. It has worked, and most of the places I've worked, it's been a really good outcome. What's really stunning to me in terms of what's happened here with the racial unrest in Minnesota, and particularly this behavioral issue with the police, is that we're finding as we dig deeper into it, that much of the problem lies with management's inability to To act and to deal with poor performance, and the union's ability, or at least creation of a structure that would keep management from moving out poor performers. And unfortunately, the lead actor in this most recent event was a poor performer with multiple examples of performance issues, and he could not be removed. And I think what it tells me is there has to be a new day with how management and labor work together. And we have to have more of a collaborative partnership model. And both parties need to be held accountable for performance. And we're lacking that today. It's more of an advocacy model today. And I think we have to move to a performance model and it's a real opportunity. And it's also one of the root causes of probably ended up where we are, at least in Minnesota, and how policing takes place here. And it's unfortunate but from every bad circumstance comes an opportunity. progress. I think that's what this is going to prove to be.

Gary Bisbee 16:02
Well, on a happier note, let's talk about Prime Therapeutics. You recently celebrated your one year anniversary with Prime. Will you describe Prime Therapeutics for us?

Ken Paulus 16:13
It's a very interesting industry and company, we're in the pharmacy benefit management space. And I've always been in the IDN side of things. I spent some time in the health plan business at Harvard Pilgrim Health Care when I was running the physician side of the staff model. So I know the health plan side, I know a lot about risk and capitation. Having done that, in many places across the country, we sit squarely in the middle between pharma, providers, caregivers, IDNs, if you will, and health plans and we are a construct of a broken system in some ways. The fact that the interest of pharma the interests of providers and caregivers and the interests of health plans are not aligned. And as such, the PBM industry came before and we're in the middle trying to get pharma care to reduce prices, through rebates and other management formularies, passing those savings on to health plans and then working with providers to manage utilization. And it is purely a construct of a system that doesn't work. And in the ideal world, if the United States healthcare system really was efficient, there's no need for us. Unfortunately, we aren't efficient, we're not aligned, the incentives don't really work, and we actually are critical right now to make sure that the cost of medicines does not spiral out of control. So we're a reflection of a broken system that's still compartmentalized and still has incentives that don't deliver the outcomes that our nation needs, which is a stunning thing for me to say as a CEO of a PBM. But that's quite frankly where we are.

Gary Bisbee 17:48
So why the transition to pharmacy benefits manager to Prime, why did you do that Ken?

Ken Paulus 17:54
Gary, I had run my course of working in the IDN side of things. And I have mostly worked with physicians and caregivers throughout my whole life. And I've loved it. I've absolutely loved it. But I really needed to see a different side of healthcare, I needed to get out from under the IDN space, and see how others view it. And mostly I'm seeing health care from the payer, and PBM pharmacy management space now. And I'll have to say some of the things I'm seeing I wish I would have known as an IDN leader. The fact of the matter is, we're missing some very important issues on the provider side that you don't see when you're in the middle of it. And now that I'm not in it, it's like, wow, it's very apparent that there's an opportunity. So I absolutely love it. I never thought I would. But it's a great learning experience. I've learned a ton about how this system works. And it's very interesting to see how insurance organizations and health plans view the health care world. It's quite different and quite important.

Gary Bisbee 18:56
So how does Prime work with the patient? How do you work with blue plans?

Ken Paulus 19:02
The plans really come to us to work with pharma to stand between them and pharma to make sure that they're getting a reasonable deal. That's basically in a nutshell what we do. So they at Prime we represent 30 million Americans across 23 states 23 blues plans, and our job is to make sure we represent with pharma with pharmaceutical industry, that block of business and we buy and procure and source all of the medications and treatments that pharma represents. we acquire those treatments on behalf of our health plan partners and try to do so to create efficiencies, and it's very effective. I have to say, I know there's a lot of unusual perceptions around the PBM space because it is so opaque. The fact of the matter is in at least in our case, we're transparent PBM we pass through everything to our health plans, which you see is what you get. We don't have a lot of these arcane structures to move money around within the system. And we do play a critical role I can tell you, there are billions of dollars of savings that come through to health plans, and then to employers and then ultimately to patients and members. That wouldn't be there, at least in today's healthcare industry, if we weren't doing our jobs. So very interesting. And it's a critical role that said here, I have to say there's some aspects of this business that are incredibly inappropriate and broken, that create undue friction, and actually, harm quality in some ways. Those are some of the things that I'm very excited about working on.

Gary Bisbee 20:37
How do you work with the IDNs then?

Ken Paulus 20:40
That's where I do think that we're creating barriers to the very best quality for patient care. And there are two ways I can see with the IDNs that we should be integrated and working with them. One is what I call the friction model. Our model today is built on creating, you know, I hate to say this but barriers and gates for providers and caregivers to get through to make sure that they follow a formulary so that we can then use that formulary to lever pharma to get a better price. And it's a crazy way to do business. But it's the only way we have right now. So we have a very high friction model that we use with caregivers and patients to put them through these barriers and gates if you will hurdles. And that forces the system to drive to an outcome that again, we can use then to save money. That's one big problem. I'm not a fan of using friction for caregivers and patients. And having worked on that side for 30 plus years, the friction is untenable. We are putting caregivers through so many hoops and barriers that they can barely get their jobs done now. So that's one major problem. I think the other major problem or maybe opportunity, is that what's happening and pharma is the science is stunningly good. I mean, if there's one industry in this world that we actually lead-in, it's this bioscience, this creation of new solutions to pithy, complicated healthcare problems through incredible advances in science. And I think we're gonna look back and say this is the golden era of development. It's like when antibiotics were created back 50 years ago, this whole business of using the genome to unlock opportunities to treat patients in very different ways. It's really stunningly good. What's remarkable about that is that while we're breaking through on a daily basis with science and finding these new solutions, they're very complicated. They're very expensive, and there's no integration between pharma what we do and what caregivers do. I think the second big opportunity is for the health plan and the PBM leaders organizations to work very closely with pharma and the provider side to create partnerships in ways that we don't have today. We're basically buying cooperatives now that's interesting. It's a short term solution to a big puffy, complicated, expensive problem. But I just don't think it's going to deliver us to Nirvana, I think we're going to need a very close relationship with providers. And once we have that, and we bring pharma into the equation, I think two really important things will happen. One is caregivers will be put back in a position to drive these big complicated specialty treatments instead of throwing these patients over the wall to us. And I think pharma will move from a sales model to a knowledge model where their job is to put information in the hands of caregivers, health plans, members, to make the right decisions at the right time in the right place. And boy, if those two things happen, we will advance quality lower costs substantially in our healthcare system. So that's what I'm really excited about those two things, taking unnecessary friction out of the system, and bringing in a partnership level perspective for pharma and providers and what we represent so that we can create a breakthrough. And that's what's exciting about this job.

Gary Bisbee 24:20
Very exciting. What's your guess, I mean, we talking three years, five years, 10 years for this change to unfold?

Ken Paulus 24:26
Unfortunately, Gary, I'm 61. And I can't do this forever. I am in a hurry. We have got to show improvement and progress on this in the next three, four years, we have got to put a down payment on this. So for lots of different reasons. One is it's what the healthcare system needs. Two, it will save substantial money. Three, it will vastly improve quality. And I think probably most important, if we don't do it, I just can't imagine how this fragmented healthcare system will survive. I just I'm not seeing it. I just don't think it's working today and we have so much to improve. This is probably my last chance to run a big healthcare organization that could make a difference. I have got to go out in good form, I have got to be able to look back and say I was part of the solution not part of the problem?

Gary Bisbee 25:16
Well, we're looking forward to that. We have some confidence you will make a difference can let's move on to the COVID crisis. What observations from your current vantage point? What observations have you made about trends that might have already been in occurrence but that the COVID crisis accelerated?

Ken Paulus 25:34
There really is one big one that has me quite concerned. And you can worry about our inability to track infectious disease and our lack of preparedness and all those things. They're all things that we need to improve. But I have to say I'm most concerned about the fact that there's today for any given American there's really no captain of the ship, there's really no clear advocate or some person, entity-relationship that is air traffic control for a patient in need. And this crisis brought that to bear. I mean, if you are sick during this COVID crisis, you couldn't reach a primary care doctor's office, it wasn't clear who you'd go to for advice on well, do I do this test or not? Do I go into urgent care now or not? It is a fragmented combination of solutions and you had to do the best you could. Do I call telehealth? Do I go drive into my office? Do I go to the ER, it just wasn't clear. And we are in this position where COVID put a light on this incredibly broken system of no coordination. And there's really nobody in charge. So the patient's left to his or her own devices. And man that is just not a way to run a healthcare system. And that's what we've got today. And I think What you're seeing across the nation is any number of approaches to how to manage this crazy thing. And we're, of course, we're not getting much leadership from the government, not that that would have made much difference, but there certainly isn't much leadership from healthcare either. The industry hasn't done a great job and we are very fragmented and we're paying the price the fragmentation right now.

Gary Bisbee 27:20
Did COVID affect Prime's business model at all or Prime's economics at all?

Ken Paulus 27:26
Not really, because I think we acted relatively quickly. One of our first worries was the run on the bank for medications and there was one early on. And people were so nervous about getting their medications, chronically ill patients that needed their medications that they were stockpiling. And we had to immediately lay in rules that would manage the supply so that they were 30-day supplies or shorter supplies so that we didn't have patients with years of supply and not having other patients that needed medications and they couldn't get them. So we immediately worked with the government to put in rules and structures to manage the stockpile run on the bank kind of circumstance, and we avoided that, thankfully. So we didn't really run into shortages. It was close. There were some shortages around the hydroxychloroquine run that took place after the President made his comments. But they were short-lived. And I think we've managed through them pretty well. So I think, for the most part, we got through it, and we avoided any really significant problems. Thank God.

Gary Bisbee 28:26
It's evident that public health is now part of national security. We just never thought about it that way. How do you think about that, Ken?

Ken Paulus 28:34
I think public health has never gotten it's appropriate do in our system? It harkens back to our earlier comments, scary when you ask question around well, how IDNs work, you know, whatever. Public Health just isn't rewarded. Our nation doesn't really prioritize it. Now, I think we're realizing a pandemic. It's critical. And countries around this globe that are really good at public health has have done a great job of managing and pandemic in an incredibly difficult circumstance. We have no public health assets really, in terms of the scale or the integration or the coordination of public health in this country, we don't have it. So we ended up with our fragmented system which we already know isn't really well-coordinated doesn't communicate, put through the wringer. We have no public health system really to rely on and we ended up with the mess we've got and you get what you pay for. We got what we paid for. We've never prioritized public health. So I think we're gonna have to find a balance in the future between acute care, public healthcare, centricity of a patient, where is the place where cares delivered, acute care can be the center of the universe any longer. It's not even urgent care. It's not even home or maybe I think it might actually be virtual that there's a virtual system and public health has to be tied into that virtual system. So we're all coordinating and gosh, it's going to be so hard for us. Our political parties and our constant bickering back and forth, somehow we're gonna have to break down these barriers. And I'm not sure exactly how that's gonna play out.

Gary Bisbee 30:08
It is hard to see. But I totally agree with you. We need to get there. Well, let's turn to leadership, you've ideally positioned in the sense that you've led a variety of different kinds of companies. All in healthcare, of course, but when you first became aware of the COVID crisis, what was your first thought?

Ken Paulus 30:28
I really think my first thought was two concerns, one, protect my employees, and to make sure patients get their medication so we don't cause havoc. And I think those two things I thought oh my gosh, we have got to make sure that those two things are intact. And it's a scary time and critical time.

Gary Bisbee 30:51
So moving from that to what are the most important characteristics of a leader during a crisis, Ken?

Ken Paulus 30:57
There's much to be written about this. But for me, the first thing was calm in a storm. I mean, we're in a frightening circumstance, we still are, we don't understand it. And I think leaders must stay calm. We can't panic. I think the second thing for me was very regular, transparent, and high levels of communication. At a time of uncertainty. People need to know what's going on. Even if you don't have the answers. It's okay to say that you don't. I think third, it requires action. I mean, you really have to have a propensity to act. Assuming you're calm. Assuming you're highly communicative. I think you have to have some courage to make some tough calls and move. And I think that's critical. So I think for me, those three things really are like the three legs of a stool to get through a crisis. There's that great line from Rahm Emanuel during the financial crisis that I ascribed to and they were going Through with Obama and Rahm Emanuel going through this process of the Great Recession, and he said, You never want to, I'm paraphrasing, but you never want to let a good crisis go to waste. It's your opportunity to do great things. And that's really what we have here is an opportunity to great things. And the question is, do we have the courage to do it? That's really what's gonna come down to and I hope our leadership does and I hope I do. That's really what we need to accomplish today.

Gary Bisbee 32:28
Well, it's all about leaders at a time like this. No question about that. Has the COVID experience change you as a leader in any way or as a family member?

Ken Paulus 32:37
For sure it points to the importance of relationships and in health care, we're in the relationship business. It's critical. You can't optimize health for somebody that that's one of your charges, somebody you're responsible for without a really good trusting relationship. And I think we all now are looking at our relationships differently and realizing how important they are to us. I think that's probably the key takeaway for me, Gary is social distancing has put a spotlight on either the ability to maintain or the importance of those relationships and also the some of the challenges of not having a social connection that is a critical part of the human beings needs. So I do think it's all about relationships and social connection. And if I had to say on health care, the patient relationship or not even before they become patients and individual relationships, that trusting relationship is up for grabs. It will be very interesting to see who owns that for a lifetime. Will it be IDNs? Will it be primary care doctors? Will it be some health care, air traffic controller? Will it be a health plan? I don't know. But somebody is going to play that role. And I'll tell you, there's a lot of disruption in healthcare because nobody has stepped in to fill that void. COVID has shown us that we need somebody to focus on that long term relationship and it's just not happening today. Again, with great challenges come great opportunities. Now that's a big one. And if I was running a healthcare business or an IDN right now, I'd be thinking, we have got to be running like heck, to solve that problem and fill that void. Our nation needs it now.

Gary Bisbee 34:23
That's a terrific finding. This has been an excellent interview. Ken, thanks so much. I have one last question. If I could. You're a board member. Of course, you sit on the board of Teladoc, but you've been experienced boards throughout your career. What are the key questions a board members should be asking in a crisis like this?

Ken Paulus 34:41
I think it's really a couple things. One is definitely getting through the acute phase of crisis. We're in that now. And it takes all of those leadership skills that we talked about. I think those are really important and staying steady at the helm, communicating the heck out of it and acting and moving, and having the courage to make some really critical, tough decisions. I think that's really important. actually think the bigger opportunity is envisioning what your organization will look like when this thing's all said and done. And this is one of those unique opportunities to take a completely fresh look. blank sheet of paper, we're going to come out of a crisis, a very changed nation in a lot of ways. And could you do something substantially different, that would really advance your organization, your service, your connection to consumers, whatever. I think this is one of those rare moments in all of our careers where you can basically be bold, and go for it. The second thing I suggest to all leaders of the boards I sit on is to get through the crisis phase. But while you're doing that, put equal time in the recovery phase. And in that recovery phase, it's a chance for just incredible transformation. Take advantage of it, run with it. That's where the action is going to be with this.

Gary Bisbee 36:00
Well said, thanks, Ken, terrific interview much appreciated Good luck to you and Prime as we move forward.

Ken Paulus 36:07
Thank you so much, Gary. It's been a pleasure talking to you.

Gary Bisbee 36:09
This episode of Fireside Chat is produced by Strafire. Please subscribe to Fireside Chat on Apple Podcasts or wherever you're listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested. Fireside Chat is brought to you from our nation's capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisbee's Brief. For questions and suggestions about Fireside Chat, contact me through our website, firesidechatpodcast.com, or gary@hmacademy.com. Thanks for listening.

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Transcription:

James Linder 0:03
Every health system is looking at their labor stack if you will. Who does what work? How is work getting done? How's the care provided? So I do believe we will get to a different care delivery model than we had in December of 2019. And hopefully, that will be better for the patients and be more efficient economically.

Gary Bisbee 0:23
That was Dr. James Linder, CEO of Nebraska Medicine, discussing how the COVID crisis will lead to a new delivery model to provide more convenient and efficient care for the patient. I'm Gary Bisbee. And this is Fireside Chat. Dr. Linder has a storied career at the University of Nebraska, including being interim president, a long term faculty appointment as Professor of pathology and microbiology, and his current appointment as CEO of Nebraska Medicine. Dr. Linder is a long-standing entrepreneur with a broad range of interests. Let's listen to Dr. Linder respond to a question about the public health infrastructure and its importance to national security.

James Linder 1:05
The pandemic has illustrated the fact that robust public health infrastructure is essential for not only the health of individuals but the health of the economy. It's not nice to have, you really need a strong public health infrastructure. And I think every city-state and the federal government has underfunded that for many years because it's not a glamorous activity. Hopefully, people have learned from this pandemic that proper investments and public health are essential.

Gary Bisbee 1:37
Our conversation includes Dr. Linder discussing a leader's most important characteristic in times of crisis, Nebraska medicine, economics, what he likes most about Nebraska, and the role of the Nebraska medicine biocontainment unit that received early COVID patients from the west coast. I'm delighted to welcome Dr. James Linder to the microphone.

Well, good afternoon, Jim, and welcome.

James Linder 2:03
Thank you very much, Gary, I'm delighted to be with you on this podcast.

Gary Bisbee 2:06
We're pleased to have you at the microphone for sure. It's always interesting to learn about our guests. You're Midwesterner born in Nebraska and have been at the University of Nebraska in one form or another for quite a while. What do you like best about the Midwest?

James Linder 2:21
As you say, I was born and raised here. And I guess I could say I like the seasons to some extent, and I certainly like working with the people. I've had just great professional interactions since I joined the faculty here in Nebraska in 1983.

Gary Bisbee 2:37
For those of us that aren't familiar with Nebraska, how would you describe Nebraskans?

James Linder 2:43
Well, I would say we're the well-deserved brunt of many jokes. You know, it's like a study, in contrast, it's a very agricultural state with expanses of land with very few people. So we've been practicing social distancing since 1869. Then we also some major metropolitan areas with huge businesses with Fortune 500 companies. So it's a nice contrast that appeals to many people.

Gary Bisbee 3:12
What would be the distinctive feature of Omaha as a city other than there are these four companies and Nebraska medicine and so on, but how would you describe Omaha to somebody that was not familiar with it?

James Linder 3:25
I'd probably still describe it as a big town as opposed to a city, which is a little unfair since the metropolitan area has close to seven or 800,000 people, but it's a community I think, where people do still know each other, they interact a lot of farmers markets, cultural events, and everything is accessible. And I lived in the Boston area for a while for work. It was very hard to go to a show because of just the logistics of traveling and parking, whereas in Omaha, you can still enjoy those things.

Gary Bisbee 3:57
Now our listeners wouldn't forgive me if I didn't ask the obvious question. Do you know Warren Buffet? And do you run into him at all?

James Linder 4:05
I do know, Mr. Buffett. We have run into each other on a few social events. And he's a very private individual. And I think everyone in Omaha respects that. I've been in restaurants where he's been at a table and no other people walk up to him to start conversations. They're very grateful for what he's done for the community and for all the investors in Berkshire Hathaway, but he enjoys his private life. And a favorite story about Mr. Buffett, I actually when I was a younger person, saw him in a hardware store looking for a part on his own, and walked around some aisle and there's Warren Buffett. I didn't have the foresight then to ask him for investment. My wife Karen actually did write a book on the women executives who served Berkshire Hathaway for many years. And in doing that, we learned quite a bit about the company and its success.

Gary Bisbee 4:59
That sounds like a must-read and maybe the next podcast interview would be with Karen, but on to you. When did you decide on medicine?

James Linder 5:07
Well, I was an undergraduate biochemistry major Iowa State and was actually pursuing a PhD program in the 1970s. And unfortunately, that time, getting a PhD in biochemistry was a ticket to the unemployment line. And I decided that I could be a very good researcher with a MD degree, as well as a PhD degree. So that really drove my choice of medicine. And some of you may know that I'm a pathologist by training. And pathology is more of basic science. So that was kind of in line with my research interests.

Gary Bisbee 5:40
You've held a variety of positions at Nebraska, including interim president in the university and certainly been a professor of pathology microbiology for quite a while and currently CEO in Nebraska medicine. What were the circumstances that resulted in your being appointed interim president?

James Linder 5:58
I was working in the university prior to that time leading to technology development. And that was because I had worked in industry for about 12 years. And so I had a good sense of tech transfer. And when the president of the university took a position at the City University of New York, he recommends that I'd be one of the candidates for that consideration, simply because we had worked together at the system level. The University of Nebraska has four different campuses. So it has quite an expanse throughout the state.

Gary Bisbee 6:31
How long were you interim President, then?

James Linder 6:33
So luckily, I had to get out of jail free card. My agreement specified that I could not be a candidate. The search concluded after one year, and so I had a full year of all the things that you would have as a university president, including an occasional athletic department, controversy or two, but then when the year ended, they had a good candidate who followed me who was dedicated to being a university president. He took that job on.

Gary Bisbee 6:58
If you could focus on one thing that you learned as President of the University of Nebraska during that year, what would it be?

James Linder 7:05
I would say that it is a learning that I've tried to carry all my life is that if you have people who are working for you or with you, let them do their jobs, don't try and do their jobs. Because the reason that they are a dean or department chair or Chancellor is to lead their faculty and their employees. And I think that's always been a valuable lesson. I've applied in different roles. I was the Dean of medicine for a while and I left the chairs to do their job. And as CEO, I let my chiefs and divisional leaders do their jobs, that's why they're there to do the best job possible.

Gary Bisbee 7:43
That's a good transition to the current role you're holding, which is CEO of Nebraska Medicine. What were the circumstances, Jim, to your being appointed to Nebraska medicine? You were sitting on the Nebraska medicine board at the time. But what were the circumstances underlying your appointment?

James Linder 8:01
I was on the Nebraska medicine board and clearly had no aspiration or even concept that I was qualified to be the CEO of the health system. But the board asked me to assume that leadership role and I talked to my wife and she thought I was being a little underutilized at that time since I had finished the university presidency. And I thought it'd be a good experience.

Gary Bisbee 8:26
So you agreed to do it. And you've been CEO now for about two years. What have you learned as CEO that you didn't realize when you were sitting on the board of Nebraska medicine?

James Linder 8:39
I think the greatest thing I came to realize both as a board member and as a physician practice at this hospital for decades, was how incredibly complex it is to deliver patient care at a high level. It's really, as all the other CEOs listening know, you're running basically a hotel, restaurant, Critical Care Service and emergency room. It's a very complex business. And each day when we have our daily shout out here 30 different departments report. And if anyone of them has a problem, say pharmacy, it dramatically impacts the rest of the health system.

Gary Bisbee 9:17
Most people don't realize that you're also a highly successful entrepreneur. When did that interest develop?

James Linder 9:25
It probably grew mostly out of my experience in the industry. I began working for a company part-time, and in the mid-90s. That was based on some of the academic work I'd done. And at the same time, I retained my faculty employment. But in doing that, we were forced to innovate new products, we had the opportunity to look at partner companies for either acquisition or other relationships. And it really gave me direct exposure to business and business development. So when I came back to Nebraska. I was actually leading the technology transfer office at the Medical Center for a while. And in doing that was active and trying to build commercial activities out of some of our intellectual property.

Gary Bisbee 10:14
So what are your current entrepreneurial interests, Jim?

James Linder 10:17
Well, for 10 years my wife and I have operated an angel investment fund called Linseed capital. And I think we invested in about 30 companies. And all of those have been great experiences because we live vicariously through the founders. Clearly, not all of them have been successful. But we've had great learnings from dealing with those people. And then for about the last five years, my wife and I have been operating, she more than me, a company that does ceramic 3d printing. And we were attracted to that because of potential medical applications. And that's been true, but then there are also great uses for ceramics and other industries.

Gary Bisbee 10:59
A very Interesting life you live, Dr. Linder. Why don't we move to Nebraska Medicine? Can you describe Nebraska medicine?

James Linder 11:07
Well, at Nebraska medicine we are the primary teaching hospital for the University of Nebraska Medical Center. We are a free-standing entity that has its own governing board. We don't report directly to the state of Nebraska. We operate to hospitals, approximately 800 licensed beds. And during the course of a typical year, we'll have around 34,000 visits, 95,000 emergency room visits, and 74 clinics that accommodate probably a million clinic visits. So we're small compared to many larger academic medical centers and health systems, but really ethically share some of the same opportunities and problems.

Gary Bisbee 11:47
What about the culture? How would you describe the culture of Nebraska Medicine?

James Linder 11:51
I would say it is targeted toward getting things done doing the right thing. Innovation, teamwork, the pursuit of excellence. wants courage and healing which are embodied in our values. People work really well together.

Gary Bisbee 12:05
Nebraska medicine received one of the early COVID patients, as I recall, share with us why Nebraska medicine would have received those early patients?

James Linder 12:15
It's a very good question. And it underscores a comment that Steve Jobs made and a commencement address at Stanford, that you can only connect the dots backward. And if you look back to 2004, a decision was made to establish and biocontainment unit at the University Nebraska Medical Center. It sat unused for 10 years, but every month, the staff in that unit practiced donning and doffing and taking care of highly infectious patients. Then in 2014, we had of course, the Ebola crisis that led to people receiving care in the US, and Nebraska medicine took care of the majority of those patients. After that, experience it was recognized that the country in the world needed training and dealing with highly infectious diseases. So over the next five years, we participated in training thousands of military and civilian personnel in the country and actually established the global center for infectious disease on our campus. And it was that center that was activated when the patients from the diamond princess cruise ship, were returned to the US who were COVID positive. And we monitored some of those who are not too ill in isolation and then provided care for the others.

Gary Bisbee 13:35
Definitely an interesting story. Let's move to COVID a little bit more in a moment. There's been obviously social unrest around the country. Sounds like Omaha has had its share. How would you describe that Jim and how has it affected Nebraska Medicine?

James Linder 13:53
Omaha has had a share of an appropriate share, I would add of concern over the disparities that exist both economically for people of color and in healthcare access. And our physicians and nurses have stood with those individuals. There was an event just on Friday, where hundreds of healthcare professionals knelt in a moment of silence to recognize the problems that our country is now dealing with. When I communicate to our staff, I emphasize that we cannot solve problems on a national level. But locally, we can do a lot to impact in a positive way the lives of people who would like education and healthcare, would like to add this as a career. And certainly dealing with the healthcare disparities, making sure that everybody has access to screening and care in the state.

Gary Bisbee 14:47
Well said let's turn if we could to the COVID crisis, how has the surge progressed in Nebraska and particularly for Nebraska Medicine?

James Linder 14:57
if I had to use a term, I would say a Rising Tide as opposed to a tidal wave. We began preparing for a surge, probably in February, maybe March. And that was based on some of the modelings we had seen, that could affect our estate. And either because of social distancing or other factors, we didn't see that spike in impatience. But we've seen a steady climb and the number of COVID-19 patients we're caring for, typically 10% to 15% of our inpatient census, I pointed out to people that during this entire preparation for the surge, more than 90% of patients that we care for either in our ambulatory clinics or the hospital are the routine issues of heart attacks and cancer and neurologic disease that require our attention. So you're ramping up to do something totally different taking care of patients, while at the same time you have to deliver excellent care for everyone else.

Gary Bisbee 15:55
Shortage of PPE has been all around the country, particularly those in the midst of the surges, how has PPE been for Nebraska medicine?

James Linder 16:07
In general, we had adequate supplies. And that is partly because of the position we sat in the country of being prepared to take care of large numbers of patients who might be ill with an infectious disease. We did pioneer early on the UV decontamination of N95 masks, which allowed an individual to use his or her mask over say three times. We also thought a lot about innovation. Our teams put together ways for droplets that might arise from having nasal canula in place, using shields that could protect anesthesiologists and a lot of environmental controls to make sure that health care workers are not affected.

Gary Bisbee 16:52
There's been a lot of discussion about the role that the federal government ought to play for stockpiling PPE. How do you think about that, Jim?

James Linder 17:02
Well, it's a question of when you're doing it. If you're doing it prior to a pandemic, it's a wonderful thing. That way, health systems can equitably access those resources. Yes, the federal government is competing against health systems to buy PPE during a time where you're trying to secure for your own patient care needs, and there isn't a system to equitably distributed and that can cause problems

Gary Bisbee 17:29
How about the state of Nebraska? Is the state of Nebraska have any stockpiling of PPE?

James Linder 17:35
The state of Nebraska has been a very good partner for Nebraska medicine from the onset of the pandemic. Our staff here at UMC have worked with the six different regions in the state to try and make sure that people were educated on protocols and as much PP was available as possible. So we did have some state resources we drew on some of the resources that existed at Nebraska Medicine to make sure that the hospitals and nursing homes could actually deliver the care in a safe way. pp is just an amazing tool for controlling the pandemic. We have had no health care workers that have become infected when properly using PPE that's since January of this year. Now I'm knocking on wood here because we could always have a mistake tomorrow. But we made use of PPE extenders to make sure that our individuals were in the care setting or properly putting on and taking off their PPE so that did not accidentally contaminate cells.

Gary Bisbee 18:39
Jim, how about telemedicine? It has exploded in virtually every health system in the country. How about Nebraska Medicine?

James Linder 18:47
It has likewise seen a dramatic increase. In the last month, we had some days where there were more telemedicine visits than there were in-person visits. And so if there is ever a silver lining from this pandemic It is illustrated that patients like telemedicine. Physicians can practice high-quality telehealth remotely. And it is a real plus for healthcare Also consider the fact in a rural state like Nebraska, it can enable care to populations that otherwise may not get it. So I think that organized medicine should work hard with the federal government and insurance carriers to make sure that the reimbursement for telehealth services is appropriate.

Gary Bisbee 19:29
If the reimbursement is appropriate, do you think that this increased usage will continue or even grow?

James Linder 19:35
I think it will continue. I think it will require our health systems to rethink how they engage patients. So we may have diagnostic centers where blood draws could happen. And imaging studies could be done here, before or after the telehealth visit. So all that information is there. And then I think you'll see some services that have not been adequately served in the country such as in-cancer screening, that will grow tremendously because the paucity of dermatologists and many communities has led to a deficit in screening for skin cancer. And I think that can be resolved by telehealth. So the CMS and the states issued waivers pretty early on. Was that particularly helpful? I think that the waivers that were issued were helpful, and I think that we should look carefully at how that has impacted care. And when it's improved care, we should look for those waivers to be made permanent so that it is part of the ongoing provision of care. how do you think about social distancing with let's say your amatory care,

Gary Bisbee 20:40
How do you think about social distancing with let's say your ambulatory care, waiting areas will there need to be new planning to accommodate social distancing?

James Linder 20:51
The point you bring up is very important. A lot of the ambulatory care areas if you think of how they were historically patients would come in, they would be given a clipboard and they'd fill out several pages of answering questions. And that does not lend itself to good social distancing. So with the digital front door, if you will, that we've developed with our Nebraska medicine app, which is similar to what many other health systems use, those questions can be answered before the patient comes in. So literally, they show up for their 10 o'clock appointment can be seen immediately in the exam room where they're scheduled to be seen. We've taken the position that all of our providers in the ambulatory setting do wear masks. We provide masks to patients when they come in if they don't have their own. We think that the physical barrier the mask is essential for limiting the spread of the virus.

Gary Bisbee 21:45
How about rebooting surgeries Have you begun to institute surgeries now?

James Linder 21:52
We began doing "elective surgeries" when it was permitted by the state surgeries that were required for life and limb, even during the onset of the pandemic we did. The things that could be postponed for four to six weeks were postponed. And we began doing those largely limited by the availability of staff as opposed to our time. Then we found, as I'm sure many other CEOs have taken care of patients who have COVID-19 infections as a significant burden on your critical care, faculty, and staff, whether they're anesthesiologists or pulmonologists and that has limited our ability to staff some of those procedural areas. But we're gradually getting back up to the neighborhood of 80%.

Gary Bisbee 22:42
COVID has accelerated the timeline for discovery in many cases, vaccines, drugs, devices, as you've pointed out innovations that Nebraska medicine will that accelerate to provider delivery cycles in a commencer Why do you think Jim?

James Linder 22:59
I think every health system is looking at their labor stack if you will. Who does what work? How is work getting done, how's the care provided? So I do believe we will get to a different care delivery model than we had in December of 2019. And hopefully, that will be better for the patients and be more efficient economically.

Gary Bisbee 23:20
Let's go to the economics of this, which is not a pretty picture for any of our health systems. How will this COVID outbreak affect and Nebraska medicines finances in 2020?

James Linder 23:33
Well, for fiscal year 20, we will incur probably a modest financial loss. We were in a fairly strong position, coming into say April this year, but April, May, and June will all be actual negative, if you will. We made the decision early on to not furlough any of our employees. And we had the luxury of doing that because we had sufficient days of cash on hand that we felt we could absorb that law. We also thought that those colleagues would be essential for the recovery of our activities in June, July, and August. But still, it's going to be a difficult year. And it will require some innovation and work on part of everyone to make sure that we can deliver care in an efficient way and make sure patients feel comfortable coming back to the clinics in the hospital.

Gary Bisbee 24:23
There's a lot of fear out there. Probably 40% of individuals are reluctant to come into a healthcare setting. How are you dealing with that? Are you trying to communicate with the community about that, Jim?

James Linder 24:35
I believe that the most effective way is direct conversations with the individuals who normally would schedule those patients, making sure that they are aware of the safety precautions in place for their well being. And I make the point that Nebraska medicine was one of the most advanced facilities in the country or the world in dealing with the patient who had an infection. Likewise, the safety protocols we put in place, I think are strong, supportive, and safe for the patient. Fear is fear though. And it does take repeating that message many times over.

Gary Bisbee 25:11
Yeah, I'm sure. Well, let's hope we don't have another wave in the fall as some are predicting. How are you expecting the payer mix to change?

James Linder 25:19
Well, I think the payer mix will change in a couple of different ways. In Nebraska, we're finally getting to a point of Medicaid expansion. So we will be reimbursed for Medicaid from sources we did not have access to before. And then I think on the national scene, there will probably be the ongoing juggling of different payers. They probably had a very strong third and fourth quarter because of the fact that many elective procedures were postponed, but there'll be rethinking about how they want to support healthcare and there could be federal legislation as well that affects the payment of services.

Gary Bisbee 26:00
Turning to leadership. I think we all agree leadership is always important, particularly in times of crisis. What characteristics do you think a top leader ought to have during a crisis?

Jim Linder 26:12
Calm. That answer may be too brief, but I think it's essential. I think you have to analyze the situation you're in, get input from people who are at the front line and be calm as you'd help guide people through the decision making.

Gary Bisbee 26:25
Yep. As I've asked other CEOs, that's a frequent answer. So you all have that experience. Let's go to the health infrastructure, it seems clear that public health is more part of the national security than we might have thought in the past. How do you think about that, Jim?

James Linder 26:45
I think that the pandemic has illustrated the fact that a robust public health infrastructure is essential for not only the health of individuals but the health of the economy. It's not nice to have. You really need a strong public health infrastructure. And I think every city, state and federal government has underfunded that for many years because it's not a glamorous activity. Hopefully, people have learned from this pandemic that proper investments and public health are essential.

Gary Bisbee 27:17
I totally agree with that. And it seems like it's up to us to continue to push that ball forward, or it runs a risk of being forgotten. Again, Jim, this has been a terrific interview. I'd like to ask one last question if I could. We've been talking about the new normal, off and on now for a couple of months. What do you think would characterize a new normal?

James Linder 27:40
I think we have to acknowledge the fact that the diseases that plague people before the pandemic continue to exist. And we have to figure out a way to deliver care to those individuals in a way that's safe, while at the same time meeting our challenging requirement of providing care for Cova 19 patients for at least the next year. We think that probably 10% of our hospital occupancy will be of that realm. Then, relative to your public health question, I think the more that we are engaged in communities, making sure people are healthy, making sure that there are not health disparities and access and care. I will have a healthier community overall, and just make the country a better place.

Gary Bisbee 28:25
Jim, excellent interview. Thanks so much for your time today much appreciated.

James Linder 28:29
My pleasure.

Gary Bisbee 28:31
This episode of Fireside Chat is produced by Strafire. Please subscribe to Fireside Chat on Apple Podcasts or wherever you're listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested. Fireside Chat is brought to you from our nation's capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisbee's Brief. For questions and suggestions about Fireside Chat, contact me through our website, firesidechatpodcast.com, or gary@hmacademy.com. Thanks for listening.

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Transcription:

Terry Shaw 0:03
There are many times that I would want to go back and deal with the issues that I'm comfortable with when what I really needed to be doing is making sure that I was working on communications and organization and thoughtful planning for the future of our organization. There was a time period where I just told the team, I'm out of the firefight. I'm taking four people and we're going to spend two weeks doing exactly what I said. So that's what we did.

Gary Bisbee 0:30
That was Terry Shaw, President and CEO AdventHealth, discussing the necessity for a CEO to focus on the right things, rather than those with which they might be most comfortable. I'm Gary Bisbee, and this is Fireside Chat. Terry outlined AdventHealth's 2030 aspirations document and spoke about how the experience with COVID accelerates the consumer plan from five to two and a half years and how they decided to harden their telehealth services into a business. Let's listen to Terry respond to a question about whether it will become a new core competency of health systems to flex up and down in the face of a crisis.

Terry Shaw 1:07
For this crisis specifically, that means you have to have an inventory of not only people but equipment and supplies that you can move across your system. As you turn PC us into IC us and med surge into PC us as COVID ramps up. What I never want to have done in the future is a complete shutdown. We need to be able to flex up and down with the outbreak that happened across the country in the markets that we're in and not disturb the other markets that we're in. While we're providing normal routine care to everybody.

Gary Bisbee 1:43
Our conversation includes Terry's view of how consolidation among provider health systems will play out over the next three years. What steps CMS should take to make care more efficient and consumer focus, how he expects AdventHealth to lose from $400 to $600 million in 2020, what were his first thoughts when he realized that the covert crisis is going to envelop AdventHealth, and what personal and professional learnings he took away from the crisis. I'm delighted to welcome Terry Shaw to the microphone. Well, good afternoon, Terry, and welcome.

Terry Shaw 2:18
Hey, good afternoon. Thank you, Gary.

Gary Bisbee 2:20
Pleased to have you back to this microphone. You were the first guest in our very first episode, and you're the first guest who will succumb to our interviews again. So well done.

Terry Shaw 2:30
Well, thank you. I've enjoyed listening to your podcast with other members. It's been a great learning for me. So thank you.

Gary Bisbee 2:37
Well, terrific. Thank you. In your first episode, we lead with the observation that you made that CEOs make the same three mistakes. Do you remember what you said?

Terry Shaw 2:46
I do. CEOs generally don't address HR issues quickly enough. Sometimes we allow the inertia of an organization to push back on our plan and we give up and sometimes we find ourselves focusing on what we're comfortable with as opposed to what we really ought to be doing. I think it kind of sums those three things up.

Gary Bisbee 3:07
Yeah, that was perfect. And the follow-up question, of course, did the COVID crisis cause you to lean into these three challenges even more than you had been?

Terry Shaw 3:15
Absolutely. Without a doubt. Times of stress amplify both weaknesses and strengths. And when you're in the middle of a three-month crisis, you have to, as a CEO, lean into that. I don't want to go into any details. But yes, from an HR perspective, I had to modify some things in the middle of the crisis because things just weren't getting done. There was a lot of inertia if you can imagine in 50 markets on how things ought to work. And we actually pulled a CEO from one of our facilities to run the command center, so that we were getting the voice of everybody into the process. And at that juncture, we pushed back on the inertia pretty hard and ran this as a company. And there are many times that I would want to go back and deal with the issues that I'm comfortable with when what I really needed to be doing is making sure that I was working on communications and organization and thoughtful planning for the future of our organization. There was a time period where I just told the team, I'm out of the firefight. I'm taking four people and we're going to spend two weeks doing exactly what I said. So that's what we did.

Gary Bisbee 4:29
We'll cover COVID more in a moment. But why don't we review AdventHealth? Could you do that for us now?

Terry Shaw 4:35
Sure. In brief, AdventHealth had a great year last year with $12 billion in revenue. We have two-thirds of our operations in Florida. We're in eight other states. We have multiple partnerships with large progressive organizations for which were most thankful. The first two months of 2020 had been exceptionally normal, middle of March was exceptionally normal, and then like everybody else, all hell broke loose. So we're coming out of that, and we're trying to go back into normal, we've all got to manage COVID like it's a product line, and not let the engine stop the next time around. We have a spike.

Gary Bisbee 5:10
You put together your 2030 aspirations document, which was very substantial. Could you describe that for us, Terry?

Terry Shaw 5:17
We spent a year working on our 2030 aspirations and taking a good hard look at our organization. We had the thought of the consumer, the thought of our board members, the thinking from our physicians. And then last but not least, I had 10 industry experts come in and give us their thoughts on what AdventHealth may be missing in our thinking. And Gary, we were just about to roll that out for our company when COVID hit and what that's done is allowed me to go back and take a look at that and actually nudge some things along differently than we originally thought. I'll give you an example. Virtual care is something we've played with but not hardened and turned into a business. Risk care capability is something we're playing with. And when you think about those three coming together, in order to have AdventHealth be anywhere we want to put it. We're calling it AdventHealth everywhere. Those three business lines are items we're bringing up and getting very serious about here in the next 18 to 24 months. We've accelerated our consumer work we've had a rich two and a half years of leaning into consumerism, but our five-year consumer plan and our 2030 aspirations have been shortened to three years and we're working on multiple four-month sprints and a command center like focus to get done much quicker than we thought we were going to get done what we needed to do. Last but not least in this process. I gotta tell you the way we think about distribution and supply chain is been turned on, it's ears and we don't have a lot of final things on that, But I can tell you a year from now, Advent Health will think a lot differently about where they play in the supply chain and distribution process for needed product to take care of its employees, our team members, and our communities.

Gary Bisbee 7:15
On that point, the supply chain point, I think we all agree it needs to be more reliable. There's also the thought that certain of these PPE really should be produced domestically, or at least much have been produced domestically. How do you think about that, Terry?

Terry Shaw 7:31
We don't let other countries build our fighter jets, nor do we let them build our battleships. I think in healthcare, we're going to have to go to a methodology of thinking about what are the things that we really need to have for our country for the 330 million people that live here? And are we really going to let other people manufacture and control that process? Or a we kind of come to the conclusion as a country that just like we do for other things, that's just something we're going to do in the states to protect the people that we have to protect.

Gary Bisbee 8:07
Makes good sense. I know that you and other health systems have taken steps to make that happen right away. So well done there. On the virtual care issue. I'm sure that telemedicine telehealth kinds of visits exploded at Advent health like they did in most of the other health systems. Can you describe that a bit for us, Terry?

Terry Shaw 8:29
Telehealth was about 2% of our business before COVID. And through COVID, for our physician practices, it went to over 70% of our business, and we had to harden our business quickly. And it's only been there in the past as a benefit to our employees. And as an offering, we can put in an article for a doctor to reach the patient. And as we've watched the business grow and as we've watched our capabilities in the business grow With it, we're clear we can turn that into an actual business and make it available to our Docs. But then also run a business so that we can actually reach people anywhere.

Gary Bisbee 9:11
To follow up on the hospital at home thought. That seems to be one of those thoughts that hey, it's easy to think about that. But when you actually do it sounds like it's very complicated a number of ways. Am I right on that? Or am I missing that point?

Terry Shaw 9:27
No, it is. And when you think about it as a standalone issue, it doesn't make a lot of sense. But if you're gonna turn virtual care into a business, and you're gonna have physicians and nurses, let's say they're distributed or in a bunker, and you add to that specific risk-based clinics that need outside office hour care that you could also run out of that bunker. And then you add to that, the ability to do hospital care at home for a certain set of diagnoses all sudden all of them the synergies across them make enormous sense. It is a way to get into markets that you're not in today and do it from a capital-light perspective.

Gary Bisbee 10:10
Okay, in our discussion six months ago, talking now about your executive team, you indicated you're going to add four executives, Chief Digital Officer, Chief Consumer Officer, Chief Brand Officer, Chief Risk Officer. Have you been able to do that? Or did COVID get in the way of hiring those people?

Terry Shaw 10:28
Believe it or not, we did that all before COVID hit and we were very thankful to have each one of those during this time period especially. We stood up a 1-800 virus HQ call center process very quickly. We've reached people all over the globe. It's amazing digitally how people can find you. Our Chief Digital Officer in this space has been invaluable. And then our Chief Brand Officer and Chief Risk Officer were obviously involved in this. Our Chief Risk Officer is just getting going to be honest with you about what our plans are. But we have it's called Project silver, and how we're going to bring up risk-based clinics across our current network and other networks that I believe will drive the same operating income that the rest of our organization drive to our enterprise at this juncture.

Gary Bisbee 11:24
I know you're looking into building a unique Medicare Advantage product, is that in the purview of the Chief Risk Officer?

Terry Shaw 11:32
It is. Yep, sure is.

Gary Bisbee 11:34
Moving on to COVID. One thing that's been interesting to me is that we've seen acceleration and discovery such as vaccines and medicines. And I'm wondering if that will flow through to accelerating on the delivery cycles. Do you have any thoughts, Terry about that?

Terry Shaw 11:51
It's interesting. I was on a G100 call and the CEO of Johnson and Johnson was talking and he was talking about the vaccines that are being worked on. Whether it's going to be one vaccine or a series of vaccines, he paused and he goes to list to really talk through this, making the vaccine viable is one thing, producing the vaccines another distributing a vaccine to 7 billion people. And either one doses or two doses is yet a third. And I believe there's going to be an amazing amount of energy that is going to have to be deployed not only in America but across the globe to get the vaccine to people once it's available. And I think it is a huge distribution problem. Yeah, for sure.

Gary Bisbee 12:35
Thinking about health system decision making. I think all of you executives of health systems really stepped up in the last several months through COVID. Do you think that that's a trend? Will decision making increase or the pace of decision making increase on the part of the health system executives now?

Terry Shaw 12:56
I sure hope so. We actually sat down and did a post mortem on why it was. So many things were able to develop so quickly during the last three months, and a couple of takeaways. One, we didn't put things on agendas to get to in two months or two weeks, we had rapid touchpoints every day. Number two, we put a person in a swim lane. And as opposed to helping them swim, we let them swim. And those two things coming together, has really taught me a lot about our own company, about how to use design thinking and command center structures to push things forward in a way that may take you an enormous amount of time to do that you ought to be able to get done quickly. Thus, for us trying to take our five-year consumer journey down into two and a half to three years. How do you compress, organize, distribute, and make things happen in a way that you didn't think we're possible before you went through this?

Gary Bisbee 13:58
Yeah, that's a great example. Just moving to capacity, it seems like there's an agreement that health systems are going to need to develop the competency to quickly scale up and quickly scaled down in a case of something like this COVID crisis. How do you think about that, Terry?

Terry Shaw 14:16
I agree. So for this crisis specifically, that means you have to have an inventory of not only people, but equipment and supplies that you can move across your system. As you turn, PC use and ICU and med surge into PC use as COVID ramps up. What I never want to have done in the future is a complete shut down. We need to be able to flex up and down with the outbreaks that happen across the country in the markets that we're in and not disturb the other markets that we're in while we're providing normal routine care to everybody. So this concept of having healthcare shut down. We've just got to not do that.

Gary Bisbee 14:58
Yeah, that didn't work. But building a capacity question comes to consolidation. And the question there is, do you think that the COVID crisis will cause further consolidation among health systems?

Terry Shaw 15:12
I think it's very possible when I look at the last crisis, which was really a financial crisis in '08-'09. If you look at 2011 and 2012, coming out of that there was an enormous amount of m&a activity that took place. My guess is, is when the dust settles in the middle of '21 into '22 and '23. There will be another round of consolidation in the healthcare structure in the country seems likely for sure.

Gary Bisbee 15:42
You've been very articulate about new provider models involving physicians, as I recall, you maybe even had five different levels. How's that going? Is the COVID crisis changed? Your thinking there at all?

Terry Shaw 15:54
No only thing that COVID crisis has done for me is make me realize that the path we were On to have consumers be able to access physicians the way they want to access them. It's even more important now than it's ever been before. And if anything, it's just accelerated our thinking of providing those opportunities and choices for people, and then figuring out a way to help them access data so they're not left on their own to understand how to get it to it. We're complicated enough as it is, we need to make it simple and then have people understand how to get access to it.

Gary Bisbee 16:30
Thinking about facility planning, social distancing, ambulatory care, waiting rooms and so on. Seems like there's gonna have to be a rethinking of your facilities. How are you thinking about that?

Terry Shaw 16:42
What a great question. So everything that we generally do has had to change. We've got nice big round stickers on the floor that say stand here and then there's one six feet in front of it. Masks are going on everybody that walked in the door, we've had to change small waiting areas to no waiting areas. From a digital footprint, we tap people through a text that say, okay, you can come in now. For your appointment, please wait in your car. We're going through an enormous change in how people wait visit and access services so that they feel safe and so that we're providing the right kind of care for them, while at the same time making sure that the underlying diseases in your community to still have a chance to be cared for what was crazy. In the last three months, we've had an enormous number of people in this country, not get the appropriate heart care, etc. Because they were afraid to get the care. We just can't let that happen. Again, we have got to create a digital and a waiting room environment for people to plan their lives so that we can still care for them, which means we as providers have got to do a better job organizing our own care processes around that

Gary Bisbee 17:59
Right. Thinking about reimbursement. The government's role as a payer. You're, of course, former CFO and Adventist and so you've got a good command of this. But there are signals that CMS will pay for televisits, which would be a good thing. What other changes in payment? would you suggest for Medicare and Medicaid coming out of the COVID crisis?

Terry Shaw 18:21
There's been several waivers that have come through and the whole care delivery process so telehealth is one, the waiver of licensures another. So coming out of this in one person's opinion, we did take a big picture, look at health care, telehealth needs to work, and get paid for it. Number one. Number two, licensure has got to start moving across state lines, not only for doctors but for nurses etc. Number three, we've got to land the plan on where we're going to start. It's gotten a lot of noise, but still no action. And number four, I think risk-based models are gone. To have to continue to be implemented thought through and brought up in the industry. Or we're never going to move to a situation where we've got the majority of governmental payers in an environment where you're incentivized to take care of them no matter what's going on.

Gary Bisbee 19:19
I mean, those are all really good points. I worry that sometimes our health system executives aren't active enough in Washington or the state capitals, in urging our educators to learn more about this. How do you think about that?

Terry Shaw 19:35
I don't disagree with you. Although I will tell you the healthcare industry is such you know how it is, um, you have how many members that the CEO council 5075 and what I've learned is, is you can spend quite a bit of your own shoe leather or you can move into spaces and be a part of something bigger than yourself and it works really well. The Health Leadership Council In Washington that Mary Greeley runs, is a multi Industry Council, the HMA, your organization has done some really good work pulling things together. The American Hospital Association lately especially has done some really good things that I appreciate. And I think we all need to be a little more active and thoughtful. And we all need to lend a little bit of political support to helping some larger organizations have the right voice. So they're representing a broader swath, as opposed to just representing a small organization like admin health.

Gary Bisbee 20:41
Yeah, here here. That's well said. Moving to something that's not such a pretty picture is the economics of all of our health systems. How did the COVID-19 crisis affect Advent Health's finances for '20?

Terry Shaw 20:54
So, January and February were great. We were ahead of budget and April, May, and June we're 400 million behind budget. So I'll just put that in perspective. Our January to June budget for Ebidta is 800 million. And we're going to be about 400 million behind through the end of June. Now look, I know it's not the end of June right now, but I'm looking at our volumes, we're back up running 95% of where we were before COVID. And every week that goes by it continues to go up. Logically, when you take a step back from this, from a hospital perspective, unless we've cured some underlying disease, we got to go back to the census we had plus COVID. So on an $800 million budget for the first six months of the year, we're going to make 400 million will be 400 million off-budget. we're forecasting right now what July through December looks like it's another $800 million budget. So on a $1.6 billion budget is not gonna surprise me Gary, if we're not Four to 600 million off of that budget by the end of the year.

Gary Bisbee 22:03
So as that kind of effect tap backs, not only this year, but next year.

Terry Shaw 22:07
It does. So we spent 75 cents of every dollar on capital. So in this budget by 500 million, there's 75% of that we're not going to spend on capital.

Gary Bisbee 22:19
$400 million. It's gonna be tough to make that up, at least. What are you thinking about? '21? There's really no way to know, we don't know if COVID is coming back or not. But right now, how do you think about that?

Terry Shaw 22:32
I personally don't believe COVID will be cured in '21. I think testing will get better from both in terms of how the test is done, and the quantities of tests that we have available to us in the market. I think our supply chain will get better. I think the ventilator supply will go up. I think people will learn to flex. And I think by 21 there will be outbreaks in cities and areas that people have to deal with. From a healthcare perspective, but healthcare will stay open. And we'll be back to treating what we use to treat plus COVID. And so I'm at this juncture other than this, we're running 17% unemployment. And unless that gets fixed, there's no way the industry is going to have the same payer mix in 21, then we have today. So as we think through that calculus, I don't think we'll produce a much as much profit in 21, as we're used to producing but I think the payer mix issue, not a demand issue.

Gary Bisbee 23:32
I agree with that as well. One other thought, then let's turn to leadership in a crisis, but it seems evident to public health as part of the national security now in a way that we didn't think about it that way before. What steps should we be taking as a nation, Terry to deal with that issue?

Terry Shaw 23:52
You know, Gary, it's just different than it used to be. When I was a kid. Public health was very active. I remember school you start the year and then line up and some lady dressed in a white uniform would get the whole class a shot. It's like I hated those days. But anyway, today we're the healthcare system that we've got is the public health care system. And if we're going to keep it that way, the facts are I'm fine with that. But I'd go back to my earlier conversation, we need to be less dependent on countries outside of the United States. We need to move back to domestic manufacturing of the critical things that we think we need to protect the American people, even if that means they're going to cost a little bit more to produce. And somebody smarter than me can sit down and figure out what that is and how we're going to approach it. But you can't let one province in China be disrupted and not allow yourself to take care of your people without going to brokers for supplies. It's just a crazy world and we need to solve it.

Gary Bisbee 24:58
Yeah, we've got to be smarter. There's no question about that. That actually is a nice lead into leadership when you first became aware of the COVID crisis. What was your first thought?

Terry Shaw 25:11
I hate to say this, but I went back to being the chief financial officer. And in February, I call Paul after watching the news one night and said, borrow a billion two. He goes, like, he goes, what are we doing that for? And I said, trust me, if COVID comes in, it's a mess. We're not going to be able to borrow money this summer, borrow it now. So we borrowed money. The second decision we made was to ramp up our sourcing for personal protective equipment and ventilators in a way that I didn't dream was possible, and it got done. And then the last thing we will likely have done is we've studied best practices in China and in Italy and in New York. So that when our COVID case was started building here, in our ICUs. We had the best thinking that we knew to find at that juncture to help people live through the process. So those are the three tracks I'd tell you, we went on as a company.

Gary Bisbee 26:12
What are the most important characteristics of a leader during a crisis of this magnitude? Terry, just generally speaking?

Terry Shaw 26:19
It's a good question and put it in this order, staying calm. If you're calm, everybody else will be calm to being determined. The ability to communicate I'd say is on that list, putting the right people in the right swim lanes and then letting them lead. And then I tell you this concept of daily input and processing for fast decision making whatever that is in your company, figuring that out on the front end and then following it.

Gary Bisbee 26:49
Did the COVID experience change you as a leader at all or as a family member, community member?

Terry Shaw 27:01
It did. I gotta tell you, I think everybody's grown a lot in the last three months, me included. We did things that I didn't know we could do. And we were responsible for things that I was clear, we wouldn't know exactly how it's gonna work out. It tested everybody and I got to learn a lot about myself and my team. some good, some not so good. And we all have learnings from this that we need to apply to not only our personal lives, but our professional lives that I think will benefit us on a go-forward basis. Personally, let me go back to personally, we're also busy so my kids are in medical school in California. My wife used to be going somewhere and every week, and we've lived this cool life and now all of a sudden, I'm at home all the time. And so, I don't know what it's done for everybody else, but it's made my wife and I go back to really figuring out why we got together in the first place, enjoying our time together and you is been a really interesting three months of discovery on a personal side.

Gary Bisbee 27:56
Thanks for sharing that with us. By the way. This has been another terrific interview. Let me ask one final question if I could, Terry, and that is there's general agreement that we're moving toward a new normal. you've outlined Advent health plans in that regard. What changes and financing and delivery Would you like to see as part of the new normal going forward?

Terry Shaw 28:28
I'd like AdventHealth to be a lot less dependent on it surgical department and its emergency department for its economic welfare. So people ask me, does that mean you're not going to buy or build new hospitals? And the answer's no, I didn't say that at all. We plan on growing as an organization in that regard, that having so much revenue, that is profitable run through those two mechanisms is something that over the next several years, we've got to move away from and we'll be doing that,

Gary Bisbee 28:57
Terry, this has been a great conversation with you I appreciate your willingness to tee it up again here many Thanks.

Terry Shaw 29:03
No problem Gary.

Gary Bisbee 29:05
This episode of Fireside Chat is produced by Strafire. Please subscribe to Fireside Chat on Apple Podcasts or wherever you're listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested. Fireside Chat is brought to you from our nation's capital in Washington DC, where we explore the intersection of healthcare politics, financing and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisbee's Brief. For questions and suggestions about Fireside Chat, contact me through our website, firesidechatpodcast.com, or gary@hmacademy.com. Thanks for listening.

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Transcription:

Russ Cox 0:03
What we soon found out was that we were posting that on YouTube. Employees were watching it regularly. But what we also found out is it in a vacuum of information, they were forwarding the link to their family members and to other people. And it became a very good community communication as well. To the point we even had media watching it.

Gary Bisbee 0:22
That was Russell Cox, President and CEO of Norton Healthcare commenting on the benefit of his daily video for Norton caregivers, which quickly went viral in Louisville for their families, the Board of Directors, local media, and the Louisville community. I'm Gary Bisbee, and this is Fireside Chat. Russ is only the fifth CEO in Norton's history. We'll track Russ from his first job as a teacher and explore lessons learned that he uses to this day. All health systems have seen telehealth visits explode as has Norton. Russ provides a unique answer to the question of whether telehealth visits will recede along with COVID and which demographic will benefit from them and why? Let's listen.

Russ Cox 1:05
You look at folks who have mobility issues, immunosuppressed people that have transportation issues. I think our patients have always had the muscle to do telehealth they've just never had to flex it. And COVID made them flex it and made them actually say I've got this I can do it.

Gary Bisbee 1:20
Our conversation includes reference to the community dismay at canceling the Louisville institution, the Kentucky Derby, the importance to maintain needed surgeries and treatments in the face of a crisis like COVID, how Norton invested in its employees so that they could focus on Norton's patients, characteristics of a leader in a crisis, and the fundamental learning from COVID. I'm delighted to welcome Russ Cox to the microphone. Well, good afternoon, Russ and welcome.

Russ Cox 1:32
Thanks very glad to be here.

Gary Bisbee 1:55
We're always pleased to have you at the microphone. Most of us are generally familiar With Norton Healthcare, but probably not in as much detail as we'd like to be so could you please describe Norton Healthcare for us?

Russ Cox 2:08
Yeah, sure, Gary. We're in Louisville, Kentucky. We sit in a metropolitan area with a population of about 1.2 million people. We have five hospitals that are geographically located within 13 miles of each other, the furthest to reporter 30 miles. So we operate very much as a system where about two and a half billion dollar system that probably the most meaningful statistic for you to think about where Norton healthcare is in loyal is that we have about a 55% market share, which is really a good thing. It's many things but it's a responsibility when you really think about it.

Gary Bisbee 2:42
Right, but quite amazing. How would you characterize the culture of Norton Healthcare?

Russ Cox 2:49
The culture of Norton Healthcare really goes back a long way when you go back to the beginning of Norton Healthcare. We've only ever had five CEOs. I'm the fifth one. So there's been very few CEOs, folks who stay around a long time, and we go back to Wade Mounts who was the first CEO who was the very first president of AHA and really did some great things in the Hall of Fame. And you come right on through to Jim Petersdorf who was very focused on measurable quality. Then come right on through that Steve Williams, the CEO prior to me, we were the very first organization to post every quality score on our website when we did that 12 years ago. So transparency is part of the culture, very community based, our Board of Trustees all sit right here and live in Louisville, Kentucky. So it's a very community-centric, very transparent, very trusted asset in the community.

Gary Bisbee 3:40
Actually, I was at AHA when Wade was chairman officer so I go way back with Norton and your leaders.

Russ Cox 3:47
Sadly, we lost Wade this year.

Gary Bisbee 3:48
Really? Okay.

Russ Cox 3:49
We lost him the first week of March. He had a great life. He lived 93 years and he was healthcare through and through.

Gary Bisbee 3:56
We'll get into the COVID outbreak in a little bit, but could you describe your main priorities before the COVID outbreak?

Russ Cox 4:03
We were in the beginning of a brand new approved strategic plan that really had great focus on extending access even further in our community and had a strong emphasis and platform on telehealth for convenience, for reach, for being able to extend our nearly 2000 on the medical staff 1500 employed position and provider platform that we really felt was a great opportunity. It turned out to be a great thing that we were because we certainly needed it sooner than we thought we would, but we were all about pushing access. We were all about looking for ways that we could personalize and make the convenience much better for the consumer. I think everybody had that focus going into it, but it just really was taking on a bigger role in how we advocate for patients and getting access to specialty services for patients who lived out further in Woodland in Kentucky. So again, it was fortuitous that we had such a focus on the virtual model. And we had already begun construction of that and already begun preparing for that way. So we were able to accelerate very quickly when this COVID-19 issue came about.

Gary Bisbee 5:14
Absolutely good timing. Let's turn to you for a minute. Russ. It's always fun to get the background of the CEO, the health system, so a lifelong resident of Louisville ever think about going elsewhere?

Russ Cox 5:25
Oh, sure. I had the opportunity to in my early days. I worked with what was Humana, the hospital company, and then it became an insurance company and then it became Galen. And then it became Columbia HCA and then it became HCA. I had the opportunity to relocate to Nashville, Tennessee with HCA and I actually did live there on a temporary basis for about a year and a half, two years. But I've always considered Nashville a very dynamic city from the standpoint of what the Frist family has done for entrepreneurship and healthcare and how so many interesting things have happened in healthcare in Nashville. So I'd say Nashville would be up on that list.

Gary Bisbee 6:02
Of course, we all think about Louisville we think about the Kentucky Derby. Seems like you and the Norton executives are all active in Kentucky Derby week. This year didn't happen, probably what the first time in a long time that the Kentucky Derby wasn't held?

Tim Pehrson 6:19
It absolutely was. And it's just another one of those signs of how different things are because we can't even imagine the first Saturday in May is just absolute tradition in our state and in the country. And for it not to happen this year was just devastating, both mentally and from a financial perspective to our community. So we're certainly hopeful that it can be run in September, we're not sure whether or not we're going to be able to be there to watch it in person. But these are different times and we understand that we all have to adapt and adjust and we certainly are going to be supportive of fire brother and at Churchill Downs and hopefully we get through this and things get back to normal.

Gary Bisbee 7:00
Well, what do you like best about Louisville?

Russ Cox 7:02
You know, I'd have to say here that one of the things that have always attracted me to Louisville is the strong healthcare DNA and Humana. David Jones and Wendell Cherry started up a hospital company here from scratch that turned into what you still know is Humana but in a different configuration. It's all about insurance and on the payer side and Medicare Advantage, we've had a lot of firsts that happened in this community in healthcare. If you go back to hand transplants and you know, a competitor hospital if you go to the first pediatric heart transplant that was done at Norton Children's Hospital. And there's been a whole lot of things that have happened in our community that have really made that DNA strong and such a vibrant part of the community. And I think that's always been an attraction. I'll tell you the other thing that you have to appreciate about Louisville is that it's not a parochial community at all. We've had people we've had physicians relocate here, we've had all kinds of people relocate here. The one thing they say is you can be as involved in the city as you want to be. It's a very welcoming, very open, very willing to let you be involved in anything you want. It doesn't matter what your last name is here. It really just matters what your passion is. And it's been a great thing for this community. I think it's it's helped us get through this particular time as well.

Gary Bisbee 8:14
Now, I know from past discussions that you were a teacher earlier in your career, was that your first job after college?

Russ Cox 8:22
Actually, it was, I was certain that I wanted to be an attorney. I had been accepted to three law schools. My father had paid a $500 deposit for me to attend one. I clerked the summer of my senior year in college and came home and said, "Oh my god, I can't do this." This is not like what lawyers look like on TV at all. And it was a good experience that I never will forget. My father told me that I said, I'll pay you back to $500. And he said, don't worry about that. $500 to find out what you don't want to do is a good investment. I graduated from undergraduate and taught school for two years and taught Middle School of all things. So I often say that if you can be prepared five days a week for middle school students, you can do anything in healthcare, because it's a different kind of challenge. But I did that while I went to graduate school and was able to then find myself working in the early 80s. For Humana in its early days as well, in the Human Resources function there. So I jumped into healthcare in 1982, after having been a teacher for two years and had a good background and obviously Training and Education and Human Resources area, and the rest was kind of history. It was such a growing company back then. And the opportunities for somebody to come in and really develop and really grow were great because it was growing so fast. They needed people and Mr. Jones and Mr. Cherry were not afraid to throw you in the deep end and help you learn how to swim. That's exactly what they did with me and it's been good for me, I still say that I call upon those teaching skills on a daily basis, Gary,

Gary Bisbee 9:55
Well, the other skill may be what you learned at Humana. Can you share with us? What lessons did you learn there that you've carried on to Norton?

Russ Cox 10:05
There's so many things to transfer both ways, the investor/own side of it. And let's just put this at the top of it. Both places put the patient at the very center of every decision that they make. And I never saw a decision made at Humana that was in any way detrimental to a patient. As a matter of fact, it was always about the patient. So there's a lot of similarities that are there. I think the differences that you have to think because you have a responsibility to shareholders. We have a responsibility to bondholders, but we can be a little bit longer-term thinking the not for profit side. And I think that's an advantage. You can be more strategic from the long perspective. I think that when you're investor-owned, you have to think about what am I doing that will increase value over the next 90 days. Now, that's not to say that everything's that way. But you get a report card every 90 days, and that's a pretty serious report card. So I learned to think in terms of how can we improve a situation and get it done quickly? How can we expedite? I think I also learned a whole lot about measurability because in the investor/owned side, it was very important that you be quantitative, that you get the right data to make decisions with. And I think that's played over into the not for profit side, currently. But I think it took a little bit longer to get to that place. So there's a lot of things that have transferability. But at the end of the day, we're all very similar in how we approach patient care.

Gary Bisbee 11:30
Let's turn to the COVID-19 crisis. What was the surge or the profile of the surge in Louisville?

Russ Cox 11:40
Well, it's been an interesting time for us. Obviously, we anticipated a larger surge than what we actually experienced. And hopefully, if we're going to want to say that we took enough very appropriate action quickly and made certain that certain things happen. We had a very, very strong, newly released Governor Andy Bashir, who really took a great leadership position in the state and made sure that while the decisions weren't always popular to shut things down earlier to stop things from happening, that it was the right thing to do. So we were able to preempt a whole lot of what that surge could have been, we were all prepared for it. What we've really seen is more of a less than expected surge that we would hardly call a surge and it's flattened into what we now are calling a steady plateau. We're seeing about the same numbers come in and go out on a daily basis. So our new abnorma...l is I'm calling because I don't think anything will be normal again... but our new abnormal is that we're probably likely going to have in our system 40 to 50 COVID positive patients on the inpatient side, every day for a while. We were fortunate that we didn't see a whole lot of event utilization. We were prepared for that. But we always had plenty events, most of our obviously more serious patients on the inpatient side, we're in the ICU. So we monitor those days very carefully. But it's been a pretty steady sort of run over the past two to three weeks. And hopefully as things begin to open up, we'll be able to see that steadiness continues. We hope that it doesn't create a spike. But we're prepared for that. If it does, and hopefully by continuing to do the things that we're doing, we'll continue to see that gradual decline.

Gary Bisbee 13:20
Building on that we've seen that there's a lack of information and probably disinformation going around how have you communicated with the community, Russ?

Russ Cox 13:31
Well, we've taken a multi-pronged approach to how we communicate. We knew in early March that this was going to be different and we were going to have to do some things very differently. So one of the things we did is I started recording a video once a day, about 10 to 12 minutes where I was 100% transparent with employees gave them exactly the numbers of people that were coming in. How many of them were positive, how many of them were impatient, where they were, how many employees we tested, how many employees were positive. We gave how many people were Were out on medical furlough, how many people have returned from furlough, then we would use what was left of the 10 to 12 minutes to talk about significant shifts in policy that we needed to make whether it be a restricting visitation, whether it be utilization of PPE. I took the last two or three minutes and we set up an email where people could send in questions and we just tried to run through questions that people had sent in as quickly as we could. What we soon found out was that we were posting that on YouTube. Employees were watching it regularly. But what we also found out is it in a vacuum of information, they were forwarding the link to their family members to other people, and it became a very good community communication as well. To the point we even had media watching it. And again, 10 to 12 minutes is about all you can do. The players don't have time, but what we found was that people were watching it at home, letting their spouse watch it at home. And so it was a very effective sort of communication. We send it to all of our physicians, all 16,300 employees got link to that on a daily basis. This afternoon I'll film number 72 in a row of doing that. And it's been one of those good things that we've been able to do because people will watch that video, people tend to get an email and only glaze through it and not get some of the details. So we've really tried to extrapolate what is it that people really need to know to do their job the next day. So that's been very effective. The other thing we've done is we've worked very effectively with local and state governments to make sure that they had our information that we were helping them in any way that they needed possible to get messages out. When you have 55% market share, you have an opportunity to leverage that. We're an epic, EMR. We've got my chart, we were able to leverage my chart to really improve telehealth. We went from probably 250 telehealth visits in February to the month of April, we had 18,000 telehealth visits. So we were able to use that to communicate with patients as well. We did zoom media availabilities once a week where we would just again, be very transparent. Take any questions that the press had. I just felt like that our history of transparency and a responsibility that we have to make sure that we're providing as much information as we can for the public really required us to take an hour out of a week or whatever, and just sit down with the media and say, here's what we're saying, here's what we think, what can we answer for you? We leverage social media as much as it could be possibly leverage during this time, as I'm sure everyone did. But my goal for our organization was to be accused of over-communicating. I think that's one of the things you learn for being a teacher sometimes is that sometimes you've got to be repetitive, repetitive, repetitive, as they say for students to learn and sometimes for the public to understand we have to just continue to they use that message I'd really like to have $1 for every time I said, make sure you wash your hands, make sure you social distance, make sure you cough it to your elbow. Make sure you don't go to your eyes and nose with your fingers. I mean, I could give these speeches over and over again, but we just made it our goal to over-communicate. I also should add that we included our Board of Trustees in those videos. And that was probably one of the smarter things that we did because it sure made board meetings a lot easier. They would watch that video every day and be able to keep up with what we were doing and how we're doing it. So we got a board meeting and we didn't have to recreate everything that had happened over the past month. It's an effective tool.

Gary Bisbee 17:26
Well, it's 72 videos, you're going to be quite a personality around Louisville. If you need an agent Russ just let me know I'm available.

Russ Cox 17:36
I didn't say the news was always good. I was delivering. We did learn from that too, Gary. That if you are palms up with your employees and tell him exactly how it is and it's pretty hard for me to stand in front of that camera last month and say, folks, the month of April, we're going to lose $80 million. But it was very much a rallying cry for everybody to say hey, at least I know what it is. And at least I feel like we have a plan to figure this out. And we did our best to make sure that every day, and it got us through some PPE issues to hearing, because we had PPE problems just like everybody else did. I mean, I literally would go on the video every day and say, here's how many of these we have, here's what our burn rate is, we're going to need to reuse these and we're going to need to use ultraviolet rays to sanitize these masks, and you're going to need to use them the next day and I bring in somebody from our infectious control to actually talk about this will work and you need to trust it. So it has so many uses that I would do it all over again, I think that was the one strategy that really did make a big difference for us.

Gary Bisbee 18:41
If we could dig into telemedicine, you made the point that your virtual strategy was a priority pre-COVID, and that played well into what came post-COVID. How do you see televisits growing from here?

Russ Cox 18:59
I think they'll grow. There's going to be circumstances where the face to face visit with a provider is always going to be the best possible way to do it. But there's going to be a real need for telehealth and increase telehealth going forward because we have so many people who fit into this higher risk category. And until we have a reliable vaccination, we're going to have people who shouldn't be out and about. So leveraging this and the good news is one of those categories of at-risk are elderly people. The good news is that elderly people have been introduced to technology to communicate with their grandchildren and their children. So telehealth now feels very natural to a whole lot of people who in the past, wouldn't it use telehealth? So, you look at folks who have mobility issues, immunosuppressed people that have transportation issues. I think our patients have always had the muscle to do telehealth, they've just never had to flex it. And COVID made them flex it and made them actually say, hey, I've got this I can do it. So we're pretty excited. We last week announced a concept that I'm very excited about and really it just came from understanding more about telehealth. We're building the first permanent drive through testing diagnostic site that I think we've ever seen. We certainly have none of them in this region. And I don't know if there's any in the country, but we saw how telehealth works so well. And we realized, hey, if we could almost if you could think of a Jiffy Lube concept, but for healthcare, we're gonna have three bays where people could pull up, they can have lab work done. They can have diagnostics done. They can have tests, they can have vaccinations, and we learned a lot that if you can do it in your car, you can have a telehealth visit, get the orders, go get your lab work and your car and not have to leave your car and not have to come into medical office buildings or labs and interact with people. And we can put two people in Pampers for the whole day and save PPE. So we're moving up telehealth to the next iteration of testing diagnostics for an express drive-thru and walk-up perspective that we think will help drive even more telehealth. So I think we have to look at how do we get ahead of the curve on this because the circumstances that we're in may change, but the memory of the patient is not going to change for a long time. And if we have spikes, we're going to need this capacity. If we have another virus of some kind, which is altogether possible, we're going to need this skill set. We're going to need these kinds of opportunities with telehealth and travel through testing to make people feel very comfortable with continuing to use. So yeah, I'm very bullish on telehealth and drive-thru and walk-up permanent testing sites. Be interesting to see how it works.

Gary Bisbee 21:35
Yeah, for sure. Well, that's a terrific initiative and on Norton's part, one quick question there. Do you think insurance companies will continue to reimburse for televisits the way they have during the crisis?

Russ Cox 21:48
We certainly advocated for this during the time we've worked with all of our political leaders that we know we've worked with our payers. It will be a shame if they don't because we're able to make a difference in so many people's lives that otherwise won't come in. And I've tried to convince some payers along the way that we will probably lost some people that will never get to come to again. And that's going to be to their benefit. So hopefully, they'll see the wisdom in continuing to invest in good reimbursement levels for telehealth, but I'm going to be honest with even if they don't, the consumer is not going to let us discontinue this service. I really think that it's a whole different world that we're living in as it relates to patient and patient advocacy around how they want to receive health care.

Gary Bisbee 22:33
Let's turn to a story that's not quite as attractive and that is surgeries, particularly elective surgeries, you make the point that we might be a captive of our own terminology. Why don't you dig into that a bit? If you could, Russ?

Russ Cox 22:46
We've always known the importance of surgical procedures, diagnostic procedures, and the like on hospitals. I don't think in my careers, and I've been in it since '82, that it's ever been hammered home more than it was when we were forced to discontinue those kinds of services because it's a severing of the cord, if you will, with the patient in many ways to not be able to do those things. Not to mention what it does to your revenue stream. But I really do feel like we're a victim of our own nomenclature at times because the word elective, so often go to the mind of a consumer or the mind of the general public that all we did was cosmetic procedures. And that's so wrong. All we did really was delay procedures that needed to be done. And they got categorized as elective and pretty soon everyone's arguing over what elective is, and I think that was a learning for us all in this that we need to really examine how we define surgeries that need to be done. And all we did was delay which many times put the patient in a compromised position. What is elective about a person needing spine surgery with horrific back pain? What's the elective about a knee replacement? If the person has a blood infection in that joint, there is nothing elective about that. But we found ourselves arguing about what's elective and what is just really has to be done. It certainly was an eye-opener for us. As I mentioned earlier, we lost $80 million in the month of April. And a whole lot of that goes to the fact that we couldn't do surgeries, we couldn't do procedures. We never laid anybody off. We never reduced anybody's pay, we made the conscious decision that we were going to invest in our employees and that we were going to ask them to focus on patients and focus on staying ready when the patients came back, and we were going to fight through it together. So it all added up to not a good financial result. But the culture of our organization is better for the fact that we stood by our employees and I think physicians have noticed that I think that as they make decisions as to where they want to practice in the future, they're going to remember to take care of their employees. So we're glad to see that we're able to return to 100% of elective surgery starting tomorrow. We were at 50% for the past two weeks. We saw a very strong willingness for patients and physicians to come back. We were worried. I think one of the lessons I learned here is that you can't just tell patients, trust us, it's safe. They expect us to say that. They think oh, of course, you're gonna say it safe. But what we have to do is tell them how it's different. And so our communication strategy has been to communicate with patients how it's different. You're going to get your temperature taken before you come in the door, you're going to be asked to put a mask on, you're going to be asked to only have one visitor with you, when you're here. We clean all of our areas with UV ray machines, we're not going to have waiting areas with chairs that are not six feet apart. So we've worked very hard on building trust back by not just saying trust us, but by saying here's what's different. We're encouraged our fear at times that what I'm seeing right now and feeling good about is just a backlog of necessary surgery that is enthusiastic, we come back so I think we'll know a whole lot more over the next four to six weeks is to the general public's willingness to read Return to those procedures. We've done a lot of research, I think that everybody knows that they're more comfortable returning to ASC than they are to hospitals that have procedures. So we've done everything we can to communicate what we're doing and how we're doing it and to get people to places where they're going to be comfortable with a procedure with the surgery being done.

Gary Bisbee 26:19
Following up on the economic story, how do you see 2020 ending up? And how do you see '21 ending up given there's so many variables here that it's just impossible to figure out?

Russ Cox 26:32
It really is. I have to say that I'm very pessimistic for the rest of 2020. Simply because I think that it could have everything from spikes to another surge to still some reticence on the part of patients to come back as quickly as we would hope. I think it's going to be a difficult slog for us. Well, let me say that the Cares Act has made a difference for us. For us getting $43 million is significant. It doesn't make up for the revenue we lost. But it helps. And it's certainly something that we didn't count on or expect. So I think that's been a good thing for hospitals and healthcare organizations to at least have that assist going forward. We don't know how much more that's coming if he's coming. But that would always certainly be welcomed and help. I like to think that payers are going to understand that they've done very well during this time. And that hopefully, they'll see their way fit to help us through this time as we go forward. So might be crazily optimistic on that. But I think these are different times. I think that it's in everyone's best interest to be some shared help along the way. So I'm more optimistic that if we're able to do the things that we're doing and sustain the behaviors and activities that we're in right now that 2021 can be a year that we maybe not return to the levels where we have been in the past, but that we begin to calibrate more towards what we're used to.

Gary Bisbee 27:54
We've touched on this several times before today, but let me ask that question directly if I can, what are the characteristics of a leader in a crisis? What should they be?

Russ Cox 28:06
I'm going to go back to what I said earlier, I think it's number one, two, and three, a good communicator, and a communicator that's willing to share everything that they know. And everything that I say, I think is important for people to know. And be willing to do it in a way that is very palms up, very transparent. And that creates a sense of stability and calm. I think the mistake that a lot of leaders make during this time is to get so buried in the details of execution on operations around things that they forget that just communicating that we're going to be fine. We are going to get through this and that we do have a plan and that we're going to tell you about that every day and be willing to say to people, it's going to change because the situation is gonna change and just watch us every day. Listen every day and if you have concerns, we set up a hotline one 800 number for if you have concerns about PPE call this and it will get it resolved to date. If you're not feeling good call employee helpline. It's one central line here. But I think communication I just go back to, it sounds so easy to say all communication is so important. What I found during this time is you cannot communicate too much. And you need to be out there regularly. They need to be able to see your face and not just read an email, they need to be able to see the emotion that you feel. They need to understand that you're very much into this and that you're very much about making certain that they're safe, that they have the tools they need to do their job, and that they can take care of patients. I've become a big believer in that anything in everything that you can do. To communicate is very important and I haven't it hasn't been lost on me that you're not just communicating with your employees. you're communicating with their families in the morning information they're able to share with their families, the more secure their families feel about that person coming to work and putting themselves in harm's way every day.

Gary Bisbee 30:09
Well said, Russ, this has been a terrific interview, we appreciate your time, I'd like to ask one final question. That is this idea of new normal, you make the point that we're not going to see normal again. But what comes to your mind in changes in the delivery system as a result of COVID that you would like to see?

Russ Cox 30:29
Flexibility. I think there's going to be a list of terms that we hate going forward and I'm going to put in an abundance of caution on that list. I hate that term. I feel like I've used it so many times and it's become so trite but new normal is another one that I hate, but I think the new normal if you will, is flexibility. We've got to meet patients where they are. Some are going to want those telehealth opportunities, some are going to want to come to the office. Some are going to want to delay care. How do we stay in touch with them? Some are going to want to do it virtually, we established a virtual hospital during this time, it's been a great success. We were able to discharge people into this virtual hospital where they had a virtual visit every day from their provider, and we were able to monitor their vitals remotely. So we're just going to have to meet people where they are and have a flexible approach to saying, How do you best interact with us, and what makes you most comfortable, what makes you feel the best about it? What makes you feel the safest? So my new normal and the thing that I preach here every day is meeting that patient where they are and having a flexible enough model that we can accommodate whatever it is that they choose, and however it is they choose to interface with us,

Gary Bisbee 31:41
Russ, thanks so much for your time today. Norton is lucky to have you and we've enjoyed very much having you on the show.

Russ Cox 31:48
Appreciate being here. Appreciate the great work of the Academy and look forward to us all being able to get back together again someday.

Gary Bisbee 31:55
This episode of Fireside Chat is produced by Strafire. Please subscribe to Fireside Chat on Apple Podcasts or wherever you're listening right now. Be sure to rate and review Fireside Chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested. Fireside Chat is brought to you from our nation's capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisbee's Brief. For questions and suggestions about Fireside Chat, contact me through our website, firesidechatpodcast.com, or gary@hmacademy.com. Thanks for listening.

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In this episode of Fireside Chat, we sit down with Randy Oostra, President and CEO, ProMedica to talk about Promedica's acquisition of HCR ManorCare and how that acquisition has benefited both companies. We also talked about social determinants of health and the impact of the COVID-19 pandemic.

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Transcription:

Gary Bisbee 0:00

Good afternoon, Tim and welcome to the podcast.

Tim Pehrson 0:02

Thank you. Happy to be here with you.

Gary Bisbee 0:04

We're pleased to have you at the microphone. We've been talking a bit and all of us realized that the Coronavirus search is highly variable by region, what's the status of the surge in Integris Health's primary service areas?

Tim Pehrson 0:17

Really the surge never happened the way that we thought it would in all of Oklahoma. We obviously were pretty good at sheltering in place, or we already just sort of live a life of sheltering in place because we're a little more spread out than some of the places where this has really taken off. We still have our eyes at the data and looking at what's going on but so far, it hasn't been that bad. So for context, we're a 19 hospital campus, 2,000,000,700+ employed providers system. And we've had 130 COVID patients total this whole time Integris. So we just haven't had a lot now we hit a lot of PUIs, but those PUIs eventually came out as flu or other types of things that were associated with a regular illness that was in the community.

Gary Bisbee 1:08

Clearly, some hotspots 5,6,7 hotspots around the country. But a lot of the country has not received what was predicted. So what's your thinking about going forward? It's likely this is going to happen again, some other kind of virus, how do we begin to differentiate between regions of the country?

Tim Pehrson 1:29

Well, I think we need to do just that. Find a way to foster creative approaches to problem-solving, whatever it is. So in these scenarios, we look at the data, we make the best judgment and then we adjust as the data suggests. I'm not critical of the country, and the world shutting down. I think that that was completely appropriate based on the data. But now we know that the case fatality rate is much lower than we thought and it is still a very contagious disease. Largely focused on a certain kind of population, mostly co-morbid and some of the elderly. So that takes you to a strategy that would be slightly different than the one that we pursued. But we didn't know that at the time. So you can't be critical of that but I think we should be critical of ourselves if we don't start reshaping the messaging around this. And I think that's happening. I mean, we're seeing loosening restrictions, and you just have to continue to look at the data as it evolves, and make adjustments along the way. Again, we sheltered in place to preserve healthcare capacity to take care of people, if the health systems are capable of taking care of people, then there's no reason to shut down completely the way that we're doing. Now, obviously, Oklahoma has come out of that. And we'll continue to make adjustments and look at the data and then make more adjustments.

Gary Bisbee 2:44

I would guess that we would spend more energy and more resources on our modeling too, and try to make that much more sophisticated so that we could tell some of the differences in regions that we ran into with COVID.

Tim Pehrson 2:57

Yeah, I think that's actually a great point, Gary. Because I think the modeling that I was exposed to was just the same that everybody else's really didn't have that regional approach. And we had some of our data scientists and statisticians and epidemiologists create a local model that was actually very highly accurate and was showing that we were on the downside of the curve well before anything IHME was showing or any of the other models. So I do think we've got to come up with some better modeling that factors in some local uniqueness.

Gary Bisbee 3:32

We'll come back to that later. But what about the Integris supply chain thinking now about testing? PPE? How's that been? Have you had shortages?

Tim Pehrson 3:44

The early part of the COVID shutdown was very frustrating from a testing standpoint. We were getting tests turned a lot longer, a seven-day type of timeframe. So we have these patients in the hospital that we don't know if they're COVID or not. So we have to treat them as if they're COVID. With all the PPE, we have a joint venture with Quest that's called diagnostic laboratories of Oklahoma or DLO. And when we work with them, they're a great partner to us. And we got more testing capacity that was initially closer to Oklahoma and then eventually right here on one of our hospitals, which gave us turnaround times within four hours or less, and that really helped a lot. That's been much better. We still see some of the issues with some of the testing supplies that continue the same type of supply chain stuff associated with testing supplies that the rest of the countries are facing but for the most part, that hasn't been a problem for a number of weeks. PPE continues to be a real problem, particularly N95 masks. The demand is such that it's just really hard to get our hands on it. That is probably our rate-limiting factor in us getting more back to normal absent any of the market dynamics that occur in people's psyche, about coming in for care

Gary Bisbee 5:05

Thinking about testing and PPE going forward. Some are predicting there'll be another surge, in the second half of this year, perhaps even next year. How can you get yourself a position in such a way that you can not run into problems with the testing, and PPE?

Tim Pehrson 5:24

First of all, I don't want to tell that on a podcast because nobody else did the same thing.

Gary Bisbee 5:30

No secrets here.

Tim Pehrson 5:31

Just kidding. I'm in this with everybody else. But I'll tell you, we're doing everything right now to get as much PPE as we possibly can for today, as well as for tomorrow. And I think the long term strategies for America in general is we can't be so addicted to lowest cost, just in time. I think we still need to pay attention to that. That's an important part, but we need to have some manufacturing capabilities in other locations. So when we have these situations happen, the capabilities are there to deliver what's needed when it's needed. It's easier to spin up more production if you actually have a place to produce it than it is to have to create the production line from scratch. And I think that's where we found ourselves in the world, relying largely on parts of China to handle all of our needs? I think there's going to be some policy changes. I'm hopeful there'll be policy changes. And we will definitely be pushing our supply chain and our GPOs to work through getting some local sourcing, at least in the United States, sourcing for certain PPE. And I would say too, we're part of the silica deal. And that really is a guaranteed production level. It may have been addressed at a different source, right or different problem. But the concept is similar, right? It was, hey, if we can produce a certain amount and guarantee a certain amount. We're willing to pay a price for that, and know that we're going to get these pharmaceuticals that have been played around by some of these manufacturers. So I think not unlike that, we're going to have to think creatively about the supply chain and how we get more stability for such crises like what we saw.

Gary Bisbee 7:17

Regardless of what happens at the national level, you and your colleagues are totally united and making sure you address this supply chain issue going forward. Looking at your caregivers, has there been any real negativity? It sounds like there hasn't been enough cases to really cause a lot of stress on the caregivers.

Tim Pehrson 7:38

It was obviously very scary for everybody at first and there were a lot of concerns. I mean, we probably had the same types of news stories of a caregiver here or there write an email to a local press saying we weren't giving them what they needed to be safe. There was an inconvenience with what they thought they needed to be safe versus what the CDC was saying. And of course, CDC was shifting a little bit as the supply was tightening. So we were following the CDC guidelines that created stress and concern. But as we started communicating in a more robust way to the caregivers and providing alternatives and providing creative ways to preserve PPE, that really went away and then it obviously turned to, "oh my gracious the volumes have fallen out the floor." We don't have any work to do. And that has become a stress for our caregivers. Because they obviously need to take care of their families. And if we can't provide them work, it creates stress for them. So I think those are probably pretty similar to where everybody else in the country.

Gary Bisbee 8:40

How about telemedicine. Did you see an increase in use of telemedicine visits?

Tim Pehrson 8:46

I would say that this is going to be one of the things that we look back on and are grateful for COVID as we've been talking for years about the need to be more consumer-focused and friendly, but it's been a hard move. At least for here in Oklahoma and in my past life as well, it was just a slow slog. And I think largely that was just the providers having a hard time wrapping their heads around how to do it. I think there was some willingness with patience. Now you have two interested parties who want to get care and give care. And the only way to do it is to do it through a virtual setting. So 50% of our medical group's visits were virtual and have been virtual and they continue to stay as we've loosened restrictions. 40% are still that way. The way we'll be looking at it as it's between 30% and 50% of the care particularly for some specialties will continue to be done through virtual settings and will be a great thing for our consumers and a great thing for our physicians. I think that's going to be absolutely fabulous. We also introduced as many did a chatbot see a feature that created machine learning chatbots around self-diagnosing. COVID we saw that to be really positive for our community and an avenue for us to advance that beyond just obviously COVID when we were really worried about conserving PPE, we were looking at expanding inpatient consults to a virtual setting. And we never got to the point where we actually did that because the PPE ended up loosening a little bit. But that's also something that we need to chase down and explore even further and experiment with. Because I think that there in some instances, it can be just as good as the in-person thing.

Gary Bisbee 10:44

Well, now with receiving more or less equal reimbursement for a physical visit or a virtual visit seems like there will be more incentive for providers to do the future-oriented work you're talking about. Would you agree?

Tim Pehrson 11:00

That's a game-changer and it has to stay. It really does. I know payers and Medicare have been worried that there's going to be gaming and so forth. I think this is what the consumers want. And I think if you can get access to a provider early on and take care of these issues, you're going to save a lot of downstream costs through not needing additional work because it wasn't convenient to go in. I'm really hopeful that CMS will keep it and I'm hopeful that the commercial payers will put it in place and keep it there and not try to game it with some sort of discount factor because it's telehealth because it does cost money to put that infrastructure in place. We found still, that there was a reasonable amount of cost and just setting up the rooms now we might get better over time, in terms of how we have the other caregivers wrapped around for that virtual visit, that it might get more efficient, but still, I think there's still going to be costs associated with doing that. So I'm very hopeful that they don't try to monkey around with that because that would be a shame. And I think it might drive us back to doing some of the other things that we were doing that really aren't consumer-focused and friendly.

Gary Bisbee 12:08

I totally agree with that. Let's move to elective surgeries. You're in an interesting position, Tim. I think you've been coming back to elective surgeries now for maybe two weeks, much of the country is just now beginning. So you're a bit of a test lab. Can you share with us how you found the last two weeks and moving back to elective surgeries

Tim Pehrson 12:29

Before our governor put a hold on elective surgeries in March. And because of the PPE burn, we decided to just stop doing them because we didn't think we're going to have enough for this surge that was going to come. And so when the governor said, "Hey, I'm lifting the restrictions on elective surgeries on the 24th of April," we had physicians just ready to go and a lot of the community gone six weeks or so without those elective procedures. So we still have the PPE concerns so we've created an algorithm that our physician leaders created to help protect the PPE. We're working down the elective heart, surgical procedures and so forth on more urgent nature procedures. And we haven't yet turned on elective hip surgery, for example. But those are coming. I mean, today, probably 120% of normal on those surgeries. The first week, we were at 90%. Again, we could have been probably 140% that first week, if we would have just had enough PPE to handle it. Now that backlog gets work. I don't know what the demand will be if it'll just go back to normal or if it'll go back to this new normal that we think is which is normal minus a certain factor. It's hard to tell. We think it will definitely go back to normal plus a payer mix change to the negative. At any rate, it's been pretty encouraging that the volumes have come back. Now, emergency rooms are still pretty empty. And the revenue for my system is still 30% behind. And so we spent a lot that's not opening even though we've opened or functioning normally, just because people are nervous to come in and leave, send a message to stay home. And now we need them to start getting back. But people are dying from strokes and dying from heart attacks, because they're afraid to get COVID and they're at eight times greater risk of dying from heart disease, then COVID. So we need you to come in and get the heart procedures that you need done.

Gary Bisbee 14:41

There's been a general concern that patients would be reluctant to come back for elective surgery because of their concern about COVID. Doesn't sound like you've found that actually?

Tim Pehrson 14:52

So far we haven't and we've been changing our messaging over the last probably a week before we knew we were going to start reopening. We started sending out messaging and it was actually part of our medical group plan to get people into the clinics, or at least in the telehealth of saying, "hey, you can safely come in." We've got these different avenues we created, for example, in all of our check in points that we don't have waiting rooms, we just get people right in, we have people waiting in their cars, and we'll text them when it's time to come in. We try to create a just in time experience for the patients so that they don't have to sit in areas and then we've tried to communicate that that's the way we're keeping them safe. And so far, that's worked. But again, we're working off of six, seven weeks of backlog. So there's a lot of anxious people. We'll see how well that sticks as we start getting that backlog worked out where people's minds are coming out of this COVID crisis psyche.

Gary Bisbee 15:50

Right. So Tim, you mentioned the revenues down by 30%. What will be the effect on the 2020 Integris financials?

Tim Pehrson 15:59

End of June we finished our FY 20, and it's devastated. I mean, all of our metrics were tracking perfectly in our finances. We're where we had planned them to be. And that's been shot in two months, really a month and a half. And so we anticipate the rest of this year that it will have quite a deleterious impact. We took some pretty early actions as a leadership team. So there were several pieces obviously we volume adjusted everywhere leaning and we're all the direct patient caregivers are. That's something that we did even more purposefully. So for example, I have a big medical campus that has two campuses, one across the street from the other. They used to be two separate hospitals. They're now licensed as one. One of the hospitals had 10 or 15 patients in it. And so we said, well, we'll keep the emergency room but we're going to move patients over to our Northwest Campus because we can optimally staff that way. So we've been pretty aggressive in trying to look for direct patient caregiver volume adjusting, but then we also did a real furlough for our non direct patient caregiver, people. And that's never been done as long as I've only been here for 18 months, but from what I've been told, my COO has been here for 30 plus years, and it's never been done. So that's been an interesting shock. And we've been able to flex down our work hours about anywhere from 20% to 30%, of what we were running before. So that's going to be helpful, but not enough. Obviously, executives took a 20% temporary pay cut, we stopped the match for the 401k. And 403 B's this year. Something we don't want to keep in place forever, but it's something we've got to do. And we're just looking at new ways to try and survive and I think we're gonna have to do even more. Because the impact for a financial perspective is really great advice coming from a balance sheet. That's pretty strong. We have to react. And if we don't, then we're going to be hurting even worse. So 2020 is going to be a disaster. It's going to impact our fy 21, which starts in July. And we've got lots of different scenarios that nobody knows what's going to happen. I mean, this is the trick right now. Meeting with my board talking about next year. Normally, we're bringing in our capital and operating budgets. And our capital budget, obviously, is pretty easy to slow down a lot. But the operating budget is literally a guess. I mean, nobody knows where it's going to go. And how this is going to come out. We're trying to tell the board listen, we're a forever organization. Let's look out two years, we're going to take a best stab at what we think will happen here. And we need to not look at it as a budget, we need to look at it as a weekly monthly rolling forecast that we just keep adjusting to throughout the next 18 months and then we will get to a point where it'll stabilize. So we can predict a little bit better. And at that point, we can firm these up more in terms of budgets and forecasts. But right now, it's pretty murky. I think it's pretty murky for everybody.

Gary Bisbee 19:10

I think that's right. Thinking about Integris health. Would you just give us an update on Integra itself? For those of us that aren't that familiar with Tim?

Tim Pehrson 19:18

Yeah, sure. We're Oklahoma's largest health system, to $2 billion 19, hospital campus, and 153 clinics 700 and employ providers, about 1500 physicians that are clinically integrated. We've been in a community for more than 100 years. So it's a great organization. It's got a history of being the leader in the community. Medical first starts here, we end up taking care of a lot of the very, very high-end stuff, even though we're not an academic medical center, we do have teaching going on and the kinds of stuff that we do here. You would think It was a teaching facility based on the difficulties, the cases that we take care of at our flagship hospital. But we're also out in the community in community hospitals and some rural areas. And we have clinics everywhere. We're an important Oklahoma asset that is a thought leader in the community.

Gary Bisbee 20:21

How would you describe the culture of Integris? You kind of referred to that, but how would you describe the culture?

Tim Pehrson 20:28

I think it's kind of what I was saying there. I mean, it really has been built on being the leader and the leader in the community, the leader in the region, and doing hard things in the community. The culture is great. It's a wonderful family feel. People are really open to concepts around continuous improvement. You know, I came here, having been the leader of that at my prior life and another organization, and people have embraced that culture of continuous improvement and driving best practices. So it's been fabulous. It's a great culture.

Gary Bisbee 21:02

Back to COVID for a second. Did you implement a remote working policy for any of the Integris?

Tim Pehrson 21:09

Yeah, actually, for a period of time, even our whole executive team was remote. But we moved them off site, everything that could possibly move into a remote setting. We made those changes. And some of those are still in place. And I think that will stay in place forever. We're actually in the process. We've got a couple of buildings that are coming up for lease. And we've been thinking we created a new corporate office somewhere in the question, I think we'll still do that. But the question is, how much space do we really need? Because we think that a lot of this can be done remotely. And obviously we don't know what the long term furlough effects are going to be. And so we've got to just be smart about that. But yes, I think remote working has been great when I in my past life, before coming to integris LED that process for innovation. And then driving a lot of the remote working thinking. And because the region that I was responsible for was separated by a two and a half hour drive, so it was very nice to be able to organize that way. And I've just found it to be so effective to work in that environment. Obviously, I'd love to be meeting with people in person all the time. But if you can't do that, the next best is some sort of a virtual camera experience where you can see people and, and get better at it.

Gary Bisbee 22:28

Do you think on the M&A front that COVID situation will increase M&A, or decrease M&A among our health systems?

Tim Pehrson 22:36

I think it's gonna increase it. I think that the strong are gonna take the opportunity to do things strategically, and the weak will need to have help. It'll be interesting to see if the strong are super aggressive. Or if they're really more, what's the right strategic move as opposed to just getting bigger for bigger sake.

Gary Bisbee 23:01

Where does scale matter?

Tim Pehrson 23:03

I think scale matters all the time. But I think particularly like in the supply chain revenue cycle, your digital going out the markets, the financing piece of it. Clearly there are benefits from being bigger. However, I will say that the economy that we had was such that there was so much capital deployed into healthcare innovations, particularly in those areas that I was just describing, that you could almost acquire the expertise that someone else would have if they had an essential who has this big, broad national footprint. You can almost acquire that at a pretty good price and get much of the technical capabilities that you otherwise wouldn't be able to access to this in the case of Integris as a $2 billion health system. I still think that local relevance is really important. For the obvious reasons, but I think for the less obvious reasons of influence in the community thought leadership, let's just take, for example, one of the core, the number one strategy to Integris is driving evidence-based medicine into the organization. You can't do that as a small player. And you can't influence public policy to move in that direction. As a small player, so locally, you need to be relevant. If you're small, locally, but big nationally, you don't have any ability to do what I just described on the local level. I think there's two elements to scale, a local relative size and then a national presence. And I think the national presence, there is some leveling of the playing field based on opportunist capitalists who are out there trying to monetize some of these expertise that are out there.

Gary Bisbee 24:55

Right, let's turn to your 18 months at Integris. As you mentioned, when you join Integris, how did you go about setting your priorities?

Tim Pehrson 25:04

Oh, boy, it seems like that was just yesterday, I talked to a lot of executive friends from around the country and asked him that very question. How do you transition into one of these roles and the thing I think that was most helpful was just to read a couple of books. First 90 days by Michael Watkins is a must read for every transitioning executive. But also just the advice to just listen, you're going to want to get in there and do stuff. I tried to take a first hundred days, I was very clear: hey, I'm here to get smart. Help me understand the leaders, the environment, the strategy, the key physicians and community players and just meet with as many people as I possibly could. Once I did that, it was actually just right enough time for me to then really assess number one, what was my leadership situation, what changes if any I needed to make there I made these changes fairly quickly after that, and then simultaneously, what were our strategies? And then how were we going to execute on those strategies, which was developing this integris leadership operating system that I had developed at another place and personalizing that to this community. And the rest was history. It was just starting down the efforts of working on those key strategies and building the relationships with the board and building trust with the physicians and the caregivers and seeing some positive results from those activities.

Gary Bisbee 26:35

You've got a very strong board there at Integris. Are you doing anything differently because of COVID?

Tim Pehrson 26:41

I stay in contact with my board regularly. I think it's just the best practice to communicate, we meet on a quarterly basis. So my communications in between the meetings are just as important as the board meetings. So normal times, I'm writing a quick email once a week, maybe every other week, very high level. But pointed on a couple of things I want to express when COVID hit. I was emailing them a couple times a week. And then I just said, I can't do the second, I actually got to get these folks on the phone, I just made them aware of what's going on. There were so many moving parts, and it was moving so fast. So we started doing a board call initially, once a week, and then that turned into a video call once a week on Microsoft Teams. And we really got into a rhythm. And then as things started to normalize, I talked to my board chair and I said, I don't think we need to do this every week. Let's style this back. And so we just dialed it back a little bit. And I continue to do my emails and I continue to occasionally do a board call that has been very nimble, they're not doing anything else in a place that calendars are pretty wide open. So that's been really great. The Virtual PC has not been as bad as I thought it would be. I still would prefer to be in person for sure. But my board, I've got some national board members to travel in. And the ability to make this happen if something comes up is I think, going to be something we'll try and leverage in the future.

Gary Bisbee 28:11

Tim, this has been a terrific interview. Thanks for your time today. Let me wrap it up if I could with one question. And you've made reference to it a couple of times today, and that's this thought about the new normal. What do you think is going to change as a result of COVID?

Tim Pehrson 28:27

I think the payer mix is going to change permanently. I think we're going to see more government payer mix. I think there's going to be greater competition amongst the providers for the remaining commercial insurance. I'm hopeful, as I talked about earlier that there will be a continued trend to telehealth and virtual services. So those are going to definitely change. I think the other piece is our cost structures clearly need to be lower. We've known that for a long time. But I think that what this has really underscored is that our cost structures need to be more flexible, we tend to be very fixed, as I said earlier in the history of integris. They don't remember a time when you were following in a volume adjusted type of way than non direct patient caregivers. And I think we just got to say, all costs are variable in the long run. And so we probably ought to start treating them like that. So I think that's gonna be really important. I'll tell you one thing that has really opened up for me, the importance of communication is always there, right, but you're part of a statewide health system. And the ability to communicate in real time is so difficult to try and get out to all those places. It's obviously great if you can be there and in the olden days, shake hands with people. But we've been leveraging virtual technologies, and we've been experimenting with a lot of different solutions, virtual town halls, and these have been great I mean, our caregivers, our physicians, our hospital boards that have responsibility for safety and quality in the local markets, the ability to get out to them quickly and rapidly and share methods and shape what we're doing and build confidence has just been magnified by these virtual Town Hall. So we're going to keep using those forever. And I bet that's the way it is across the country, because there's just so much going on. And we become such a visual culture through YouTube and Instagram, and Marco Polo, whatever else we do, it's all video driven. And so this is a great way for people to do it. You can probably get better questions out of these virtual questions that they can ask on the side of the video piece and answer those as they're asking questions and you can in a big room of people because people are less afraid to ask the hard questions. So I think that's going to change obviously, the financials. I think that we're going to, this is going to leave a lasting mark on it. But I will say, I am still very optimistic that good will come of this. It's hard to go back and look and remember what it was like before 9/11. And all these security checks now we just sort of part of life, right? I think that we will return to normal. I really do. I think that it's easy to get in a funk to say that will mean it will feel normal, it won't necessarily be the same normal that we have. But it will feel normal, right? It feels normal to stand on the security line going through a checkpoint at an airport. But that wouldn't have felt normal before 9/11. And so I think that there's going to be some things like that where we'll have to adapt and adjust. won't feel comfortable at first, but we'll figure it out and it will feel normal and hopefully it's for the better I think it's going to be for the better in the long run, even though I think it's It'd be more challenging from a financial perspective to continue our missions and, and visions. But I think it's possible. I'm hopeful that it is. I'm optimistic that it is. And we're looking for every way to reimagine ourselves in this time. I mean, what a great time to rethink everything. You have all the reasons in the world to do it. And everybody sees the reasons why you need to at least think about it. They're expecting you to think differently, right? So that's what we've got to do as leaders and that's what we're doing.

Gary Bisbee 32:28

Tim, great interview Integris is lucky to have you, and we'll look forward to seeing you in the future.

Tim Pehrson 32:34

Thank you. I appreciate it. You'd be safe and we'll chat soon. Hopefully it'll be in person sooner than later.

Gary Bisbee 32:39

Thanks, Tim.

View Details

Transcription:

Gary Bisbee 0:00

Good afternoon, John, and welcome.

John Starcher 0:01

Thank you, Gary. It's good to be with you.

Gary Bisbee 0:03

We're pleased to have you at this microphone. Let's get right into Coronavirus and COVID. We've learned that COVID surge is highly variable by region. In your case, you've got eight states in two countries to think about. How do you think about the surge across all your service areas, John?

John Starcher 0:21

Well, Gary, it's absolutely variable to your point. But it depends across each of our states, within the states, each of our markets, obviously across the country with our presence in the Republic of Ireland as well. It's been unbelievably variable. At the end of the day, we've treated about 4000 patients that have tested positive for COVID since early March, we currently have about 220 patients in-house today. But when you look at the surge to your question, I think what we do is in our bed capacity planning, we've been looking at the number of folks in the community that has been infected per 100 thousand in the population. And that shows just dramatic differences across our markets. We have some markets as high as 400 persons per 100,000 that have been infected in other markets as low as 50 persons 100,000. At the end of the day, we've got some markets that have seen more than 1000 COVID patients and other markets that have only seen about 40. So it's extraordinarily variable and something that certainly one size doesn't fit all when it comes to the management of these populations.

Gary Bisbee 1:29

Let's come back to that later. But why don't we ask you to describe Bon Secours Mercy, of course, you went through an integration 18 months ago? So if you could just bring us up to speed on Bon Secours Mercy that'd be terrific.

John Starcher 1:41

Sure Bon Secours Mercy Health is the merger between Bon Secours and Mercy Health, which happened in September of 2018. So to your point, we're about 18 or 20 months into the relationship respectively. We were about $4 billion net revenue organizations that came together and formed an eight-plus billion-dollar organization. Today we are tracking over $10 billion in net revenue because we picked up the largest private system in Ireland as well as a handful of hospitals here in the United States as well. So all told today, I've described this as an integrated delivery network. We've got 48 hospitals, over 1000 sites of care across seven states in two countries. We've got about 60,000 employees, we see about 10 million patients a year and give about $2 million a day back in community benefit. Obviously, since being a faith-based organization mission is at the heart of everything we do.

Gary Bisbee 2:40

You were making a point that you were glad you got through much of the integration before the COVID crisis hit. How are you thinking about getting back to business, John?

John Starcher 2:50

The integration between Bon Secours to Mercy Health is really something that we're proud of and our board is proud of. I think it could be a test case for the industry. We put the merger together in less than nine months. And here we sit 18 months post-merger. And we've effectuated for the most part 95% of our integration plan, which was to take the better part of three years. And so we targeted coming in about $300 million in efficiencies by coming together. And we've already exceeded $285 million. The good news is that because we worked so quickly and moved with such speed and putting our respective ministries together, it put us in a really good position, operating as one to deal with a pandemic that has so many arms and legs to it as this one does.

Gary Bisbee 3:37

What are you thinking about in terms of rebooting elective surgeries?

John Starcher 3:41

Well, that's been variable based on each of the seven states within which we operate. But currently, we've opened back up elective surgeries in some markets and some sites. We are preparing to do that obviously in the other communities that haven't yet reopened, but I believe that I think many of my colleagues believe that this is the new normal if you will and that we're gonna have to continue to effectively be able to operate in a world that has an infectious disease, communicable disease on the scale of which we've never seen before. We've got to be comfortable reopening. We've got to be comfortable that we're providing safe spaces for patients to be seen, and safe spaces for our caregivers to give care to those patients. And we feel really good about where we're at in our ability to reopen and time will tell as to how quickly the buyers will come back. But we are open for business.

Gary Bisbee 4:31

Is it too early to tell or have you had any experience in figuring out how the consumers will be treating coming back?

John Starcher 4:38

It's a bit too early to tell, Gary. We began working on this problem, as you might imagine, at the same time we were canceling procedures back in early March. When we were canceling folks, we were already beginning to schedule them out into May in anticipation that we could hopefully rapidly move through the height of the pandemic and for the most part, have been able to do that. We have some markets and some practices within markets that are already very busy, and that have been scheduled out for the better part of the next three months. And then we have others that are limping along and struggling to get back on their feet and that are going to take a little bit more time. And so I think it's highly variable just as the pandemic has hit us has been highly variable, but the manner in which we're doing it across the board and preparing for it is consistent.

Gary Bisbee 5:21

What's been your remote working policies across your health system?

John Starcher 5:26

We've embraced it fully. We, for the most part, closed all of our shared services and support services offices, both in Cincinnati and in Baltimore. And in Virginia crossed our footprint in mid to late March, depending on where you are located. We've transitioned now, over 6,100 employees that are working remotely today that were not prior to the pandemic. So you might imagine the yeomen lift that was both from an IT perspective and resource perspective to have over 6,000 associates translate working from home. But we've been successful in that effort. And I would say, for the most part, we haven't missed a beat, certainly a new way to getting used to work. But we've been getting work done.

Gary Bisbee 6:09

Excellent. Does that give you any opportunity going forward relative to facilities planning and so on? In other words, some of those 6,100, will they continue to work remotely?

John Starcher 6:20

Yeah, I think there's a very good possibility for that. Obviously, if folks are able to work effectively from home right now, we want them to be able to do that. That's the prudent thing to do until we have vaccines for COVID-19. And that gives us a little bit of time to evaluate moving forward each of our workspaces and locations. We have a fairly new corporate environment built within the last five years that has open spaces and lots of cubicles that aren't spaced 6 feet apart, as you might imagine. So we're re-envisioning what those workspaces look like walking through just the building and looking at elevator management or plexiglass. I asked for spacing of furniture, HVAC units or negative pressure areas, vending machines, sterilization procedures and processes, you name it. All of that stuff has to be relooked at and we will do that, The good fortune is that because we have such a strong IT infrastructure and have enabled folks to work from home, there's no rush for us to get our employees back to work until we can ensure that it's a safe and appropriate environment. But invariably, it will affect how we use our business space and commercial real estate moving forward.

Gary Bisbee 7:32

Communicating is always important, particularly in terms of a crisis. How did you think about Bon Secours Mercy communicating with its multiple communities?

John Starcher 7:43

That's vitally important and we knew that from the get go. We've gone out of our way to make sure that we've been thoroughly and appropriately communicating with our communities. We established a covert hotline immediately on the first days of the pandemic to allow our patients to call in with questions. And to be triaged, based on their symptoms, launched video visits and have had literally thousands 10s of thousands of video visits since the early April launch. We put out a website which we have carried out in virtual triage capabilities. And we've seen since we put out that website and 80% reduction into the COVID hotline, so folks are beginning in our communities to get used to navigating the website in the virtual capabilities of chat bot. That's been fun to watch. We've had a broad social media campaign, as you might imagine, with informational posts, and thank you campaigns for our direct caregivers. And we continue to drive results through our blog and website quite effectively. We've got a 340% increase to our website as a result of some of these social posts. So a comprehensive outreach to the community as you might expect.

Gary Bisbee 8:53

What about the caregivers? How did you think about communicating with them?

John Starcher 8:58

Just as important if not more important. Because we're coming into this on the heels or in the midst of the integration of Bon Secours and Mercy Health, we're always focused on communications internally. And so historically, at least over the past 18 months, we've been publishing a weekly newsletter, a couple governance newsletters each month, three monthly caregiver newsletters. But during the pandemic, we put those efforts on steroids, if you will. We've now established a pattern and a cadence for 25 communications each and every week. So we have daily leader updates. We have daily associate updates. We've got five times per week media and legislative updates. We've been doing podcasts five days a week hosted by various members of my senior leadership team. We have videos that go out to all associates once a week. So as you might imagine a heavy lift and we've been polling our caregivers to see how that effort is gone. And I'm very pleased to say I just got those results back last week. We've got 72% of our caregivers. That feel that they've been well informed about our COVID-19 approach and almost 70% have full confidence, our approach in response to COVID-19. So that's, that's quite positive compared to what you're hearing in the industry is this.

Gary Bisbee 10:16

It's just terrific. Well done there. Let's move to telemedicine. How has telemedicine grown over this time?

John Starcher 10:24

Again, huge. There's been rapid consumer adoption of our telehealth platforms. And we've experienced just dramatic growth in the platform. If you look at this time last year, Gary, we were seeing on average, less than 25 video visits per day. And currently, as we sit here today, we're seeing nearly 9,000 video visits per day. So we're doing more in a day than we did in all of the previous years. That's just been phenomenal. And I think that you'll continue to see that usage and I don't think you're going to see that go down magically anytime soon.

Gary Bisbee 11:01

What about the caregivers manning the phones as it were? How have you been able to find enough people to handle all these telemedicine visits?

John Starcher 11:11

Well, one, we've got a tremendous physician practice and grip leadership that works very closely with all of our physician practices primary care and specialty sites, we have the technology platform already in place and available. Some were using it, some were not all are using it today and using it quite effectively. So we've been tapping existing resources within each of the practices, again, with some very stellar leadership, both from our lay position group leaders and our key position leaders. We also had a couple platforms in place that were already plugged in play for this. We have a subsidiary company called Conduit Health. That was a 24/7/365 nurse triage center where we already staffed around the clock with nurse caregivers to assess triage and transfer patients. That's been vital to us. Success and managing the COVID patient population and getting them scheduled during this period of time. And then I'm sure you know about ensemble Health Partners, which was our owned revenue cycle company that has done all of our scheduling and rescheduling, and certainly navigates the telehealth and telemedicine platforms extraordinarily well.

Gary Bisbee 12:18

Speaking of revenue cycle, how important was CMS waivers and insurance coverage for telemedicine visits? How important was that in the increase?

John Starcher 12:28

Well, I'm glad that the government led by examples. I had some early conversations with HHS when they were considering doing it. I'm glad that they did it. And I think we're all seeing the benefit of it today. And for the most part, the commercial insurers have followed suit. And I think that's a good thing. I want to get started on the things that commercial insurers are not doing that they can or should facilitate this effort, particularly at this time of crisis. But at the end of the day covering telehealth and telemedicine has been a very positive move, we can still do some more things in terms of accessibility across state lines. But nonetheless, it was vitally important to our efforts today.

Gary Bisbee 13:09

Do we have to do anything to make sure that that is sustained? Do you think that they will automatically do that?

John Starcher 13:16

I'm hoping they will automatically do it. But you don't know what you don't know. So I think we have to be vocal to the federal and state government, HHS and locally with our departments of health and state Medicaid organizations. We also have to do so with our commercial insurers, hoping they see the success that the last two months has given us in terms of effectively being able to treat patients virtually, where they can appropriately be treated virtually and but we can't take it for granted. I think we have to be out there actively advocating and lobbying for an ongoing position.

Gary Bisbee 13:46

Let's turn to the supply chain. How is supply chain holding up for PPE?

John Starcher 13:51

Really well, I have to tell you, we've got a great team who saw this coming in early January. We have a bunch of horses in the supply chain department and we unleashed them and let them do their thing. And so we got out in front of it across the board with respect to face shields and masks and isolation gowns, gloves, you name it, they've really done a tremendous job and ensuring that at no time throughout this pandemic, were we short, that's saying a lot. When an organization our size, we go through about 22,000 masks per day, about 10,000 gowns per day. That's a big lift. I want to make it sound easy. It's not been easy. It was because of their foresight, and the fact that we let them run. And the other thing that we're proud of, I'm sure on the national news, you picked up the reprocessing capabilities for face shields and masks, at Mattel, which was a company located in Columbus, Ohio. We were integral on pushing that through HHS, and the Food and Drug Administration to allow that company to safely reprocess and sterilize face shields and masks. And so today, we've re-processed over 20,000 masks with them as well. And so that's something we're also very proud of.

Gary Bisbee 15:02

You know, that's just terrific. I've heard it around the circuit, people talking about reliability of the supply chain and wondering whether we need to do anything as a country about reliability of the supply chain. How do you think about that, John?

John Starcher 15:18

Well, I fall in the camp that would say we absolutely cannot be dependent on foreign nations for our supply chain, especially China, for PPE or medical supplies or equipment or pharmaceuticals. At the end of the day. I believe, Gary, it's a matter of national security. And I've been very proud of the entrepreneurial spirit across the United States here these past couple months with companies that have jumped in and stepped up to the challenge to manufacture some of these items urgently. I hope that we take a longer term view of it because I do believe we need a more dependable and more reliable supply chain in healthcare.

Gary Bisbee 15:56

But it does seem evident that public health is now part of National Security if it wasn't known before it should be known now. And this is another question, what can the health systems do to make sure that our governments recognize that?

John Starcher 16:12

There's little question that public health is a part of the national security and fabric of this nation, I also don't believe or agree that the government is best suited to run health care moving forward. And so I think we have to be careful. It needs to continue to be a balance, as it is today. And the government can and should employ appropriate oversight with respect to safety and limited but targeted regulations, they should allow for fair and free trade. But at the end of the day, we need the government's assistance and support to ensure moving forward that, as I just said, in the prior question, that we're not dependent upon foreign nations, for our pharmaceuticals or our medical equipment, PPE and that we don't put the US or the US taxpayers in the position to subsidize the world for research and development or our cost in the distribution and use of all of these supplies moving forward. I do think there's a role for government. And I think we have to continue to advocate for that. Particularly other things that could put us in a perilous position with respect to health and safety. But I also think we need to be careful that we don't allow the government through some of the local subsidies that have happened to the distribution of the Cares Act or other things to overreach and begin to attempt to run health care because I'm still a firm believer in free enterprise. And at the end of the day, there's no greater economic or efficacious engine than a free market. I think left to its own devices it will do better than anyone else.

Gary Bisbee 17:42

Well said. You have a lot of support in the field for that, John. Let's go to Bon Secours Mercy economics, which aren't pretty for any of our health systems, really. But how do you expect Bon Secours Mercy to look in 2020 at the end of the year?

John Starcher 17:59

Well you got that right that it isn't pretty. This is probably the most challenging financial situation that any of us as leaders have ever been through. The good news for Bon Secours Mercy, is that we came into this pandemic in a strong position. We had over 250 days cash or debt to cap ratios for less than 40%. We've just been upgraded by Moody's. So we were in a strong position coming in, which is going to allow us to effectively weather the storm. But it's hard to tell at the end of 2020, what the ultimate damage will be. It's going to depend on, as I said earlier, how quickly our communities open back up, How comfortable our patients and communities feel coming back into our facilities for care. But at this point in time, Gary, I believe we're probably going to see 10 to 15% less annual net revenue than we historically would have for the US. That's over a billion dollar impact in net revenue. We're used to operating at 3% operating margins per year, even through the merger this year, clearly not going to have a 3% operating income margin. It's quite obvious to me and the team as we look at our financials that we'll have negative cash flow this year, which is really tough to imagine when you think about, again, historically over the recent years running at greater than 9% cash flow margin. So you lose a billion dollars in revenue, we're doing our best to mitigate those damages. But at the end of the year, we will lose 10s of millions of dollars. The good news is, we're in a position to absorb it. And we believe we'll come out stronger than most

Gary Bisbee 19:33

Well it's a heavy hit for sure. What about capex? How will that be affected?

John Starcher 19:39

It's certainly going to be affected in the short run. We'd probably pulled back our immediate plans by 25% to 30%. As we move forward, we'll have to be pretty judicious about capex and making sure that it's probably got a greater emphasis on strategic capex than it has in the past in terms of what we expect. On an ROI, we've always been systems and ministries that have made sure that our equipment and technology is the latest and greatest and up to date and that our caregivers have the resources they need to be successful in their environment. We'll continue to do that. But I think you're going to see us and many other large systems being judicious and much more strategic about the deployment of capex and probably a lot more disciplined in the ROI that we go after in the allocation of those precious capital dollars moving forward.

Gary Bisbee 20:30

Any sense of what 2021 might be at this point? I know there's a lot of variables, including is there going to be another surge in the fall or next year, but any sense of that, john?

John Starcher 20:41

Well, I just make a couple of comments to that one. It's really tough to predict coming on the heels of 2020. You don't have the typical run rate analysis and zero based budgeting activities that you would ordinarily have in a normal year. I would say to you, Gary, a couple things. One is that we knew coming into the pandemic, we had a billion dollar budget gap over the next five years as it was even before COVID-19 hit us. So the good news for us is back in January, our senior leadership team had a retreat. And we were already talking about how we're going to bridge that billion dollar gap over the next five years, what efficiencies that we need to take on automation, digitization, you name it, and then what growth that we need to offset the continuing declinations and reimbursement, continuing difficulties in recruiting and retaining skilled workforce, all the other inflationary factors that we're up against your year with supply chain expense increases and pharmaceutical expense increases and, you know, the gamut. So we were already preparing for that. This certainly has exacerbated that billion dollar gap. So for us, it just accelerates the timeframe for which we were already looking at closing a gap and makes those efforts made that would have been spread over five years forcing us to front load it more than we otherwise would have. But the good news is we were already out in front, already taking a look at it. The other impact, I think that we'll all see, sadly, is given the general impact on the economy and the unemployment now, of what 25 plus million Americans in the last month alone have filed for unemployment. So the increasing numbers of unemployment are clearly going to swing folks from the commercial or private payer ranks into Medicaid or self pay. I think that payer mix shift is going to hurt us, obviously, more than we probably recognize or appreciate at this time since people are still on continuation of benefits or COBRA. So that's another headwind we'll face in 2021. I do think we'll be back to cash flow positive in 2021. We're going to be doing our best to get back to what is our normal performance, even in some difficult markets to get back to nine or 10% cash flow And two to 3% operating income margins, but it's going to be an uphill challenge. Make no mistake about it.

Gary Bisbee 23:07

Let's turn to a happier note. We always like to learn more about the background of our leaders. Let's talk about you for a moment instead of all these crazy finances. When did you first become interested in healthcare?

John Starcher 23:18

Well, you're going back decades now. I became interested in healthcare when I was a junior in high school. I had a high school history teacher that was talking to us about the baby boom population. And so I started doing back of the napkin math, and said, You know, when I'm in my 40s, there's gonna be a lot of folks that are going to need health care. So I think that's the space I need to run to. So I actually enrolled in Bowling Green State University in my freshman year in a healthcare administration program in the business school, and I've never looked back.

Gary Bisbee 23:51

What was your first job?

John Starcher 23:52

My first job was a result of a fellowship from Bowling Green State University at the Medical College of Ohio, which is now the University of Toledo medical call center and human resources and I worked there for a couple years straight out of college before I got my law degree in the evenings. I had a mentor there at MCI that had come from the industrial sector at Owens, Illinois that told me that if I really wanted to differentiate myself, I needed to be a doctor or lawyer. Not an MHA or MBA. And so I took his advice and got a law degree in the evenings. And then my next stage of my career became in House Counsel, doing mostly labor and employment law, but then gravitating over time to physician practice and M&A before I ultimately got into operations.

Gary Bisbee 24:35

Well, the law degree definitely differentiated. Very few of our CEOs have law degrees. Now you also spent time in the investment sector. What lessons did you learn that you carried back to the nonprofit health systems John?

John Starcher 24:48

A lot of lessons. Probably two and a half to three of the most valuable years in my career is when I was at health management associates, which at the time was the fourth largest publicly traded healthcare system in the United States. I came in as a Group President running about a third of its portfolio, and after being there only a year was appointed as the CEO of the entire company. Which had 71 hospitals over 15 states. So that was the result of both a hostile takeover by our largest shareholder and a brokered sale by our board at the time. There's all kinds of details and nuances I could talk to you about about the shareholder world and its impact on publicly traded companies, particularly in the healthcare space. Beyond making me a new and resilient leader, I think probably the thing that you learn more than anything else in the publicly traded space, you have an accountability to the market and to shareholders on a 90 day basis. With your quarterly earnings calls, there's nowhere to run, there's nowhere to hide, and your performance has got to be up to snuff each quarter. And so it ensures that you execute well. Then you execute quickly and you can't drag your feet on decisions that need to be made. I learned the whole new paradigm about execution and the importance of speed and execution in that environment.

Gary Bisbee 26:05

Let's follow up on the leadership theme. What characteristics do you think a top leader needs during a crisis,

John Starcher 26:13

I would say a leader brings stability in the face of chaos. Back to the old deodorant commercial, I guess, "never let them see a sweat." You've got to be poised, you've got to be competent. You've got to know that you've got the right talent in the right places, doing the right things. And you've got to let those people and those leaders run. A crisis is no time for bureaucracy and you can't have everything have to go back up through a chain of command to be approved. You have to give your leaders the freedom to fail, and the confidence knowing that they have the ability and the authority to make decisions at the end of the day. I'm a big disciple of Covey's, "The speed of trust." I genuinely believe that organizations only move as quickly as the trust that they have. And that's a culture you either have or you don't. Not one that you can create in the midst of a pandemic. Thankfully, at Bon Secours Mercy Health, we've always had that culture. We've heightened sensitivities around that culture over the course of the past 18 months in our integration, but to move at the speed of trust, you got to have integrity, you got to stick to your principles and be honest, you've got to do what you say you're going to do. We've established a good track record of doing that. I think your organization has to appreciate that your motives and your behavior are positive and your intent is positive. They got to know that you have the capabilities. And like I said before, we've got an extraordinary team that is unbelievably competent. And for the most part, I just get to let those horses run. And I think you also have to have an established track record of success. And certainly our results speak for themselves over the past several years. We do have a track record of being an organization that's capable of executing on details capable of executing quickly and at the end of the day, speed matters. The speed of trust facilitates that, and I think that's the type of culture you need to have in place to be successful in a crisis like this.

Gary Bisbee 28:04

John, this has been a terrific interview. I have one last question. We've talked about the "new normal" several times today, what do you think will be the aspects of the new normal?

John Starcher 28:16

I think there's the obvious things and that is, the new normal will be much more virtual than it has been historically. There will certainly be a push to automation, as all of us look to become more efficient and to take labor intensive work off the table as labor becomes more and more short in supply, digitization can be another key component of it. I think the other aspect of new normal is what you'll find are integrated delivery systems like ours, not just taking the learnings of the past two months and then putting them on a shelf and waiting for the next pandemic or infectious disease to hit. I think the lessons that we've learned is that we need to be pandemic ready at all times. And our facilities and the layouts of our workspaces need to be conducive to clean and dirty spaces, if you will separate entrances, separate hallways, ingress egress a lot of the things that we already do and some of the ambulatory sites under HOPD rules, but I think what you're going to see is a constant state of readiness. So that there isn't this rush on the 11th hour to retrofit spaces or facilities. And hopefully, we'll never again, be a movement to shut down services across the board. Who knows how many patients in our communities will be impacted by decisions delayed or denied? While some of our electric procedures and labs and imaging have been down the past few months, and so I hope our lesson is to be pandemic ready at all times so that we can handle the normal volume and the normal visits in addition to any type of search that might come our way.

Gary Bisbee 29:57

One follow up. What about consolidation? Do you think this will drive more consolidation either in the hospital or the physician group sector?

John Starcher 30:06

It should. And let's hope that it does. Anybody that knows me knows I've been speaking for some time about how absurd that it is the lack of scale that we have in our health system in the United States, if you look at the largest provider among us in terms of acute care facilities, they've got about a 3% overall market share. Any other industry would look at a 3% market share is laughable. And we've convinced ourselves over the years that we believe that 3% is a significant scale, which is just really nonsense when you have almost 5000 hospitals, and the largest system only has a couple hundred. I mean, you got 1800 Health Systems still today, Gary and you've got only 80 that have more than 10 hospitals. So I think at the end of the day, there will be a lot more consolidation. I think that this is going to help prove that this scale does make a difference, particularly as it relates to PPE and testing and preparation and a balance sheet that can withstand setbacks like this. I'm hopeful that we can remove some of the artificial antitrust regulations that exist, that we can create a sense of encouragement, if you will, for a more efficacious delivery system, which I think by its very nature will lead to more m&a. So both in the physician practice space and in the acute care provider space, I only see benefits from scale at this time,

Gary Bisbee 31:30

John, excellent job today. We do appreciate your time.

John Starcher 31:34

My pleasure. Thank you for having me.

Gary Bisbee 31:35

This episode of Fireside Chat is produced by Strafire. Please subscribe to Fireside Chat on Apple Podcasts or wherever you're listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested. Fireside Chat is brought to you from our nation's capitol in Washington DC, where we explore the intersection of healthcare politics, financing and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisbee's Brief. For questions and suggestions about Fireside Chat, contact me through our website, firesidechatpodcast.com, or gary@hmacademy.com. Thanks for listening.

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Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

TranscriptionAlex Gorsky 0:03
As we announced in late March, our goal is to be able to do this in a safe and effective way and have more than a billion vaccines by the end of 2021. We're working with regulators in the United States and around the world. We're partnering with other companies, particularly manufacturing facilities to be able to scale up so that we can produce here in the United States, but also around the globe. And that we would be doing all of this on a not-for-profit basis.

Gary Bisbee 0:29
That was Alex Gorsky, Chairman and CEO, Johnson and Johnson, on J&J's goal to produce 1 billion doses of coronavirus vaccine by the end of 2021. And to do so on a not for profit basis. I'm Gary Bisbee. And this is Fireside Chat. The most important next step in the battle against coronavirus is the availability of a vaccine. Alex discusses the prospects in progress as of May 20, 2020. The day this conversation was recorded.

Alex Gorsky 0:57
For making good progress there's still a lot of work that needs to be done. Much more testing needs to be concluded. But every piece of data and new insights that we gather, I think, are giving us greater confidence that this is certainly something that is possible, and that we're going to do everything we can to make it happen.

Gary Bisbee 1:14
The vaccine update is all-important. And in addition, we went deep with Alex on a wide range of topics, including the development of medicines to treat COVID, lessons learned from J&J's global and resilient supply chain, the most important characteristics of a leader in a crisis, key questions the board should ask in a crisis like COVID-19, the resources and support J&J have devoted to frontline workers and the value of J&J's diversified business model. I'm delighted to welcome Alex Gorsky to the microphone.

Good afternoon, Alex, and welcome.

Alex Gorsky 1:53
Hey, Gary, thank you very much for having me.

Gary Bisbee 1:54
Well, we're pleased to have you at this microphone. Let's lead off with the discussion of the all-important vaccine and everybody's talking about that. It was just recently front page on the Wall Street Journal and so on. Can you provide us with an update on the status of J&J's pursuit of the coronavirus vaccine, Alex?

Alex Gorsky 2:14
Sure, Gary. First of all, let me say it's a pleasure being here with you to have this discussion. Thank you and all the Academy is doing to continue to educate and inform stakeholders about these important issues. And I guess the way that I would start off there is, first of all, who would have thought, even two-three months ago, let alone two or three years ago or several decades ago, that we would be facing into likely one of the most challenging times in our country's history. Perhaps other than World War Two and a few others as we face and deal with the coronavirus. And I think by almost any measure, certainly in terms of human life, in terms of health, healthcare systems, our economy, and many other issues. It's challenging us in ways that we really haven't been challenged before. And what I would say is, many companies we were watching closely when some of the first news started to come out of Asia, very late in 2019 and early 2020. And when we first started getting the reports, our priority was to ensure the safety of our employees in the region, as well as to secure our ability to continue to serve customers, hospital systems, physicians, and consumers in their respective countries. And at the same time, it was about mid-January, when the scientists that worked in our vaccine group who have long been researching significantly in areas such as HIV, such as an ebola, and the Zika vaccines identified coming out of the healthcare system in China, the DNA sequencing of the coronavirus. And they quickly did some work and developed hypothesis that if we utilized our vaccine platform, combined with information regarding the virus itself, obtained from the gene sequencing, that we could in fact, have the potential to develop a vaccine that would develop neutralizing antibodies and would eventually work. And in a process that would usually take five to seven years, literally in five to seven weeks, they put together a plan that included the work that I just mentioned, and some early animal studies that indicated we had a strong likelihood of producing a safe and effective vaccine. But also one that could be produced at large scale. And so really, since then, the entire focus of our organization has been on doing just that. And as we announced in late March, our goal is to be able to do this in a safe and effective way and have more than a billion vaccines by the end of 2021. We're working with regulators in the United States and around the world. We're partnering with other companies, particularly manufacturing facilities to be able to scale up so that we can produce here in the United States, but also for around the globe. And that we would be doing all of this on a not for profit basis, given the significant challenge that the virus represents to the world, and we're making good progress. There's still a lot of work that needs to be done, much more testing needs to be concluded from every piece of data and new insights that we gather. But I think they're giving us greater confidence that this is certainly something that is possible, and that we're going to do everything we can to make happen.

Gary Bisbee 5:50
Well, that's our great news and congratulations on your efforts in this space. Could we dig into the timeframe a little bit more? You mentioned 2 billion doses by the end of '21. What does that suggest in terms of the approach to the FDA and clearance and so on? In other words, would it be cleared by the end of this year or by mid next year? What would the timeframe be?

Alex Gorsky 6:17
Well, there's still much more than we need to learn through the preclinical work, the clinical work as well as the scale-up in the manufacturing process work that we're doing. And what I can tell you is I've never seen in my more than 30-year career in the industry, the level of partnering not only between different companies but also between regulators, the FDA, organizations such as ARDA are responsible for vaccine oversight and the United States. The same agencies in Europe all understand the severity and the importance of this moment of trying to do everything possible to accelerate that process. However, to do it in a way that ensures safety, and that ensures a high level of quality in everything that we do. Now what that means for us technically is that we are working hand in hand with regulators trying to parallel pass certain processes, where we would ordinarily, for example, do certain testing procedures prior to starting our larger scale-up of capacity and manufacturing an actual product. We're going at risk and doing some of those things simultaneously. We're looking at what are the absolutely critical steps in the process, and what can be done by utilizing new types of data analytics, at times even utilizing data and information from other similar compounds to see what we can do to move the timelines up. Because all of us understand that if we let it run its full process this could take five or seven years. Which frankly would be unacceptable. At the same time, if something is going to be used, with literally billions of patients or around the world, we need to ensure that the risk-benefit equation is very strong and agreed upon by regulators and other interested parties around the world. We're working hard to be in humans by late August or early September. Again, we will be producing at risk by that time to be able to have sufficient quantities. And it's our expectation that as we work our way through the early part of 2021, that we could be at that time producing at a rate of hundreds of millions of vaccines. Our goal is to be at a position by the end of 2021. To be doing at the rate of a billion doses, we do want to ensure that there's broad Global Access that's affordable that it's accessible for everyone. And again, on a not for profit basis.

Gary Bisbee 8:46
Well, good luck. We're obviously all very enthusiastic about the work that you're doing. Why don't we turned to medicines or treatment options?

Alex Gorsky 8:57
The very good news here, Gary, is that while this is a difficult virus, and certainly one is presented a major challenge in terms of what should be the right approaches to treatment, and how can they rapidly help address the underlying pathophysiology and biology with the patient and the disease. Once someone is diagnosed, we have literally dozens and dozens of companies working on therapeutics, medicines, and vaccines. And I believe that literally 10s of billions of dollars, hundreds of billions of dollars have been invested in the biopharmaceutical industry over the past several decades, that have put us into a position where we are today to be able to make significant strides in relatively short order. While again, there are dozens of approaches being studied. I would say the two main are one - can we develop an antiviral? Or how do we better perhaps regulate the body's immune system either up-regulating it or downregulating it in certain cases, it needs to be expanded in other areas, it can actually overreact and result in challenges something called the cytokine cascade syndrome. And so by either taking these independent approaches or combined approaches, I believe most scientists would agree that in the coming months, we should be in a position where we have not only one but potentially several therapeutics available to treat patients who've been infected. As we all know vaccines take longer, but here too, I think we're going to have multiple approaches. We're going to have RNA, DNA, mRNA approaches, vector approaches as we have. And what I can tell you from the collaboration that I've seen, between the various pharmaceutical companies involved is that we don't see this as competing against each other. We see this as competition against COVID-19. And something that's so important for the world for humanity, that we've got to do everything possible to bring these kinds of solutions to patients.

Gary Bisbee 11:26
Well, we appreciate the leadership that you and J&J have shown, along with the other pharma companies. So again, our good wishes are with you. Why don't we turn Alex to the caregivers who have operated under a very stressful environment. And I know J&J has spent considerable resources developing expertise and workers and the stress that workers are under. Can you describe the programs where J&J is committed $50 million to supply frontline workers with PPE?

Alex Gorsky 11:59
Sure, we're very proud of the long tradition in history we have at J&J investing in our frontline health care workers. In fact, Johnson and Johnson is one of the first companies to support nurses in a significant way. And on a personal level, to me, that's very important. My wife and sister are both nurses. I have a niece who's literally a nurse manager at ground zero in one of the local areas that are significantly impacted by COVID-19. And there's always been a strong ethos at J&J. We certainly put a priority on bringing new technology to patients and healthcare systems, but nothing replaces the important care provided by those frontline workers, the nurses, the aides, the physicians, the EMTs, who are literally on those front lines every day and imagine those who were there today, often putting themselves at risk often having to improvise in a significant way due to the patient load they were facing at any one particular time. And it's been nothing less than a rollercoaster. What we've seen particularly in places like New York City, Northern New Jersey, Detroit, Michigan, New Orleans, where there have been really significant outbreaks, we've made a commitment actually to do over 250 million dollars of investment over a 10-year time frame. But then we've also got another 50 million, half of which has already been committed directly to the pandemic issue and we think that that's important that we're there showing our support of putting tangible programs and other investments in place, all in the spirit of trying to help them do their job that's ultimately going to help patients.

Gary Bisbee 13:43
You've also supported the Chan public health school at Harvard and thrive global for stress management resiliency program. Can you describe that for us, Alex?

Alex Gorsky 13:53
We're fortunate at Johnson and Johnson. That was actually one of my predecessors, Jim Burke. Dating back to the 1970s, really put a challenge on the company to say we not only want to have the best workforce, but we want to have a very healthy workforce as well. And recognizing the important role that healthcare for each of us and for our families plays, ultimately in helping to ensure that we can be our best every day that we can show up to not only do our job but to be our best and make a contribution to be able to take care of our families. It's essential that we take care of ourselves. And through the last several decades, we've been able to make a lot of progress in wellness prevention live for life energy programs, that all have the focus on saying, "How can we help people be at their very best physically, and ultimately, that manifests itself in things like productivity, but also levels of engagement, how they feel about the company, and frankly, how they're also able to engage with their broader community. Where they live and work and raise their families, whether they're online training programs, whether they're in person, classes that focus on things like diet, exercise, like sleep. And again, all with an emphasis on prevention and wellness is perhaps being some of the most important steps that we can take to maintaining our overall health. And that certainly applies to COVID-19. And through the years, we've taken these very same ideas and programs, and in many cases, we've worked with customers and other partners and help do a like a train the trainer of sorts where we have produced these programs in their institutions. And I must tell you, the feedback is great. I think if you look at some surveys among nurses and physicians and other health care providers, their own health and in making sure that they are getting the amount of rest that they need on a daily basis is a significant challenge and I think the feedback that we've gotten from many of our partners has been overwhelmingly positive. And it's another way that we can take what we do at Johnson and Johnson, partner with others, and hopefully have a positive impact on the entire healthcare system.

Gary Bisbee 16:14
Well, the Academy has worked with J&J on several of those programs. And we're definite fans. Alex, I know there's a number of other activities and programs that J&J has worked with the health systems. Many of our audience are health system executives. Can you just share with us a bit about other programs that J&J is working on during the crisis in particular?

Alex Gorsky 16:42
Sure, you know, what I think is exciting about the crisis and every crisis that brings forth an opportunity to work in new ways together, and very early on in the crisis. Partners came to us asking if we could help in areas such as for example, acquiring PPE. Our hospital group rallied very quickly worked with our internal teams that were where we use PPE extensively in many of our manufacturing and production facilities and worked with some of their suppliers to try to assess hospitals to get an adequate supply of mass gowns, gloves and other types of equipment. We did that to a significant degree. When it looked as though we're on the cusp of exceeding capacity for ventilators in this country, our engineers and one of our groups quickly went to work and came up with a way to almost double the output from ventilators by creating a splitter, a 3d printed splitter, that could be applied in the right circumstances to help maintain additional patients on those systems. So again, in a very hands-on patient facing away, but in other cases, who actually helped some of the large accounts with terms we tried to revise our contracts that were very customer friendly. Recognizing the challenges that they were facing. So those are just a few of the ways that we been trying to partner and we continue to do so today as many hospitals start to open up again for elective surgeries. They're having to consider what kind of changes do they need to make in their supply chain to ensure that they can ramp back up that during a period where they're likely to accelerate their number of elective surgeries that the supply chain stays robust, stays constant? How do they ensure that they can get their workers and technicians back into the operating room with the right kind of protection and equipment in place? So these are all areas that we think offer a significant opportunity to partner likely in new and unprecedented ways with inpatient and outpatient health care systems around the country and in fact around the globe?

Gary Bisbee 18:45
Well, it's much appreciated by the health systems. You bring up supply chain if we could turn to that for a moment. The supply chain for PPE has been, I think we would agree, unreliable. We've looked across the country and I know J&J has substantial experience in building a reliable global supply chain. What are the key success factors that health systems could learn from J&J in terms of a reliable supply chain?

Alex Gorsky 19:13
Well, look, I think we're all going to learn a lot of lessons in this process that will hopefully put us in a better position and prepare us for the future or in a significant way because chances are, this won't be the last pandemic that we face. There will be things in the future, that through better preparation, better planning, and better early execution, we can make an impact sooner in the course of the disease. A few things that we've always tried to focus on at Johnson and Johnson is ensuring that you've got the kind of resiliency and redundancy systems in place that enable you to handle certain surges. We've seen this to a significant degree. There are parts or products that were quickly taxes as hospitals and others. Systems ramped up, being able to quickly engage not only your own internal supply system but other external partners to help fill some of the gaps that can be created when you see that kind of surge is critically important. Having the kind of business continuity plans in place so that you know what the checklist is where you need to go, how can you quickly adapt things as simple as your purchasing order requirements and protocols to be able to rapidly seek and complete ordering in a very different kind of environment that many of us face. So those are things that we have done that we continue to do and that I think all of us are going to have to improve our systems going forward like that. The other big opportunity here, Gary is I think, technology innovation. I think we're finding that in many ways. Many of our systems are rather antiquated, and how can we apply some of the new technology and the new ways of looking at and using datasets to gather insights and to rapidly develop options for us in a much more integrated, digital and connected way.

Gary Bisbee 21:13
Well, there's a balance between the federal, state, and private sectors regarding PPE supply chain stockpiles and so on. How do you think about that, Alex?

Alex Gorsky 21:22
Well, look, I don't think anybody has the ability to do it alone. I think it's going to take a lot of public-private partnerships, there will be certain components of the supply chain healthcare system that should be more centralized or standardized or done at the federal level, just as you would expect us in a company like Johnson and Johnson to do. On the other hand, you want the right amount of agility, flexibility, accountability, and responsibility at the local level. so that people can respond based upon the unique needs of that particular unit or customer at any given time. So I think again, knowing what should be done for example, In the preparation stage around stockpiling, or clearly, the federal government could play an important role versus what are those unique hospital opportunities? Do we want to continue to support at the local level to ensure that we are matching real-time need, which real-time supply and not encumbering it with ultimately could be a kind of paralyzing bureaucracy or other impediments that would prevent a particular system from getting exactly what they need at a certain time?

Gary Bisbee 22:36
Let's turn to J&J's diversified business model. Can you describe the Johnson and Johnson business diversification for us, Alex? Particularly, what's the value how you see that contributing to Johnson & Johnson as a whole,

Alex Gorsky 22:50
Our diversified model is one that we believe is an essential component of our success. For well over 100 years and it's a choice on how we run our business for the long term. If you look over most measures of performance, over 50, over 25, or 15, over 10, 5 years, Johnson and Johnson has exceeded the performance of its peer group. And we think because we have a diversified bottle of a consumer group, pharmaceutical group, medical device group, that at various times in their life cycles have either outperformed or underperformed. It gives us the optionality to continue to perform even in a market like today where the medical device market is down significantly. And yet our pharmaceutical business and consumer businesses continue to do very well, even in this type of environment. We think that having that kind of breadth and depth across our different businesses, frankly also gives us a very unique insight into healthcare. We try to go where the best technology the best capabilities are, we are not relegated by only is this type of pharmaceutical product or this kind of device or this kind of consumer product. And I think it gives us the ability to leverage the spaces in between. In fact, right now we're working on a comprehensive program in our cancer group to say, "How can we prevent and cure and treat cancer much, much earlier in the process?" All too often we find cancer very late. And if we can find it, if we can diagnose it, identify it, and treat it much earlier in the process, the probability of success and have a better outcome goes up significantly. And it's only because we have such a diverse portfolio that we are positioned to do something like that. Again, we think that there's a number of advantages, but we also expect each one of our business units to compete within their particular vertical to be competitive in terms of their performance of their pipeline. Their cost structure. So it's something that we pay a lot of attention to. And again, we think it's a core strength of Johnson Johnson.

Gary Bisbee 25:08
As a CEO of a diversified company, what do you pay particular attention to, Alex?

Alex Gorsky 25:15
I think it's all about appropriately managing your portfolio. And we set consistent and strong goals in place that each one of our sectors and each business within each sector should strive to be number one or number two in their category. Because we know that when you've got that kind of critical mass, it gives you the ability to find better science, find better people, and frankly, reach more customers. We require those respective units to have strong pipelines for the future, are they investing with the long term in mind so that they can be competitive today, but also competitive and five months, five years, 10 years away? That's critical. Next, we look for ways for these businesses to be complimentary. With other businesses, is it something that would be a good match to either help them better serve a particular customer? Or is it something that can help us be more effective or efficient within a particular business? And of course, we require all of our businesses to be competitive to also have a strong business over time that they have a competitive p&l relative to benchmarks in their particular area. And it's one of our businesses that doesn't meet those criteria over time. Then, of course, we ask a question, is it the right fit for J&J, even though it could be a healthy and good business, perhaps it would be a better fit someplace else. So that we could continue to invest in other areas of perhaps greater unmet medical need, or that presents a greater growth opportunity. So it's an ongoing process, literally something that we do with our leaders monthly, that we do with our Executive Committee on an ongoing basis and all the way up to our board of directors, to make sure we're investing areas where number one, we think we can make the biggest difference with patients and consumers. And number two, where we can ultimately generate the best long term returns for our company to be able to continue to invest in for shareholders to realize an appropriate gain.

Gary Bisbee 27:16
So if I could follow up on the leadership question for a moment, what are the most important characteristics of a leader during a crisis, like this crisis?

Alex Gorsky 27:25
I think that there are so many characteristics of a leader that really have a light shine upon them during times like this. One is an ability to react quickly to a situation frequently, we can become so bogged down with bureaucracy, or having both the systems that are there often to protect this kind of takeover versus understanding that decisions need to be made in a very timely in a very agile and a very flexible way. The way that I frequently describe it is: the best leaders are those who know that when things slow down, they speed up. When things speed up too much, they slow things down. And I think having your hand on the rudder of the organization, so to speak, at all times, to know when to ramp up and ramp down to make the best decisions is critically important. The next thing for me, it's, it's about engagement and communication, people expect to be communicated with particularly in today's environment, and if you leave a vacuum void, unfortunately, negativity tends to fill in versus speaking in a very authentic adult way providing your team's your colleagues with the facts of the situation that as best you understand them and know them at the time and then providing them a clear path or roadwork ahead that acknowledges the challenges but also gives them a reason to believe in the future. So I think those elements I found to be important always in leadership, but particularly so during times of crisis.

Gary Bisbee 29:04
Turning from leadership to governance, you sit on several large company boards in addition to J&J. What are the key questions of board members should be asking in a crisis situation like this Alex?

Alex Gorsky 29:17
As both the Chairman of our board and also as a board member on IBM, I think the kinds of questions you need to be asking in times like this are, what are the risks that the company faces? What are they in by risk, in terms of business, financial, operational, execution, an employee at all levels, so that, again, plans can be not only put into place but reinforced were necessary to ultimately protect your stakeholders. The second thing that I think the boards should be asking is, look, what are the immediate, near term and long term challenges and opportunities that will evolve as a result of this particular situation. We all have to work simultaneously on the issue. But also be looking around the corner over the hill so that we have the right and appropriate balance between today, tomorrow, the next month, next year. The actions we're taking not only allow us to address today's issue but better position us for the future, as well. I think the other question that the board should be asking is, what are we doing to ensure the safety, the success, the resiliency, of our people in our teams. Times like this can be very, very trying. There's always going to be an issue or a situation that you're dealing with, but making sure that you're providing your employees the kind of support they need to work from home, to help manage their family issues as well as their work issues, how to take care of themselves, how to continue their own career development, even during times like this. More important than ever, because without the engagement, the support of your employees, you just can't be successful.

Gary Bisbee 31:05
Alex, this has been just a terrific interview. I have one additional question if I could, and that is that we're all talking about a new normal that we imagine will be coming. How do you think about a new normal? in particular? What would you like to see, change, or evolve in the future?

Alex Gorsky 31:24
I think out of every crisis, there comes an opportunity to rethink the way that we do everything. And I think coming out of this, a few changes that will actually be good for us as a society and as a country would be a reprioritization, of public health policy. And I think we clearly are gaining an understanding that without a strong public health policy and outcomes, we can't have a strong economy, we can't have strong security, we can't have a strong society. So making those appropriate investments and keeping them consistent going forward, I think is going to be more important than ever. The second thing is I think that we're going to only accelerate the uptake in technology across almost every aspect of healthcare and of our business, whether it's telemedicine, telehealth, whether it's the way that we think about doing medical education, and training and support, whether it's the way that we merge files and data sets to do better patient and virus tracking and understanding technology, data, AI, machine learning, connectivity, sensing will all be inherent in what we do. And I think the pace of that uptake will only increase in the coming months and years. And last but not least, I think we're going to perhaps rethink the working contract that employees have with large institutions and organizations. I think we're realizing here that there are some jobs and roles that need us to be there every day. There are others that can be done remotely. They frankly facilitate us to be more productive and more engaged. And so rethinking the standard roles and responsibilities that many of us have had in place for decades, in light of the way that we live, the way that we work today, I think will present a significant opportunity going forward as well. I consider myself a realistic optimist. And I think I am in this case, there's no doubt we still have a significant road ahead. There will be challenges along the way. But I do remain confident that on the other side of COVID-19, that we can be a stronger healthcare system. We can be stronger leaders, we can be a stronger country if we address these things in the right way.

Gary Bisbee 33:45
Alex, thanks again, just a terrific interview. We very much appreciate your time today.

Alex Gorsky 33:51
Thank you very much, Gary. Stay safe, stay healthy, and I look forward to talking again soon.

Gary Bisbee 33:57
This episode of Fireside Chat is produced by Strafire. Please subscribe to Fireside Chat on Apple Podcasts or wherever you're listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested. Fireside Chat is brought to you from our nation's capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisbee's Brief. For questions and suggestions about Fireside Chat, contact me through our website, firesidechatpodcast.com, or gary@hmacademy.com. Thanks for listening.

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TranscriptionSteve Markovich 0:03
Part of the culture of OhioHealth is that it’s a very team-based culture. We tend to solve all of our problems in multidisciplinary teams. And how do you do that and still have the same chemistry and dynamic while you’re making social distancing or working from home?

Gary Bisbee 0:16
That was Dr. Steve Markovich, President and CEO of OhioHealth as he works through changes brought by the COVID outbreak. I’m Gary Bisbee. And this is Fireside Chat. OhioHealth has the largest health system in its region, with 12 hospitals and 400 ambulatory sites. Dr. Markovich and his executive team are focused on using lessons learned from COVID-19 to accelerate to the next level of convenience for consumers. Recovery is a top priority for the health system, and for patients needing surgery or treatments. The OhioHealth executive team is working to solve a key barrier to patients returning, which is the restrictions to limit or exclude visitors and family members from accompanying patients. One of the learnings from the COVID crisis is that the state and local governments have an expanded view of OhioHealth actual delivery network. Let’s listen.

Steve Markovich 1:12
I think the government views us, in fact, as a system that is more comprehensive and more integrated than it really is. I was being asked questions by the governor’s office about well, how are we coordinating with all the nursing homes to use nursing home beds as overflows we need them. And they frankly didn’t understand that. OhioHealth doesn’t own a network of nursing homes.

Gary Bisbee 1:32
As a result of the crisis, OhioHealth will be addressing more completely the integration of disease management and public health. I’m delighted to welcome Dr. Steve Markovich to the microphone.

Well, good morning, Steve and welcome.

Steve Markovich 1:49
Good morning.

Gary Bisbee 1:49
We’re pleased to have you at the microphone. We’ve been leading off our conversations the last eight or 10 weeks with the discussion of COVID. What’s the state of the surge in OhioHealth’s primary service areas, Steve?

Steve Markovich 2:02
So we’re in central Ohio central and southern Ohio, very stable right now we compared to some of our colleagues across the country, and our governor acted very quickly and aggressively. And that blunted when I think most people would think of as the surge. So we are averaging about 1100 patients in the hospital across the entire state, of which we have 80 to 100 at any given time at OhioHealth, which is a 12 hospital system. So it is relatively flat. For the last few days, we’ve seen declining volumes at a state level. So this may take you straight to see the backside of the curve, that the big exponential peaks and a lot of people have predicted it really was born in Ohio.

Gary Bisbee 2:45
Good news there compared to some of the other hotspots. Why don’t we move to OhioHealth? Many of us are generally familiar with OhioHealth but Steve, could you give us an update on OhioHealth as it is today?

Steve Markovich 2:58
Sure. As I mentioned, we’re headquartered out of Columbus, Ohio at the center of the state. We’re the largest system in the region with 12 hospitals 400 ambulatory sites about 1000 employees, physicians, and about four and a half billion in revenue. 30,000 Associates. So it’s a medium-sized regional player, we are only within the state of Ohio and don’t venture up to Cleveland or down to Cincinnati. So to that center part of the Midwest, Columbus is a unique community in the state capitol. It’s not a manufacturing center. It’s really very much a business center. It’s the Ohio State University. So you’ve got a lot of the economic base here is very, very stable. It’s actually a great place to have a health system.

Gary Bisbee 3:39
What’s been the policy on remote working due to the COVID outbreak?

Steve Markovich 3:43
As soon as the Governor declared a state of emergency we effectively sent anyone who wasn’t a frontline caregiver home. And we are still working from home yet the typical administrative challenges up front are making sure everybody had access to the right software and the remote capability, but we’re making it work. It’s great when you can see people are just doing a session. Today, one of the things we got back is the associates that are working remotely while they’re able to do their jobs, that connectivity to their teams, and the connectivity to their manager, something that is challenged. So we’re trying to work out ways to work through that. We’ve had board meetings, we’ve managed to work through it. And so we are right now we’re working on a plan to hopefully bring everyone back. You know, you look across the community. I know folks that aren’t even planning to come back in Columbus, some folks in other industries are coming back in September. So we’re trying to figure out what makes sense, let’s say for our associates, where there might be some increased operating efficiencies. Now let’s prove to people can work from home. While it was a challenge, I think it’s one of those things that in the long run, we’re going to find that it creates opportunities for us.

Gary Bisbee 4:49
Can you focus a little bit more on the opportunity side? Will this translate into people permanently working from home in certain cases?

Steve Markovich 4:58
For example, revenue cycles, Our revenue cycle prior to COVID was largely campus-based at one of our administrative centers. We’ve got 1000 people working from home now. And the intention is not to bring them back. So I think especially folks that are working transactionally will benefit from working at home. I think for a lot of individuals, we’re going to end up at a hybrid model, where people will be able to as needed work from home, one of the things we have to do is we have to look at our physical plant and say, okay, at the administrator spaces that were designed in the past, with large group operating spaces, can we still have space, social distancing, we’ve got signs up in the elevators. Now, at work, you can only have two people in an elevator, there are things we’re going to have to rethink how we do part of the culture of OhioHealth is that it’s a very team-based culture we try we tend to solve all of our problems in multidisciplinary teams, and how do you do that and still have the same chemistry and dynamic while you’re maintaining social distancing or working from home?

Gary Bisbee 5:54
It’s a big project. You mentioned earlier that you have teams working on thinking about how to get back to whatever normal is going to be. How’s that working out? Steve?

Steve Markovich 6:05
We got two teams. We knew the day this all started, we started what was called back to business. We knew that there was going to be a wave of patients on the backside as well. I think yesterday we had 4000 prepped up imaging studies that needed to be done for patients. So we knew that there was this way that was going to have to happen. And so how do we come back to business? How do we make sure we’ve got the staffing, the supplies, the clinical protocols that allow us to function in the new world, as the governor relaxes some of the restrictions that he has in Ohio. We can do surgery, we can do elective surgery. We just can’t keep people overnight. Emergencies are still a “go”, treating pain, treating cancer, those things are still good, but you can’t do an elective procedure. We have to stay overnight. So we know there’s going to be this wave of people that need care. So we start thinking about that the day that the Cova crisis started. At the same time, we have another team that’s looking at what we call COVID plus one, which is what they learn from COVID. And how do we not go back to the way we were meant, like most of the systems across the country, our er volumes fell 50%. So people come through the front door 50% of baseline. Do we want to take it back to what it used to be? Or can we create new models of care and new delivery models where we can hopefully save some economic impact? Because we all know that there are a lot of folks that end up in different levels of care that really don’t need that, that level of support. How can we further leverage ambulatory surgery centers rather, for elective surgery, rather than bring people to the big hospital? Because prior to COVID, it was really a lot of physician input and physician preference. But really, we have to think about it differently now, as opposed to just saying, we want to bring everybody we can’t do our big institutions. So we’ve got two separate teams working on those things.

Gary Bisbee 7:56
Makes good sense. What’s your feeling about the way that your community is looking at coming back. Is there any way to judge how much concern there will be with coming back to your surgery facilities or the hospitals?

Steve Markovich 8:13
It’s anecdotal at this point, we had heard some concerns and started to make some plans, thinking I’d hear from other system leaders across the country that there was a significant number of folks that were hesitant to come back out of fear. We are working both through our physicians, some of our physicians are our best advocates for the safety of the healthcare system. Our government officials have stepped up. The mayor did a public service spot where he was talking about how safe the hospitals are. And then we’re going digital and print media to let people know how safe things are, that we have adequate PPE and that we will take great care of them. One of the big concerns we heard was really not so much around patients being concerned about infection or more COVID as much as the severe restrictions that were put in place around visitors. Family members, people who are willing to come to the hospital. But if they ask if their wife can’t come with them or their, their caregiver or partner, that creates an issue. So one of the things we’re really looking at is what’s the policy on folks coming? If folks are coming in for surgery? How far do we let support folks come with?

Gary Bisbee 9:18
Just follow up on that you’ve been mentioning, communicating with the community with your caregivers. What has been your communication strategy, Steve?

Steve Markovich 9:27
We’ve had multiple channels. We communicate internally with associates and physicians every day. My chief medical officer is on point for daily communication. I communicate to the organization with a video once a week. I communicate to my board once a week, and then every two weeks or so I do a communication video to the medical staff. We’ve done some things that I think are a little unique, and I’m very proud it covers from several aspects of the crisis. The four system CEOs we got together, and we said, “Listen, this is bigger than any one of us.” And so when it comes to the safety of the healthcare environment, our policies around visitation support for an alternative site of care, you know, standing up the convention center as 1000, better 1500 bed hospital in Columbus, for mass casualty management, we did that together. And so there’s been a lot of communication to try to reinforce across the community, that it’s not just about a house, it’s about the network. It’s about the system of care that exists, and that people should have confidence in that all four CEOs. We wrote a big letter to the editor. In some communities, hospital systems don’t collaborate but we’re really proud of Columbus. We have a way of doing things that are above us at that level. We all agreed to be one team.

Gary Bisbee 10:43
Excellent. What’s the morale been of your caregivers? It doesn’t sound like you’ve been swamped, like some of the hotspots but nonetheless, treating patients on a continuous spaces. What’s the morale been?

Steve Markovich 10:56
It’s really been pretty good. We’ve been very transparent with where we are, what we’re doing, we created some really solid channels for feedback as well, as we got into this. We had some physicians from the front lines that jumped in to help us work on the teams to set policies and procedures and help us as things evolve. We recognize, right upfront, there are eight principles that we set out at the beginning. And one of them was taking care of our associates, economically, physically, and psychologically. And when I say associates, I include the physicians with that. And so we created physician associates resilience teams. So every day there’s an incident command center report out and resilience and burnout is actually an agenda item. So we’ve been working hard to take that into effect. The good news is because we didn’t have the volumes that you might have seen in other parts of the country, we’ve been able to manage the workload, and frankly, when the volumes went down, we sent a lot of people home to keep them safe and keep them ready for a recovery period. So we’ve been able to rotate people through to make sure that people are feeling refreshed as best they can.

Gary Bisbee 11:57
Just thinking about leadership for a moment. What have been your takeaways from this crisis in terms of your leadership style? What have you had to do differently or think about differently?

Steve Markovich 12:10
It’s interesting. I’ve gotten a lot of feedback on that because I’m a relatively new CEO. Having only been in the job now about seven months when this thing kicked off. Historically, I would have been the guy that was probably running Incident Command, and I needed to stay about it. And so we put together and I essentially kept the senior team out of incident command, we put together a structure where we had clear channels, we had clear roles and responsibilities. We empowered those people, we gave them as broad of decision making authority as we could. And we basically said, “Listen, job one is to take care of the people, and that could be the patients or the associates.” We got to do this safely. And we’ll figure out the processes and the finances on the back end. But we got to make sure we got the right PPE, we’ve got to make sure we’re managing this appropriately. We got to collaborate with our government officials. The biggest thing is that my leadership change was really elevating. And then letting those people that are really experts at the job, just turn it loose, and they have really done a great job and it has been great to see some of those young leaders mature and grow into the roles.

Gary Bisbee 13:10
So you mentioned PPE, how’s the supply chain been holding up for PPE for OhioHealth?

Steve Markovich 13:17
It was really challenging at first, like most places, we have GPO relationships. And we had gone to a lot of relatively limited inventory. And so there were a lot of challenges up front. We ended up working back channels and alternative producers. And so we are in a pretty good place right now. We were super fortunate. And you may have seen it on Today Show and I think it was on Time Magazine. There’s a large think tank in a town called named Patel. There’s a lot of government work and research and we work with them to actually come up with a decontamination system. And so at one point, you can reuse a mask 20 times and so we started decontaminating them long before we had the alternatives PPE or from a supplier perspective, we were recycling PPE to the tune of 10,000 masks today at one point. It was great to see that innovation come up. That was one of our family physicians who in partnership with Mattel, started thinking about how can we fix this thing. And it was great to see that level of cooperation. But we’re in a pretty good place right now. We are tracking it very closely in Ohio. The governor has a perspective that really the healthcare system is in fact a system where you’ve got small hospitals, big hospitals, nursing homes, the independent silos and bureaucracies, and the different legal entities. I think he takes a perspective that, listen, it’s one system, we all got to take care of each other. And so you’ll have a hospital association stepped up and helps us track who’s deep in PPE who’s not who can help somebody else out. So some of that does go on, but we’re in a pretty fortunate place right now.

Gary Bisbee 14:52
Many of your colleagues are talking about the fact that we should have a more reliable supply chain for PPE And perhaps thinking about how much of the supply chain is outsourced globally? How would you think about that?

Steve Markovich 15:07
I think that’s spot on, I think we’re going to have to rethink for critical items, whether it’s in 95, or facials, there are certain surgeries. And we’ve seen even before COVID, we saw the problem with one of the major GPOs with the problem of production in China, and sterility. So this idea that we’re dependent on relatively few channels, and those channels are offshore, it creates challenges. So I think we’re going to need to look at that. I think whether it’s local sourcing, or creating deeper bench deeper stockpiles, I think those are all the things we’re gonna have to look at.

Gary Bisbee 15:39
So you were a command pilot in the Ohio National Guard for a number of years. How does the military handle its secure, reliable supply chain? Are there any lessons learned there for us and healthcare?

Steve Markovich 15:51
The military focus, you know, has some of the same issues. You’ve got some relatively specific items that may be sourced from a single vendor and they have to do another on a worldwide basis, so you end up with inventory management. And there’s a logistics tail to just getting things moved, that the military is really, really good at. I think inventory management awareness of where you are things that you can learn that I took away from the Air Force, clearly a strong sense of supply chain management, people that understand that business and just making sure you go through your contingency planning to where if you’re dependent on a single supplier or one or two suppliers, that is a risk that we’re not talking about at the board level. In today’s world, it’s not sustainable.

Gary Bisbee 16:31
Yeah. Well, and the question is who’s really going to pay for this excess capacity that we all think we need now that we’ve drummed out of the system before? So I’m sure you’re talking about that with your board too.

Steve Markovich 16:45
Yep. We had a tremendous response and I’m sure most communities did. We had a tremendous response from the business community for folks that have in their particular businesses. They may have used masks or protective equipment. We had over a million items donated in a relatively short time, we actually had to get a separate warehouse just to take care of what was being donated. Again, that was another place where all the systems in Columbus came together. And so it doesn’t make any sense for each one of us to be looking for help from different businesses. We ought to look at this together. And then if there are issues we got to supply that we can draw from. Yeah, that’s just terrific.

Gary Bisbee 17:20
Turning to telemedicine, have you seen a marked increase in telemedicine visits?

Steve Markovich 17:25
Huge. I think through the last report that I saw, we’ve done 75,000 telemedicine visits, ie visits, video visits, mobile chat with a patient so that was a relatively immature space for us. We knew we were gonna have to get better at it, but there just had been that catalyst to make it all happen. And COVID really pushed it. And so we’ve got 900 providers now that have all been trained, and the office staff and we’re actually encouraging folks, especially for routine follow-ups, things like that telemedicine is going to be huge. He’s been using it for a while. tele-consults for things like urology, counsel to the Are things like that, but pushing it down to primary care? we’re operating at a whole new level now. And I don’t see that going back.

Gary Bisbee 18:07
Well, it helped the CMS and the insurance companies are paying for the tele-visits to I suppose that was an important part of it.

Steve Markovich 18:13
Absolutely. I think in this case, just because of patients not wanting to go into their doctor, there’s pressure to solve that problem no matter what. But the fact that they’ve now created a way to make the economic model work is a good thing.

Gary Bisbee 18:26
Have your providers your caregivers responded to this? Have they been innovative in terms of how they’re thinking about and using telemedicine?

Steve Markovich 18:36
They’ve been superpartners. Most of them are very engaged, they see and they’re thinking about it from a safety perspective and a patient care perspective. They don’t want to bring people into the office that don’t need to come into an office. It’s really been remarkable to watch the collaboration. It is challenging in a community-based hospital system like Ohio Health. Our providers are all on epic. But you’ve got independent folks that aren’t and so it was interesting, there were a lot of requests for help to help create a telemedicine solution for them something that they could connect with their patients or that was secure and appropriate. So we’ve been trying to help them as much as we can stand up that capability.

Gary Bisbee 19:12
Well, let’s turn to the all-important economics piece. How will OhioHealth end of the fiscal year? I think you’re a June 30 fiscal? How will you end up your 2020 fiscal year Steve?

Steve Markovich 19:25
We are going to weather this better than some. So we did take advantage of a number of government programs as well as the Medicare advance payment. So from a cash flow perspective, we’re in a good place. We did curtail capital. And we did discretionary spending. We put a lot of constraints on the organization, new capital projects were stopped and we actually lowered the threshold, the authority matrix for what people could do to really try to make sure that we have things clamped down on things. Our fiscal year ends June 30, essentially the last third of the year. We’re what we’ll probably watch about the first two-thirds of the year. But overall, I think we’re going to end up in a pretty good place moving forward, we did make the strategic decision, we have a pandemic PPE program. So even though I’ve got associates at home, we’ve released June 1, we’re keeping them whole economically, we’re going to need those associates, we are modeling as quickly as we can, what the bounce back is going to look like both the short term pent up demand as long as what as well as what is the new normal look like. And so rather than put associates in a conundrum or an economic hardship, we leveraged our economic stability to keep them whole. And our board was very supportive of that. And we’ve gotten a lot of positive feedback about that. Just the fact we had the ability to do it, we chose to do it. But this next few months will be those are going to be the benchmark that we use to look at how the next quarter looks and we’ll probably end up in a quarter to quarter budgeting or management situation for a little while.

Gary Bisbee 20:50
Well, that makes good sense. What about cap x? How are you thinking about budgeting next year for cap x?

Steve Markovich 20:56
We will still have capital available. It’ll be a little more emphasis on routine capital. And then some of the big projects with long term bricks and mortar type things that would have had a much longer-term financial payback. We’re really looking at those. Clearly cash is important right now. And so we’re trying to be very, very selective of what we need to do. There will still be regular routine infrastructure that has to be managed, and some strategic thinking, but some of the major projects right now, I was on a capital meeting yesterday, and everything is being relooked at because we just don’t know the volume assumptions that went along with some of those strategic projects. Those are actually in flux. So we got to figure that out.

Gary Bisbee 21:32
Sounds like, in addition to your cap x plans, your strategic plans for the next several years may need to be adjusted as well.

Steve Markovich 21:39
Absolutely. I was talking to our population health team this morning on a call, they’re gonna have to help drive what the new normal looks like and how we deliver the care and what level of care is going to be appropriate in the new home. I’m not gonna say the whole strategy has changed, but I think that demand on the system is going to change just because of the nature of people going to the doctor or going to the house. Go to the surgery center. People are rethinking those things as how bad they need it. Or where else can they get it?

Gary Bisbee 22:05
Let’s turn to the Board of Directors, which you mentioned meeting with previously, how have you communicated with your board during the crisis?

Steve Markovich 22:14
I do a letter to the board every Friday that summarizes how the week is gone and what the issues are dealing with. I think I mentioned earlier, I do an all-staff video once a week on Tuesday, I attach that video to the mailing to the board. So the entire board gets that I’ve gotten a lot of very positive feedback on that. I have had a couple of private board calls with my executive committee in my chair, just to inform them of anything major that was covered down or what we were, whether it was the plan for reopening of elective surgeries, things like that. So the communication with the board has been good. We have had one full board meeting. We’ve had several committee meetings, but the full board actually had one fully electronic remote meeting, which was great.

Gary Bisbee 22:55
Well now I’m asking everybody any tips for smooth virtual board meetings.

Steve Markovich 23:00
Give ya a couple that worked well for us. One thing is we literally because you know, most of us use PowerPoint or something like PowerPoint, one of my concerns was keeping everybody on the same slide, you got to make sure everything is numbered, even the agenda, each topic of the agenda. It’s had its own separate slides. So if you just went page by page by page, you knew where to go. We also put whoever each slide was assigned a staff member. And that name was put on the slide so that if a board member had a question because some of the board members had visuals, and they were using an AV tool that had visual capability, and some board members were calling in. So sometimes when you’re calling in, you can’t tell over the phone who’s actually talking. And so I wanted to make it crystal clear if you had a question on slide 17. Here’s what you should ask. And so there was no ambiguity as to where to direct your question as you went through the meeting. Because it’s not unusual to have a person meeting you could have three or four people talking and I could appreciate on the phone, you might not be able to I understand we need to direct the question to it went really well.

Gary Bisbee 24:03
Yeah, that’s a terrific idea. I had not heard that before. So well done. Let’s move back to a higher strategic level, it seems evident that public health is now part of the national security, not sure that we thought about it that way before. How do you think about that? Steve?

Steve Markovich 24:20
I think this has been a real eye-opener. Frankly, there’s a lack of integration of public health, both at the state level and at the federal level. I think this is going to be the catalyst that makes us rethink that I mentioned a little bit ago, I think, in the health systems. I think the government views us in fact, as a system that is more comprehensive and more integrated than it really is. I was being asked questions by the governor’s office about how are we coordinating with all the nursing homes to use nursing home beds as overflow as we need them. And they frankly, didn’t understand that. Ohio health doesn’t own a network of nursing homes. They’re independent, very high-quality nursing homes in the region. But it’s not like we’re networked on a giant computer database. Well, we know what each other census is and what the demand is for beds or TV or anything. So when we say public health, it’s not just about testing and disease management. It’s how do you in situations like this? How do you create a system that truly is integrated and leverages everyone’s capabilities? Like most hospitals, we’ve been through a lot of mass casualty exercises, and contingent outbreak exercises. We’ve never exercised the system to this level. New York during 9/11 would be the closest thing having come from the military. I’ve got this vision of Sunday, there’s gonna be an exercise, where there’s a Blackhawk helicopter from the National Guard landing on one of our hospital helipads. When we start thinking about it at that level, we will be on the right track.

Gary Bisbee 25:45
Does this kind of add to our focus on social determinants of health?

Steve Markovich 25:50
I think the data is showing for patients who are struggling with social determinants of health and this particular disease outbreak is or having worse outcomes. It’s just another case where folks, folks that are either socioeconomically challenged or medically challenged, their prognosis is poor. We have to figure out ways to address that. You’ve got cultural barriers to testing. There’s actually I sat on a committee that was looking at how do we get greater penetration of testing into minority communities where there is a fear of government and fear of gig systems, because they don’t trust they don’t know where the data goes, they don’t know how to be used. So this is a multifactorial problem of how do we address not just social determinants, but deeper penetration of the healthcare system and to all the patients that we serve?

Gary Bisbee 26:36
Yeah. Well said, this has been a terrific interview. Steve, if I could wrap up with one question. We’ve had a number of people at this microphone talking about a “new normal.” What do you think will be changing going forward as a result of the COVID crisis?

Steve Markovich 26:54
Could there be so many things I think the just how we approach our interaction with each other you know, whether it’s the need for physical distancing or the desire to do things in a way, that is like, if I can do it from my family room, if I can find my groceries that I can find my paper towel, I can I see my doctor and get what I need. So I think there’s going to be a whole new, and I’m a family physician by training, you know, I was trained with the idea that you know, your patients and you understand your patients, and you have these deep relationships, that whole model is going to be challenged. And I think that’s probably one of the biggest things we’ll see. I think, too. How do we continue to deliver high-quality care in smaller communities, this clearly shows us the economics of health care are going to have to be addressed. If you look at the hospitals that are dealing with hundreds and hundreds and hundreds, if not thousands of COVID patients in the larger urban centers, or the small community hospitals that were living on elective surgeries and we shut that off. I think that’s a wake-up call that we’re going to lose. County hospitals are smaller community-based hospitals if we don’t do something.

Gary Bisbee 27:57
Well said, Steve, this has been terrific. Thanks. So much for your time and good luck to all of you in Ohio and OhioHealth.

Steve Markovich 28:05
It’s a pleasure. Thanks for doing for this.

Gary Bisbee 28:08
This episode of Fireside Chat is produced by Strafire. Please subscribe to Fireside Chat on Apple Podcasts or wherever you’re listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested. Fireside Chat is brought to you from our nation’s capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisbee’s Brief. For questions and suggestions about Fireside Chat, contact me through our website, firesidechatpodcast.com, or gary@hmacademy.com. Thanks for listening.

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In this episode of Fireside Chat, we sit down with Mitch Daniels, former governor of Indiana and President of Purdue University. In this conversation, we explore the challenges higher education is facing due to the COVID-19 crisis and what leaders can do in the days ahead.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription Mitch Daniels 0:04

Between the time I was elected and sworn in, I went to one or two programs somebody had for incoming governors. And I was sitting around, at that point, the retired governor. And somebody at the table said, “What’s the one thing you would encourage us to study up on or think about that we might not otherwise?” And everybody expect him to say, “Oh, you know, education or corrections or, or environmental policy,” something. He immediately said crisis management. He said, you’re going to have one sometime, and he didn’t want to start your homework then. And he was right.

Gary Bisbee 0:44

That was former Indiana governor Mitch Daniels, currently president of Purdue University, responding to the question about a governor’s most important responsibility. I’m Gary Bisbee, and this is Fireside Chat. Purdue was a leader in committing to reopening for classes in the fall, and a growing number of universities are following suit. Governor Daniels outline the extensive steps that Purdue is taking to narrow the risk for faculty employees and students. Governor Daniels has substantial healthcare experience as a board member of a large healthcare IT company and former executive of Eli Lilly. He is well qualified to discuss the similarities between higher ed and healthcare COVID has impacted lives and the economy and sports may be lower down the list and importance but college sports have wide interest. Let’s listen to President Daniels’ view.

Mitch Daniels 1:35

This is another trend by the way that was already underway. People were saying but we’re doing is unsustainable and in some cases, irresponsible so much money and so forth. And that reform was necessary and probably inevitable. And now I think again, this has been accelerated a lot every day. Now again this morning looking in the press and another school canceling sports or paring back or laying people off. So I don’t know where it’s coming out. But like so many other things it will not look just the same when this is over.

Gary Bisbee 2:09

Governor Daniels commented on the importance of COVID in the forthcoming presidential election, difficult COVID related decisions being made by governors, and the important characteristics for leaders during a crisis. I’m delighted to welcome governor mitch daniels to the microphone.

Well, welcome to the podcast. Governor.

Mitch Daniels 2:30

Thanks for having me.

Gary Bisbee 2:31

I’m pleased to have you at this microphone. You’ve been president of Purdue now for seven years following two terms as governor of Indiana. Let’s start with a description of Purdue University. Could you describe Purdue for us please?

Mitch Daniels 2:44

I’m always glad to talk about it. free advertising is one of my favorite things. Purdue is a research one university and we do the most research of any university in the country, I believe, that doesn’t have a medical school. Some people don’t know we’re as big as we are. We have 34 thousand undergrads and 10 or 11,000 graduate students at the main campus, plus some regionals. We’re a land grant school, some people don’t know that. But we have a very special mission that comes with that. And I guess the other thing is that we are one of the most STEM-centric, that is science, engineering, math, and so forth, schools in the country. About two-thirds of our undergrads and a higher percentage of our grad students are in one of those disciplines. And that’s very much by strategic choice. We’ve been moving further in that direction the last eight years, believing that that’s a special contribution that we can make to this state and country in this knowledge-driven age.

Gary Bisbee 3:37

The COVID crisis is affecting all of us and clearly higher education. How are you working through the balance between life must go on and health at Purdue?

Mitch Daniels 3:48

We walked around that question early on during these days when even less was understood, and it is now about this virus and its implications, but we decided two or three weeks ago, in large part because of the manifest interest from our students telling us they really want to be back on campus and continue their education in its full dimension. So we think it’s our job to do that. And we announced earlier than others that it’s our intention to bring them back in the fall, and going to do everything. We took dramatic transformations of the way we teach and live on campus to do that. We are out to achieve that. Happily for us in the last couple, three weeks, more and more schools have come to the same conclusion. So we’ll be working on this together.

Gary Bisbee 4:33

I see that at least one other Big-10 school and several the Ivy’s have announced and as you say, I think that list is growing day by day isn’t it?

Mitch Daniels 4:43

It is. The White House organized the zoom meeting a couple of days before we’re taping this, and I think there were 14 or 15 schools represented. Some very important institutions, including Stanford, Carnegie Mellon, UVA, and others. Everybody now is at least in that group, expressing the viewpoint that it’s our job. It’s our duty to find a way to enable these young people to learn and not have to take an important year out of their lives because we can’t figure out how to keep them safe or more to the point, keep the people teaching and serving them safe. The people we now all know, are far more vulnerable to this virus than young people themselves.

Gary Bisbee 5:22

I’m sure parents are concerned as well as students, faculty employees. What measures are you going to take to protect all of these people on campus?

Mitch Daniels 5:32

Now the short answer is everything we can think of. The interesting thing about a college campus, at least one the size of ours, to me is that my shorthand is we have the density of New York City but the demographics of an African nation. Which say we literally have as many people we’re gonna win the same acreage as a major city. But their demographics are so different. 82% of the people on or right around our campus are under the age of 35. We’re the reverse of a nursing home, let’s say. And so although it won’t be easy, we do believe if we focus our every effort on the protection of vulnerable sometimes means their separation. We’ve learned like every enterprise a lot about telework in the last few weeks, we believe and we have an instruction, now a mandate from our board to move at least a third of our administrative jobs off of campus. So that’s a couple thousand people who won’t be exposed at all. We will have many of our faculty choose or we will ask them to teach remotely on every occasion they can we know a lot more about that than we used to. We’re changing our physical spaces. That is to say we’re calculating how much distance needs to be kept in those settings like putting up Plexiglas and other protective barriers. Of course, we hope to be testing and tracing as comprehensively as anybody can. We’ve already set aside several hundred dollars for the temporary as isolation of people who test positive, so there’s more than that. We have six teams arranged around these goals. And I’m working with them on a daily basis to make sure we use all the time we have to get ready for August 24.

Gary Bisbee 7:21

It sounds like new learning models are being developed at the core of your approach. Would that be an accurate thing to say?

Mitch Daniels 7:29

Yes, it would people have been reminded during this experience that catastrophes like this, it’s been noted for a long time that don’t so much create brand new trends as they do accelerate trends that were already in motion. And the hybridization of learning using more remote instruction is something that’s been called for and slowly coming through the ponderous institution that is higher education in America. And this is obviously propelled that trend into moving into a much higher gear.

Gary Bisbee 8:02

I was just wondering about Purdue global and whether that gave Purdue a jumpstart on understanding online learning?

Mitch Daniels 8:10

Yes, it did. We purchased an existing and very successful online university teaching a new student group. That is to say, adult learners trying to enhance their marketability and their incomes and success in life. And we did that in part because we weren’t, as far as I was concerned, learning enough fast enough about this new world of online education. And once again, hiring has been one of the most ossified sectors it’s been so insulated and protected makes me think of healthcare in some ways.

Gary Bisbee 8:44

And we’ll get to that in a minute governor.

Mitch Daniels 8:47

And it was in business terms a “build or buy” decision. We bought it. And yes, it has helped us a lot. We know a whole lot more than we did. We are still learning like everyone, but there are certainly ways not to completely replace for most students, at least traditional students there’s still invaluable learning that happens on a campus learning from more intimate contact with faculty and learning from in our case, certainly the laboratory experience. The undergraduate research that we try to make a universal on our campus and learning from each other and students learning from each other. So I’m very, very glad Purdue Global is succeeding on its own. But it has also certainly been a learning experience for us at the mothership.

Gary Bisbee 9:35

Well, it was a prescient decision by you and the board at Purdue so well done as an educator. Another question comes to mind which is the primary-secondary students are missing at least three months, maybe more in the classroom. Any thoughts about what long term impact that might have on them?

Mitch Daniels 9:54

Can’t be positive. I think some colleges… I’d like to think ours is warranted. Pretty good, pretty credible job of finishing the semester remotely. But I don’t hear anything good about what happened in K-12. And I’m not blaming it, I don’t think we should blame anybody they had even less experience with this we did. But I think it was a highly unsatisfactory experience as we certainly hear this from parents of incoming freshmen. They got a few weeks exposure to online at least at the K-12 level, and it did not impress them at all. But I again, it’s like so much else about this experience. A lot of mistakes have been made. A lot of things have not been done well, but I’d probably be more charitable and forgiving and some people have been I don’t think second-guessing something so new and novel should go too far.

Gary Bisbee 10:49

There are many more important things in sports that COVID has changed and affected, obviously but college sports are a big part of our society. Who makes a decision on returning to college competition? Is that the NCAA, the conferences, or schools themselves?

Mitch Daniels 11:04

I don’t think schools themselves can do it. I’m not sure any individual conference can do it maybe in one or two exceptional cases. Now, I think it’ll have to be a much more collective decision. And this is another trend by the way that was already underway. People were saying what we’re doing is unsustainable, and in some cases, irresponsible, so much money and so forth. And that reform was necessary and probably inevitable. And now I think again, this has been accelerated a lot every day now. But like so many other things. It will not look just the same when this is over.

Gary Bisbee 11:50

Yeah, for sure. On to healthcare and education, which you brought up earlier. You encompass higher ed as President of Purdue of course and healthcare by sitting on the board of a healthcare IT company and having been an executive at Eli Lilly, what do higher education and healthcare have in common, Mitch?

Mitch Daniels 12:09

A lot. I wrote a somewhat whimsical newspaper column about this a couple three years ago. And I think the parallels are pretty obvious. First of all, both of us are selling what is deemed the necessity of your home. Obviously, your health is your first priority and the college degree has seemed like a must-do item to many people. You have little or no transparency in pricing, people can’t tell exactly what they’re paying or whether it’s too much or whether there’s better value available somewhere else. Biggest parallel is both areas are awash in third party financing, which is to say people are insulated and don’t feel the true cost of what they’re consuming. In the case of fire, they may feel it later because a lot of it may have gotten borrowed that they didn’t feel at the time. I sometimes say if you tried to if you set out to do design a system built for overpricing, it would look a lot like that? Well, in both cases, there’s been incredible pricing power, that is to say, the ability to raise tuition, raise healthcare prices, and you don’t lose business. Some cases in higher ed, you actually got more business because people had no other way than the sticker price to judge quality. The other parallel did observe for a long time that these two sectors for all their size and importance have lagged in terms of effective use of technology. I think it’s even more true in higher ed than it is in healthcare. But in both cases, you haven’t seen the efficiency gains from technology that it is brought to essentially every other realm of life.

Gary Bisbee 13:44

Correct. A crisis, as you pointed out, generally accelerates trends already underway. So what were the trends in higher ed that will be accelerated through this crisis?

Mitch Daniels 13:55

Right. One is that we’ve discussed already was using new forms of education on and so forth, no question a lot of that is going to stick. There were already forecasts for quite some time without a weed out in higher education, you got viewers, we’re not making enough children in this country. So you have 18-year-olds entering the system, pricing well out of control that finally there’s resistance there and you got a cost structure that’s very difficult to change. This rather unusual arrangement of tenure that we have a means that it’s hard to adjust a cost structure to deal with a financial challenge. Anyway, we’ve been losing about a dozen schools a year, little ones generally winking out here and there, you’re gonna see a lot more of that you already have. I told somebody the other day that some of these small super expensive private schools are the 80-year-old as medics of this area, that is to say, they were extremely vulnerable to start with, and this episode we’re going through is probably going to be fatal or permanently impaired. A whole lot more of them.

Gary Bisbee 15:01

Can universities sustain their current revenue model? You’re suggesting high costs third party payers, lack of transparency, and so on. But if the bulk of classes are online, will the customer perceive that the current revenue model is sustainable?

Mitch Daniels 15:18

Short answer’s no. The model probably wasn’t sustainable. It was already starting to fray and fail in some cases. And this I think, is really exposed and absolutely the sudden exposure of many more people, to at least today’s version of online education, has convinced many of them that it’s not the same as the full experience and they’re right. We think that at our place that the quality of the instruction can be maintained and that we do in fact we insist on it. But that leaves out all the other learning that can it comes from being on the campus. I should add that we’re not completely unique. We may have been steps ahead of some. But a very high percentage of our on-campus students, were already taking at least one online course every year. A lot of them in the summer but others while they’re on campus during the regular school year, and there’s nothing new about that. But again, that alone leaves out an awful lot of participatory learning that can only come from being in the community we call what you’re discussing relative to higher ed, affordability, and healthcare.

Gary Bisbee 16:29

And much of the discussion that you’re having about higher ed is applicable of course to health care which leads to another question. Many people are speaking about a new normal for healthcare because of the crisis. Sounds like we’re going to see something similar in higher ed, but what are your thoughts about what might constitute a new normal for higher ed,

Mitch Daniels 16:51

I’m tempted to quote Joe Inline in 1949 when somebody has asked him about the historical meaning of the French Revolution, and he said too soon to tell. I do think it’s a little too soon to tell. But almost certainly, there will be, I think, finally a flight to quality and flight to value. I think that we’re going to see a shakeout of many of the small like colleges. This may look like many of the small rural hospitals that have been either consolidated up or simply closed for lack of sufficient business. And I do believe there’ll be a lasting replacement of expensive untouchable labor with either more contingent faculty that’s been going on anyway, in many places, not at our place. Incidentally, we still have one of the highest ratios of tenure track faculty in the country cited. In other places, there’s already been a shift to so-called contingent or temporary, and the next transition will be to technologically deliver instruction in on a much broader scale. After that, I can’t tell you. Don’t bet against the model entirely. A lot of appeal to it. And there’s still a lot of value in it when it’s well done.

Gary Bisbee 18:07

Yeah, for sure. We’d like to focus on leadership in these conversations, thinking about the change that might be coming. As the leader of the institution. What opportunity does a crisis like this give you to tweak the model or change the model?

Mitch Daniels 18:25

There’s no question. That’s the case. I guess the question is, how much of that opportunity will boards and leaders choose to exercise or be forced to exercise. But I don’t think any of the changes we’re talking about were not speculated about or taught or called for before. It’s just that now their urgency and in many cases in the necessity of doing on this is more plain.

Gary Bisbee 18:48

Turn into politics. You of course were a two-term governor of Indiana, led OMB during the Bush administration. The presidential election is six months away. How much of a role will COVID play do you think in the presidential election?

Mitch Daniels 19:03

Well, it has to be central, but I don’t think we have any idea yet. In what way? I think there will at some stage, and it probably happens before the fall, there will be as we learn more, and people live this more, I think you’re already beginning to see a lot of questions about whether the rather absolutist approach we have taken with lockdowns and so forth was really the wisest course. And that may be more debated by far what but again, we will just have to see how the epidemiology moves as well as the economy. But if in fact, it remains the case that this is a disease that is especially or is very dangerous in certain subpopulations and not particularly dangerous elsewhere. Then I think you’ll see a lot of second-guessing some would probably, you know, in called for. But that’s what happens in elections.

Gary Bisbee 20:02

Just to make that point in a recent Washington Post commentary, you referred to HRD, which was an acronym for hindsight recrimination disorder. Can you share with us? What prompted the writing of that commentary, Mitch?

Mitch Daniels 20:15

Oh, it was just on my mind that we have such an instinct in this tribal society we’ve drifted into for people to pounce on every opportunity to castigate the other side, whoever, whichever side you’re not on. And we’re seeing it already with people who are spending more time arguing about whose fault this is, then they are trying to fix the problem. But it’s as I just suggested, it may prove easy over time to say the Swedes were the smart ones. We destroyed a lot of lives and actually cost a lot of lives by reacting as we did. I wrote the column just to say how about we all just forswear that people are doing the best they can. They’ve been dealing with inadequate information. We didn’t understand the bug to start with, in a way as well as we already do. And wouldn’t it be better to just indicate all tell ourselves right now, in whatever direction things take, let’s just stipulate to the good intentions and the best efforts of all the people who’ve been working on this now? And some of their judgments inevitably will not look smart, later. But let’s not claim that it was all because they had a hidden agenda or some special interest of their own. You know, the example I gave was the Iraq war where the decision that looked very flawed, in retrospect was built on the best intelligence available at the time. So it ought to be enough to say, those were bad decisions. How do we make sure that next time the intelligence is better than the choices made are better, but you don’t have to go around tell say that everybody was a liar when they want.

Gary Bisbee 21:56

Yeah, for sure. Well, you made an interesting point also in that same comment, I believe, which is, you wondered if the family might make a resurgence around a dinner table since everybody’s working from home?

Mitch Daniels 22:08

Well, yeah, actually, that was a separate column. But I did. I was scratching around early on this thing for things that might be positive coming out of it. And that was one that people might rediscover some of the virtues of family life, including eating at home, which was only happening about half the time in America prior to this. So I also expressed however, the hope that maybe this would bring our tribes together a little bit more and get out of some of this partisanship. That one hasn’t worked out so far. Sometimes there are silver linings and I speculated on to in that piece. Well,

Gary Bisbee 22:41

Well, if it’s not COVID. What will cool down the hyper-partisanship in Washington, Mitch?

Mitch Daniels 22:46

I wish I could tell you. Unfortunately, the data now tell us something that I hoped was not the case. What I hope was the case and there was still commentary to this effect fairly recently that there were people who were talking about an exhausted idea. The idea being that the hyper partisans, were a small percentage on either end, and they dominate the discussion. They dominate the airwaves, they dominate the primary process, which is a big issue, the process by which the two major parties select their officeholders. Unless you’re the one I used to be that it just could be that at least for now, most Americans and I think it’s more of cultural expression than, say an economic matter, have chosen to try chosen a team. And once you’re there, it’s hard to get past that, you know, I suppose one party or the other could suffer and sooner or later, we’ll take the seat and regroup in a way that created a new consensus that’s happened a few times in our history and some political scientists has forecasts that it’s going to happen again, maybe that might be the way to a broader and a little less partisan future.

Gary Bisbee 23:58

So going back to the Bullmoose Party with Roosevelt, I guess

Mitch Daniels 24:01

The collapse of the Whigs produced the Republican Party, the collapse of the Federalists produced a long era of dominance by the democrats the day so it doesn’t happen often, but it can happen.

Gary Bisbee 24:12

You made reference to 9/11. I believe you were in the White House literally that day, then 9/11 happened. Can you share with us some of your thoughts and how that they evolved?

Mitch Daniels 24:23

Well, I remember pretty well. In other situations you can look back and say, Gosh, even the minimal preparations hadn’t been made. No, I remember there was no communication system at all, or literally somebody running around going to tell everyone to leave. That was the alarm system that morning. And of course, just like this situation. In a flash, basically, all of the priorities fell away. And dealing with that issue became the dominant assignment really for everybody. I certainly spent the next month working on very little else or everything I did seemed related one way or another, to the response whether it was managing the support of the rebuilding. Oh, gosh, the compensation of the victims was a huge issue. How do you do that fairly and with some sense of fiscal restraint? How do you get the airline’s protected so they get back in business at all? Issues like that. It’s a little bit of fog thinking back, but certainly a lot of very vivid memories in there.

Gary Bisbee 25:32

One thing the COVID crisis and that crisis had in common was lack of information on uncertainty. Right when it was happening, how long did it take you to actually figure out what had happened?

Mitch Daniels 25:43

Oh, I think we did it almost instantly. Now what to do about that? It took a little while longer. And yet, if you think about it, the President had this nation in motion against the Haven harbor in Afghanistan within a couple of months at the time, and it seemed like every day was an eternity. But in fact, the response got going pretty quickly. And that was certainly true on the home front, the rebuilding front. I will say that there were lots of overreactions. And that’s only natural in a situation like this one. I remember so much as every congressman competing outbid the next one on what they could buy for so-called Homeland Security. And later on as governor, I saw a lot of, oh, I don’t know, unused gas masks of rotting away in some fireman’s trunk in rural Indiana. But excess and overreaction are I guess a natural consequence of an event is terrible.

Gary Bisbee 26:40

As a result of 911 of course, Homeland Security was created. Do you see any kind of similar response to this crisis? Perhaps a cabinet department for overseeing future health crises?

Mitch Daniels 26:53

Oh, boy, I hope not. We may have needed more PPE and advanced research in this area but what we don’t need another cabinet department. No, I think they bureaucratic machinery is there and if anything in surplus, and you know, the existing, certainly the agencies, HHS and the Department of Homeland Security that was created among them not be able to take the assignments to. So we’re better prepared next time

Gary Bisbee 27:17

Thinking about the role of a governor during a crisis like this. Several the governors are beginning to reopen their states. Now, of course, uncertain situations, the state has multiple regions, and this surge is different in each region. How difficult does it become for a governor to deal with an issue like this?

Mitch Daniels 27:37

One, of course, is difficult, and then I have a lot of sympathy for them. And I think it as a general rule, they’re doing it very well. There’s a reason that always no matter when they’re asked that people express greater confidence in their state governments and usually local governments, then the federal government. And I think that confidence has probably been justified in this experience. But you know, we dealt with things not quite this long-lasting but things very, very, very serious during my time and without assignment. Half of our state was flooded and underwater for weeks and weeks and 2008 a very devastating situation. I saw the role is that making sure the necessary resources were available. Taking down obstacles is a big part of it. You have to just pull those people who want to protect turf or assert authority that gets in the way of somebody else’s doing their job, you know, demand results and every way and measure them but also try to project some sense of calm and competence. Remember that this is what you’re hired for. You know, suddenly this certainly reminds me that between the time I was elected and sworn in, I went to one or two programs somebody had for incoming governor and I was sitting around talking to a very wise at that point, retired governor, and somebody at the table said, “What’s the one thing you would encourage us to study us on or think about that we might not otherwise,” and everybody expecting me to say,” Oh, you know, education or corrections or, or environmental policy,” something/ He immediately said crisis management. He said you’re gonna have one sometime. And you don’t want to start your homework man. And he was right.

Gary Bisbee 29:28

He was right to the point then. So what’s the governor’s most important responsibility during the crisis?

Mitch Daniels 29:34

Yeah, I think it’s the things I just talked about. You have to mobilize centralized people. It’s not usually turf protection, usually trying to do what they think they’re supposed to and every agency wants to round. So on its own thing, you get a lot of waste. You don’t centralize necessarily procurement that way, but worse, we’re still folks getting each other’s way. I still remember going to one of our worst-hit counties early on in that flood that I talked about and beginning to discover all the different needs people had food, income, temporary housing, I lost my identification, everything. And I remember saying to somebody I want every single agency, state, local or federal in one building, take the know-how about that high school gym down the street, which is actually what they use. We made the model everywhere. So that was one place and we put one person in charge so that we simplified the task for each citizen who in need. That’s the sort of thing that doesn’t happen naturally unless somebody cracks a whip, and that is that somebody is usually the governor,

Gary Bisbee 30:40

Peggy Noonan in a recent column suggested that politicians need to provide hope to their constituents during a crisis. How do you think about that, Mitch?

Mitch Daniels 30:49

Yes, of course. But when I said something about trying to project calm and competence and encourage people to believe that we’ll get through this, you know, I think frankly there has been again with good intentions, people thought if we don’t really drive home the dangers here, people won’t cooperate. So they effectively scared a whole nation into their homes and probably the right thing to do, at least initially. But at the same time, encouraging people to see that, like all problems ultimately, this one’s manageable. You know, another person I taken in as an old friend of mine, I read every word she writes, she’s great. Another person in that category is George Gilder and George wrote a piece about the same time rather ironically, for him. Praising politicians in Georgia as one of the most astute knowledgeable scholars of science that we have. But he pointed out and I thought this was so important that science has to inform our public decisions, but it can’t default the whole system of choice to them or to any one dimension, we hire politicians like her and the President to balance interests. That is a pretty fair definition as leaders to make wise choices, reconciling competing interests. You know, for every benefit, there is a cost. Somebody has to calculate these things and try to think about the overall public interest and survey. I think, in part because so many of our politicians have no scientific background, they, in some cases been too deferential to people whose life mission is one dimensional, God bless them for it. But that’s not the mission of the people in public office. By the way, George wrote something I think that’s pertinent to this conversation. In that piece. He said, the healthcare system is not separate from the economy, but a crucial part of the healthcare system saves lives. The economy provides everything we need to live, there are not and never will be scientific answers to all public problems. That’s where the politicians coming in or should work.

Gary Bisbee 32:59

Well said, we began our discussion talking about Purdue, which brings to mind governance as of course you’re on several boards. But how active has the Purdue board been and working through your decision to open classes in the fall?

Mitch Daniels 33:14

They’re very central to it, they have to be. You know, my view is that too many college boards have abdicated over the last decades, their full responsibility. I mean, look at the bylaws of any school, public or private, and you will always find that ultimate authority rests. None of that has been ceded or conceited over time to administrators, faculty, and others. And I think it explains many of the problems that higher ed has. So I’ve always felt the Purdue board out to be primary everything we do, we have already taken. We have three meetings scheduled in the space of a month. At the first of those they already approved the first six actions of what will ultimately be a multiple of that, that we will take and I will take all the actions and everything that we discussed earlier and more to that board for their review and I and I hope approval. You know, at the first meeting, for instance, they mandated that a change in our academic calendar, we won’t have a labor day break, we won’t have a fall break. Why? Because we don’t want people coming and going unnecessarily more avoidable to and from the campus. Possibly hastening the spread, they mandated the maximum possible testing and tracing regime they mandated standard flu vaccinations before anybody can work or study at Purdue, etc. I’ve said many, many times to audiences of influential people like those who probably listen to this podcast that if you’re on a college board or in a position of influence as a prominent alum or a donor for goodness sakes, press for reform press for more value and affordability press for changes that protect thought all these things. And if you’re not prepared to do that, let somebody else have the job. I have to believe this is true of a lot of hospitals and healthcare boards too. You have been close to enough to some of them that some love the institution so much that they don’t challenge it very often and as often as they should.

Gary Bisbee 35:20

Now, that’s great advice. So I take your board meetings have been virtual,

Mitch Daniels 35:24

Yes, is that the chairman and I were in the room at the campus and everybody else was working. I think that’ll continue, certainly through the next two. And beyond that, we’ll just play the ball where it lies.

Gary Bisbee 35:35

But one of the questions I’m asking all of the health system CEOs is any tips for how to manage a smooth virtual board meeting.

Mitch Daniels 35:44

You know, so many of us have become much more familiar with these technologies. Once again, that’s something that will not revert completely to the way it was before because in many cases, I think they’re superior I think meetings and my experience, I don’t know that yours That meetings tend to be a little tighter than they might have been in person. Not everybody feels like they have to speak to every single point. And when people do get their minutes on the screen, they tend to be a little more concise and thoughtful about what they say. So it’s very like I think, other forms of work or the instruction on our campus, not a full substitute. But some blend of virtual and traditional is probably what we’re going to have when the smoke clears.

Gary Bisbee 36:28

But back to leadership for a moment, what are the characteristics of a CEO or president of a university that will allow them to excel during a crisis?

Mitch Daniels 36:38

Oh, well, you know, I could make all the obvious points about what’s helpful, but I think that the one that may not be quite as obvious is that sometimes it can be hard for someone raised in a system in a sector, socialized to that sector a lifer, you know in higher ed or in like, possibly in Healthcare to move as aggressively decisively, as one of these situations often calls for. People are just naturally reluctant to close down the department they used to lead, to let go the person they’ve known for so long, it can just be harder for all the most human of reasons. That’s not an argument for rushing out and bringing in an outsider, it’s just to say that boards who have people who have been particularly built their whole career in a given institution or system probably have to be a little extra vigilant, a little extra, maybe aggressive themselves.

Gary Bisbee 37:37

Mitch, this has just been a terrific interview. We thank you for your time. One last question, if I could. That is you’ve lived through September 11 and were intimately involved in that. Your floods in Indiana, the Great Recession. What advice do you give us all for just balancing what we’re feeling now with this crisis and what some kind of normality might be in the future.

Mitch Daniels 38:00

If I’m imagining correctly, that sort of leadership, people who would take advantage of your podcast… be vocal about the need for some balance. About the costs that aren’t as visible as the current anecdote of someone who is victimized by this virus. I think it’s time anyway. Now for medical voices, scientific voices. I said the same thing that two counterparts from other universities the other day to speak up, again, without any criticism of choices made up to now, but to talk about where we go next, and help people to understand the dangers that that aren’t there, as well as the ones that are and understand that we will get past this but we don’t want to do too much permanent damage or unnecessary damage to people in their lives because of timidity about that transition.

Gary Bisbee 38:54

Governor, many thanks again for your time today. Just an excellent job. Thanks Mitch.

Mitch Daniels 38:58

I enjoyed it.

Gary Bisbee 38:59

This episode of fireside chat is produced by Strafire please subscribe to Fireside Chat on Apple podcasts or wherever you’re listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested Fireside Chat is brought to you from our nation’s capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisby’s brief. For questions and suggestions about fireside chat contact me through our website, fireside chat podcast dot com, or Gary at hm Academy dot com. Thanks for listening.

Transcribed by Otter

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In this episode of Fireside Chat, we sit down with Dennis Murphy, President and CEO, Indiana University Health to talk about next normals of the healthcare system following the COVID-19 crisis and how IUH is navigating the challenges of the pandemic.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription Dennis Murphy 0:04

We’re trying to avoid the use of normal, and actually talking about this idea of a series of next normals, which is we’re going to monitor data and continue to adjust and adapt as an organization. We’ve avoided the new normal because it almost feels like it’s a destination and then you become static.

Gary Bisbee 0:28

That was Dennis Murphy, President and CEO, Indiana University Health reframing the term “new normal” following the onset of COVID. I’m Gary Bisbee, and this is Fireside Chat. IU Health is the largest provider in the state with a commitment to improving the health of the Indiana population, which is among the lowest of any state in the country. Social Determinants of Health is not an abstract term for IU Health, and Dennis is hoping that the Indiana legislature will allocate more resources to public health at its next session. Dennis has a unique view of the likely next normal. Let’s listen.

Dennis Murphy 1:05

I think Gary, this notion of who has to come to you for care, versus where do you go to them either virtually or physically, is going to be one of the most profound changes for us.

Gary Bisbee 1:19

Dennis shared with this the effects of the increased use of telemedicine during the COVID outbreak, which might result in 30 to 40%, fewer exam rooms, and a new building being planned. He spoke about the board support during the COVID crisis and the risk of not slowing the pace of CAPEX. I’m delighted to welcome Dennis Murphy to the microphone.

Well, good afternoon, Dennis, and welcome.

Dennis Murphy 1:44

Thanks, Gary. It’s always a pleasure to talk to you.

Gary Bisbee 1:47

Well, we’re pleased to have you at this microphone. Let’s get right into what we’re all dealing with: Coronavirus. We’ve learned that the surge is highly variable, by region, and in your case by the state as a statewide system. So what is the status of the surgeon IU health primary service areas, Dennis?

Dennis Murphy 2:00

You know Gary, it’s been interesting because overall, I would say the state’s seeing a slow progression down that it’s not this very high peak and rapid downturn, but rather a rapid increase and then a very slow downturn with plateaus that in our largest market in the Indianapolis metropolitan area, we’re still seeing a significant number of cases and new cases. And then in other regions, we tend to divide the state up by other college campus towns are other hubs. And we’ve had two of those that have seen a more rapid decline and one of them actually be near a new focal hotspot; a meat processing plants where they had relatively low volumes for the first 45 days of this outbreak for us, and all of a sudden had 100 patients that were either admitted or triage to another one of our hospitals in a very short period of time, just over a week. And so, again, that’s probably some of the benefits of being a big system as they felt like they had resources to tap into for really emblematic and I think troublesome for our politicians in the state because they’re hearing in some areas and southern Indiana, they’ve had all of seven patients the entire past 60 to 70 days. And in Marion County in Indianapolis, that number has been substantial and really not too different than other major metropolitan areas around the country.

Gary Bisbee 2:55

Well, you said that the surge ramped up considerably, but it’s ramping down very slowly. Is that correct?

Dennis Murphy 3:57

Correct.

Gary Bisbee 3:58

So hopefully we’ll see over the course the next couple of months things get back to normal. Is that what you’re thinking?

Dennis Murphy 4:05

We’re trying to avoid the use of normal. And actually talking about this idea of a series of next normals, which is, we’re going to monitor data and continue to adjust and adapt as an organization. We’ve avoided the new normal because it almost feels like it’s a destination, and then you become static. Once you get there trying to continue this notion of being adaptive throughout this. First, because we don’t know. There are lots of different predictions on how this will roll out in the future. Is there a large second wave? Is there a series of rolling waves? And so trying to have a mindset of adaptability. And then I think we’ve learned a lot of really good things that are positive for our organization that we don’t want to lose and I think the analogy we’ve used as we’re in this epoxy like a moment that it’s fluid and shapeable. But pretty soon it’s going to get solid again. And before it gets solid and people retrench to their old behaviors, how much of the place can we change? Our current example is we’ve started elective procedures, and really pushing our surgeons to say, why would you ever do a pre-op and post-op visit on 100% of your patients in an office and really pushing hard to move them to virtual visits either on the front end or the back end or both. And so that notion of next normal I think has resonated well with our organization and where people want to see us go.

Gary Bisbee 5:51

in terms of telemedicine virtual visits. I’m assuming that same thing happened for IU health, which is a dramatic increase in these sorts of visits, is that true?

Dennis Murphy 6:02

Absolutely. So we can, the first week that we stood up our virtual screening program. We saw more patients in that first week than we had the entirety of the year before. And pretty quickly, we’re on a pace to see more per day than we had that prior year. And so that is a piece that I don’t think patients or providers want to go back on. I think they realized the access and ease is really important from the patient standpoint. And from a physician’s standpoint, I think they realize it’s a better way to provide care quickly and efficiently. And I don’t know that any of our practitioners will go back to 100% office-based practice again.

Gary Bisbee 6:52

Well, that’s interesting. How much training did you have to do with your practitioners?

Dennis Murphy 6:56

Well, it was interesting because we had a number of specialists who are doing consults around the state via telemedicine. So we’re comfortable with the technology, but not comfortable doing it with a patient. And maybe our biggest learning curve was with our primary care physicians because they were almost exclusively doing in-office visits. And the good news is they’re smart, adaptable people. We had some basic training that we did with all of them. But I would say there is a lot of learning on the fly as people use technology but very adaptable. And again, it’ll be interesting to see how many folks want to revert back to the old practice style. But I would say the bulk of them that I’ve spoken to say at least a day, day and a half a week. They can see themselves just doing virtual visits and not having exam room or clinic sessions all the time.

Gary Bisbee 7:56

I’m sure you’re modeling that out for the future, but what consequences do you think that has for your strategic planning in the future, Dennis?

Dennis Murphy 8:04

Pretty massive. We had planned to integrate two large hospitals that are a mile and a half apart. In downtown Indianapolis, we had always assumed that virtual medicine would change the ambulatory model that we were looking at. But I would tell you, Gary, pre-COVID, that change was single digit change and volume assumptions. Now we’re working with our chairs and clinicians and may remove 30h to 40% of our exam rooms, just based on how much we think we could do virtually, how you would change the Hours of operation, a whole set of assumptions that we’ve had a natural experiment during this COVID outbreak that is really proven. You can work differently and see that on a regular basis.

Gary Bisbee 9:01

Sounds like a win-win for the practitioner and for the consumer.

Dennis Murphy 9:05

That’s the goal. And again, this has been really interesting how much you can learn in a 60 day period versus things we were trying to model and test and play out before that we’ve really seen people adapt. And again, I think you’re right, the clinicians do see the value in this, both personally and for their patients. So it’s a nice Win/Win.

Gary Bisbee 9:31

Why don’t we turn to IU Health if we could, many of us are generally familiar with it, but you’ve grown a lot over the last several years. Can you please describe IU Health for us now, Dennis?

Dennis Murphy 9:42

Sure. So we are 16 hospitals, all located in the state of Indiana and we have the commitment to see how we make Indiana a much healthier state. We have 300 plus physician offices or ambulatory sites spread out through the state and about 34,500 team members. So a pretty big footprint, three hours north of Indianapolis and three hours south of Indianapolis. So a lot of geography that’s covered, and that we have the unique circumstance of being the only teaching hospital and health system in the state. So there’s only one allopathic medical school in the state. And that is Indiana University. There are some unique market advantages and market obligations that come with being the only one in an entire state.

Gary Bisbee 10:42

Seems like a long, long time ago, but what were your top priorities before COVID hit?

Dennis Murphy 10:49

Probably like most academic centers, you’re building a destination program. We have a health plan that has about 250,000 lives attributed to it. So looking at both growth, but also understanding how to manage populations well in terms of quality and cost, looking at social determinants of health and community health, being something critically important to us. And then I think uniquely in Indiana, we are a state that is not very healthy. And so depending on the metrics you use, were somewhere between 38 and 40 is really how do you drive those, as the state’s largest healthcare provider to have better outcomes and really seeing the state become healthier are pretty broad array but given our footprint and our size and our market share, we felt like those were critical strategies for us.

Gary Bisbee 11:51

Sure. Well, speaking of social determinants, given what’s going on now with the unemployment and the COVID situation, it seems like the work you’ve done there is going to be very valuable for you going forward.

Dennis Murphy 12:04

Yeah, it’s been critical to getting outside your four walls. And again, we were doing that as part of this strategy, whether it’s we had a congregational relationship program that was ecumenical, so no specific denomination, but working with about 20 different parishes, or temples or religious groups around Indianapolis, with the idea of expanding this throughout the state, and really thinking about those patients who were socially isolated as sort of a core group that relationship and partnership could help us with. And we were already getting an incredible set of insights into why they were isolated, what were their broader health issues, what was the social set of issues that were driving that isolation, and so COVID sort of prompted us to say, you can’t sit back and just wait for everybody to get sick, just like we weren’t in these other circumstances. And so, we have been actively working with our state health department to test in every skilled nursing facility, every assisted living facility, our Department of Corrections, ensuring our federally qualified health centers had access to testing, really looking to take a lens to the disparities issues, as we’ve gone through covered based on the learnings we were having, thinking about these other social determinants of health.

Gary Bisbee 13:41

Well back to IU Health for a moment, what is the remote working policy, Dennis?

Dennis Murphy 13:46

What we said is if you are a nonclinical worker and can work effectively from home, that we are asking everybody to do that and continue to do that through the month of May, and then we’re going to reassess for our ambulatory, clinical, and elective procedure. The personnel we set up early on a resource pool that you can think of it as a call pool, and basically said if you join the call pool, we will pay your full salary. So we have not furloughed anyone. We have not cut anyone’s salaries. Through this, we have not had layoffs. We have asked our team members to be in that resource pool. And they have been the ones to ramp up our telemedicine programs. They have staffed up our COVID units, they have helped with broader infection prevention program development, and we really tapped into that pool and sort of repurposing those folks. And then a little bit earlier discussion about when we’ve had particularly hard hit hospitals, we’ve deployed that resource pool to that hospital staff in that pool, so it’s been really helpful to have a little bit of slack in the system to be able to address urgent issues.

Gary Bisbee 15:10

Communication is obviously very important in a crisis. How have you communicated with the IU health community?

Dennis Murphy 15:17

Yeah, I would say if I had major kudos to go out, they would be to our communications and PR team. We have all the findings of our incident command for the last 24 hours in terms of decisions that were made, policies that we’re changing, all of that goes out daily, in writing. I do a weekly message that’s videotaped to our employees. And then we have a blog. So I get questions, you know, virtually every day that either I’m fielding or I’m triaging, down to people on our team to deal with, but we have found that being brutally transparent, and I have pushed our team. We show all of the numbers of bed used, employees that have been infected, employees tested, whatever the status. There’s no piece of data that I see that we don’t share with all of our employees throughout this incident. And I think where we are, is we’ve probably got better employee engagement now than we’ve had in my tenure here that transparency, I think it’s been really critical to it.

Gary Bisbee 16:37

How’s morale? I mean, it sounds like the morale is terrific, based on what you’re just saying, but how is the morale among your caregivers?

Dennis Murphy 16:44

I think there’s a pride for all health care workers to serve and to be there and sort of worst possible circumstances. There’s a joke that a lot of us are like firefighters you run to the fire you don’t really run away from it. And I think that’s true of all of our care teams. And I say overall, really strong whenever you have, you know, over 34,000 people, it’s not going to be a universal feeling. But I would say the numbers of detractors have been in the handfuls and very small, but overall, we’ve really focused on ensuring team members’ safety, both physical but then even the emotional sense of safety. And I think they feel that way and feel supported. Thankfully, we’ve had a balance sheet that’s allowed us to do that and let them feel supported through this

Gary Bisbee 17:42

Coming to testing supplies because that also relates to your caregivers, but how has the supply of testing and processing capability been?

Dennis Murphy 17:52

I think we’re probably like everybody in not only the country, but the world is we’ve had adequate testing to deal with our team members, our patients that are either inpatient or outpatient and then some of this vulnerable population support that I talked about either skilled nursing facilities and our state health department. But we aren’t able to open up to the public yet, and a broader set of generalized testing. And I think it’s been interesting, just in a state relatively on the lower impact side to New York, Chicago, Seattle, all of California. Just you end up lower on that prioritization list for resources. And so we’ve had to be creative with local vendors and help from others to actually build up that testing capacity.

Gary Bisbee 18:53

Well, that leads us into the supply chain for PPE. Was that Ben Dennis?

Dennis Murphy 18:58

Yeah, it’s evolved dramatically since early March. And you know, I think in the first weeks of this, we were like everybody in a state of panic saying, Okay, if the burn rates are what we’re seeing, it would be really problematic. We’re fortunate we built an integrated service center. So Indiana happens to be one of the hubs for Amazon and FedEx and a few other big internet marketing companies. And so we actually had their logistics teams help us build a service center that supplies all of our facilities out of a single location. And so pretty quickly, we were able, and again, probably like a lot of others that your standard vendors were not going to meet your needs and that you were going to gray market or black market kinds of vendors to meet that demand. And thankfully now I think we’re in a position where we have at least 60 days of all of our essentials and 90 of the majority of those items. And so feel like the supply chain is catching up. And that we’ve been able to create a big enough buffer that if there’s another wave, we feel like we’re prepared.

Gary Bisbee 20:18

There is substantial momentum among your peers, CEOs to redesign the supply chain so that it’s more reliable. How do you think about that, Dennis?

Dennis Murphy 20:27

I think it’s going to be critically important. And again, I don’t know where the trade-off is Gary between trying to build reliability into the supply chain and maybe I think one critical incident is going to not look like the next one. So PPE and a whole set of things that are critical items for this incident… I’m not sure we can assume that they will be the exact same ones for the next incident that we all face. We’re trying to, I think, build that durability in the supply chain. But I think also, quite honestly, just getting into the warehousing function, because we received some supplies from the National Stockpile, but I would say it was extraordinarily limited relative to our demand. And so I think a key learning for us was that we have to become more self-reliant in this whole thing, which may mean just taking some portion of our balance sheet and saying, it’s going to go into inventory that we have to maintain just because you never know when you’re going to need it.

Gary Bisbee 21:38

I think a lot of people are thinking the same way, Dennis on that one. How about the capacity of ICU beds and ventilators?

Dennis Murphy 21:44

We have been again, as I said earlier, strained but not broken. Our ICU beds have ranged depending on the hospital. We’ve had some that are at 110% of their license capacity and some that had been in the 60s. So overall, we’ve had an average of about 80% utilization today as we speak, and that ventilators we have never really broached a point where those had been a problem. They’ve always been someplace below 50% utilized and that was one patient, one ventilator, we early on, created the capacity to do that splitting, in case we needed that and that’s not in that denominator. So we always felt pretty well resourced from a ventilator standpoint.

Gary Bisbee 22:35

In terms of elective non-emergent surgeries. You indicated that you’ve begun to ramp up what’s been the reaction by the practitioners and the patients.

Dennis Murphy 22:47

What we’ve done, Gary is we’re one week in. Last week, we tried to place a cap at 25% to understand the impact on PPE impact. Extra early on were we continuing to see volumes go down because, at the same time, we were opening out elective surgeries was when the state had begun to open up some of those social isolation rules. And we had to make sure we weren’t going to see sort of this influx of patients at the same time. And so from a surgeon standpoint, as you can imagine, there was some prioritization required every surgeon but their patients were the most important and the most critical so really had to have our or committees come up with prioritization requirements in terms of which cases we didn’t exactly follow the American College of Surgeons, an Rn, and I think there are a couple of other bodies put out some guidelines. We felt like they were really complex and we needed something a little more streamlined. And so part of it was patient urgency. Part of it was how much risk any of the procedures put the caregiving team at. So I have them or aerosolized procedures, how much of it was important for us as an organization, if we were trying to get through what we have now is a backlog of starting last week 14,000 procedures that we had to get through. I think the first week went well. And now we’re looking this week to say, can that 25% increase up to a number closer to 50. And by the end of this week, and then we’ll keep, again, monitoring and assessing and adapting those numbers as we see the internal impact and the external impact.

Gary Bisbee 24:45

Underlying that is you can take care of both COVID patients and call them regular patients at the same time, doesn’t have to be exclusive. Right?

Dennis Murphy 24:56

Correct. And I think we’re in most of our facilities, large enough that you can create isolated COVID units within your hospital. We continue to have the same very strict visitor restrictions that we’ve had. And again, that is part of that monitoring and adapting phase that we’re going through right now. We’ve been able to keep one of our large academic facilities COVID free. And so we have continued to run our Transplant Program. There are cancer patients are there, and a set of other more fragile patients and really cohort, all of our COVID adults at a different facility, and our pediatric COVID patients have all been a part of our children’s hospital.

Gary Bisbee 25:47

Why don’t we turn to the economics, which isn’t a pretty picture for any of our health systems? How is economics going to be affected in 2020 for IU health?

Dennis Murphy 25:57

I think as you said, Never pretty. We sort of estimated early on and saw that play out pretty consistently about $40 to $45 million a week that we were losing and revenue. We have had, again, some help from the feds cares act grants, nowhere near enough to make up for that. And I think, Gary, the real issue we’ve been trying to figure out is, our board has been really helpful in terms of our perspective that they view this as a balance sheet issue, not a statement on how we are operating as a team, at least in this early stage and said, you’re probably going to lose half a billion dollars in this first wave of this. And thankfully, our balance sheet is strong enough to absorb that. I think the real question is, what do the subsequent months look like? How much of an impact will we have if there’s a rolling set of, you know, second, third, fourth waves if there’s one large second wave, we, like every other state, are seeing huge unemployment numbers? So what does it mean for a charity care standpoint? Not only is staying in lots of Medicaid applications, but their tax revenues are down. So I think the bigger concern is not how much have we lost today? It is, what is the forecasting look like for the next 24 to 36 months?

Gary Bisbee 27:36

Right, for sure. Because almost certainly cap X will be affected by it.

Dennis Murphy 27:39

Yeah, I think the pace of it will be affected, and I talked about that big project we had on the books. We’re looking at that project being fundamentally different. I think we will carry forward with some version of it. I know there are other academic health centers that have pulled projects completely off the table. We’re not planning on doing that. But everybody is reassessing their cap x. I think everybody’s reassessing how much of their strategy is reasonable to invest in and push forward just because there’s inherently some investment level and some risk and all of those moves and you’re not going to have the resources to take the levels of risk. You may have, you know, four months ago.

Gary Bisbee 28:30

I’m assuming that’s a strategic plan falls in that same category of affecting it over the next 24 to 36 months.

Dennis Murphy 28:37

Absolutely. So there were several big initiatives that were, again not pulling the strategy but probably reassessing the pace of the strategy and re-prioritizing what are the essential few for us to move forward. Just until we have a better sense of how all of this is going to play out.

Gary Bisbee 28:59

Dennis thinking about it is inherent in what you’re saying, really. But it’s now evident to public health as part of the national security. How do you think about that?

Dennis Murphy 29:08

It’s really tough Gary in a state that has consistently ranked 48 out of 50 states and terms of investments and public health. So we have been pleading with our state legislators and our governor, to see this as a priority over the past five or six years. And I think this incident has brought all of that to light. And so I’m interested to see in the next legislative session, Indiana. Indiana’s a bit unique. They only do their budgets every other year. And this upcoming session is a budget session. How much will they be willing to put behind the idea of building up public health infrastructure? Because it’s clear this is demonstrated the need for that in terms of governance.

Gary Bisbee 29:57

You mentioned your board weighed in right to the balance sheet, have you had a virtual board meeting yet?

Dennis Murphy 30:03

We have, you know, it’s been interesting because we’ve got a really diverse board, from business leaders to federal appeals court judge to somebody who’s a faculty member in Health Sciences Department at a major university. And I would say the comfort level of using technology varied. But overall, I think it went well. And maybe the important learning for us for our future ones are, you probably have to leave twice as much time for questions, just because I think you can answer them offline. And you got to do everything sort of virtually with the whole group. And so we realized the meeting went long just because it required a lot of communication while they were in the room

Gary Bisbee 30:52

At some point in the future when you could have every meeting in person, which is still thinking about mixing in some virtual meetings or not?

Dennis Murphy 31:01

We have a board retreat in June. And we have been asked by our board chair if we can do that in a hybrid fashion. So we have probably a third of our board is out of state. And then a third is here in Indianapolis, and then another third is spread out around the state. So we’re going to try a hybrid approach and really pressing on our technology team to say, how do we make this as seamless as possible for people?

Gary Bisbee 31:32

Dennis, this has been a terrific interview, I’d like to ask one last question. I’ve been asking it in terms of new normal, you made the point earlier that you’re thinking about it as next normal. But what do you think the major aspects of a next normal will be?

Dennis Murphy 31:48

I think Gary, this notion of who has to come to you for care, versus where do you go to them, either virtually or physically, is going to be one the most profound changes for us, again, some of the numbers that I’m seeing from our team, half of your ambulatory visits may be things you could do differently than what you’re doing today. And getting that embedded into our culture, both from a patient standpoint and a provider standpoint, is really going to take some work. But I think there’s been a proof of concept that’s occurred over these past 60 days that we want to take advantage of.

Gary Bisbee 32:31

That is thanks again, terrific interview. You’re doing a great job at IU health, and we very much appreciate your time.

Dennis Murphy 32:37

Thanks, Gary, and thank you for the opportunity to talk and I’m glad to hear you’re doing well.

Gary Bisbee 32:43

This episode of fireside chat is produced by Strafire please subscribe to Fireside Chat on Apple podcasts or wherever you’re listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested Fireside Chat is brought to you from our nation’s capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisby’s brief. For questions and suggestions about fireside chat contact me through our website, fireside chat podcast dot com, or Gary at hm Academy dot com. Thanks for listening.

Transcribed by Otter

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In this episode of Fireside Chat, we sit down with Kaveh Safavi, M.D., J.D., Senior Managing Director, Accenture to talk about how healthcare systems and businesses around the world are adapting to COVID-19 and what the new normal will look like as a result of the pandemic.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription Kaveh Safavi 0:03

We have sped up the cycle time for discovery because of COVID, whether it’s sequencing the gene or trying to get diagnostic tests in the market or trying to get therapies in market, and that is going to result in innovations in treatment, and it will be incumbent on the delivery system to speed up at cycle time for adoption and distribution of those new treatments as well as for society to gain the benefit.

Gary Bisbee 0:31

That was Kaveh Safavi, Managing Director, Global Health Practice Accenture, observing that the COVID driven accelerating cycle time for discovery will require commensurately paced acceleration of the cycle time for adoption and distribution by the delivery system. I’m Gary Bisbee, and this is Fireside Chat. Kaveh discusses the new competency to flex the delivery system by ramping down and ramping up as analogous to a dimmer light switch.

Kaveh Safavi 0:59

There are two ways to think about whether or not two people need to be in the same room at the same time. One of them is what is the relative level of trust between the parties? And the second is what is the relative level of risk associated with something going wrong in that interaction?

Gary Bisbee 1:16

Kaveh spoke about telemedicine visits as an experienced good. That is, neither the consumer nor provider were aware of its value until they were forced to try it because of, in this case, concern over acquiring a COVID infection. I’ve known Kaveh for nearly 15 years and he’s always been one of the most entertaining and astute observers of healthcare. You’ll find this conversation to be engaging and informative. I’m delighted to welcome Dr. Kaveh Safavi to the microphone.

Well good afternoon, Kaveh and welcome.

Kaveh Safavi 1:50

Thank you, Gary. It’s an absolute pleasure to be with you.

Gary Bisbee 1:53

We’re pleased to have you at this microphone for sure. We have a lot to cover today, Kaveh. So, why don’t we kick right in here with the biggest story of some time, which would be the COVID outbreak? You travel extensively. What’s your view of the impact that COVID-19 is having internationally?

Kaveh Safavi 2:11

Well, clearly, it’s a global pandemic. And the broad brush issues are the same, whether it’s about physical distancing of the population and its economic consequences or the health consequences. But clearly, it’s extremely local in the way it’s playing itself out and local could be by country, or in the United States, it’s really state or even city level. What we are discovering is that our approach to understanding both the public health and the economics of COVID require a much more nuanced approach than a one size fits all approach that we originally went into this crisis with. Have you tracked

Gary Bisbee 2:50

Have you tracked how this disease is unfolding in the sense that we’re now hearing that there might be another outbreak in the fall? If we don’t get a vaccine, there might be another outbreak in 2021. I know you read extensively, what’s your feel from the literature on those?

Kaveh Safavi 3:07

Yes, absolutely. Well, our clients ask us the same question. So while we are ourselves not a public health company, so we don’t build out those forecasts, the businesses have to operate in the context of the state of the disease and the economic consequences of the disease. So I think there are two parts to this conversation. The first is this particular COVID epidemic, and how do you build an organization that has a level of resiliency and flexibility because of the unknowns associated with it? And then the follow on is a recognition that the pandemic is a factor in the marketplace. I have moved from a paper exercise to a real one. And so we have to build in persistent capabilities because there are likely to be other pandemics. And we would like to be in a better position to respond to that with respect to the question that you’ve asked. I think if you consider the fact that we don’t have a complete understanding of immunity. But most of the research at the population level suggests we’re nowhere near herd immunity. And we’re certainly a ways away from anything like a vaccine. The likelihood of recurring episodes or outbreaks between now and the time that we either get herd immunity or a vaccine is real. The intervals between them are unknown, and the peaks are unknown. But the need to respond is factual and not speculative. And so every company is trying to figure out how to build a plan that has the ability to flex and to be resilient and to really respond to opportunities, whether it’s the scale up or scale down. And it’s both directions because scaling up and scaling down are really two very different organizational skills, which require different sets of insights. And what we’re recognizing is that you need to have both of those capabilities in place.

Gary Bisbee 5:01

What’s your assessment given the customers and clients that you run into? What is your assessment of how far down this path of building a flexible model and one that can flex up and down? Is there a general consensus about how to approach that?

Kaveh Safavi 5:16

Well, it certainly varies by industry. And I’ll talk about health specifically. But I get the benefit of working with colleagues across multiple industries. I will tell you that Accenture, as a company, is considered probably one of the most virtual companies in the world. And we did that for other business reasons before COVID. So our ability to respond to things like for social distancing was basically immediate. And many of our clients came to us and asked us a question that went something like, you know, we used to ask you about this theoretically, but you guys actually do this. Like, how would we actually get people to do this? And so a lot of it was a recognition that in many ways they hadn’t invested in the underlying let’s call it technology and infrastructure and digital capabilities that allow you to go from a physical to a virtual and back to a physical. They just didn’t have a model for that or the capabilities. And I think one of the things that will happen coming out of this will be a recognition that that agenda item, which was always there, but maybe was calibrated in different places in the priority line might be a greater imperative Now, just to provide them with the flexibility that they might need in for the next, unforeseen events.

Gary Bisbee 6:27

Let’s come back to that a little bit later when we talk about the large health systems in the US. But for now, you’ve mentioned Accenture, you’ve been there for nine years, I guess. Right, Kaveh?

Kaveh Safavi 6:37

Yes.

Gary Bisbee 6:37

Can you share with us a bit about Accenture for those of us that are not entirely familiar?

Kaveh Safavi 6:42

Sure. Absolutely. We’re a professional services company, publicly traded and global. 500,000 people, $44 billion in revenue, 90 countries, 14 industries that we serve. I’ve had the privilege of being part of the healthcare business, which is a 22,000 Thousand 500 people, we focus on a dozen countries. My particular group focuses on the payers and the providers and the state and federal governments. The kind of work we do falls broadly into three buckets. We do professional services, advisory work. So think consulting anything from strategy to business process improvement. We also have a large amount of work that we could call technology work that’s either system integration, so putting big information systems in place or application development, and then we have a very large part of our work, which is where we run functions for companies so often called outsourcing but it doesn’t have to be outsourcing to a company with employees offshore, it could be very much in the same country, but the idea that you have a company run a function for you, is also a big part of our business. And our health business does all of those including the operating functions, particularly for health insurance. Which is a significant part of our business.

Gary Bisbee 8:02

As the head of global health, how do you define your swim lanes? Where do you spend your time, Kaveh?

Kaveh Safavi 8:07

I spent some of my time worrying about our own internal business and where are we going to grow? What countries? What problems are we going to solve? What investments should we make? What talents should we bring in? What asset should we acquire? So there’s sort of that part of the business strategy for our growth. And then I spend part of my time with our clients and in the market, in part, generally representing the company to stakeholders, including governments and media and analysts. But then a significant part of it is with our clients, which are large organizations, whether they’re large health systems or large payers or state governments or federal governments in different countries. And my own background and my personal focus tends to be around areas of business model innovation and digital strategy. So when I do client work, it’s that kind of conversation that I engage in the most. I’ve been around healthcare and healthcare information technology for a number of years, and I’ve seen a lot of different things come and go as well as some of the really interesting, promising technologies. And my view is that we are at a particular juncture now where we have technology tools in our toolkit that we’ve never had before that allow us to answer questions that had been particularly hard to address until this point in time. So there’s a big material inflection point, I’m sure we’ll talk about that a little bit more.

Gary Bisbee 9:24

Yeah, for sure. I guess we go back, what past Cisco maybe? So we must have known each other for 15-20 years?

Kaveh Safavi 9:33

Yep. 2002/2003.

Gary Bisbee 9:35

Good. Thinking about Accenture and COVID. We were talking about this a bit before and it’s very interesting, but can you review Accenture’s COVID work policies for us and how Accenture is adapted to that?

Kaveh Safavi 9:48

Yeah, we saw a number of issues. The first issue we had to do was we had to respond as a large employer to the immediate geographic needs to move employees from physical offices. they were a nonessential task. And that was a global challenge for us. Now, as I said, we are already a virtual company and particularly with our consulting workforce that wasn’t too hard. But where we have large groups of employees in countries like India or the Philippines, that would typically come to a call center. It was not a simple task to move those employees to work from what is effectively a home, and yet provide the kind of services that they provided. But we were able to do that and we moved pretty quickly. Our clients asked us about the same issue. So we had to basically help our clients move to a virtual model pretty fast, and we plan to stay virtual subject to both the local laws of the jurisdiction we’re in as well as our client’s needs and expectations. Our business is always managed by a combination of what our clients model and preferences are as well as what the laws and the regulations are that we operate in. We don’t put any kind of a fixed date on this. It’s very much driven by jurisdiction by jurisdiction and client by client, how we’re going to unwind. And we because we are flexible, we’re comfortable staying in a virtual posture until it’s safe to come back from that physical location. And it may be that some of the work that we do will stay persistently virtualized because the client is comfortable with it. And our teams are comfortable with it.

Gary Bisbee 11:23

I know you travel extensively, how much of your time do you actually spend overseas, Kaveh?

Kaveh Safavi 11:28

Well, prior to COVID, about 20% of my time was spent out of the United States. On a personal level, I certainly look forward to it. I enjoy being with people and I enjoy working in lots of different places. So I am hoping personally that that opportunity will come sooner rather than later. But my plan is very much flexible and based on what the realities are.

Gary Bisbee 11:50

Any sense on if we are talking 30 days, 60 days, 90 days?

Kaveh Safavi 11:53

I don’t have anything immediate. I don’t think our clients are ready to commit to a decision. Our desire to travel is very much directly related to our client’s needs, right now HIMSS in Europe is slated to take place in Helsinki, Finland in September. I hope that goes on, and if so, I hope to be there. But if you look at my calendar, that would be the only thing that is defined outside the United States like I have no domestic travel in the United States set up at this point in time, because we just don’t know. So maintaining a very, very flexible posture on that.

Gary Bisbee 12:27

Sounds right. Let’s move to information technology. I know that’s an area of expertise of yours. And you know, I’ve been thinking recently after spending $35 billion on the high tech act last decade to digitize medical care. How important has that been, do you think, to assist the health systems and physicians to respond to the COVID crisis?

Kaveh Safavi 12:49

More important than you’d think in a very basic fundamental way. Our delivery system was forced to virtualize nonemergency care pretty quickly. And it was hard enough when you think about just the ability to communicate and collaborate, and the tools necessary to do that. But if we had not digitized records and created some ability for information to be available, regardless of setting, it would have really been a daunting task. Because it would have been hard enough to talk to your patients but to try to document or to look at documents would have been virtually impossible. So the fact that the high tech act caused essentially the vast majority of us hospitals and health systems to move to an electronic health record was at least a good basic enabling platform. What also we learned from it is that digitizing medical records is really necessary but not sufficient to gain any real benefits. And that has been a journey that we continue to go on.

Gary Bisbee 13:46

Well as I’ve been speaking with CEOs from the large systems over the last couple of months. The use of telemedicine has skyrocketed during these last two months. Do you foresee that telemedicine will become the norm?

Kaveh Safavi 14:00

I think there will be a step function increase in the use of telemedicine when the COVID crisis recedes, it won’t be at the level that it is today. Because it’s a forced adoption level, there are real situations that were done at a distance that would have better been served in person, but that just wasn’t a plausible option. I think about the equilibrium for where virtual health will stay based on a number of different dimensions. The first dimension and the probably the most critical is one of the barriers to acceptance of this has simply been that patients and doctors had no experience with it. And the lack of experience made them skeptical. The benefit of forced adoption, because of the need for physical distancing for infection control primarily, has caused both doctors and patients to become comfortable with this as a modality. These kinds of information products are often described as experience goods and you don’t know you need it until you have it. Just like people’s experiences were with going from a CD to an mp3 to an iPod to essentially a computer in your pocket. No one’s seen it, and it didn’t make any sense until after you had an experience with it, then you would never give it back. So I think that we have sensitized users to the benefits of it. And there’s comfort, we have some issues around regulation and reimbursement that were liberalized and how liberal they stay and where they equilibrate will have some effect on the relative adoption. I think we also have to look at the care model issue here because if you think about a doctor-patient interaction, some of those interactions can be done completely through a conversation with no kind of physical interaction, no kind of examination, and arguably, we should have been doing that all along. And whether you do it by chat or by voice or by video is great from an acceptance perspective. And I think this experience will simply consolidate a number of services to stay virtual wherever possible. However, there are also services that require some kind of physical touching or examination, and some that require specimens and laboratories to be obtained. And we have to solve that problem. Even if you have a conversation with the patient, if you don’t have some biological data that you need, you’re going to have to solve that problem. So either we’re going to end up having the patients come to the office because it’s simpler to do it all at one shop, or we’re going to come up with maybe another location, an intermediate location that either the patient goes to for a telemedicine encounter or after a telemedicine encounter. Where you can solve some of these problems. And then there’s a percentage of services where you need the physical laying on of hands. So you’ve got that dimension to work on and there’s another way to think about this. That is just when two people need to be in the same room just for a conversation? So I described from a clinical perspective where you have to do an examination, but even the conversation itself has a different dimension. I learned this during my tenure at Cisco when we were first putting out telepresence as a form of business conferencing, which we would later adapt to healthcare. And what I discovered was that there are two ways to think about whether or not two people need to be in the same room at the same time. One of them is what is the relative level of trust between the parties. And the second is what is the relative level of risk associated with something going wrong in that interaction. So if you’re going to see an oncologist about a new diagnosis of something that could be life-threatening, the likelihood that that conversation can occur in a way that doesn’t require the two people to be in the room together adequately is low because those two people have no trust and the risk associated with misunderstanding is extremely high. However, if you have a chronic condition with a care provider that you had a long term relationship with trust is high risk is low, because what’s the worst thing that happens? You have another conversation or a visit. So you can see that these conversations will calibrate themselves out against that continuum as well. And doctor-patient interactions will feather themselves out as to whether or not the trust risk equation is right for a distance visit or in the same room kind of a visit whether an examination is required or not.

Gary Bisbee 18:32

Well, that’s an interesting take on it. It certainly sounds right to me. Why don’t we use this to springboard into our largest health systems in the US, which have suffered a tremendous financial hit? What’s your sense that the financials will stabilize? Probably returned to something like a semi-normal over what period of time will that likely happen, Kaveh?

Kaveh Safavi 18:55

That’s an impossible question to answer because we don’t really understand two dimensions to this. The first dimension is from a physical distancing perspective. When do we think that we’re going to see jurisdictional relief around some of the physical distancing requirements, but even if we do, when are our patients going to be confident enough to go to get elective care? If they think that they might be exposed to an illness, so even if a doctor says, “the office is open for business,” or even if they are open for elective surgeries, are patients going to feel like they are safe and healthy? Those two questions have to be answered independently. I think the other challenge is what is the total duration of this event going to be and for example, is job loss and insurance loss is going to have an effect on people’s willingness to seek elective care? So this is a multifaceted problem. What’s also more challenging about it is that hospitals made the decision to immediately empty out all elective work, and arguably faster than they should have, because there certainly wasn’t the demand coming in from COVID to refill it. So maybe they would have had more runway. The challenge historically has been at hospitals’ capacity to turn themselves on or off as much more like a light switch than a dimmer switch. They didn’t necessarily fully understand their capacity issues as well as their ability to iterate. And I think what’s happening now is hospitals are going to have to acquire a level of sophistication. So maybe they switch the light off, but they can’t switch the light back on. They do need to bring it up gradually. And hospitals and health systems in general, because it’s both inpatient and outpatient that have a more nuanced approach to this are probably going to do better, ramping up and then ramping down again if they have to. And I think they all recognize the fact that if they ramp up, they have to be prepared to ramp back down. If winter brings another outbreak in the city that you’re in. So it’s gonna require a different level of judgment for the management team to try to protect their economic position as much as possible.

Gary Bisbee 21:09

Yeah, that’s right. The CEOs I’m speaking with clearly recognize they’re ramping up and down if that’s necessary, and are working on that right now. And you have to give him high marks for at least anticipating that there was going to be a surge and emptying out the electives. In many cases, it just happened and it’s a circumstance where it wouldn’t have had to happen. And as you know, the surge is highly regional. Right?

Kaveh Safavi 21:37

Well, and also nobody, I mean, nobody understood the impact of massive social distancing on the total. So the fact was that they did the right thing based on the information they had and the circumstances changed.

Gary Bisbee 21:50

Just as you’re thinking about it, DC changes in the way that health systems or physicians practice medicine due to the COVID outbreak?

Kaveh Safavi 21:58

Well, I think it ties a little bit to the issue. of virtual. Which is that we’re going to now have to incorporate physical distance as a competency. Historically, we thought about things like distances or access or convenience. But now it’s actually built into our psyche as a requirement for infection control. And to the extent that social distance will be the first response to a novel outbreak of disease, and we have to be able to continue working, I think that becomes a fixed competency at some level. The second one is really the ability to surge resources. We were good at disaster planning, but that’s a different kind of a surge than an epidemic. And we’re learning through this experience, how we’re going to surge. I think one of the challenges that we’ll have as a society is who is responsible for paying for and maintaining surge capacity, because if you think about it, prior to COVID, the economic argument was that hospital should not carry an excess capacity because that’s essentially a tax that everybody pays on every service, right? So the whole idea was to get excess capacity out of the system. So there was no subsidy associated with that excess capacity. And then an epidemic occurs that requires Intensive Care Unit services. And everybody asked the question, Where was the capacity? And the answer is, we took it out on purpose. And we know we might need to need it in the future. So who’s responsible for maintaining that surge capacity? Is it something that everyone should maintain and it should be subsidized? Or is it something that we should be able to stand up? Like we would, you know, think the way the military stands up a field hospital, but at that level of acuity, because we need it to be sort of paid for in a different way and paid for as a crisis as opposed to built into everybody’s cost structure? These are somewhat big questions that we’re going to have to answer.

Gary Bisbee 23:48

Yeah, huge questions, a lot of discussion about that among the health system executives, as I know you’re aware part of what you’re talking about is its excess capacity or flex capacity. You think that’s likely to lead to another wave of m&a among the health systems?

Kaveh Safavi 24:04

Any kind of a crisis like this generally affects the weak first. And so you have a balance of how much of those services are essential. And I mean that in more of an economic sense, maybe in a political sense, and if so then who essentially rescues them? And how much of that is just capacity that comes out of the system? I think for healthcare, there are two different dialogues, because the same thing is happening right now with physicians, particularly independent physicians, in small and mid-sized groups who very, very much many of them feel essentially the same way small businesses do. If their business was primarily elective business, and they basically stopped doing the work in the office, or the patient stuff coming. They have a problem. I know, for example, that pediatricians have been particularly hard hit because patients’ moms don’t want to bring their kids to a doctor’s office if they think that they might get infected. And you know, the doctors didn’t have to create surge capacity to treat pediatric COVID patients, but there’s a trust problem there. And these small if they’re a small independent practice that doesn’t really have the capacity to go without patients for a long period of time, there’s going to be an interesting issue there. So I think the hospitals and the physicians independently are going to go through a bit of a shakeout here in terms of business models, and particularly the ones that are financially too weak to sustain. These kinds of downturns are the biggest and biggest risks.

Gary Bisbee 25:26

How long do you think it is going to take for that to work its way through the system? I mean, do you think it’s a one year, two years, three-year timeframe before the weak will be assumed?

Kaveh Safavi 25:39

Yeah, it’s a great question. I don’t think it’s a thing that has a destination. I think what happens is it gets feathered into everyone’s business calculus because it’s not an abrupt issue. And remember, ultimately, at the end of the day, we didn’t have a lot of doctors sitting around doing nothing. We had a fundamental shortage of caregivers. At a macro level, that would get bigger because the population was going to grow with its increasing demand. So it’s not like we need to take capacity out of the system. In fact, we’ve always tried to figure out even before COVID, how we could scale that capacity, so we wouldn’t have shortages. So from a societal perspective, we’re going to need to figure out how to keep the caregivers in place. It’s just the business models that are going to be in play as to who do you work for? And can you be a small entity versus a big entity? Those kinds of things?

Gary Bisbee 26:29

We’ll come back to that in a moment. But let’s go to the economy’s right now. You’ve got global responsibility, of course. So what regional economies will be particularly hard hit? Do you think?

Kaveh Safavi 26:42

I work primarily in, we’ll call it rich countries, developed countries, much like the US. I think their characteristics are all similar to the US narrative. And you know, there are some geographic differences because of the way that governance occurs. In Europe, for example, there tends to be a little bit more willingness to have a central authority and central solutions. In the United States, maybe not. So you have some unevenness along with the state levels. Frankly, I’m much more worried about countries in the developing world that are potentially going to get hit by COVID and are completely unprepared for both the clinical and economic aspects of the disease but haven’t really hit our radar right now. Because it’s been more or less rich countries and highly populated countries. The global recession issue is its own challenge because so much of the business is global. And so what happens in one country affects another country. I think how it plays itself out in the United States is going to ultimately be felt by the healthcare systems around unemployment and therefore insurance status, and whether or not people ultimately stay in employer-sponsored insurance or have to move over to Medicaid or an exchange coverage policy and what the subsidies look like. That’s how it might play out here.

Gary Bisbee 28:00

There are many uncertainties, obviously. But do you have a sense? Let’s just take the US and Europe? Do you have a sense of how long it’s going to take us to dig out to any point of normality in terms of the economy?

Kaveh Safavi 28:14

Certainly, I’m not an economist. And we don’t make those kinds of projections. I think the way I answer your question is, I’m not sure what normality means. I think what’s happening is essentially a different steady-state with different considerations. I think the likelihood that everything will be exactly the same. The way it was it was before is zero because some things we’re going to want to keep. Like, for example, we described the workforce issue, but we know this with the supply chain and this is both for healthcare and on health care because you need resilience in your supply chain. Your ability to rely on a single source that comes from outside of your country suddenly becomes a risk factor. So people have to rethink sourcing, and that has an effect on businesses, and the allocation of scarce resources becomes a public good. So pure markets alone may not be adequate. I think all of these things get built into our new model. And that’s why I don’t think it’s a return to normal. I think it is more a question of, if we get past the immediate COVID crisis, then we have an economy that has forever in it, the memory of pandemic, and that gets built into it as a persistent consideration.

Gary Bisbee 29:19

Yeah, it’s like our grandparents in the depression, they never forgot it.

Kaveh Safavi 29:25

Or, terrorism. After 9/11, national security and terrorism was a persistent consideration in every decision in our lives.

Gary Bisbee 29:34

Yes, that’s a much closer point and a good one. What are you hearing about the likelihood of a vaccine? First of all, is it possible even for a vaccine to be developed for COVID, which seems to have multiple strains? But if so, what’s the timing on that?

Kaveh Safavi 29:52

Again, not as an expert, but as a reader and worrying about the implications for business: my senses that people talk about the plausible timing of a vaccine as anywhere from 12 to 18 to 24 months. And we know that as the vaccine is first available and approved, the amount of vaccine available will be small. And so it’s much more likely to be reserved for use with high-risk people, healthcare workers, people who work with seniors in housing situations, public safety workers, and therefore, the access to a vaccine for high-risk workers is in the first part of that horizon. And access to a vaccine for the general population is in the last half of that horizon. So if you take that 12 to 24-month horizon, it seems unlikely that we will have vaccines and wide use for populations sooner than a year and a half or two, even if the vaccine is available in a year because of the issue of where it’s going to go to first and that speaks to the effect of when markets can open up. So I think most people have figured that into their calculus if we come to the conclusion that this is a condition for which a vaccine is simply not effective, we have to readjust our thinking.

Gary Bisbee 31:13

Yeah, that seems to be the consensus. Now, we did have Allbert Bourla at this microphone a week ago, who’s the CEO at Pfizer, and they have four candidates that they’re putting into trials. I think they started this week. And they’re actually retooling manufacturing, in the anticipation that one of them might get through the FDA. Albert said that they’re working very interactively with the FDA. So there’s not a lot of the normal downtime there for the FDA to respond. So that would be the optimistic view, and we certainly hope he’s correct, but it’s going to be a while I think we can agree to that. Similarly, a drug to treat COVID I mean, you don’t really hear as much about that being available even as you do about vaccines in the process, what do you think about that, Kaveh?

Kaveh Safavi 32:07

I think there are two dimensions to drug treatment. The first is the primary treatment of the disease. And then the second is the treatment of the complications that lead to either ventilator use or death. Both of them are proceeding forward with lots of experiments in the field. Attempts to get validation and clinical trials, the better we are at those, the more comfort we will have in relaxing social distancing because we can deal with the worst consequences of the disease. So that’s part of the challenge here is that we have to build a societal and a business capacity that is built around uncertainty. And I think one of the challenges is trying to do a point prediction and build a business case to a point prediction is just too risky. Most of the businesses are really thinking concepts, you know, think about scenarios, and they think about maintaining maximum flexibility and this is essentially the ultimate unknown problem in complex adaptive systems. Four kinds are known and then two kinds of unknowns, the unknown unknowns, and the unknown unknowns. And then the unknowable. This is probably in the Unknown, Unknown category. And the way you deal with an unknown is primarily through a test and learn and iteration. Because you don’t actually know how things are going to respond and how the effect of what you do is going to be on the system. It’s not an analytic problem, you can’t forecast it like you do the weather, you just have to test and learn. So it’s a real challenge for our leaders to take that posture on dealing with this, and really adopting a full-on test and learn approach to running a business.

Gary Bisbee 33:37

Well, one of the unknown unknowns is just are we willing to adhere to social distancing for any time in the future? Do you think?

Kaveh Safavi 33:45

Well, I don’t know what our options are. I mean, the truth of the matter is that it’s a continuous balancing act. And I think what people are looking for is taking a nuanced approach. I don’t think anybody believes that the blanket approach is ideal, but when you’re dealing with an immediate crisis, and you don’t have any idea where to look. That’s the first thing that you do. And then you start to relax it with knowledge. And so I think, you know, all the discussions about our ability to test and then track and isolate, give us freedoms to liberalize, distancing in some places. But I think the concept of distance is now built into our narrative, just like the concept of national security that I just described earlier. And it will be forever part of our consideration about how we organize our society and what people do.

Gary Bisbee 34:31

Kaveh, let’s turn to the boards of directors. I’ve been spending a lot of time speaking to health system trustees over the last two months and have done a couple of interviews with them. I’d love to get your thoughts about it. So what questions should boards of directors of health systems be asking during this crisis?

Kaveh Safavi 34:51

I think the first one is as really stewards of the organization from both a mission and its resources perspective is not just how are we responding? But how do we build in a persistent capacity to respond to problems like this, looking at how the organization can respond to a crisis, not a specific crisis, but any crisis, and whether it has an organizational capacity and resilience, leadership skills, the right investments in technology, all of those kinds of things are decision making. Those are really interesting and important. A client I had a conversation with recently, a healthcare client made a really interesting observation. They said that the command center that they had stood up to deal with the crisis was making decisions at a pace that they hadn’t seen in the 25 years they’d been at that organization. And their hope was that after COVID, they would maintain that level of agility and discipline. There were two things about that process that they hadn’t done before. The first was they had a small group of decision-makers that were empowered and also required to decide all working collaboratively, and they were working off of information. Because of the problem and we’ve seen this, some people pull their crisis committee together and gave them no information to decide from. So a boring question might be, what was your crisis governance approach? What did we do differently? How do we instantiate that? How do we keep some of that going, but how do we make sure we can always do that if we need to? That’s one angle.

Gary Bisbee 36:23

Another question coming up by the directors is, normally, they would select the new CEO in good times, and now they’re looking at the crisis and they’re thinking what questions should we be asking a CEO candidate in good times that would allow us to predict performance in bad times? Any thoughts about that?

Kaveh Safavi 36:45

Really interesting question. This goes a little bit to what I was describing some of their theories about agile leadership and agile management. This idea of being able to test and learn for example is one. The other is how do you allow a level of distributed decision making, but still adhere to principles because people have to go quickly. Right? So there’s, there’s a bit of a mindset and a culture issue there. For example, you have to substitute authority and command and control with other concepts in terms of not only the people you select but the sources of information, the alignment on values, transparency, these are all big issues. So you can’t just take one away without adding something else. I would say, realizing that crises like these occur, and asking or testing for the CEO skill sets. For things that you know are necessary for a crisis is probably now a fixed requirement of CEO selection.

Gary Bisbee 37:36

I would agree with that, Kaveh. This has been a terrific interview. Let me ask one final question. Mark McClellan was with us at this microphone a couple of weeks ago and made the point that we will be entering a new normal that healthcare will not go back to the way it was. One, do you agree with that? And if so, how would you think that a new normal is going to be defined?

Kaveh Safavi 38:03

Well, I think there are three specific things that COVID has caused the healthcare system to do that we’ll never give up. Whether you want to characterize that as a new normal or not is more of a rhetorical question. But the first is, this idea I described earlier that we have to embed the ability to take care of patients at a physical distance as a matter of necessity because of infection control, we have to build that in. The second is we have to build in the capacity to surge our people and our resources up and down in ways that are much more dramatic and sophisticated than what we had before. And that requires a set of competencies. So I think that concept of the ability to search is critical and the ability to do that is critical. The third one which I think is really interesting, we touched on that when we talked about vaccines and drugs. We have sped up the cycle time for discovery because of COVID whether it’s sequencing the gene or trying to get diagnostic tests in the market or trying to get there in the market, and that is going to result in innovations in treatment. And it will be incumbent on the delivery system to speed up its cycle time for adoption and distribution of those new treatments as well as for society to gain the benefit. But I think this COVID experience has permanently sped up the clock time for innovation, and therefore it’s going to have to permanently speed up the clock time for adoption.

Gary Bisbee 39:29

Good place to land, Kaveh. Thanks so much. Appreciate your time. It’s been a pleasure. Well done.

Kaveh Safavi 39:36

My pleasure, Gary, I look forward to seeing you in person.

Gary Bisbee 39:38

This episode of fireside chat is produced by Strafire please subscribe to Fireside Chat on Apple podcasts or wherever you’re listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested Fireside Chat is brought to you from our nation’s capital in Washington DC, where we explore the intersection of healthcare, politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisby’s brief. For questions and suggestions about fireside chat contact me through our website, fireside chat podcast dot com, or Gary at hm Academy dot com. Thanks for listening.

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In this episode of Fireside Chat, we sit down with Dr. Joanne Conroy, President and CEO, Dartmouth-Hitchcock Health System to talk about the COVID-19 pandemic and how the crisis has changed several aspects of healthcare for the future.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription Joanne Conroy 0:04

If we continue to have a significant portion of our workforce working from home, then I have an opportunity to repurpose some of our space for activities that actually are growing and need more space. We were thinking about building an extra administrative building. And now that’s totally off the table. I wouldn’t even consider that.

Gary Bisbee 0:27

That was Dr. Joanne Conroy, President, and CEO Dartmouth-Hitchcock health system, noting that lessons learned from treating COVID patients has led to the development of an approach that allows COVID and non-COVID patients to be treated at the same time. I’m Gary Bisbee. And this is Fireside Chat. Dr. Conroy has seen telemedicine visits grow from three visits a week pre-COVID to 2,000 visits a day post-COVID. Concern overexposure to Coronavirus drove the increase but Dartmouth Hitchcock found that many users embraced it and will continue to use it going forward. The caregivers quickly became facile with it, and Dr. Conway believes that they will become increasingly innovative in how to best work with patients.

Joanne Conroy 0:44

COVID patients when they are admitted, actually Gary are quite sick. If you look at the CMI of most of their admissions are pretty high, and they’re very resource-intensive to care for them. But you don’t have to shut down the entire institution in order to provide that care. You just have to make sure it’s appropriately cohorted.

Gary Bisbee 1:02

Dr. Conroy has concluded that Dartmouth-Hitchcock’s approach to the future will be substantially different. The new normal will include reconsideration of facilities incorporation of remote working and Dartmouth-Hitchcock’s human resources, strategy, and restructuring ambulatory care waiting rooms and patient flow. I’m delighted to welcome Dr. Joanne Conroy to the microphone.

Well good morning, Joanne, and welcome.

Joanne Conroy 2:02

Thanks, Gary. Glad to be here.

Gary Bisbee 2:03

We’re pleased to have you at this microphone. We’ve learned that the surge is highly variable by region. What’s the status of the surgeon Dartmouth-Hitchcock’s primary service areas?

Joanne Conroy 2:13

Well, it really depends on what model you look at. I would say that the Washington model had indicated that our surge occurred early in April. Our epidemiologists, however, are looking at the data, and they are actually predicting that we may have a more meaningful increase in volume in September. But nothing that would exceed the ability of our health system to manage those patients from an ICU. That perspective or ventilator perspective.

Gary Bisbee 2:45

Well, as a chronic disease epidemiologist, I’m delighted to see that we’re all now including epidemiologists in our planning going forward. But the fall surge has been under discussion for some time and it sounds like your epidemiologists are thinking that that might be the case.

Joanne Conroy 3:02

We had one of the first cases in New England up here. We had an employee that had traveled to Italy and came back at the end of February and was probably the first patient tested for COVID-19 in the state of New Hampshire. And that activated the entire state, we were on the front page of every single newspaper. And I also believe the globe and the New York Times covered it as well because the employee chose not to strictly adhere to quarantine and they went to a party. And that activated the entire community to be aware of the implications of COVID-19. And I would say that we had a diminished surge because people were social distancing, and staying at home from the first weekend in March, which was in advance of any order from the governor or in a blanket expectation across the state. But you could see that across the state. We canceled a very large fundraiser on the 14th of March. And we did that a week in advance. People weren’t happy with us. But when we look back, we can see that probably had a big impact on communities spread a virus.

Gary Bisbee 4:13

Yeah, for sure. You definitely were early. What’s been the morale of the population? If I could ask it that way. Are people sticking with social distancing and staying at home and so on?

Joanne Conroy 4:25

I would say shifting initially in early March, people were actually a little frightened and angry at the employee that had not adhered to quarantine. Then they moved into appreciating the impact of the virus and were very supportive of healthcare personnel in the hospital and you could just see the surge of support moved through the community. I would say now people are having a little bit of quarantine fatigue. And now that the days are warmer people are out. But most people up here are wearing masks, voluntarily any time they’re outside their homes, and are trying to adhere to social distancing. We have a pretty obedient population in the upper valley.

Gary Bisbee 5:16

Well, I live in the New York area and there, you would not describe this group as obedient at all, but why don’t we go on to Dartmouth-Hitchcock Health System for those of us that may not be familiar or up to date. Joanne, could you please describe Dartmouth-Hitchcock health system for us?

Joanne Conroy 5:35

Dartmouth Hitchcock is a health system that is about 2.8 billion a year consists of the academic medical center here in Lebanon, as well as a PPS Hospital in Keene, New Hampshire. We also have three critical access hospitals, and we have a nurse and hospice association that serves the upper valley of New Hampshire and Vermont. We also have 24 ambulatory practice sites and actually three very large multi-specialty group practices in Concord, Manchester, and Nashua. They serve anywhere between 20% to 35% of the people in those communities. So a robust ambulatory enterprise. Those ambulatory facilities actually are responsible for a lot of the inpatient volume at hospitals that we are not affiliated with in Manchester and Nashua and Concord.

Gary Bisbee 6:41

So before COVID here, what were your top priorities?

Joanne Conroy 6:45

Our top priority before COVID was consummating a combination agreement with Grant at One which is a Catholic Medical Center. And we have continued to work on consummating the combination agreement. But how we look at it and how we look at assets and how we look at our future has changed dramatically. And I don’t think things are going to go back to the way they were pre COVID. So we are moving through an evaluation of kind of what’s possible from a capital perspective as, as well as thinking about how the markets going to change in the future.

Gary Bisbee 7:27

Are you thinking differently about scale? Now, you must be but is size more important? Do you think about going forward?

Joanne Conroy 7:33

I think the size is much more important. In fact, our system members would say that they have seen the benefits of being part of a system through COVID-19. And I’ve actually received letters from a number of physicians that work at the other smaller facilities that they felt much better prepared, much more coordinated, and how we approached managing this surge. Much better supported from PPE and information perspective than they think they would have been if they had remained a standalone facility. So I actually think people will see the benefits of being a system. The things I think are going to change, though, will be certainly the ambulatory enterprise. Because there are things that we learned about telehealth, our ability to provide it, and the community’s willingness to embrace it through COVID-19.

Gary Bisbee 8:32

Most of the health systems have seen a dramatic increase in tele-visits. That sounds like you have as well?

Joanne Conroy 8:38

We went from about three telehealth visits a week to over 2000 a day in less than 10 days. So it was a dramatic increase. And it’s the fascinating part of that is that we really wanted to continue to care for our patients, but the insurance also paid for us and that removed one of the major obstacles to really expanding telehealth is that many payers didn’t acknowledge it. And it’s both commercial and government payers. I don’t think you could put that genie back in the bottle now.

Gary Bisbee 9:13

Any lessons learned as you’ve gone to 2,000 visits a day that will allow you to adjust how you’re approaching tele-visits.

Joanne Conroy 9:21

We have done a combination of video, when available, and telephone visits when a video is not available. So a couple lessons learned are in rural health care. A lot of the broadband access is inadequate to do really robust telehealth and I have to say that the governor of Vermont is investing a lot of money in increasing broadband capabilities across the state which will be really great for telehealth number one. Number two, I would say that patients do like it. It is convenient especially if they are afraid to leave their home are concerned about community transmission of the virus however it most of the older patients do say I am looking forward to seeing you to all of their primary care providers. So I don’t think our patients will go totally telehealth, but they will probably incorporate it as part of their relationship with us in the future.

Gary Bisbee 10:23

Seems likely that as the physicians become more familiar with it, they might figure out ways to make the patients more comfortable with it. Do you see that happening?

Joanne Conroy 10:33

Some of our providers are better than others in navigating through a telehealth visit. There are a couple things that we’ve started to look at. Number one, let’s understand really the infrastructure needs of telehealth. We have an MA, who actually calls the patients a day before starts to populate the record. Make sure that the technical capability of the patient allows for the video ad or telephone visit. So they actually do some work ahead of time so the provider can move through their list of visits, without a lot of technical things getting in the way of taking care of patients. So we need to really figure out what the cost is the infrastructure costs of telehealth, which will be less than face to face. But it is not just the cost of a provider on a computer. There is other costs that we’ve got to quantify and then figure out how we can actually create that type of infrastructure for everybody that is doing a data telehealth visit.

Gary Bisbee 11:36

Well, that makes good sense. But as you say, it seems unlikely that at least around the country will put the genie back in the bottle on these tele-visits. So what’s been your policy for working remotely, how many of your staff are working remotely?

Joanne Conroy 11:52

When we did an analysis of how many people were actually logging in remotely the vast majority before COVID-19, were providers or people working after hours after they got home. So logging in through VPN, or through our remote access. Within a week, however, when we decided to move all non-essential people off-campus, we went from basically a handful of people that were remote working to over 4,000. And I actually think that’s something else that’s gonna stay. I think there are some leaders institutions that are resistant to remote work, which I don’t agree with. I think remote work is something that allows you access to a national talent pool instead of just a local talent pool. Number one. I think that we have demonstrated that people are actually very productive when they work remotely, but we do have to train our leaders to actually lead remote workforces which is different then, sometimes leading a workforce that you’re face to face with a team, five days a week. I would say that a lot of our employees like it, and they feel that they save time on the commute. Some of our employees are commuting an hour and a half to get here. And they also are probably juggling some of their childcare and homeschooling issues now, as we have stay-at-home orders for all the schools, and they’re all online. And that actually helps those employees accommodate all those different demands on their daily working hours. It remains to be seen though, how many employees will say yes, I want to continue to work from home when their kids go back to school and the younger children maybe go to a local daycare. Now, I would say that it creates an opportunity for us to look at our space needs here. If we continue to have a significant portion of our workforce working from home, then I have an opportunity to repurpose some of our space for activities that actually are growing and need more space, we were thinking about building an extra administrative building. And now that’s totally off the table, I wouldn’t even consider that. The second thing is the parking. I have to say that there’s no problem with parking anymore here. And for most hospital CEOs, that is something they get an incredible number of complaints about, but when you don’t allow visitors in the institution, and your employees are remote working, all of a sudden, we have just scads of parking. And you know what, that’s a real investment. We were even thinking about building a parking garage and we’re not going to do that now. So I think there are a lot of advantages to leveraging a remote workforce.

Gary Bisbee 14:53

We have a question later about the new normal, but you’ve just covered two points. One would be the tele-visits and the other is working remotely and what that means to the administrative expenses. Well, if we could go back to COVID communication with your community and with your caregivers is all-important. How have you thought about communicating with the community, Joanne?

Joanne Conroy 15:17

Our communications team isn’t really a fabulous job. They have communications that come out from me every single day. And we have a flash report that identifies where we are in the surge and also key points for leaders to share with their teams. They also very early on created town halls and webinars for the community. So we could put our epidemiologists on camera, put our Chief Clinical Officer on camera and talk about what we were learning about the virus, what was available in terms of testing, whether or not people had questions. We do have a studio here in the hospital. And that’s been invaluable for really creating these 15-20 minute webinars that go out broadly on the community. We use Facebook, but I would say that the uptake in the community has really been tremendous. And people were actually waiting to see the webinars to get an update on our best understanding of what the community could expect. They had a lot of questions about testing, about symptoms, about quarantining, and we were able to address all of those. So I would say communication was critical for actually managing the concerns of the community number one, and it’s even going to be more critical as we try to get people to start to think about coming back to the facility for the appropriate care of their chronic diseases and or necessary procedures.

Gary Bisbee 16:59

What about the community with your caregivers?

Joanne Conroy 17:01

So we send out an email every single day to all of the caregivers. I would say, I receive lots of feedback that people feel very well informed about everything that’s going on. In terms of the adequacy of PPE, the understanding of the virus, the status of people in the hospital. Can we share with them the number of people that are in quarantine, answer questions about any employees that have turned positive. We’ve been very fortunate; we have had no employee turn positive. While there were using appropriate PPE with a COVID 19 patient. So our employees actually moved from being super anxious about dealing with this patient population to feel supported and protected.

Gary Bisbee 17:49

How’s the morale been among the caregivers?

Joanne Conroy 17:52

Pretty good. I toured in the COVID-19 ICU about 10 days ago. And there is a sense of confidence and definite competence, there is no panic. You know, they’re taking care of incredibly sick patients that have to be proned for 6 to 12 hours a day. And it’s just kind of part of their work and how they care for these patients. And at the same time, they’re training other providers throughout the institution. So if we have a surge and have to expand our COVID ICUs, that we have enough people that have that level of experience with COVID-19 patients so they know how to care for them with confidence.

Gary Bisbee 18:37

What about testing? Have you had enough supplies to conduct the right level of tests?

Joanne Conroy 18:44

Our lab has been fabulous. When we first started on this journey. there weren’t tests or reagents, etc. They very quickly got some virus to actually use as their quality control and then developed their own internal tests. You know, we have two of the Abbott machines here. So we can do 1000 tests a day. And they struggled a little bit with reagents and viral media, as everybody did across the country. They created their own viral media and validated it and used that. Then they also just figured out how to do dry nasal pharyngeal swab testing where you don’t need media and validated that. And now they’re working on a 90-minute bass test. So they’ve really been ahead of the curve. In fact, we did most of the tests for the state, because they were overwhelmed after about two to three weeks. And there was an incredible backlog it was like eight days to get a test back. So we work the backlog for the state so they could actually get to some level of testing that they could actually manage. We continue to be challenged in getting reagents and I think just like everybody else, that’s one of the limiting factors. We did actually contract with a supplier that did not make nasal pharyngeal swabs but created some nasal pharyngeal swabs that again that we validated so we have plenty of nasal pharyngeal swabs to actually test any patients that require it. You know, we’re testing symptomatic patients. We’re testing people in nursing homes, we’ll test first responders and healthcare workers that feel like they have been exposed. We are talking about testing patients that come in for elective procedures or semi-urgent procedures, and people that are coming in for bronchoscopies, endoscopies, and cardiac procedures. We’re also talking about testing patients that are admitted to the hospital, but we all know that the specificity of that test decreases if people don’t have any symptoms, so remains to be seen. It just has not been validated in people that don’t have any symptoms. Well thinking about the possibility of a September increase in a surge, what’s happening to try to find the right reagents and solve this testing capacity issue? Well, we expect to have a validated accurate serology test number one, so you can actually see if somebody has anybody, which will be helpful, I would say our supply chain and this is a benefit of being a health system has just been phenomenal in sourcing both reagents and PPE, you know, the search for PPE, you feel almost like a drug dealer sometime. You know, you’re wiring money to China, not sure you’re going to get the supplies but we’ve worked with the University of Vermont and as a large purchaser has been able to secure large shipments of level two masks for our institutions. And the same people that are sourcing PPE are working really hard to source reagents, I would say that the manufacturers are starting to ramp up. And that probably will be an issue that solved by September. I would expect people who will have appropriate PPE will have appropriate reagents will have accurate tests will be able to do the test more quickly. And we should have a reliable antibody blood tests by then; those are all good things. I think we’ll be in a much better position in September.

Gary Bisbee 22:33

Have you begun to treat elective non-emergency surgeries at this point?

Joanne Conroy 22:38

We’re starting with time-sensitive surgeries and we started on Monday with that. And we feel that after a couple weeks of work in that backlog of people that actually were asked to delay their procedures, then we’ll move into more elective procedures that I call that more preference-sensitive. That means the patient could have it now, or they could have it three months from now. And patients do want to have their procedures. There are a subset of patients that are nervous about leaving their homes. And those patients may elect to wait two or three more months, but they’ll eventually want to have their procedure. So we’re trying to figure out how do we accommodate time-sensitive first and then roll into elective?

Gary Bisbee 23:25

That’s a good transition into Dartmouth Hitchcock’s economics, which of course, has not been a pretty picture of any place in the country for our health systems. How does the economics in 2020 look for Dartmouth Hitchcock?

Joanne Conroy 23:40

So like every health system, we tried to figure out how much we could lose. But yeah, with the backstop it and we had positioned ourselves well. We actually had finance two of our major construction projects before January of 2020 and we actually secured line of credit with our banks that give us more cash should we need that. And we started out in a pretty strong cash position. But having said that the revenue losses are breathtaking. We know how to shut down a facility and we were able to decrease all of our semi elective procedures very quickly. And I think over a week, we probably shut down almost 80% of our operations to prepare for the surge. It doesn’t take a lot of math expertise to figure out what that does to revenue. We think we’re going to be 10% off at the end of the year and our year does end June 30. And right now we’re thinking about how do we create a budget for ’21. We have gone back and forth whether or not we are going to really try to do a budget or are we just going to do a roll forward budget from ’20. And just constantly adjust it. We’re debating that right now.

Gary Bisbee 25:08

Well, if there’s another surge or at least partial surge in September, then it sounds like the first quarter to 2021 will be under attack as well.

Joanne Conroy 25:18

It could be. Not necessarily though I think that we know how to manage COVID and non-COVID patients together. What it will do will probably displace some non-COVID cases, but we’re not going to shut down the institution as we did before. We will just create COVID and non-COVID units and train people appropriately and use the appropriate mechanisms to actually route patients. So they’ve asked us to do to have kind of separate patient flow areas for COVID versus non-COVID patients. COVID patients when they are admitted, actually Gary are quite sick. If you look at the CMI most of their admissions are pretty high. And they’re very resource-intensive to care for them. But you don’t have to shut down the entire institution in order to provide that care. You just have to make sure it’s appropriately cohorted.

Gary Bisbee 26:19

Well, that’s good news, and that’s clearly learning from what we’ve gone through, which is also good news. Could we transition to governance for a moment? How did you communicate with your board of directors?

Joanne Conroy 26:31

We have been communicating a very lengthy update about every 10 days that addresses COVID-19. The search the best things we know about the transmission, the impact on the community, as well as the financial challenges that it creates for the organization and we’ve been very transparent with our board. Our March board meeting was virtual. And I would say our board members were unified and encouraging us to focus on taking care of what was most important, which was preparing for the surge and taking care of patients and taking care of the community at that time. Our June board meeting will probably be a hybrid of both people that are present and people that choose not to travel because many of our board members travel from up and down the eastern seaboard. But it will be probably a little bit more streamlined because we have kept them so well informed during this period of time.

Gary Bisbee 27:30

I’m asking everybody this question any tips for a smooth virtual board meeting?

Joanne Conroy 27:35

You need to spend a lot of time training your trustees that don’t spend a lot of time online. How to position their technology. I would say even with our staff, I encourage people to put their laptop on three or four books, so their camera points at them rather than up their nose, number one. Number two, we encourage people to use a headset, if their connections are questionable at all because audio sometimes is the most difficult aspect of this. We do use WebEx from a security perspective. But that requires an active manager to highlight people who are speaking on the screen. I would say that we are very careful to make sure that people actually do a run through. I can’t tell you how many minutes are spent sometimes dealing with echo audio because somebody has their computer audio on as well as their phone. So those are the things that it’s just it’s worth it to spend a half an hour 45 minutes with your board members ahead of time to make sure they’re good to go and it’s a better experience for them. Nothing is more frustrating than running into technical issues when you’re really trying to have an important conversation.

On a completely different note, it’s becoming clear that public health is part of the national security. I think there’s a growing view of that. How do you think about that, Joanne?

Public health has been the stepchild of Western medicine for a long time. And I think this is really emphasized to people the value of public health. I would say we’re going to see a couple things happen. Number one, I think medical students will really be interested in public health. And there are so many important aspects of medical education that will change because of this experience. People will spend a lot more time thinking about public health. I would say the whole telehealth experience we’re doing a medical student elective on telehealth because it’s a new skill for the future. I would say that our epidemiologists are embedded as members of our incident command and are really important members of that and I’m not sure that’s going to go away. I think this is kind of the heyday for infectious disease and epidemiology, probably like it was back in the 80s when we were dealing with AIDS when it first came out, and we didn’t completely understand it. So this is kind of another resurgence and awareness of the importance of that discipline.

Gary Bisbee 30:19

Well, if you could say this, back to the public health issue, how do your fellow AHA board members think about that?

Joanne Conroy 30:27

I think they’re integrating it into what they think how they can intervene on the things that we’ve discovered, through the COVID-19 experience, for example, disparities, all of a sudden, it’s become real. The impact of your economic situation and access to healthcare during this crisis. So I would say instead of generally saying we believe everybody deserves the same access to health care. This is a real example for many of the AHA board members, many of whom are from urban areas, but a lot also from rural areas. But there’s seen the impact of socio-economic disparities in the care and outcomes that people in their communities. So I think it moves it from something that’s good to be supportive to something that actually impacts the people you care for.

Gary Bisbee 31:26

Let’s come back to that new normal question that we were talking about earlier. Both Dr. Marc McClellan and Governor Bob Kerrey, sitting at this microphone made the point that there will be a new normal one, how do you think about that? And you’ve basically already said that you agree with that. What do you think is going to change going forward?

Joanne Conroy 31:49

A couple of things that we have already talked about. So telehealth, you can’t put that genie back in the bottle. Remote work. I think that’s going to be a really important part of our workforce in the future. I also think that our ambulatory care enterprise will change. Well, you may say what doesn’t change? I don’t think our in-patient enterprise changes. In fact, I think there’s a greater focus on moving to private rooms. I think the issue of a semi-private room is going to be a standard that’s going to be hard to support probably in the future. I would say that all of us will be looking at our ambulatory enterprise and trying to consider how much of that business will stay in the telehealth space and how much we’ll come back with face to face visits. And then it’s also how do we actually space out the patient flow in the ambulatory enterprise we see 4000 people a day here in Lebanon, and some of the waiting rooms are actually very busy, that’s not going to be acceptable anymore. So we actually have to look at our physical plant as well as our patient flow to figure out how can we make sure that people have appropriate social distancing, but we actually move them through the facility in an effective and efficient way. I would say waiting rooms may even disappear, and we’ll have different patient flow. So people go right into a room. When it is an appropriate time for them to see their provider. So it’s going to change that dramatically. I believe,

Gary Bisbee 33:28

Joanne, this has been a terrific interview as expected, always great chatting with you. So thank you very much for your time today.

Joanne Conroy 33:34

Thank you, Gary.

Gary Bisbee 33:37

This episode of fireside chat is produced by Strafire please subscribe to Fireside Chat on Apple podcasts or wherever you’re listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested Fireside Chat is brought to you from our nation’s capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisby’s brief. For questions and suggestions about fireside chat contact me through our website, fireside chat podcast dot com, or Gary at hm Academy dot com. Thanks for listening.

Transcribed by Otter

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In this episode of Fireside Chat, we sit down with Barclay Berdan, CEO, Texas Health Resources to talk about the COVID-19 pandemic and how the health system is managing communication, working from home policies and PPE.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription Barclay Berdan 0:03

We had identified some time ago a relationship with a company that actually produced PPE locally. One of the… there aren’t a whole lot of them, but they produced it locally. We supported them, even though maybe their pricing was a little bit higher than we could get from overseas and bought a lot of products from them. And they proved to be a very loyal supporter of our organization through all this.

Gary Bisbee 0:28

That was Barclay Berdan, CEO, Texas Health Resources, Barclay explained how THR’s is long-standing relationship with the local PPE supplier, allowed THR to avoid problems inherent in the global supply chain for PPE that has caused substantial disruption in the care of COVID patients throughout the country. I’m Gary Bisbee, and this is Fireside Chat. Barclay discuss the approach that the four counties of North Texas have taken with the coronavirus outbreak and the coordination between local county and state officials. He outlined the virtual dashboard that THR developed to monitor COVID growth use and the need for PPE and staffing and the analytics that are associated with it. Barclay reviewed the effect that postponing elective surgery has had on THR’s financials. And it’s currently strong balance sheet. He spoke about THR’s commitment to its physicians and employees, and that there have been no furloughs. I’m delighted to welcome Barclay Berdan to the microphone.

Good afternoon, Barclay.

Barclay Berdan 1:34

Good afternoon, Gary, how are you?

Gary Bisbee 1:36

Well, thank you, sir. Welcome to the podcast.

Barclay Berdan 1:39

Thank you. It’s a pleasure to be here.

Gary Bisbee 1:40

We’re all facing the COVID-19 outbreak and we appreciate your joining us to discuss what is the status of the surge in North Texas and how Texas Health Resources is responding. So why don’t we start with the Coronavirus timeline? How are things faring there in North Texas?

Barclay Berdan 1:57

Well, I would say in North Texas we’re maybe in the early phases of the surge. We actually started in Texas fell, officially standing up some of our management groups and probably about the end of the last week of February and have been tracking things and advancing things ever since. If I fast forward to today, we have had so far 23 deaths in the four-county area of Collin, Dallas, Denton, and Tarrant County, which are the main four counties of North Texas. And we’ve had 1409 cases, positive cases.

Gary Bisbee 2:40

Have you had any indication from the CDC about when it’s likely to hit?

Barclay Berdan 2:45

Gary when we first started looking at a number of the models that are out there, we thought that the peak would happen this week. The current models really have the peak happening really much later in April or early May. A big issue has been testing capability which has been a challenge here in North Texas. What we do know is that our growth rate right now is between 15 to 20% for the past several days, and probably a lot of people have seen models that have sort of best average and worst curves attached to them. And right now, our modeling would say we’re probably closest to our average curve.

Gary Bisbee 3:27

Any sign that the testing supplies are going to become more available?

Barclay Berdan 3:32

No, there been a number of new tests become available. But one of the challenges that we have had in North Texas is trying to get ahold of the test kits. FEMA has intercepted them and redirected them. So we have now got the ID now test kits that are available and we’ve distributed them to all of our hospitals. We’d like more but right now we’ve got the capability to do about 2000 a week, and that’ll go up. We expect to next week, bring an Abbott M 2000 online. Which will give us the capability of doing about 3000 a week if we get the test kits. You know, the other thing that’s occasionally off and on been a challenge has been the media and the swabs. The last week or so that doesn’t seem to have been a problem. We stood up some remote testing sites that were walk-in for our physician group that serves the patients of our physician group. Opened our fourth one this week, spread across North Texas, and so far, we’ve been able to keep those going. Each site can do about 50 tests a day. We’ve been monitoring PPE as well as test swab and media material and they’ve been able to keep up with it. So that’s a good sign. A couple weeks ago, I guess the federal government brought two testing stations to Dallas, that was located here that were capable of doing several hundred tests a day each. Unfortunately, I saw in the mayor of Dallas’s website that they’ve told him that on April 10, they’re going to pack up and go home. So that’ll put a dent in it. Clearly understandable that as they stood up their commercial capabilities, that they were flooded with tests, and we’ve seen them struggle with that at times. But right now we’re seeing the average time for a commercial test turnaround to be two to two and a half days. Maybe one day, but more likely two days. Maybe three days, more likely two days. We’re really thinking by the time we get to the end of April, internally, we’ll be able to do about 6500 tests a week. And that’ll really help us in the hospitals because right now, we have had a substantial number of PUI’s (persons under investigation), who are awaiting responses from the commercial testing that are occupying beds. And what we’ve generally found both in our outpatient testing and in our inpatient testing is that somewhere around 10% to 12% of those folks are going to test positive. But the ones in the beds may or may not have to stay in the hospital and we’d like to free up that capacity. So, you know, when we’re chewing up PPE it’s just not a great situation. The first thing is getting testing available in house so that we can get determinations on the PUIs and the people in the emergency rooms so that we can let the folks in labor and delivery and in the OR test those patients. So they can be more confident that the patients are taken care of or not infected. And then we’ll start moving out into the larger community with essential workers. Because we certainly know that a lot of employers in the area, whether it’s the city who operates the sanitation services, for instance, or the police and fire, or the EMTs, and the first responders are all interested. And while there is some testing through the counties that’s available for those folks, best practice has shown two things in general really have an impact on the shape and duration of the infection in our community. The first is your suppression activities. Basically, how effective you are at getting people to isolate themselves and prevent the infection from spreading. And a big piece of that, aside from stay at home type orders, is the ability to test people. We saw that in a couple of countries do widespread testing, and we do not have widespread testing available to us at this point. So we’re having to rely in North Texas mostly at this point on our ability to prevent the spread of infection by, say at home borders, which has its own challenges.

Gary Bisbee 8:08

Right, what has been the population’s view of staying at home and self-distancing?

Barclay Berdan 8:14

Mixed, as you might imagine. The Dallas Fort Worth area has about seven and a half million people. Most of that population is in the four main counties, but our service area is 16 counties. So all the surrounding counties are a part of that. People will travel across political lines to go to work, to shop to play to go to school. So it’s a very mobile society. And the real challenge for us has been that the political leaders have not acted in unison. So we’ve had a lot of variation. The first act was really the county judge in Dallas County who was followed relatively quickly by the mayor of Dallas. The governor has not done a stay at home order but has obviously declared a disaster as have ultimately all the county judges. And then what’s happened has been this progression really over the last three and a half weeks. Everybody sort of responding and tightening and pushing. Where we were at the beginning of this week was one of the four main counties, Collin County, which is north of Dallas County, a very high growth area. Lots of population had really resisted strong stay at home orders and had businesses pretty much still operating. The governor of texas this week finally defined essential businesses within his order. It left it vague up until that point, and that really forced the county judge in Collin County to rescind his order and direct the businesses to close. But I think in the end, what we have right now is reasonably good. What I’ll call suppression tactics going on. I can look out my window. There are still people driving around, but it’s nowhere near the number of people. We’ve had news reports of people going out to exercise and not necessarily paying much attention to social distancing. And we have different counties that respond differently. When the state home orders were first put in place in Dallas. We actually had employees that were coming to work in our facilities that were stopped by the police. But that hasn’t happened in any other county. And actually, the police have kind of backed off on that at this point. So the challenge is Texas has always seen itself as a very business-friendly state and one that respects people’s independence and that’s the balance that the politicians have tried to achieve. What the healthcare leaders, I myself, and the other health care leaders in North Texas, have really been pushing on is that time is of the essence. And in the absence of our ability to do widespread testing, the biggest tool that we have to limit the shape and scope and duration of the infection in North Texas, is what they like to call stay at home orders. But I think in general, people are adapting to the change trying to comply. I spend every Friday morning on a call with a number of the employers and several other healthcare systems a lot that’s moderated by Mercer and Oliver Wyman. And just listening to the challenges that they’re seeing with their employees. And make sure that we’re paying attention to the anxiety the challenges of such big changes and patterns. People working from home dealing with children and pets being around and we are seeing as I think everybody that gets in this situation starts to see in the community that there is a little bit of an increased level of abusive behavior, unfortunately. We’re really pushing out some of our behavioral health services, in terms of availability to folks and making sure employers know what they can access in that regard.

Gary Bisbee 12:24

What’s been Texas Health Resources policy on your own employees, Barclay in terms of working remotely?

Barclay Berdan 12:32

We have a substantial number of people that are working remotely. I mean, I’m sitting in the corporate office today. I come in two days or so a week. And normally that’s a pretty populated office. There are probably about 20 cars in the parking lot today. So you know, most people that can work remotely, we pushed out and are working at home. Our IT think people just really did a yeoman’s job. We had a certain store of equipment that we could give to people if they didn’t have the equipment. And we’ve made a number of adaptions along the way. And part of the challenge is making sure that we retain a secure environment with our IT infrastructure. And we have seen a bit of an increase in attempts to violate that security from the outside. But I think we got a great group of folks, they’re paying good attention, we’ve got the right rules in place. So a lot of people working from home, it is a bit different to have meetings via Skype or other zoom or, you know, different software that’s out there. Probably spend more time on the telephone than we did before because you’re not having any face to face meetings. There are some positives to it though. If you’re not doing a video meeting, you can get up in the morning and stay in your jammies. You don’t have to shave you know, you know, some things you don’t have to do and you know if you’re not going to be on video, there’s always a bright side.

Gary Bisbee 13:57

Yep, bright side for sure. What about postponing elective or non-emergent surgery. Have you done that yet?

Barclay Berdan 14:04

Oh, yeah, we did that several weeks ago. Some of the orders executive orders that have come from either at the county or the city or the state level, actually, were commanding that hospitals quit doing quote-unquote, elective cases. But, we had actually wound down about a week or so before they mandated it from a regulatory or executive order point of view. And that’s for all the systems in the area. Our wholly-owned hospitals, our joint venture hospitals, our joint venture AOCs…hospitals are still doing emergency surgeries. And we gave them some guidance in terms of, you know, what might be considered elective and not elective, because, you know, there are things that are posted on the schedule that you know, just because it’s posted in advance on the schedule doesn’t mean that it’s truly elective. So we’re still doing cases that, you know, you might expect are appropriate.

Gary Bisbee 15:09

How about redeploying caregivers? Have you needed to do that yet?

Barclay Berdan 15:15

We’ve done that to some degree. Our process here has been to really pivot the entire organization and look at how we’re organized to deal with a completely different flow of patients. We had teams that were working on emergency room access first and how we were going to standardize the process and all of our ERs of receiving patients and sorting patients and treating patients and completed that and ran all those pilots to make sure it was all working everywhere last week, this week, really concentrating on our inpatient surge plans, which has really kind of three parts to it. One is first the beds. And obviously, once we canceled all the schedules for elective care, we freed up quite a bit of capacity. So we have those beds as well as some other beds that we brought into service that was out of service. The second thing you have to do is to look at how you’re going to staff those, and clearly, the staff that was working in surgery and PAC us, and on those elective side and the nursing floors. We are retraining and we’ll deploy them into these redesign care flows and floors. And the third piece is really ventilator counts and anticipated ventilator demand, and how we’re going to manage that. We’ve really got our first round of all that planned and are testing it this weekend. And we’ve designed virtual dashboards for each facility, where they can also use some predictive analytics once were really in the thick of things to anticipate where volumes are going to pick up and where they’re going to need resources, people resources, ventilator resources, supplies, PPE, we’ve been doing quite a bit right now. I think if I looked in all of our facilities on top of the volume that was left after we cut all the elective cases, that’s sort of our baseline emergency volume, we have about another 850 beds that we had available right away. And we’ve figured that we can add about another 1100 beds to that with the staffing that we have. So we can bring a substantial number of beds online and staff it and are pretty comfortable with that.

Gary Bisbee 17:43

Do you anticipate any furloughs anytime in the near future?

Barclay Berdan 17:46

We’re not at this point. We have a reassignment pool and as we go through the process of finishing these designs, we’re offering folks the opportunity to get reassigned. But I think the prudent thing to do at the present time is to basically say we’re going to need all hands on deck. And you may not be working at the same job you were working at. We’ve reassigned some nurses to our call center as a great example. So instead of providing care at the bedside, you might be providing a triage on a phone. And until things settle down, we’re not going to make any change to that.

Gary Bisbee 18:24

So turning to economics, discontinuing elective surgery, so what does it look like for this year for your financials?

Barclay Berdan 18:34

Well, that’s a good question. We’re monitoring that with some regularity. We had a pretty good-sized pool of dollars in our investment pool, and there is we’ve clearly lost some value there. But the market improved from last week we gained back about 193 million from some that we lost the week before. We had a few variable rate bonds that we were concerned about being re-marketed and we’re prepared to repurchase any of those to prevent failed remarketing. Which we don’t think is likely anyway. We have some lines of credit that we’ve drawn down, but we’re very liquid, we’ve probably got close to three-quarters of a billion dollars of liquid assets, same-day availability at this point outside of our investment accounts. And that was one of the first things we did is we started looking at this was saying we got to make sure we got plenty of cash available. At the present time, we’re in reasonably good shape. Our revenues are obviously down 35% or so I would say. Overall, our expenses are up because we’re incurring a lot of expenses and everybody’s still fully employed. So our monthly operations are going to take a dip, but our overall financial position is strong.

Gary Bisbee 19:50

Do you have any indication yet how much might be coming from the federal government with the fund?

Barclay Berdan 19:56

No. The distribution of the supplies never made it to Dallas Fort Worth. We thought whatever there was got directed somewhere else. We’re standing up the ability to apply for some of the funding. One of the things we learned from past challenging periods is that the start keeping the records of what you’re spending money on upfront. So we’re doing all that. But at the present time, we’re not concerned about how quickly that flows. We just want to make sure we get our fair and appropriate share of it as time goes on.

Gary Bisbee 20:34

If we could turn to governance for a second, what have you been communicating to your board and how often are you communicating with them.

Barclay Berdan 20:42

Our board met five times a year and operated in a committee structure. We’ve only kept one committee active. We moved all of our meetings to virtual, we’ve only kept one committee active. That’s our Quality Committee auditing performance committee because they handle credentialing of positions in that group of functions. My board will next meet at the end of April. It’ll be a virtual meeting. What I’ve done in the meantime is send them a weekly midweek, written report that highlights things that have happened during the last week. And then on Friday, we do a call at 11 o’clock for the board members. The written report actually goes to the board and the committee members. The call is it’s not an official board meeting. It’s just a call. We answer questions about the written report, provide some updates, and have some dialogue answer questions. I would say my board at the early outset, we basically talked and they passed a resolution that gave myself and the CFO, pretty substantial powers to act without them because they did not want us to be hindered in any way shape or form in terms expense limits or anything. They’re very supportive board. We’re working to keep them informed provide counsel and guidance. And that’s where we stand right now. Great relationship. Very supportive.

Gary Bisbee 22:13

This is been a terrific interview. Barclay, thanks so much. Appreciate your being with us. Let me if I could ask one final question, which is there’s been discussion among your colleagues, other CEOs about the global supply chain. And the question is, should we begin to manufacturer all these critical life-saving devices and equipment manufacturer it in the US and not count on the global system, which has been challenging during the last couple of months? Do you have any thoughts about that?

Barclay Berdan 22:48

I definitely think that we will move in that direction as a country. If I jumped down to the local marketplace here. We had identified some time ago a relationship with a company that actually produces PPE locally. One of them there isn’t a whole lot of them, but they produced it locally. We supported them, even though maybe their pricing was a little bit higher than we could get from overseas and bought a lot of products from them. And they proved to be a very loyal supporter of our organizations through all this.

Gary Bisbee 23:23

That’s a good example of that point and what we might be turning to. Barclay, thanks so much. This has been terrific. We do appreciate it. And our thoughts and prayers are with all of you at Texas Health Resources in North Texas.

Barclay Berdan 23:36

Well, Gary, we hope that you and everybody at the Academy stay well stay safe and we look forward to a time when we can get together again and all the members of the Academy I send the same wishes. Stay well, stay safe.

Gary Bisbee 23:50

This episode of fireside chat is produced by Strafire, please subscribe to Fireside chat on Apple podcasts or wherever you’re listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested in. Fireside Chat is brought to you from our nation’s capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisby’s brief. For questions and suggestions about fireside chat contact me through our website, fireside chat podcast dot com or Gary at hm academy.com Thanks for listening.

Transcribed by Otter

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In this episode of Fireside Chat, we sit down with Dr. Stephen Jones, President and CEO, Inova Health System to talk about the COVID-19 crisis, communicating with caregivers and the board of directors, financial concerns for health systems and what the new normal looks like in the days ahead.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription Stephen Jones 0:03

I see fear, totally understandable fear. But I see courage and it’s getting through that courage. I draw a distinction between bravery and courage. Bravery, is not being afraid. Courage is acting in dangerous circumstances despite being afraid.

Gary Bisbee 0:19

That was Dr. Stephen Jones, President and CEO of Inova Health System, referring to the courage of the Inova caregivers in the face of the obvious risk of personal exposure to COVID-19. I’m Gary Bisbee and this is Fireside Chat. Dr. Jones is a surgeon by training and he regularly joins the Inova team in the ER and on the COVID floors to show his support for the Inova caregivers. Inova is a highly successful health system with each of his hospitals receiving a CMS five star rating. Dr. Jones spoke about the exponential increase in Inova’s tele-visits and how they are typically more convenient for patients and more efficient for physicians. He believes that it’s important to sustain and build on the current volume of tele-visits. Dr. Jones discussed the financial impact to Inova of the COVID crisis. As the title of this episode captures, he believes that it’s the most significant financial challenge that Inova will ever face. I’m delighted to welcome Dr. Stephen Jones to the microphone.

Well, good afternoon and welcome, Stephen.

Stephen Jones 1:26

Good afternoon, Gary.

Gary Bisbee 1:28

We’re pleased to have you at the microphone. Why don’t we jump right in because of COVID-19. We’re all facing consequences of that, of course. And we’ve learned that the surge is highly variable by region, where is the surge in the Inova service area Steven?

Stephen Jones 1:44

We’re in the Northern Virginia suburbs of Washington DC. So we’re a semi hotspot more in the city than in some of the more suburban areas that we serve. So we were definitely the most active part of Virginia. We’ve got probably 260-270 patients in-house right now with COVID. And the only good thing coming out of it is that our teams have just shown a remarkable capacity to understand the nuance of the disease and manage it really incredibly well.

Gary Bisbee 2:11

Well done for them. I think we all have to say our prayer for all of our caregivers. What do the models show is when will the peak be reached in Northern Virginia?

Stephen Jones 2:20

I will acknowledge that I’ve been a disbeliever in the model since they first started coming out. I think we have to recognize these models…first, they don’t agree with each other. Second, none of them is based on data more than four months old, and none of them really has any ability to understand the ramifications of social distancing or access to healthcare. I’ve kind of looked at the potential in some areas of new social determinants of health is whether your healthcare system is overwhelmed or not. So I think the models right now, of course, we look at them and they say they’re going to be sometime this month or early May, but realistically, I don’t think we’ve really got a good idea. The way we’ve approached it is we plan on being ready for whenever it comes. Help. It doesn’t come as severely, as some of our colleagues have seen.

Gary Bisbee 3:02

I’m a chronic disease epidemiologist by training. And I couldn’t agree with you more on the models, by the way, so well done. But what’s your personal policy? Are you working from home or from the office, Stephen?

Stephen Jones 3:14

I am not working from home. Although I did start a little bit trying to if there was just purely administrative work that I would occasionally go home and do it. I don’t feel as efficient at home, I’ll acknowledge. But the other part and in fact, my senior team gave me a little hard time two or three weeks ago because I was still going into the offices and at a minimum I listen to them, spoke with some of my board members, spoke with my wife- most important advisor, and it just became clear to me that if I was telling those warriors who are taking care of the patients heroically if I told them, “We’ve done everything to assure that that’s a safe place for you to be.” How can I possibly say I didn’t think that it was safe for me. I’m an obsessive hand-washer by nature anyway. And so I’ve done everything to protect myself. But yes, I’m in the hospitals frequently and I do go into the emergency department every time I’m there, and usually go through any unit that is taking care of COVID patients. I recognize some people may feel that reckless behavior, it’s quite the contrary. It’s just I have to look those folks in the eye and say we’re doing everything for you. And I honestly believe that when we do that, we are largely preventing transmission. Several of our nurses have mentioned, they feel safer in the workplace than they do out, for example, getting groceries. So I think it’s important for a leader to look their folks in the eye.

Gary Bisbee 4:24

Well, good for you, and well done. You know you used the term warriors in interviewing many of your colleagues. Amongst CEOs, it is quite common that they’ll use the term “battle” to describe how you’re needing to deal with COVID-19. Sounds like you may have that same thought.

Stephen Jones 4:43

It really is. It’s some of our colleagues, including in New York have said this is war with our leadership group this afternoon, we had every single leader on a zoom call and I just said we are at war and we’re gonna win this war. But it’ll only be because you leaders, get out there and get your folks to be safe, but also to do all the work it requires for us to deal not only with the medical situation, but you’re well aware that this is the most significant financial challenge that our industry will ever face.

Gary Bisbee 5:11

Let’s turn to Inova for a second. We’re all familiar generally with the Inova health system, but it’s always informational to hear the CEO discuss his or her health system. Could you please describe Inova for us Stephen?

Stephen Jones 5:23

We have the privilege to serve well over 2 million patients here in the Washington DC area. One of the things that we take a lot of pride in is we’re the only large health system to ever have CMS recognize every single hospital as a five-star hospital, and that’s been a multi-year journey. It started well before I was here, people focusing on safety and quality. We’ve got five hospitals, we’re the largest private employer in Washington, DC.

Gary Bisbee 5:46

You’ve been there for nearly two years – came from the Cleveland Clinic where you were the president. What’s been the biggest adjustment for you over these nearly two years?

Stephen Jones 5:56

Well, unfortunately, I did celebrate my two year anniversary and it was not a very happy day with all we’re dealing with. So I’m hoping that maybe at some point, we’ll be able to have a happy two year anniversary, we’ve mainly been dealing with a crisis. And I would say that the reason that I came to Inova, in fact, that I would date it back to a conversation my wife and I had as I was being interviewed for it, and she said, “We’ve known that we’ve been at a place where you can have the best health care available. And that’s been reassuring to us. I’m not going anywhere, unless I’m sure of that.” And the key piece of it was identifying that the clinical care here I would put up with anywhere that I’ve ever been, including Cleveland or Vanderbilt. The clinical cares is top-notch. So the adjustment has really been a matter of course, it’s a different system. You know, the buck definitely stops with the CEO and that’s a new experience. But what it means is that you do get to set the vision and you both get a little credit if it goes well and you sure get the blame when things don’t.

Gary Bisbee 6:47

That’s for sure. It’s been going well under your leadership. Communication is all-important. And I know you believe that how are you communicating with the community, the Inova community?

Stephen Jones 6:58

it’s been a little challenge of course, because there’s so much miscommunication. So we tried to focus on our website and drive everything there. For one thing, especially in the early days of this, recommendations changed daily and sometimes hourly. And so we just tried to say don’t trust the written paper because it’s, by the time it’s printed, it’s probably wrong. So we drive people to the website. I’ve done a video that I’ve released to the public. In fact my wife had it show up on her my chart last week, talking about COVID and especially pointing back to the website.

Gary Bisbee 7:27

Stephen, I have to break in what did your wife think of your video?

Stephen Jones 7:33

Well, the interesting part is because she’s my best coach. She had seen a version of it come out previously, when night I checked the link and so she had already hopped on it, so she was supportive. So we’ve had email list of everything we can do against my chart messages. And then the county supervisor we work closely with our county government here, and they basically take content that we deliver to them to make sure that we get accurate information to the entire community.

Gary Bisbee 8:00

How about the caregivers? How are you communicating with them?

Stephen Jones 8:03

That’s the one that I regard right now is most important. Hopefully, every leader recognizes we work for them, they don’t work for us. So I record a weekly video just recorded one today, we have a twice-daily huddle sheet that again, we make sure you don’t print one, because it’s going to be different tomorrow. That goes to all of our team members. And we’ve started doing videos from both the Chief of our clinical enterprise position and our Chief Nurse executive as well. And those have been very well received. They’re just little brief snippets. We’ve had virtual town halls with all of our hospitals and sites, and I’ve participated in those as well as the local site leaders. And as I mentioned, you know, I do spend time in all of our sites.

Gary Bisbee 8:42

What’s the availability of testing supplies and processing and Inova service areas. We’ve certainly had a rocky go at that around the country.

Stephen Jones 8:51

Unfortunately, it’s been as bad here as anywhere else. The headlines are all true on how limited testing availability is. We did get set up to start well over a month ago, whether it be swabs, re-agents, all the different components. It seems like we’re always close to danger point with any of them. We, fortunately, haven’t run out of anything. But it’s kind of a daily deal to make sure we stay in front of it.

Gary Bisbee 9:11

Any thoughts about a state-level or national level testing policy to get the whole country back to work?

Stephen Jones 9:18

I think it’s a little early now to know what the ramifications of testing whether it be COVID testing or of course to serology to prove that you’re not communicable. I think right now, we probably don’t fully understand what that would be required to put that in place.

Gary Bisbee 9:31

Right. Let’s go back to supply chain how has it been holding up particularly in terms of PPE for Inova?

Stephen Jones 9:38

We fortunately got in front of it and been able to stay pretty far in front of it. So we’ve had no significant strains in the supply chain. But we started planning for COVID in January, and it still wasn’t even named COVID yet. And at the time I remember kind of teasing…gosh…I hope that we get at some point to be embarrassed about how much we over-prepared for this and obviously no one could have been over-prepared for it. But for example, we stocked up on mask and other things like that there’s kind of this constant rumor because of the headlines and news that “oh my gosh, we’re going to run out a PPE,” and I made clear to our team members that we’ve got adequate PPE. We don’t have enough to waste it. But we’ve got adequate PPE, but we certainly spend plenty of our time including my personal time, assuring it. Meds are probably our biggest concern right now, especially if we start getting into where we can open up surgery again because the same medications used in surgery as a lot of overlap with meds that are needed for intubation and taking care of these type patients.

Gary Bisbee 10:30

What about ICU beds and ventilators?

Stephen Jones 10:33

We like many people have plenty of what we tend to call it Inova we have plenty of flat spaces. So we’ve got plenty of beds, we probably still have 70% occupancy, and it certainly was below that at one point. And again, probably 25% of occupancy, at least are COVID patients right now. So we have plenty of space, plenty of ventilators. We probably overstocked in ventilators and same thing I remember thinking of I would love to have to explain to the board, why I bought all those ventilators that we didn’t need to use. So we’re in good shape with those. Same thing we would like to know that we had access to more if we needed them, but right now we’ve got dozens upon dozens of ventilators available if we had to have them.

Gary Bisbee 11:09

Excellent. Well, let’s go back to caregivers for a moment. Have you needed to redeploy any of your caregivers?

Stephen Jones 11:16

Yeah, it’s really been pretty inspirational to see that. We take, for example, physical therapy, you know, they closed down pretty early. And I see physical therapists in the ICU. One is helping position and turn patients, especially for prone ventilation. But I see physical therapists working as greeters and really doing anything that we asked of them. And it’s been inspirational to see how people truly have come together. They want to work, they want to contribute. And we’ve got people cross-training and I had an especially good story: There was a young nurse who I saw in one of the intensive care units and she looked worried and so just asked: “what’s on your mind?” And it became clear what she was worried about was not her own safety. It was a matter of that she hadn’t worked a ventilator in about three years, and she was concerned to know that she could be her best for her patients. And that, you know, you see that every day that happened to be one that particularly caught my attention that that was the only thing she cared about being her best.

Gary Bisbee 12:09

That’s just a great story. What about the caregivers in terms of the stress they’re under? I think all of your CEO peers are reporting that that’s a top priority for them.

Stephen Jones 12:20

Yeah, it’s really stressful and fear. And I’ve chosen to take that on. In fact, the video I’ve just filmed earlier for our team members that will go out tomorrow I said, you know, as I go around, I see this I see that. I see fear, totally understandable fear. But I see courage and it’s getting through that courage. I draw a distinction between bravery and courage. Bravery is not being afraid. Courage is acting in dangerous circumstances, despite being afraid and so we know that our teams are afraid. We just face it on and say we’re going to be here with you. And I think as soon as we call it out, in some ways, it’s okay to be afraid. But guess what, we’re the ones that we’re here to take care of the patients. No one else can do this. But us.

Gary Bisbee 13:03

That’s a terrific distinction for sure. Between bravery and courage. Well, what about telemedicine? Has that increase over the life of the COVID crisis?

Stephen Jones 13:12

It’s been incredible we’re doing around 100 to 150 visits a day before this started in early March. And now we’re doing I think it’s approaching 3000 visits a day, which is still not as many visits as we would have been having otherwise. But it’s been a significant explosion. And my hope is that we never go back. I’ve always wondered for a long time, why do people need to get in the car, take off work, and drive-in? Maybe somebody’s got to drive them. When we can do a video visit? So I think this… is if there’s anything good to come out. I sure hope we don’t take any steps back on that.

Gary Bisbee 13:42

That’s a universal feeling. What about elective non-emergent surgeries? Are you thinking about reinstituting emergent surgeries here at some point?

Stephen Jones 13:51

I haven’t thought about that in the last four or five minutes probably. I think it’s really important that is truly financially killing the health system and frankly, it’s taking surgeons and nurses and anesthesiologists who want to be practicing their craft. And it’s very harmful to not be able to do what you do best. And so as soon as we get in a position that we feel that we have adequate supplies for not only PPE with medications, we have intense interest in restarting that. But we’ve got to know that we’ve got it that we can do so safely,

Gary Bisbee 14:20

Will the patients feel comfortable coming back into the ambulatory surgery center, or the hospital?

Stephen Jones 14:27

I think that our industry is forever changed. I pretty early on said to our entire leadership group that we will never go back to March, early March to 2020. And so I think not only patients will be nervous about coming in for a very long time. But you know, let’s face it from the financial challenges, the payer mix will be different, you know, many of our patients who were employed non-commercial insurance when we saw them with their, whatever condition a month ago when they come back and all likelihood they will be on Medicaid or won’t have insurance at all. And obviously, we will still take care of them, but I think it’s going to change the payer mix for a very long time. And there’ll be people… unfortunately, one of our concerns, Gary, is that we’re seeing people not come in for needed medical care. And I’ve seen people with chest pain setting at home and afraid to go on and go COVID. And we’re trying to help people understand you need to be afraid of chest pain, or you need to be afraid of stroke symptoms come in. And again, we make our hospital safe and this impression at the hospital is a dangerous place to be. I think we have to be cautious with that because it’s not a dangerous place to be. That’s the place that knows better than anywhere how to prevent infection.

Gary Bisbee 15:32

That’s well said for sure. Well, let’s turn to the economics, which I’m sure is not going to be a happy story. But how will the COVID-19 outbreak affect the Inova’s finances this year in 2020?

Stephen Jones 15:43

It was immediate and drastic. Our CFO Alice Pope came into my office at some point, probably literally early March and said February was a good month guarantee we make budget this year and she’s now on a daily basis regretted having said that because it was severe and immediate. We’re off about 40% on revenues right now, which obviously is unsustainable for anybody. Inova was very strong system coming into this. No organization can sustain that without some pretty dramatic action.

Gary Bisbee 16:11

And the CARES dollars the care grant dollars, I’m sure helpful, perhaps in terms of cash flow, but they’re going to come nowhere near making up for the shortfall correct?

Stephen Jones 16:20

It’s just a drop in the bucket. And unfortunately, even our projections of what we kind of hoped we would see in the first tranche, we got about two-thirds of what we were wishfully thinking. It looks like they’re looking on some more funding, but it’s truly drop in the bucket compared to the change in our revenues. I will tell you, we spent in the early weeks $32 million, purely to protect our team members. So you know, PPE, transitioning regular rooms to negative pressure rooms, creating separate entrances for patients with respiratory symptoms versus others. $32 million right out of the gate that was not too much less than our first tranche from the CARES act.

Gary Bisbee 16:57

How do the financials look for 2021? You implied earlier that the economic consequences will be with us for a long time.

Stephen Jones 17:05

I think so, you know, I think optimistic projections would say that we’re that we might get back close to baseline at some point in 2021. But right now, I think that those, if you look at the models we built internally on finance, they’re pretty all over the map based on some assumptions, including, when we’re able to get back to doing elective work. 60% of our work was elected before this all started, and now it’s probably 10%. In fact, it’s, I guess, technically not none of it is elected if we look at it that way.

Gary Bisbee 17:31

That’s probably right. Well, let’s turn to governance if we could, how often are you communicating with the Inovas board of directors?

Stephen Jones 17:38

Well, the board chair- we talk every few days, and there are days where we, of course, talk several times, including over the weekend, here as we’re looking at some changes in our organization. We’ve held a board update, we don’t call it a technical meeting. We don’t have any approvals in it. We have a board update, it’s probably averaged every eight or 10 days. We’ve got a board man, I gotta tell you the best board in the world. Truly professional. Truly committed, they believe in our mission. But they’re also a very astute group of businesspeople primarily. So they do look carefully at not only the finances but ensuring that we uphold our mission. And they do a great job of balancing that. So what it means though, is that they are very interested, they never crossed the line and go into management. They understand the role in governance and management. But they are a very involved board, and I make sure that they are aware of what’s going on in the organization.

Gary Bisbee 18:28

Yeah, that’s definitely the right way. Have you had a virtual board meeting yet?

Stephen Jones 18:32

We had all of them since, in fact, we had our first quarter board meeting, the official board meeting was in late March, probably 20 to 25th. And we converted it to a zoom meeting right out of the gate and the management team got in the huge boardroom and was able to socially distance because of the much lower number of people in the room. But at this point, we’ve gone to it’s just become the way we do things.

Gary Bisbee 18:55

Now I’m asking everyone this one so any tips for a smooth virtual board meeting?

Stephen Jones 19:00

Well muting all the phones to start centrally helps because although you ask people to mute, they don’t all do it and they forget that they’ve hit the button. So I think that’s the key thing. And then the way I’ve approached it is, I’ll present a group of information. And then I will stop and just say any questions, any comments or board chairs, good, really terrific at managing a board meeting as well. So mainly, it’s getting a presentation, and then talking questions. Presentation, then talking questions, probably the most, the best tip I’ve got for it, and having a great board doesn’t hurt.

Gary Bisbee 19:29

No, that’s helpful. Well, here’s a question and several of the board members that I’ve spoken with have asked this question to me. So when they are looking for a new CEO, when they’re recruiting, what characteristics should they look for in a candidate that would provide them confidence that the candidate could perform well in a crisis?

Stephen Jones 19:50

Well, when I was interviewed that I specifically just mentioned, I think if there’s a global pandemic with a financial breakdown, I think I would be the right guy. But no, seriously, you know, I think that the leadership capabilities in times of calm are not that significantly different from in times of crisis, I think they just get drawn out more. And so you got to look for a leader that has the right values, the leader that’s courageous and able to make a decision and stick to it, a leader that prioritizes the other people over him or herself. I think those are the key things that I would think really come out in a crisis. If you don’t have that. Then the leader creates fear and uncertainty as opposed to calm and confidence, which is what people really need to see in those moments.

Gary Bisbee 20:34

Let’s turn to there are some generic issues being discussed. Many of your colleagues are saying the US should not be wholly dependent on global supply chain for life-saving technologies or supplies. How do you think about that, Stephen?

Stephen Jones 20:48

I think it’s the reality and I think that we all probably knew it in the back of our minds, but let’s face it, the world economic order kind of developed it did for lots of reasons. It worked right up until something like this happened. So I don’t know that we can ever go back to where we’re totally dependent on localized areas for critical things like medications or PPE or ventilators. I don’t think you have to necessarily have everything homegrown. But at a minimum you got to have some diversity in it because my understanding of the reports is tons of the things that we need right now are produced primarily in the Wuhan province in China. So obviously, if they’re having that issue, they’re not able to supply the rest of the world. So I think diversity is going to be the key piece that comes out of this and, and frankly, it goes a little bit to have those relationships in place really early on and strong systems that do it. So the reason we’ve been able to stay in front of PPE and have adequate ventilators is that we had the relationships with our vendors to were we when we saw we needed to stock up we did it early did it hard and so far, it’s worked out great for us.

Gary Bisbee 21:54

Well, another topic is the waivers that CMS in the states are granted relative to telemedicine. You made reference to that earlier, let’s not put the genie back in the bottle. What can health systems do to encourage CMS to sustain the changes,

Stephen Jones 22:09

because of our location, I probably take a more active role in that then than most of my colleagues or counterparts. I’ve spent a significant amount of my time here in Washington DC trying to get in the ears of the people who are able to influence it, whether it be on waivers, whether it be on the financial challenges of healthcare. It’s almost every day, in fact, often several times a day that I take that on because I think that the voice of healthcare leaders has never been more important or more respected. And, you know, the fact that you’ve got people lined up clapping, applauding the warriors at the front lines, By the same token, I think that the politicians and folks and agencies that make these decisions, now recognize, we really need strong healthcare and strong healthcare leadership. So I think for any of us, that have the opportunity, and in our own geographies. We all have an opportunity, we have to make sure that they understand the realities of what healthcare is right now and how we can assure the people have health care after this is all starting moving forward.

Gary Bisbee 23:13

Oh, here on that. Another topic being discussed involves health insurance. And the expense of the whole response to COVID-19 has fallen largely on the health systems at this point, and there’s some discussion that health insurance should somehow participate in that. Any thoughts about that?

Stephen Jones 23:35

I think that’s really complex. And certainly, there are some insurers that right now are probably rolling in cash because they’re not having to pay for shipping the operations and heart surgery. But by the same token, you know, they’ve got their own challenges in their industry as much as I hate to necessarily be sounding like I’m the guy supporting them, the insurers but I think it is true. One is they’ve got to figure out how they are in a cash position. If we see a ramp-up for whatever may happen, they have to ensure that they’ve got coverage at the COVID patients, of course, that is in their product. But then again, those are complex industries. Very few of them are just truly just insurers. And so you look at what’s happening in other parts of their business. I suspect every single one of those is dealing with its own set of rules and own set of challenges. And I will acknowledge I don’t think that I probably understand there’s enough to know what I think I should tell them they should do or certainly what any policy changes should be in their regard.

Gary Bisbee 24:30

Mark McClellan made the point at this microphone a couple of weeks ago that there’ll be a new normal in healthcare delivery coming out of the crisis. Do you agree and if so, what changes do you think will be made over the next several years?

Stephen Jones 24:44

Yeah, we talked about some of them here. I think that people are going to rethink, certainly in-person care. I think that people will continue to be afraid of healthcare, certain people be afraid of healthcare for probably a pretty long period of time. I think there’s a real chance that this may drive us a little bit more towards, quote, value-based care in ways that everybody’s talked about. But we haven’t really moved that far. I think this could be a change. What I hope doesn’t happen is that anyone falls in the trap. And this will be politically toxic, probably Gary, but falling in the political trap of thinking that Washington can solve problems for healthcare. When I look at how this crisis has been handled here, I think the healthcare leaders have done a phenomenal job and all the people that I talked to across the country in figuring out a crisis for which there’s no history to base it on thinking that government can come in and fix this complex system right now. I feel even less confident in that I did previously and I didn’t feel very confident at it previously.

Gary Bisbee 25:43

Right. Do you think that there’ll be more mergers and acquisitions among our health systems going forward?

Stephen Jones 25:49

I’ve never been quite as convinced on a scale as others are. I think you have to have a minimum scale. You know, we’re a $4 billion organization. I can tell you we’re not that in revenues for 2020, for sure. So you have to have a certain scale. A standalone hospital, I think is a very difficult proposition to maintain unless you’ve got something unique about your market. So I think you had to be certain big but the idea that getting bigger than what we are, that there’s nothing obvious there that tells me that it would make us better. We got every hospital at the five star CMS hospital. And it’s because we can truly focus on as much as I can get my hands around, there are others that may be able to get their hands around a markedly bigger system, but it’s not been an aspiration of Inova to necessarily grow for growth’s sake. We’ll grow because it makes us better, grow because it brings new capabilities, but we don’t, by itself, see that scale is the panacea that I think that some others have embraced it as.

Gary Bisbee 26:44

Okay, so just given your instincts and your feel for this, what thoughts do you have about currently reopening and getting the people out in the streets and working again, any thoughts about that, Stephen?

Stephen Jones 26:58

I have real concerns. about it. And I think the part I’m concerned most curious is that I think that people are looking what happened originally. So we had the first patients recognized literally within blocks where my daughter and my son lived in Seattle, by the way. And then it kind of grew slowly, and then you get to other parts of country and grew slowly. The difference is after this lockdown of social distancing, if you open up now, as opposed to a few dozen people out in our communities who are potentially exposing people, we have 10s of thousands of people probably in communities like ours, out there, that would start exposing people. And so I think unless we are very cautious, very slow, just kind of, you know, let the steam out a little bit. I do have a concern that the next surge could be significantly larger than what we saw the first time because of what I’ve described there, the number of people out there that are infectious that are not contacting each other right now.

Gary Bisbee 27:53

Right, Steven, this has been a terrific interview just in the form of a wrap up for the last question. Do you have a final word for the Inova caregivers and the other service people in the community?

Stephen Jones 28:05

Leaders often say it’s humbling, you know, it’s almost like a cliche. But really in getting out with the people in our organization, to see that the way they lean in, despite fear, you know, because when I go to any place, you can see fear on people’s eyes. And if you open it up, you’re going to talk about it. They say that, despite the fear, they know that that if not us, who will take care of our community. And so the respect that I have for and the confidence I have in our frontline, folks, our leaders is more than I ever could have imagined. That anyone, any CEO could have that respect for it. And that’s been gratifying to the point that it literally frequently chokes me up to know how great people that I work for.

Gary Bisbee 28:48

Well said. Again, terrific interview. Stephen, Thank you and God bless you and the Inova caregivers and all the Northern Virginia Community.

Stephen Jones 28:56

Thank you, Gary.

Gary Bisbee 28:58

This episode of Fireside Chat It’s produced by Strafire. Please subscribe to Fireside Chat on Apple podcasts or wherever you’re listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with Innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends for those who might be interested in Fireside Chat is brought to you from our nation’s capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisby’s brief. For questions and suggestions about fireside chat contact me through our website. Fireside chat podcast dot com or Gary at hm Academy dot com. Thanks for listening.

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In this episode of Fireside Chat, we sit down Warner Thomas, President and CEO, Ochsner Health to talk about communication during COVID-19 and leadership in crisis situations prior to the pandemic.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription Warner Thomas 0:02

You’ve got to adapt. It’s not about reacting. It’s about adapting to whatever the situation is that’s thrown at you and you may have a plan and this afternoon you may have to change it because you get new information and you may have to change it tomorrow because you get new information. And so, your game plans have to adjust and roll based upon what’s happening with your team. And with the environment and the market around you.

Gary Bisbee 0:27

That was Warner Thomas, President, and CEO Ochsner Health, recalling one of the lessons learned from the 2005 Katrina hurricane that the Ochsner team drew on during the COVID-19 crisis. I’m Gary Bisbee, and this is fireside chat. Ochsner Health has grown successfully over the last 10 years, and Warner spoke about potential consolidation opportunities following the crisis, as health systems find themselves in difficult financial positions, or they believe that they need to be part of a larger health system to mitigate risk during the next crisis. Warner discussed the rationale for aligning leadership physicians and employees during a crisis. He also spoke about the importance of communicating regularly with the community, media, physicians, employees and the board of directors to provide up to date news particularly during the COVID crisis when information has been sketchy. I’m delighted to welcome Warner Thomas to the microphone.

Good afternoon Warner, and welcome.

Warner Thomas 1:27

Hey, thanks, Gary. Appreciate the opportunity to chat with you.

Gary Bisbee 1:29

Sure thing we’re pleased to have you at the microphone. We’ve learned that the surge is highly variable by region, what’s the status of the surge in Oschner’s primary service areas Warner?

Warner Thomas 1:41

We’ve definitely seen a continued decline in COVID patients. I would say our peak was very late in March, probably around March 31, or April 1, where we had nearly 850 COVID patients across our entire system. Today that number is down to about 360. And down from last week, it was probably about 480 patients. So we’ve definitely seen a marked decline over the past couple of weeks. And really positive news is that we’re seeing more and more patients discharged successfully to go home. We’ve now discharged nearly 1900 patients who are COVID positive to go home. I think that that’s really heading in the right direction and becoming a much more manageable situation than just a few weeks ago.

Gary Bisbee 2:29

Yeah, that’s excellent. Governor Edwards has a stay at home policy until May 15th. And then potentially businesses opening after that. Does that feel about right from your standpoint?

Warner Thomas 2:41

I mean, that just happened yesterday and that they extended the shelter home through May 15th. New Orleans had already extended to May 15th about a week or so ago and I think it does feel right. Once again, these are moving targets. I think we have to see how things play out over the next couple of weeks. But we have seen continued declines in the number of cases we see certainly, as I said, a marked decrease in the number of patients that are in the inpatient arena. And I think a really a lot of that has to do with the social distancing and the shelter at home and also much better testing capabilities, faster results, which has really helped us to know whether folks are positive or not and if they are to get them quarantined timely and effectively. So, I think there’s a number of things that are heading in the right direction that are kind of helping us head towards getting more reopening after May 15th.

Gary Bisbee 3:35

Let’s come back to the whole COVID situation in a moment but first, you could share with us, Ochsner Health most of us are familiar with Ochsner but give us an up to date view of where Ochsner is today, Warner?

Warner Thomas 3:48

Sure, we really span all of Louisiana cover all the major markets throughout Louisiana, also extending the Mississippi Gulf Coast and have operations there. We really attract patients throughout the entire Gulf south and take care of patients and now attract them nationally as well. We took care of folks from every state in the United States last year and about 70 countries from around the world. So kind of a true destination center. We’re kind of based or grounded at the core with our auction clinic group practice. We have over 1500 physicians in our group. And we have besides our operations in New Orleans, where we have our flagship Ochsner Medical Center campus, we have about 40 owned managed and affiliated hospitals throughout the entire region. So we span a pretty large area we have about another hundred and 30 plus ambulatory care sites around the region as well.

Gary Bisbee 4:45

A major health system you’ve done a terrific job Warner, ins growing Ochsner Health through your time there. Congratulations. Why don’t we go back to the Coronavirus situation? Communicating with your communities and your caregivers are obviously all-important. How have you thought about communicating with your communities? What sources have you used?

Warner Thomas 5:08

We really have been very focused on communicating and upping our communications when this all started several weeks ago. And this is certainly a lesson we learned from Katrina as well. When you’re going through this type of situation, you have to significantly ramp up communications. We went into twice a day calls with our leadership team throughout our entire system. We started twice a week calls with our board members to keep our board up to date. We also, given the magnitude of this in our communities, we started a weekly call with all of our partner hospital boards. We started a weekly call with business leaders around the region, and also a weekly call with media. And I think this really helped to create a lot of transparency and a lot of insight as to what was happening because one of the challenges of COVID, there was so many questions. People didn’t understand what was happening. They’d hear things in the news and they weren’t sure what was happening in their community. So ramping up that communication internally and externally, I think really has created a lot of goodwill and a lot of trust. The other thing we did internally is we went into weekly management. So our entire management team, WebEx’s and we started a number of employee forums and physician forums once a week. So it seems like a lot and it is, but the fact the matter is, if you don’t create alignment with your leadership, your physicians, and your employees, it really is a real problem. And so we’ve had a great alignment, people really appreciate our transparency. And because of that, I think we’ve had a great response and a great outcome as we’ve come through this crisis.

Gary Bisbee 6:51

What’s the morale been among the physicians particularly back when you had 900 COVID patients in your facilities?

Warner Thomas 6:58

Morale has been positive. I think they viewed our response as being very effective. When we were ramping up…when we started this, we had about 275 ICU beds, and we had to ramp up another 120 ICU beds literally in two weeks. So moving patients around moving staff around redeploying people, we got it done. And we never were in a situation where we ran out of beds or ran out events or ran out of PPE or anything like that. But that enhanced communication, and the ability to move quickly and to get our teams to move quickly, was, I think a key to our success. And because of that, I think we’ve come through it with physicians feeling pretty good about where we are, employees feeling good about where we are and the same with our management.

Gary Bisbee 7:43

You mentioned testing earlier, and that’s been spotty throughout the country. For those of you that have been at the epicenter of the surge, that seems to have been a bigger problem. How was it in your service areas?

Warner Thomas 7:54

I would say it was a huge issue early on when we first started this, all the tests had to run through the state public health department. Turnaround times and results took many days. And the criteria to test were very, very limited as far as the number of tests we could do. Once we brought testing in house, which we did probably about two weeks after this whole process started and we worked with Abbott Labs to bring the PCR testing in house. I think that really opened up a lot of opportunities to take better and quicker care of patients, quicker care of our staff, and really has been frankly a godsend to us. Since then we’ve added the ID now testing kits and we’re testing every patient that gets admitted to our facilities or comes in for procedures or is immunocompromised like our cancer patients. And just last week, we had an antibody testing so we now antibody tested about 9500 of our employees and not that that’s the be-all and end all test from I know some people say the immunity test. Which we all know it’s not. But it does give some level of comfort or caution to folks that get the results. If you’re positive, you know, you’ve built some antibody resistance. If you’re not, you need to continue to be very vigilant as you’re protecting yourself. So I think it’s created some level of comfort and I think our employees appreciate it. We’ve made their investment in them to get that testing for all of our employees. And we’re about a third of the way through that process, and we’ll get that done over the next week.

Gary Bisbee 9:28

Excellent. Good timing on that. What about the supply chain for PPE? You mentioned you never actually ran out of PPE, but I’m sure that the supply chain was a challenge.

Warner Thomas 9:39

Yes, I mean, the supply chain was a huge challenge and whether it was working with Vivian to identify sources or working with Owens minor, I would say that Owens did an amazing job working with us to identify opportunities to get PPE. We also like many organizations or Innovation Group and our Supply Chain group got involved locally with some companies who helped us to make face shields. We 3d printed the first one and then got it manufactured locally. We work with a local clothier, who helped us make surgical masks and surgical gowns. So these are things that, once again, you can’t train for these things. These are things that folks, they either have this type of innovation and this type of leadership or not. And I’m proud of our team of how they’ve handled that. And because of that work and that creativity, we never ran short. I mean, we did have to do some conservation, when we were at the height of this situation, but I would say compared to what I hear it a lot of other organizations, I think our team and our organization did well.

Gary Bisbee 10:42

Yeah, I’d agree with that. From what I’m hearing, some are saying that there’ll be a “re-surge”, if you will, in the fall, are you feeling pretty good about testing, PPE, and so on if this does come back to some degree in the fall?

Warner Thomas 10:56

I think we’re much better prepared today than we were seven or eight weeks ago with testing, knowledge, and how we would approach this. So, I think we’re in a better situation. I mean, certainly, I think we all worry about a resurgence. And that’s why data understanding where we’re seeing an escalation of cases, speed of deploying testing teams, working hand in hand with our government officials, our business community to make sure we’re taking the proper approach and how we handle this going forward is going to be critical. The health systems play a huge role in being stewards and advisors of this process and helping our government officials and others think through how to approach this. We look forward to that opportunity. I think we will be a big resource to people. But yeah, I certainly do worry about it. I think we’re in a better place today. But we’ve all got to be vigilant and make sure we stay prepared. Should this escalate again.

Gary Bisbee 11:56

Right. You mentioned physicians earlier. How many physicians did you need to redeploy?

Warner Thomas 12:01

I don’t know the exact number off the top of my head. But I would say we had a couple of hundred that were certainly redeployed in a number of different ways into other areas. And whether it was anesthesiologist that helped cover a critical care unit or some of our surgical specialists who had that appropriate ICU and ventilator knowledge to be able to redeploy and help in those areas. There’s a number of different folks that moved around to help us address this peak, which was very challenging. I mean, you may or may not be aware, but New Orleans was the second-highest per capita number of cases in the country, second only to New York. So it really hit this region hard, and certainly was a big challenge for us. But I think we, we responded appropriately. I think the other thing was critical. As we went through this, our health research folks, were very, very critical to take the information that was available publicly. And we got together with the other hospitals in New Orleans and shared all of our ICU all of our ventilator patient data, all of our med surge data. And we were able to predict with pretty good specificity if there was an r naught a three or have to or have 1.5 or 1.1, as the r naught kept dropping after we did the shelter in place. We did a really good job of predicting over two weeks in five weeks what we thought the census would, would be, and that was critical to our planning and I think we really did a good job for their health research folks and did a good job pulling the other hospitals together in New Orleans to take this planning on directly and it really made a big difference as to how the city responded to this situation.

Gary Bisbee 13:49

Well, kudos to them. It sounds like they were right on top of it. Talking to your peers or CEOs…the stress on physicians, nurses, caregivers, they are concerned about it from the standpoint they think this is something you really need to pay attention to not only just now but in the future, how are you thinking about that caregiver stress Warner?

Warner Thomas 14:12

There’s a lot of stress in caring for the COVID patients, it was a lot of fear. But what I saw is not people running away from it. I saw people running to it. They wanted to make sure they had the right protection and the right PPE and the right support behind them, which who could blame them for that? But I saw our people lean in- not run away from it and that was really just rewarding to see and to watch. And then the fact that our corporate teams and supply chain and as we had to convert and open another 120 ICU beds, our biomedical folks, our people in our construction areas. IT, just all stepping up literally working 24/7 to get beds converted, to get equipment in place to be there to support the frontline teams. We redeployed a bunch of our clinic staff; medical assistants who essentially became certified nurse assistants working with our nurses on the COVID units to help give them the support they needed or help be runners for supply chain or PPE needs. So it was an amazing team effort. And I think there was a lot of stress as we went through it. But there was a lot of really positive feelings and a lot of rewarding activities and rewarding behaviors that I think people will look back on this and saying, that was a pandemic. That was a crisis, but it was also our day to shine and a lot of people and a lot of organizations really did shine through this process.

Gary Bisbee 15:48

God bless them from my standpoint, they deserve gratitude on all our parts. Let’s think about telemedicine for a moment, which others have reported huge increase usage in telemedicine. How did that fit into Ochsner’s plans?

Warner Thomas 16:03

Same with us. I mean, we last year, in the second half of the year, we did about 3600 telemedicine visits. Today we’re doing 4000 a day. So I mean, it’s been a huge uptake. And it’s been, I think, a real positive thing for our patients who are being cared for in a new way and like it. And adoption from some of our physicians was a little more challenging, but now that they see how this works, they absolutely are adopting and we’ve seen great feedback from our physicians as well. So it has been a huge ramp up, no doubt about it. But I would say it’s been a very positive situation both for our caregivers and for our patients. I think that’s a trend that is not turning back. Frankly, I think you’re going to continue to see that type of technology used and used in a bigger way. And I think that’s a positive. I think it’s a positive for the industry, I think that’s a positive for patients specifically and we are absolutely continuing to focus on how we ramp up telemedicine with new approaches and new ways that we can provide care to our patients and new specialties that we can provide to our patients via telemedicine.

Gary Bisbee 17:19

It seemed like CMS in the states relaxed regulations. How helpful was that in this increased usage?

Warner Thomas 17:26

It was really helpful and relaxing the regulations and paying the same fee? Right. So whether you’re seen in a telemedicine visit or seen in person, certainly if it’s something you can do via telemedicine, I think to have the same fee be reimbursed. I think that’s a big step in the right direction if we really want to accelerate telemedicine. So, I think those changes that were put in place were absolutely a key to success in the changes.

Gary Bisbee 17:57

Turning to the Ochsner o bar which we need to have You describe for us, but I was wondering if that played during the surge to

Warner Thomas 18:04

The O bar specifically probably was not a big factor during the surge itself. But I would say the fact that we had digital services put in place with patients prior to this situation, and the fact that we essentially have built digital medicine capabilities for hypertension and diabetes that have been in place for well over 10,000 patients, these are folks that their chronic disease care, never missed beat folks that are on digital medicine that allow us to care for them from home, continue to get the same level of care if you were not on a digital medicine solution for chronic disease, then yeah, I think you took a step back as you went through this process because you couldn’t come in and be seen. So I think this is where it’s so important that we continue to educate people and ramp up technology. Like digital medicine, like telemedicine because frankly, that’s how we need to be taking care of patients going forward and make it easier for them and take care of them where they want to be.

Gary Bisbee 19:12

Yeah, I agree with that. Well, that’s a nice segue into elective and urgent surgeries. When did Ochsner discontinue elective surgeries?

Warner Thomas 19:21

I don’t know the exact date it was sometime probably in early March that we discontinued electives. And we just started back on April 27 with doing surgeries that essentially had been delayed or pushed off that were not emergency surgeries and that we felt we could push off for a period of time. But now those surgeries have been delayed 30 to 45 days and they need to be taken care of. So we rebooked and started those surgeries on the 27th and we’ll continue to expand and grow those surgeries are doing over the next couple of weeks. But once again, I think it’s okay to delay care for a certain period of time. But long term delayed care is not a good thing. And so I’m glad to see that we’re able to get back and take care of patients that need that care.

Gary Bisbee 20:08

Warner, you’re in the unique position of having lived through the whole Katrina crisis in 2005. And now here we are, again, with this crisis. Any lessons from Katrina that you can apply to the current crisis?

Warner Thomas 20:23

I think so. I guess number one, and I got asked about this during Katrina. And I would just say that, first of all, how you respond to a crisis is all going to be about do you have good people? And do you have a good team? And if you do, things go really well. And if you don’t, things become really challenging. And I would just say our team has shined through this whole process. Our team shined through Katrina and our team shined at both of these events because they were talented. They’re good leaders. They communicate well, they know how to take action and work independently. And they don’t just have to sit back and wait for direction. And that’s the challenge. When you get into a crisis, you need people to be independent thinkers and to move quickly. And if you don’t have leaders that can react that way, it becomes very, very challenging. So I think the leadership team is number one, that that was critical. And Katrina was critical in COVID-19. As I mentioned earlier, we talked a lot about communication. You’ve got to over-communicate when you’re going through these situations. And I think we did a good job in Katrina and have done the same in the COVID-19 crisis. And I think the third thing and this really comes back to leadership as well, you’ve got to adapt. It’s not about reacting. It’s about adapting to whatever the situation is that’s thrown at you and you may have a plan and this afternoon, you may have to change it because you get new information. And you may have to change tomorrow because you get new information. And so your game plans have to adjust and roll based upon on what’s happening with your team, and with the environment and the market around you. So I just think that those are critical lessons that frankly play out in any disaster – play out in any sort of urgent situation. And it really comes back to your people and how they lead.

Gary Bisbee 22:20

Well, let’s move from the good news of leadership to economics, which is not a pretty picture for any of our health systems. How are you thinking about economics, your financials this year in 2020 Warner?

Warner Thomas 22:34

Certainly, it is gonna be very challenged. We had a major hit in March and we’ll get in April. We’ve received some of the cares funds through the first two payments, which will mitigate that to some extent, but it’s not going to fully mitigate the situation. That’s why I think ramping our services back making sure patients know that we’re taking extra precautions to keep them safe, making sure our clinics we’re doing the right precautions to make people safe is going to be critical to come back and to have people feel comfortable coming back into the organization. That’s going to be a process. We’re going to continue to work through all of the opportunities for state and federal funding, whether it’s through FEMA, whether it’s through the Cares Act, or through resources provided through our state government, we’re going to need that help in order to come through this with not too much damage. But that is one of the big concerns I have is what ongoing damage from a resource perspective will this leave on the health systems and that’s to be seen? And we’ll have to watch carefully how the federal funding is distributed into the delivery system.

Gary Bisbee 23:40

Well implied in what you’re saying is that 2021 might be a rough year too, how are you thinking about that?

Warner Thomas 23:47

It could be I think a lot of it really depends upon how the overall economy comes back. If we see ongoing high unemployment, which we probably will that’s obviously going to challenge health systems as more and more folks are not in commercial insurance and they’re in Medicaid or being uninsured. So I think it is going to be an ongoing challenge for all of us to keep thinking about how we address that and come through this in an OK fashion. But it’s definitely going to be a challenge. I think every system is going to have to address it a little differently. But we certainly are spending a lot of time thinking about that preparing, adjusting capital plans, adjusting spending, adjusting investments that we’re making, and making sure that we do that to be fiscally responsible, but at the same time, keep looking for opportunities because frankly, in a down market, that’s when there are opportunities that you can capitalize on. And so we’re really trying to look at both of those very carefully.

Gary Bisbee 24:45

Seems like expansion growth is likely to continue maybe even accelerate as certain systems are not as well-positioned economically as others. What do you think about that?

Warner Thomas 24:56

I think we’re going to see probably more consolidation because of this. Because I think you’re going to have systems that were a challenge that is going to be even more challenging now. So I think that’s absolutely going to be part of what we’re going to see is, is more consolidation in the industry in general, and especially in the physician area for a lot of physician groups that are independent that going through something like this. They just don’t have the reserves to make it through this type of event.

Gary Bisbee 25:20

Yep, they’re going to be hard hit for sure. Well, let’s turn to governance. You mentioned earlier communicating with your regional boards. What about your corporate board of directors, Warner, how did you communicate with them?

Warner Thomas 25:31

As I said during our communication section, we started twice a week board calls to keep our board up to date. This really helped to educate them one as to what was happening and two just keep them informed so they could have the right comfort level. I would also say a third benefit of this is especially with our community board members..I mean they have their own businesses, they’re community leaders in their own region, and in their own industries, and I think us doing twice a week calls with them educating them as to what we’re seeing and how things were evolving. It also helped them run their businesses and think about how they wanted to respond to things. So I think I’ve had multiple positive impacts, both for us to get their guidance and feedback, but also for themselves to run their own businesses.

Gary Bisbee 26:19

Have you had a virtual board meeting yet?

Warner Thomas 26:22

We did. We had a zoom board meeting about a week and a half ago. And it was different, but it was very effective. And we certainly got through our agenda had good dialogue, and it was effective. We all are getting used to zoom and various different WebEx capabilities. And it’s a new normal, we all adjust to whatever situation we’re in. And I think we’re all adjusting to this new model of video teleconferencing, using whatever vehicle we’re using.

Gary Bisbee 26:52

One question I’m asking everyone has any tips for a smooth virtual board meeting?

Warner Thomas 26:57

The only thing that’s really challenging, is obviously, the discussion can be very, very challenging. Especially in a zoom situation, you have to try to facilitate the right time period for questions and make sure there are the right conversation and discussion. That’s a little more clunky when you’re on a video than if you’re all in a boardroom. But it certainly can be done. And I also think that making sure you got the right and up to date, technology is important. And also, I think our person that kind of helps me run the board did a great job of prepping everybody beforehand on technology, so we didn’t have any technology issues going into the board meeting. So I think that was great, but no big takeaways that I can give you on the virtual board meeting. I just think it worked well for us and I think was a great way for people to be connected. I do think video is so much more effective versus a phone call. I just think being able to see the person on the other side, being able to read body language. Being able to make facial contact and connection is so much different than just doing a conference calls. I’ve actually just started doing many more of my meetings that way versus a phone call, because I just think it’s so much more effective.

Gary Bisbee 28:13

Good point for sure. Two or three issues that your peers are talking about. Let me cover them with you. If I could Warner, one of them is the global supply chain. And many of your colleagues are saying that we need a more reliable supply chain, particularly for life threatening supplies. How do you think about it?

Warner Thomas 28:31

I agree. 100%. I think you’re going to see collaboratives come together to build more of our own supply chain capabilities in the US. I dont think theres been anything specifically done on that. Yeah, but it’s coming. You’re going to see systems come together and make this happen because I don’t think anybody wants because where we were a few weeks ago, something like civica a type model that is geared towards PPE or the right supply chain components is going to be part of the future.

Gary Bisbee 29:03

Another issue being discussed is the health infrastructure. And I think the general consensus is now that public health is part of the national security enterprise. How do you think about that? And particularly, what can we do to help solidify that going forward?

Warner Thomas 29:21

I think health systems can play a role in working with the state, and even on a federal level where larger organizations were dispersed and operate well, and I’m not sure that the public health infrastructure operates in the same way. And I think we got a couple of ways to look at it. We can complain about it and not be happy about it. Or we can step in and say, “What can we do to be helpful and how can we be part of that solution?” We definitely are going to be part of that solution going forward and want to step in and work with the state. We’ve got some proposals in front of them right now about how we can help on statewide testing, and things like that, which we don’t have to do. But I think we have the capability and it’s going to be a better thing for the state. So I think we need to step up and do those types of things and play our part in public health as well.

Gary Bisbee 30:13

Warner, this been a terrific interview. Thank you very much for your time. I have one final question. And that is that both Mark McClellan and Governor Bob Kerry, when they were at this microphone, were making the point and you’ve referred to it several times today that there will be a new normal, what components of a new normal come to mind, what is it that you think will change?

Warner Thomas 30:35

That’s a great question, pondering that a little bit. I do think that there’s going to be… it’s interesting, I think, one set, you could say, well, people are going to be a lot more careful. And there’s going to be a real reluctance as far as external connection, that sort of thing. But we’re also human and we forget these things relatively quickly. So I do think the new normal though, is going to be around technology into the home and video visits in the home and how we care for people in their home or in their place of work. And so, I do think this idea of not having to just go to the physician or go to a visit is going to be a lot different in the future. And I think the video connections is going to accelerate in a very, very large way, like it has and some of that will die off a little bit, but I think we’re gonna see a really big growth continue in that area.

Gary Bisbee 31:35

Warner you’ve done a terrific job leading Ochsner, congratulations. We appreciate your time today. Thanks for joining us.

Warner Thomas 31:42

Thanks, Gary. Appreciate the opportunity.

Gary Bisbee 31:44

This episode of fireside chat is produced by Strafire. Please subscribe to fireside chat on Apple podcasts or wherever you’re listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested. Fireside chat is brought to you from our nation’s capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisby’s brief. For questions and suggestions about fireside chat contact me through our website, fireside chat podcast dot com or Gary at hm Academy dot com. Thanks for listening.

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In this episode of Fireside Chat, we sit down with Bob Kerrey, Former Governor and Senator of Nebraska and President, The New School. In this conversation, we discussed lessons learned during his time as a Governor and U.S. State Senator, the responsibilities of a lead director during a time of crisis, and how the pandemic will change our lifestyles moving forward.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription Bob Kerrey 0:04

You’re going to see fairly significant changes coming out of it. I think education is going to be different coming out of it. I think healthcare is going to be different coming out of it. I think our food delivery system is going to be different. We’re going to make changes.

Gary Bisbee 0:15

That was Governor Bob Perry, former governor and US senator from the state of Nebraska. Governor Kerry is confident that we’ll see substantial changes in response to the COVID pandemic across many sectors of our society, including healthcare. Governor Kerrey has a wide range of experiences, including being an officer in SEAL Team one and a recipient of the Medal of Honor. We covered lessons he has learned from his time as governor and US senator. He’s an experienced board member, and he provided an excellent perspective on the responsibilities of a lead director during a crisis and guidelines for relating to the CEO. Governor Kerry spoke about the coronavirus being with us for the foreseeable future, which will change our lifestyles. Let’s listen:

Bob Kerrey 1:00

This virus is not going to disappear. We’re not going to eliminate it. There’s not going to be a signing ceremony, unconditional surrender, it’s going to be with us. So we got to figure out how to live with it. And I think one of the things is that we do is to make sure that the supply chain is reliable.

Gary Bisbee 1:15

He believes that we must develop a reliable supply chain for PPE, similar to that developed by the Defense Department. I’m delighted to welcome Governor Bob Kerry to the microphone. Well, welcome to the podcast, Governor.

Bob Kerrey 1:31

Thanks, Gary.

Gary Bisbee 1:31

Well, I’m pleased to have you at this microphone for sure. Why don’t we get right into it. And the first topic that I’d love to explore with you is the role of a governor during a crisis. And we’ve seen many governors in the 60 to 70% approval rating as of now. So why do you think that the governors are so well thought of across the country, Bob?

Bob Kerrey 1:54

Well, I mean, they’re first of all their home and they have a significant amount of authority when we have a crisis. And you see it all the time, it could be a crisis of caused by weather a flood or tornado or because they have authority over the guard. But people look to the governor, even when they don’t have authority, they look to the governor and typically grant that Governor moral authority to help them understand what’s going on. And the governor, again, may not have statutory authority over employers, but the employers will look to the governor as somebody not just with authority to talk, but they look to the governor and say, “Look, this is what we need. This is what our needs are.” So it’s a unique situation, by the way, and one thing, Gary, during this COVID-19 pandemic, oftentimes people say, Well, how come we’re not like South Korea or Singapore or something, right? Well, because in 1787, when our Constitution was written, the states retained a substantial amount of authority over decision making, from education to healthcare to a whole range of things, theyve got authority. There’s nothing comparable in Korea to the (power of the) States. And it is true there are times when it makes it difficult for decision making. But most of the time, what it does is gives you a variety of different decision making some good, some bad. And then typically the governors learn from each other. They associate and they’re back and forth talking about, okay, what are you doing to make something work? So I think it’s a it’s a genius, political arrangement, but it’s different than any other country.

Gary Bisbee 3:25

Right. During the time that you were Nebraska governor, what did you feel your most important responsibility was?

Bob Kerrey 3:31

Well, I think it’s trying to answer the question “What’s going on?” So, as an example, I came into office, in fact, I got elected as a result of an economic recession that began in the late 1970s with inflation. And when the chairman of the Federal Reserve broke inflation by tightening the money supply, we had a lot of farms that went broke because they borrowed money and put up their land as collateral and commodity prices were down because it was an economic recession. So explaining and trying to understand, that not by sitting on a mountaintop, but by listening to people talking to experts and trying to get a sense of what the problem was and trying to get a good sense of what the solution was, I’d say it’s the most important the governor has to do. Now, there are all kinds of state agencies, you have to fund and you have to appoint judges and you have to make difficult decisions on pardoned boards. But I think the key thing is trying to answer the question “what is going on right now? And what do we need to do in order to reach that point that we say we want to reach which is a better life for our children and our grandchildren?”

Gary Bisbee 4:35

How tightly does the state emergency powers that the governor’s control of how tightly does that need to be coordinated with the US as a practical matter?

Bob Kerrey 4:44

First of all, it’s almost automatically coordinated as a result of the guard, is partially controlled by the governor, the National Guard, and partially controlled by the department defense. So it’s the President nationalizes the guard all of a sudden the president of the United States as Commander in Chief has full authority. So it’s, in most disasters, you’ve got a significant amount of automatic coordination going on between the Department of Defense and the governor’s office to the guard. But there are other agencies become important. The Corps of Engineers becomes enormously important. The Bureau of Reclamation becomes important, FEMA is enormously important. So a substantial amount of coordination goes on. Even if… let’s take the Small Business Administration, I didn’t have any authority over the SBA. But if we had a national disaster, and we had a couple. If you have a national disaster, the SBA becomes very, very important. So we don’t coordinate but our economic development people have to understand – what are the rules that the SBA is using? Because oftentimes people will come to the state get questions answered, and the more questions we can answer, the better job to the feds are going to be able to do to help us.

Gary Bisbee 5:53

Well, one of the key issues now- you’re referred to it in your terrific op-ed editorial and today’s Wall Street Journal, but that’s was the balance between the state economies and the health of the people? How would a governor parse through that?

Bob Kerrey 6:08

First of all, be prepared to make mistakes. And be honest when you make a mistake and as much as possible to get all the other stakeholders to buy into a presumption that we are going to make mistakes. When we make a mistake, don’t blame each other, make adjustments, and move on. Because if you don’t do that, what happens is that the process shuts down. It’s everybody pointing the finger each other trying to lay the blame off on somebody else. As opposed to, we’ve got a flood, we’ve got a tornado, we’ve got a disaster. We got to get building. And the good news is I didn’t mention this as the most important part of this in a disaster, but people really pulled together. I always say this tornado in Omaha, Nebraska in 1975, and we were about 18 months into business and our business was blown away. I was in New York when 9/11 happened. I’ve only lived in the United States. So I’m not asserting that Americans in this regard are better than other countries. Because it’s made maybe human nature, not just the way Americans are. But Americans… if somebody is in trouble, we’d like to help them. And when the tornado hit in Omaha 75, and when Al Qaeda attacked us in 2001, the city of Omaha in the city of New York became a community. We helped each other. Governments can’t do it all without that impulse to help each other, help each other rebuild volunteer time, and contribute labor, and contribute money if necessary. The government can’t get it done. So before you ever get to what is the governor does, it’s really important to understand that all the governor can do is connected to the willingness of the people themselves to help their neighbor and help somebody that doesn’t even know get through the crisis, get through the challenge. And you’ve seen that now I think with COVID. The different from COVID is we all have to stay inside. It’s harder to help but you don’t have to look very far. You see it in the hospitals. You see it in the food banks, my goodness. You see heroic people helping be willing to run a considerable risk to help, and no crisis is solvable, no leader can ever get through a crisis without that will being there.

Gary Bisbee 8:12

Right. Well, you mentioned the 9/11 crisis, of course, you were one to 10 members appointed to the 9/11 commission, and thinking about particularly recommendations out of that commission. Are there any learnings there for us, Bob, in terms of the current crisis?

Bob Kerrey 8:27

I think so. First of all, it was a very partisan time after 9/11, maybe less partisan than it is today, I don’t know but it was partisan. The R’s and the D’s were at each other’s throats. And they put together a commission that was chaired by two wonderful people, one Democrat, Lee Hamilton, and one a Republican Tom Kaine. And we had no dissenting report, no dissenting opinions. It was a unified report. And we wanted to unify because we felt that the country needed to pull together as well. As a consequence of Tom and Lee’s leadership, and as a consequence of no minority reports, I think the impact was much, much greater. And remember, the 9/11 Commission was stood up after the House did their own examination and the families of the men and women who were killed on that day. They didn’t trust it. They didn’t trust the conclusion. So the 9/11 Commission was set up to be a nonpartisan response to, first of all, tell the story what happened, what was the nature of the conspiracy? How did we miss it? And then what do we need to do to reduce the chances – not to zero and never get to zero in life – of it happening again? So is the nature of Tom Kaine and Lee Hamilton’s leadership and the willingness of the commissioners to set aside what normally would have occurred, which is minority or dissenting opinions that I think enabled Congress to see this as something that they needed to act upon.

Gary Bisbee 9:53

But do you believe that a similar process in this case that is a commission should take place?

Bob Kerrey 9:59

Not now. I like Nancy Pelosi, but I think putting a commission together in the middle of this is not a good idea. I think we’re better off waiting until a year or so we get beyond this like, it’s like, one of the things I think it’s very important to understand with this virus is that you can’t declare war on it. This is not a war. It’s a virus. It’s it’s an RNA virus, this virus has been around a long time, and we’re not going to defeat it. We’re not going to eliminate it, you’re not going to get to a point like we did with polio, where we vaccinate everybody, and there’s no danger any longer we’re going to have to learn how to live with it, and how to adjust. And we’re going to go through a period where our adjustments are going to be more extreme today than then we’re going to have to be a year 18 months from now when everybody is tested. We know who’s been affected, who hasn’t been affected. We’ll get through this, but I think we’re going to be doing things differently than we were previously because nobody wants to die of an infection of this virus. It’s not going to go away. And we’re going to need to have much better collaboration between the state and the feds on public health issues. And I think you’re going to see fairly significant changes coming out of it. I think education is going to be different coming out of it. I think healthcare is going to be different coming out of it. I think our food delivery system is going to be different. We’re going to we’re gonna make changes. I mean, the big one that’s kind of startling is the, you know, the benchmark for oil went negative yesterday, they could they couldn’t give the darn oil away, why? We’re not driving. We’re not consuming as much gasoline as we were before. Now, I suspect we’re going to go back to driving. But we might do it differently. I don’t know. That’s a great thing about living in a country where you’re free to make your own decisions. They’re gonna change the way they buy things and the way they conduct your business. Certainly, if my assessment of it is correct, which is this virus can’t be defeated. We’re not going to have a celebration where no more smallpox victims occur in our country. This is a virus it’s going to be hanging out with its and it’ll probably mutate and come back and different forms again, we’re gonna have to figure out how to live with it.

Gary Bisbee 12:02

Right. Do you think there’s any chance that we’ll form a new cabinet to oversee future health crisis as we did the Department of Homeland Security following 9/11?

Bob Kerrey 12:12

I don’t think so. This is not a one size fits all. Problem. I mean, that’s what happened with banning elected surgery. The assumption that every hospital in America is going to get a rush of COVID-19 patients. Well, they didn’t. There’s some New York, Massachusetts, Detroit, they’re places where there was a rush, Washington State, but for the most part, it hasn’t happened. And even inside the differential between what’s going on in New York City in New York State, people need the freedom to respond differently, not by ignoring it by saying, Oh, it’s a hoax, it doesn’t exist. It exists! It’s a relatively lethal virus. And all it wants to do, I’m describing is have it has a mind but it doesn’t have a mind. Its whole motivation is to get inside to destroy ourselves and I particularly like epithelial cells inside of our respiratory system. So, ignoring it is a mistake, but trying to come up with a solution that everybody has to follow, I think is not going to work either.

Gary Bisbee 13:10

In the Wall Street Journal article published today, one of the things you said I found it quite interesting was, quote, public officials live in fear of not doing enough. Can you dig into that a bit?

Bob Kerrey 13:21

Wow. Well, that’s a personal experience. And maybe the hardest thing in politics to do is somebody gets up in a town hall meeting and said, here’s a problem. What are you gonna do about it? And maybe the most difficult answer is nothing. Because there are times when nothing is the right answer. If the questions focus on what’s the government going to do, because the government can make it worse and I think banning elective surgery is a good example of a very well-intended decision, not by bad people. Well-intended decision that was a costly one. The cost-benefit ratio is decidedly against benefit.

Gary Bisbee 13:54

I think the regional variation in the surge was one thing that nobody was expecting. And you make the point that probably most of the health systems in the country; albeit having COVID patients there really could have continued to do elective surgery and perform urgent surgeries. That’s the crux of your article.

Bob Kerrey 14:17

Yeah, although I want to emphasize that I think is an even worse mistake to describe this as a non-existent hoax. It’s a real virus, it’s a virus can be isolated. It’s a virus, it could be treated. It’s a virus that can kill you. I understand why the political leaders would say, look, quarantine works. And if you look at what happened in 1918, there’s a great book john berry wrote called Great influenza about 1918 and more people died in Philadelphia because they ignored his public health people and allowed large gatherings to occur and the virus celebrated because it was a lot easier for the virus to get inside of the lungs when everybody’s kind of hanging out together. So the worst thing would be to ignore it. To pretend that it doesn’t exist, because it’ll travel. I mean, it was devastating to that 1918 influenza was devastating, very, very remote Indian tribes in Alaska. So if you think “I’m living on a mountaintop, I don’t have to worry about it.” Don’t count on that. So ignoring it is even worse. But once you’ve identified it as a problem, you got to deal with it. I think, the more you allow people to experiment, and try to figure out what works, we’re definitely going to need to do that, as we move from mostly shut down to trying to, I wouldn’t say get back to normal life, but get to a point we feel comfortable that we can gather and we can engage in social activities without having to be afraid that I’m with Gary Bisbee, and he’s going to infect me with COVID-19 I’m going to die.

Gary Bisbee 15:47

Is it frequently the case that states would be competing for those kinds of critical resources?

Bob Kerrey 15:52

Well, I think it gets back to what you said at the beginning. I don’t think we’ve ever had anything like this. If I’m the governor of Nebraska and my hospitals tell me we don’t have enough personal protective equipment, or we don’t have enough testing, and we don’t have… I’m gonna do everything I can to get whatever I need in order to give my hospitals, my medical community what they need in order to test and protect themselves when they’re caring for people. So it’s not so much competition. I’ve heard it referred to as Darwinian, it’s not Darwinian, you’re just doing your job. And it’s why you asked the question, do we need a federal authority- you may need one. You may need to identify somebody that maybe already exists, some agency that already exists, and gives them the authority and give them the money to get the protective equipment to deal with this particular virus or another one that comes down the road. That’s why I say it’s really important to see this as a virus. It’s going to be with us. There’s no endpoint here where Oh, God, we’re gonna have a celebration. We kill every single Coronavirus 19 out there in the world. That’s not going to happen. So it’s likely that the governors of the federal agencies learn a lot coming out of this thing and it’s three years or four months from now you go to the National Governors Association to the Western Governors or Mid-Western Governors, you say, what have you learned from this? What do you recommend we do to decrease this problem we had in this particular situation where we’ve got, you know, we’re asking nurses and doctors and allied professionals to show up and do their job, but they don’t have the means to protect themselves. We don’t want to do that, again. My guess is the governors and the and the federal agencies- they’ll have a solution. They’ll say, Okay, here’s what we get that was wrong. Here’s what we need to do to make sure that that part of our response isn’t going to happen again.

And I see the governors in the East in the Midwest and the West are banding together in each of those regions to develop a regional approach to this? That would seem to be… sound like a good idea to facilitate the learning that you’re talking about, right?

Yes, in the West. For people that are involved with water management, they understand a thing called adaptive management. Take the Missouri River. You got eight or nine states that are in the Missouri River Basin. We agree we’re going to try to manage that river, not as if it’s a fountain or something like that. But, because it’s very unpredictable, we don’t know exactly…so we’re going to talk, we’re going to do a, b and c, to reduce the damage of flood to increase the chances that we’re gonna have enough water available to our communities, but not too much. We need adaptive management to deal with, I think, a long term response, public health response to this virus and others like it. By that I mean, we agree, we’re going to do X, Y, and Z, with the understanding that x might work, y might work, but z might not work. And if it doesn’t work, we’re not going to blame each other. We’re going to tell the people we represent you understand that we’re not perfect. We tried x, y, and z. X worked, Y worked and Z didn’t. And it’s probably as you suggested earlier, X and Y working in some parts of Ohio and y and z work in others. It’s not perfect. So I think what we have to have is coming out of this is not just the resources to keep our healthcare workers safe, and in an environment where they feel like they can do their work without putting their lives at risk. The political leadership has to agree and the public has insisted, that we’re not going to blame each other. I may vote I probably will vote against Donald Trump in November, but I’m not going to make the case that he was horrible, that he didn’t care about it and all these mistakes, whatever mistakes he made, we should learn from them. We should learn from whatever mistakes he made on the assumption that if we were in that position, we’d make mistakes too. It’s true our mistakes, we learn how to do things better the next time,

Gary Bisbee 19:30

Right. Well, let’s turn to the economy. Bob, you ran for president in 1992 when President Clinton became the comeback kid, and it was a time of meaningful recession that I’m sure deeply informed the political debate of the day. What were the key points of discussion during the campaign, about the economy in the recession?

Bob Kerrey 19:50

First of all, we were coming out of the recession shortly after the election. So if you’re looking for who to get give credit for that recovery, you probably give it to George Herbert Walker Bush. His willingness to stand before the Congress, which was democratic at the time and say, “I’ll accept the tax increase if you guys will accept spending reductions.” We passed a budget in 1990. We amended 93 amended in 97. I mean, George Herbert Walker, Bush could take credit for balancing the budget. By the time Bill Clinton left off as we were paying off the debt. And I think that contributed to the economic recovery. There are a number of other things we lowered the capital gains rate, but you know, the economy goes through cycles, I would say the hottest of the political issues then, and it’s only gotten hotter is trade. Trade was, as you recall, the giant sucking sound was the phrase that was used by a lot by third party candidates who did exceptionally well. I think trade was probably the most contentious issue at the time. But as always, when you’re going through economic difficulties like that, you’re looking for solutions, and I think we found them. I give Bill Clinton a lot of credit. But the guy who started the process of moving us from a significant deficit to a surplus was George Herbert Walker Bush and because he did it, he wasn’t re-elected. There’s no question that his support for a tax increase, angered an awful lot of Republicans to whom he promised he would never do that, “No new taxes. Read my lips.” But I think his Patriotism helped us get out of that recession.

Gary Bisbee 21:19

How do you see the economy influencing the election this November, Bob?

Bob Kerrey 21:25

it always does. If we had not been in a recession over George Herbert Walker Bush gets reelected. And unfortunately for him, the economy started to recover shortly after the election. So it’ll have a big impact, and it’s likely that we’re going to have significant unemployment. The question is, how much of that gets attributed to President Trump and right or wrong, it tends to get attributed to the person in power. So I think it’ll have an impact. I think it’ll have an impact on the election. Now, the other thing is going on is you can look at this whole pandemic crisis and all of a sudden you see this thing is global. This is not like 9/11, or even like the financial crisis, it became global. But this one began globally. The question that I think is, at least on my mind, which is how does the pandemic affect broad support for globalism? And I think that they’re the key question is, how do we get trade agreements? How do we do immigration? How do we continue to invest in technology in a way that continues to lift the middle class because it hasn’t worked for the middle class? And they’re asking for something entirely different. It seems to me, and I don’t at the moment, I don’t see… I think both parties are struggling to answer the question, how do we make globalism work besides just shutting it down? It’s like, you can’t shut globalism down like shutting down gravity. So I think that’s going to be a real challenge because all the multinational institutions we put together after the Second World War, I think they need to be significantly reformed for a different purpose and what they were put together to do in 1945-1948.

Gary Bisbee 23:01

Well, one thing is for sure, if you talk to the CEOs of the health systems, they’re all asking the questions about the global supply chain, particularly for life-saving equipment that they have not been able to get ahold of. And there’s a lot of concern that we need to revisit the global supply chain for those critical items.

Bob Kerrey 23:26

Yeah, and I hear the same thing. It is necessarily going to be a response coming out of this. Because you can’t deal with a pandemic, if you’ve got to get all your mask and all your peepee outside the United States. We’ve done that with defense. The defense we’re not in a situation where we’re reliant on a foreign power. We have specific laws, we can’t export technology, if it puts our capacity to defend ourselves at risk. So we’ll probably and we probably should make certain that supply chain is protected. I don’t think it leads to it has to be manufactured inside the United States. But you do have to have supply chain protection otherwise, particularly for those critical items, it might not be important for band-aids for water new some things where it won’t be important. But for PPE, it’ll be, ventilators, and those sorts of things, it’ll be important going forward. And I’ll repeat it, Gary, I mean, this fire is not going to disappear, we’re not going to eliminate it. It’s not gonna, there’s not going to be a signing ceremony, unconditional surrender, it’s going to be with us. And we got to figure out how to live with it. And I think one of the things that we do is to make sure that the supply chain is reliable.

Gary Bisbee 24:32

Let’s turn back home to our veterans, you’re highly informed, I’d say an expert on the VA, what’s happening in the VA now as a result of the COVID crisis?

Bob Kerrey 24:42

Well, I’m not 100% certain on that. I actually haven’t read up or followed exactly what Dr. Stone is doing for VA Health. I do think he’s a first-rate administrator. And my guess is the challenges that he’s having is comparable to other healthcare systems, except that he’s got a very he’s got about seven or eight million veterans that use the VA Health on a regular basis, they tend to be older and they tend to have higher fraction of what’s called comorbidities, people with type two diabetes, coronary artery diseases and other sorts of metabolic diseases, and they’re at greater risk. So my guess is they’re having to respond to that greater risk. And they probably had, like the rest of the country, certain parts of the country where those they haven’t had any problems at all, and certain parts of the country where they have. So it’s a fully contained system. The choice act allows veterans to move outside into either not for profit or for-profit health care systems, but it’s still a $50 billion healthcare system that’s largely self-contained to hire their own doctors and nurses and nurse practitioners and physicians assistants, etc. So I don’t know precisely what they’re dealing with. But my guess is their number one problem is lots of patients that have comorbidities.

For sure, and those patients are more susceptible to illness

And they are tragic stories about what’s going on in our long term care facilities. I mean, there are a number, I did see that there was a couple of facilities that were operated on behalf of veterans and veteran veterans homes of some kind. So again, I think what we’ll, we’ll, we’ll have to do is learn from that what happened, I’m sure they made, they did some heroic wonderful things, and they made some mistakes. So hopefully, we can identify the mistakes and improve our performance next time and be grateful for what we had in the beginning.

Gary Bisbee 26:29

So Bob, you’ve made reference several times to learnings that will inform the next crisis or the next pandemic, at what point the governors actually turn and spend time and resources thinking about that and preparing for the next pandemic.

Bob Kerrey 26:45

First of all, I think the public should take some comfort from knowing that the governors do learn from each other. There are two big Governor’s conferences every year, one in February in DC, where they meet with the President, and one in the summer, where they all gather and learn from each other. They have an agenda and I predict that COVID-19 and the pandemic will be top of the list of their discussion. There is the Western Governors Association, a Midwestern governance Association. And lots of activity going on between the states all the time anyway, when they’re trying to just trying to do a better job yet, do they compete for businesses? And they could, yes, they do compete. But there’s a lot of collaboration going on with the governors and not the dick. That’ll be at that Governor’s level where people are going to begin to understand what do we need to do to live with those fires and minimize the number of people who become casualties?

Gary Bisbee 27:33

So turning to health system governance, you’re the lead director, at Tenant, one of our largest health systems in the country? What’s the role of the board and a major crisis like this with the large health system?

Bob Kerrey 27:45

It’s a really good question. I mean, first of all, is the legal standard of duty of care. You got to you have to meet that legal standard by doing your work and bringing the read-ahead and asking the right questions to the CEO and make it a judgment about whether that CEO is doing a good job or not. I would say it’s probably true with other boards too, but particularly true with healthcare systems is that the priorities tend to shift. We’re still concerned about our shareowners and our stock performance. But you tend to shift your concern now over to your employees, your nurses, your doctors, that people are out there on that front line taking care of people that are coming in. And you tend to think as well sort of connected that about your community. What does my community need and Palm Beach what does my community need in Dallas, or wherever the hospital is, because all of our hospitals, our community hospitals. I would say that your concern is still about your shareowners. But I find myself spending more time in discussions with a CEO, what’s going on with our employees, what’s going on in our communities? What can we do to help establish a not for profit to help our own employees as well as our community? So I think the concern shifts more towards other stakeholders in the company, particularly employees and the community.

Gary Bisbee 29:00

So as lead director, what key responsibilities do you have? Or how do you see your priorities as lead director as opposed to one of the other directors?

Bob Kerrey 29:10

My view is a director needs to know not just what a director is supposed to do, but what a director is not supposed to do. I am not the CEO of Tenant. So if the CEO asked me a detailed question, I’ll attempt to answer the best of my ability, but he’s running the company. My job is to evaluate him and to work with him and help him not to manage the company itself. And if I reach the conclusion that the CEO is not doing a good enough job and should be replaced, I have a duty to be the one that informs the board that I’ve reached that conclusion. So it’s a fine balance between making sure you know what everything is going on and not stepping in and trying to act like you’re the CEO.

Gary Bisbee 29:54

Speaking in general terms, not about a tenant or any other specific health system but one of the questions I’m being asked by trustees these days is what characteristics of a CEO should boards look for, that will suggest strong performance during a crisis?

Bob Kerrey 30:10

The keyword in your question was suggest because you can never be certain. I mean, you can look at plenty of men and women who look on paper to be a great CEO, and they just can’t do the job. You’re forced all the time to be making critical decisions. And you’ve got to be able to acknowledge when you make a mistake because if you don’t what happens, you get paralyzed, you don’t make any decisions. It’s no small set of responsibilities that a CEO has. Secondly, they have to be able to lead. By that I mean, the employees have to feel inspired. They’re being respected. And it’s typically the little things, not the big things. It’s not necessarily well, how much is my comp going up this year? But does the CEO respect what I’m doing does he understands what I’m doing? Does he understand the challenges that I’m facing and so he or she’s got to obviously, in a crisis, they’ll respond. You never know, I could have a great CEO and she’s terrific and everything is going fine. And in this crisis… I’ll just pick something grim… her husband and three of her children die. Now, don’t expect that person to be able, maybe she can… She’s a human being too. And she’s gonna be struggling with this crisis, what’s going on in her life will matter. So all you can do is look at it and get outside references and talk to other people that know them and then push a little bit. How do they do when the bottom drops out? Every CEO is going to face it, you don’t have very many businesses that you look at the graph and it just goes upward to the right all the time. There’s never a moment when the when the graph drops down to the right. And now we’re going through a big crisis. We went through a big crisis in 2008/9 and we’ll get to this one. What I’m certain of is, there’ll be another one somewhere down the road, and they maybe they can handle it and maybe they can’t, it’s not the end of the world that they can handle it. You just have to have as a board member, you have to pony up and say if they’re not doing the job, I got to replace them. It’s not an easy thing to do. But it’s enormously important thing that a board member has to do.

Gary Bisbee 32:07

Are there similar characteristics to a successful CEO and a successful governor?

Bob Kerrey 32:12

Similar, except that you got a much different constituency group you’re worried about. You get elected as governor. He get selected as a CEO. I always tell people that a CEO can be a benevolent dictator because we have a democracy. A governor can’t be a benevolent dictator. But as a consequence of our democracy, it’s a different set of constituencies, and it’s important to understand them. So somebody says to me, well, I was CEO, I can be governor. No, it’s different. It’s not the same thing. You don’t tell people what to do when you’re governor, you have to persuade them that what you want to do is the right thing. And now you could find yourself saying, This is brilliant, this genius idea, and you propose it to your legislature, and 10% of your house and Senate members support it. And maybe the public doesn’t support what you want to do. And I’ve had many, many ideas that I thought were brilliant that you nobody else liked. Well, if your CEO it’s a lot easier to put them in place than it is if you’re if you’re governor.

Gary Bisbee 33:07

Thinking about, again, politics in the fall, we covered that a bit earlier. But I’m thinking now about the whole mobile voting. And I know you’re been supportive of the mobile voting project. And that picture we saw in in newspapers recently of the huge lines in Wisconsin, do you think that we’ll see a move toward mobile voting and see it in time for the fall elections?

Bob Kerrey 33:31

Oh, I hope so. But fall elections? I doubt it. People are Oh my god, the Russians are gonna hack in now somebody else is going to hack in and out. The Chinese are going to hack in, but we probably have, I don’t know, four or 5 million secure phone calls and communications through the internet by national security people every single year. So it’s a manageable problem. And I think eventually we’ll do it. I think we’ll come up with a way to do it in a secure way. I think you’ll get greater participation if you do it. But most people Importantly, we’ll have an efficient election. I don’t think we’re ready for it. Now, the test case is actually going to be Congress because Congress is sitting in a situation where 530, they’re average age is 60. And I know Leader McConnell doesn’t like the idea of letting them vote remotely. But I think they’re gonna have to do it. It’s one thing to put members of Congress at risk, but they can’t function without their staff. So they may have to figure out a way to do this. That seamless bill that they passed was $2.2 trillion, whatever it was, they passed it by unanimous consent. They didn’t vote. I don’t think either they are the public’s going to tolerate that kind of decision making without an accurate debate and amendments being offered and careful examination of the legislation occurring, which you get with them gathering 535 of them in the well the senate of the well of the house, their staffs are they’re running all over the place, and think of the public, the public doesn’t get access to them. If you want to get ahold of your senator, your house member you got to go knock on their door. You got to go visit them in the home. You got to call them on the phone. Well, that’s inadequate, I think. And I hope they don’t open it up just to say, well, we want to get back in business. If there’s an alternative, and there’s definitely an alternative, Congress could easily set up secure voting from a distance. And I hope they do. Because otherwise, you’re going to put both themselves and their staff and risk

Gary Bisbee 35:19

Seems likely sometime over the next several years that that’ll happen, doesn’t it?

Bob Kerrey 35:23

Well, I hope it happens over the next several weeks, it would not be that difficult to do if they could go over the National Security Agency and give them the assignment of doing it. They’d put a system together immediately. They do it all the time. I mean, it would not be that difficult to set it up. The alternative is nobody actually examining the legislation, nobody actually voting or worse, you push them back into those rooms in a premature way and put them at risk

Gary Bisbee 35:47

On another topic, given the cost of the current crisis to the federal government. I’m thinking back to the Kerry Danforth Commission on entitlement reform. Any thoughts or learnings from that, that you’d want to suggest to the current Congress,

Bob Kerrey 36:03

You know, the story of the Rip Van Winkle story?

Gary Bisbee 36:06

Yeah, but feel free to share.

Bob Kerrey 36:09

Washington Irving wrote this story in the early 1800s. And the whole story was to talk about how things have changed, dramatically, things change. And so Rip Van Winkle goes up to the mountain when he goes up to the mountain, King George is there’s pictures of King George all over the place, because we were a colony of the British. When it comes down to the mountain top is pictures of George Washington. So what happened? We’re dealing with that now. Senator Danforth and I co-chair the Concord Coalition. I don’t know what to say about a $3 trillion deficit. What I do know is that’s all borrowed money. And what I know about borrowed money is eventually you got to pay it back. And at a minimum, you got to pay the interest on those bonds. And my guess is coming out of this and me the first time interest rates go up a bit. Interest on the national debt can be the largest item in the budget.

Gary Bisbee 36:59

Without question

Bob Kerrey 37:01

And you don’t get anything for it, I’ll bet you two years of interest on the national debts, I don’t know $800 billion a year. And so what do I get for eight? I get that $800 billion with taxes on American taxpayers. What do I get for that? You don’t get anything other than what we got to get out of this crisis. So I know at some point we’re gonna have to deal with it but right now it’s like a while ago the like the Republican Party was gonna attack democrats for being socialists and after the stimulus bill, we’re all socialists.

Gary Bisbee 37:37

Well, we’ll be back talking to you about learnings from the Carey Danforth commission. I’m sure that it’s just we can’t avoid that but onto your personal background. Most people I would say don’t realize that you were a pharmacy major university in Nebraska. Why pharmacy Bob?

Bob Kerrey 37:55

I love pharmacy, particularly pharmacology it’s changed a lot but I like it. I like to science, pharmacology and so I’m a cognition. I like them both.

Gary Bisbee 38:04

You didn’t want to pursue that as a career?

Bob Kerrey 38:06

Well, no. My joke is the government decided that a higher and better use of my skills, does that make me a member of SEAL Team one. No, we had a little thing called the draft. And I pass my physical and they told me I was about ready to be drafted by the army. I just read human works the cane mutiny, and volunteered for the Navy. Went thought Officer Candidate School and underwater demolition look like a lot of fun. So I volunteer for that. Next thing I know I’m in Seal Team. My life is one moment of serendipity after another, and that happens to be maybe the most important one I had.

Gary Bisbee 38:37

Well, thank you for your service. What gave you the inspiration to run for governor Nebraska?

Bob Kerrey 38:42

Well, probably just generalized beliefs and values of service. I was raised in a Christian church and we were taught that it’s better to give than receive and I can give you lots of examples that demonstrate that case. I believe that you’re afraid of losing something and you’re constantly holding on things and only care about yourself. If you forget the golden rule, you’re going to have a difficult life no matter how much money you got. I believe in service and I had enough experience in the government because I’ve been in business for 10 years, and you got to get permission from the government, variety of different agencies. So I’d worked with political leaders. And in 82, when I ran, it was the number of people who were on the Democratic side thinking about running, they all came by to see me and tell me why they were going to run and then none of them ran, they kind of talked me into it. So there was a number of things that I wanted to do, and I thought I could be pretty good at it. And I thought I would enjoy it. And I wasn’t disappointed. Plenty of mistakes, many things I do differently. But all in all, I got more than I gave.

Gary Bisbee 39:40

looking back on it. What was the most important accomplishment during your term?

Bob Kerrey 39:44

Oh, in the event that somebody that’s thinking about becoming a candidate for office is listening. I would say the most important things are small. There’s a lot of power in the office of the governor a lot of power in the office of Senate. And if you recognize that power and make sure you never abuse it and never let anybody working for your abuser. You can use it power and change people’s lives just by helping them a little bit with a problem that they have with the government the problem that they’re having with their corporation or in my case because I’m a was, at that point relatively well-known entity I visited people who were suffering trauma and hospitals. And it wasn’t like I could do anything for him necessarily but I had the experience of having volunteers come to see me when I was in the hospital in Philadelphia, I knew how important it was to have somebody just lay your hand on you and say I care about you, I want you to get better. So the little stuff is what’s most important. I mean, men and women who were involved in my campaign became friends for the rest of their life. Some of them get down, they got married, had kids, they wouldn’t got married, had kids were not for the campaign. It’s a little stuff that I value the most in terms of the impact on the state. It’s probably the financial reforms that we put in place, how to budget how to set tax rates, how to protect the tension so they don’t get ripped off by people wanting to get access to that money, and then there was a number of financial reforms that we put in place that can go have that long-lasting positive impact on the state. But the one thing that again, in the event somebody listened to you, you got to be very careful not to really care if anybody remembers. I can take you to places in Nebraska, and say, you know, you know why this exists. You know why this road is here, this park is here, this thing, it’s here because somebody that I don’t know that you don’t know, cared about it and helped build it. So it’s not an exaggeration to say we stand on the shoulders of the people that came before and it was a lot harder to be governor in the first 20 or 30 years of the state is a lot harder together during the Depression. So there’s a lot of things that I benefited from the most important of which is we have a spectacular capital that was built with cash during the Depression with Bertram Good. He’s one of the world’s finest architect and designer but you think, How’s it possible they built this thing and they build it to last forever. They didn’t build it to survive a depreciation schedule.

Gary Bisbee 42:00

So on to the Senate, how would you compare being a senator to being a governor?

Bob Kerrey 42:06

It’s different. First of all, it’s healthier being governor, you’re home all the time. And while you’re away from home, it’s harder. You’re away from your kids, you make more mistakes when you’re not at home. But on the other hand, it’s again an event like the Navy, it’s the United States Senate. And it matters. US law matters. What a senator says matters both good and bad. You’re voting on War Powers Resolution, you’re voting on things that affect all 50 states, all 330 million Americans can be affected by a single vote, a single speech. So what you’re left with is a sense of the power of this country and the value of the republican form of government we have and it does put you in a position to be able to help people understand maybe a terrible system, but it’s better than anything else. It gives you an appreciation for the difficulty, but the genius of the idea that we can govern ourselves,

Gary Bisbee 42:54

Governor, we very much appreciate your time. Let’s land here. Thank you again, we’ll enjoy. Listen to this podcast many times.

Bob Kerrey 43:02

I look forward to seeing again

Gary Bisbee 43:04

Thanks Bob.

This episode of fireside chat is produced by Strafire. Please subscribe to fireside chat on Apple podcasts or wherever you’re listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested in fireside chat is brought to you from our nation’s capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership. Read my weekly blog Bisby’s brief. For questions and suggestions about fireside chat contact me through our website, fireside chat podcast dot com or Gary at hm academy dot com. Thanks for listening.

Transcribed by Otter

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In this episode of Fireside Chat, we sat down with James Hereford, President and CEO, Fairview Health Services to talk about the COVID-19 pandemic in the twin cities, how Fairview is handling the crisis, financial implications and pressures and communication with caregivers and the board of trustees.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

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In this episode of Fireside Chat, we sat down with Joseph Impicciche, JD, President and CEO, Ascension to talk about telemedicine, communication with the board of directors, and looking ahead and re-opening under the new normal after the pandemic.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

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In this episode of Fireside Chat, we sat down with Sarah Krevans, President and CEO, Sutter Health to talk about telehealth medicine during the pandemic, communication with caregivers and the board of directors, overcoming financial obstacles, and working through PPE shortages during the crisis.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription

Sarah Krevans 0:02

Because providers we have to then say, how are we going to make this experience equal or better clinically? And for what patients? Is that appropriate? It's not going to be appropriate for every patient in every circumstance. And then, again, how do we improve the workflow, so that actually the video visit becomes less expensive for us to provide and ultimately less expensive for the purchaser.

Gary Bisbee 0:25

That was Sarah Krevans, President and CEO Sutter Health, speaking about the enormous increase in telehealth visits prompted by the COVID crisis and the responsibility of providers to ensure that telehealth visits are equal to or better clinically than a personal visit and that the workflow results in a less expensive visit and less cost for the payer. I'm Gary Bisbee, and this is Fireside Chat.

Sarah Krevans 0:49

When I sent out our March financials, I sent it out with a thank you note from me. And the reason I did that is - I was worried that our managers would look at it and they would feel that they had failed. Because in the last two months of March, and again, these are unaudited and we don't release external financials. But we are talking about this... we lost about 100 million dollars a week.

Gary Bisbee 1:12

All health systems are losing hundreds of millions of dollars due to the COVID crisis, and larger health systems will be losing billions. It has remarkably changed virtually every aspect of leadership and operations. Our conversation included Sarah's approach to staying connected with the Sutter caregivers through adverse situations like the dramatic shortage PPE, pressure on the supply chain system going from the use of 1,000 N95 masks a day to 5000 daily, and up to 41,000 surgical masks a day. We covered the COVID-19 waterfront. I'm delighted to welcome Sarah Krevans to the microphone.

Good morning, Sarah.

Sarah Krevans 1:54

Good morning, Gary. How are you this morning?

Gary Bisbee 1:56

Excellent. Thank you. We're pleased to have you at the microphone and welcome. The focus of this conversation is COVID-19. Thank you, again, so much for participating. We're all facing challenges due to COVID-19. And we've learned that the surge is highly variable by region, what's the status of the surge in Sutter Health primary service areas.

Sarah Krevans 2:18

So Sutter Health operates primarily in Northern California, although we do have one hospital in Hawaii. And in California, we had some of the earliest cases in the country. But we also had a state that acted very early in terms of putting in place a shelter in place. And so if you looked at some of the initial models, particularly the model out of the group from the University of Washington that I know many, many providers across the country follow many states are following. Those early models showed a surge that would happen mid to late April, and showed also a very high number of deaths of a very high number of cases and showed the health systems in California not being able without adding capacity to keep up with the demand for beds, ventilators and particularly ICU beds, and what we've really seen in California is what all of us had hoped for which is where starting to fall off of in an exponential increase in cases. And so if you look at it, we are not one of those states that seen a doubling of case rates every three or four days, a doubling of deaths every three or four days. While this has still been really hard in California,

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In this episode of Fireside Chat, we sat down with Albert Bourla, Chairman and CEO, Pfizer to talk about the development of a vaccine for COVID-19, their international and U.S. contribution to the battle against the pandemic, the five-point plan to rally the biopharma industry and their desire to collaborate on combating global pandemics and partnering with leading health systems in areas of shared interest.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription

Albert Bourla 0:03

As a leader, I think staying focused on what matters most has been essential to serve as we are living our values and supporting our employees and communities.

Gary Bisbee 0:14

That was Albert Bourla, Chairman and CEO, Pfizer. Albert was responding to a question about leadership in times of crisis. And he spoke about the importance of a laser focus by his executive leadership team and himself. I'm Gary Bisbee. And this is Fireside Chat. Earlier in his Pfizer career, Albert was Group President of Global Vaccines Oncology and Consumer Healthcare businesses. We dug into the value of vaccines and the issues related to developing a vaccine for COVID-19. He referred to Pfizer's entering for vaccine candidates into testing during April. To get to market as quickly as possible. Pfizer will concurrently modify and ramp up existing manufacturing facilities to meet the needs of the clinical trial and VA Our conversation covers Pfizer's international and US contribution to the COVID-19 battle. Pfizer's five point plan to rally the biopharma industry to collaborate on combating global pandemics and Pfizer's commitment to partnering with leading health systems and areas of shared interest. Let's welcome Albert Bourla to the microphone.

Good afternoon, Albert. We're pleased to have you on the microphone. Welcome.

Albert Bourla 1:27

Thank you very much, Gary. It's a great pleasure to be with you.

Gary Bisbee 1:30

Well, by way of background for today's conversation, again, we appreciate your being with us due to the COVID-19 outbreak. We're all facing challenges and seeking opportunities to contribute none more than Pfizer as a leading multinational pharmaceuticals and vaccines company. So to begin our conversation, Albert, could you share with us what Pfizer is doing to contribute to support the Battle of COVID-19 both internationally and in the US?

Albert Bourla 1:56

Of course, first, let me say that it is both a great privilege and a great responsibility for our colleagues to serve patients in general. And particularly at this moment in time, we have an opportunity to demonstrate to society, the power of our science, and the quality of our character because we want to make sure that at the end of this crisis, we find ourselves in the right type of humanity as well. So as one of the world's largest pharmaceutical companies our focus in this crisis is dual. On the one hand, we are focused on protecting the safety and well being for our colleagues, while maintaining the continued supply of our medicines to patients around the globe. But also on the other hand, and more specifically, we are working with experts, both within and outside of Pfizer to contribute medical solutions to this pandemic. So let me share some of the examples. This is what you were asking, first of all, in finding medical solutions or collaborating with industry partners and academic institutions to develop potential new approaches to prevent and treat COVID-19 We aim to leave no stone unturned and I'm pleased to say we have made advances on multiple fronts. We announced recently that Pfizer and biotech have entered into a global cooperation agreement to co-develop biotech's potential first and last mRNA based Coronavirus vaccine program aimed at preventing COVID-19 infection. We plan to jointly conduct clinical trials for these vaccines in ...

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In this episode of Fireside Chat, we sat down with Wright Lassiter, President and CEO, Henry Ford Health System to talk about crisis-generated innovations and how he has encouraged his team to sustain and build on those innovations post-crisis.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

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In this episode of Fireside Chat, we sit down with Steve Huebner, Board Chair, SCL Health and Board Member, Intermountain Healthcare to talk about supporting management during a crisis, how he defines priorities as board chair, and tips for how to have a successful virtual board meeting.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription

Steve Huebner 0:04

I think the thing that's most rewarding, Gary, is just working with a really good group of individuals. As you know, not for profit boards: if there's any compensation at all, it's very modest. You really have to be committed to the purpose. You have to be committed to governance and you have to be committed to that board. I found I thoroughly enjoy the boards I'm on. I think it's a committed group of people really focused on governance and wanting to be the best that we can be in fulfilling our responsibilities.

Gary Bisbee 0:34

That was Steve Huebner Board Chair SCL Health, Board Member, Intermountain Healthcare, and interim CFO Seattle Cancer Care Alliance. He is speaking about the most rewarding aspects of serving on a health system board of directors. I'm Gary Bisbee and this is Fireside Chat. Steve has had a distinguished career with KPMG and Arthur Andersen, where he worked closely with the boards of directors of client health systems. He's been on the SCL and Intermountain board since two 2012 where he's had the opportunity to be on the inside of health system governance. Steve reviews the importance of the board and supporting management during the Coronavirus pandemic, how he defines priorities as board chair, and he provides tips for how to have a successful and productive virtual board meeting. He reviews the COVID-19 related policies at each health system, the challenges presented to the Board of Directors during the crisis, and their unique responsibilities. Steve is a thoughtful and experienced healthcare professional and health system chair and board member. Let's welcome Steve Hebner to the show.

Well, hi, Steve, thank you for joining us on Fireside Chat.

Steve Huebner 1:39

Thank you, Gary. Looking forward to this.

Gary Bisbee 1:41

We go way back to your KPMG days and now you're a board member of course at SCL health and Intermountain Healthcare. Why don't we kick off Steve. You're in Seattle of course and that was where the first national awareness of Coronavirus hit. How is Seattle doing these days?

Steve Huebner 2:02

Well, I think Gary, we're dealing with all the same things that everyone else is. We probably just started dealing with them earlier. I would say certainly over the weekend, and early this week cases continue to grow. Every day that I look at the paper, we have a few hundred more cases. Hopefully, we're not growing exponentially, but we certainly are continuing to grow. And we're dealing with everything our governor just came out last evening with a stay at home proclamation, which is quite restrictive. Unless you're an essential business as we are with healthcare. I think people are taking it seriously and really trying to stay off the road, stay out of business, and really comply with it. We may be ahead a little bit but I think other major cities are catching up and surpassing and we have to keep doing the things we need to do.

Gary Bisbee 2:50

Oh, I was gonna ask how are you adapting but with this new stay at home policy, so will you be going in? I mean, you're working in essential healthcare industry?

Steve Huebner 3:00

I will be going in some, but virtually all of our meetings are being done virtually. So with that in mind, we feel like as best we can the executive team should be complying as well. There are certain things that we may have to be in office for, but it's very limited.

Gary Bisbee 3:16

There's a question on the table, which is, well,

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In this episode of Fireside Chat, we sat down with Dr. Marc Harrison, President and CEO, Intermountain Healthcare to explore the impact of the coronavirus pandemic on healthcare, his pathway for preparation, consolidation around the challenges, communication with the board of directors, and Intermountain’s finances.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

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In this episode of Fireside Chat, we sat down with Peter McCanna, President, Baylor Scott & White Health System to discuss dual transformation for a large health system, the fundamentals of a health system business model, how to think about an asset-light structure and its relationship to the health continuum, digitization, and how to attract top-tier talent.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription

Peter McCanna 0:01

We have to be much more nimble. Our new competitors are coming into parts of that care continuum, and really going after the profit pools and the patients within them. And we've either got to partner with them or we've got to be as nimble as they are.

Gary Bisbee 0:16

That was Pete McKenna, President Baylor Scott and White health system, speaking about competitors attacking Baylor along the health and care continuum. I'm Gary Bisbee. And this is Fireside Chat. In our conversation, Pete gave one of the best descriptions of dual transformation for a large health system that I've heard. He outlined the requirements for the legacy health system business to compete, and he explored the three sources of capital for the new transformational business. Pete reviewed the fundamentals of a health system business model, how to think about an asset-light structure, and its relationship to the health continuum. What role digitization plays in Baylor's strategy and how to attract top tier talent including from outside healthcare. Stay tuned for Pete's description of his background and where he developed the foundation for leadership. Let's welcome Pete McCanna to the show. Welcome Pete, great to have you on the podcast today.

Peter McCanna 1:11

Great to be on the podcast, Gary.

Gary Bisbee 1:12

We were chatting before of course we're early stages of the Coronavirus pandemic. And we were chatting about what you're doing at Baylor Scott and White, which I found particularly interesting. If you don't mind, let's cover that a bit before we get into our discussion about the business model. But one of the things we were chatting about is where you actually are digging up information. Right now, where do you go for information about the coronavirus pandemic?

Peter McCanna 1:42

What I try to do is have a diversity of sources. Obviously, the clinicians within our organization are really up to speed. I turn to our vendors, particularly vendors in the supply chain because some of the difficulty we're going to have is going to be around the availability of supplies. Professionals in other markets that have been hit early with the virus, namely the Seattle Washington area would be an example of that. I read all the sources New York Times, Wall Street Journal. Particularly focusing on countries like Italy, what are some of the questions we need to be asking ourselves. And then some of the podcasts, Wall Street Journal, The Daily, those things that had some really good coverage, a little bit more in-depth coverage on it, but really taking that all in as a way to help educate me on it.

Gary Bisbee 2:32

You also said you reached out to the various health insurers to try to get their view of how they were proceeding and thinking about it.

Peter McCanna 2:39

Yeah, we want to understand how they're thinking about it because we're going to have a large number of patients and really understanding how to treat them is what the coverage will be so that there are no barriers to people seeking care is a really important component of this.

Gary Bisbee 2:56

Assuming that the surge begins in Dallas, How are you thinking about testing?

Peter McCanna 3:02

On testing, which is really a key component nationwide, we've developed a capability and a capacity to do a certain amount of testing per day. And what we're trying to do is for those potential patients that they suspect that...

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In this episode of Fireside Chat, we sat down with Nancy Howell Agee, President and CEO, Carilion Clinic to talk about the needs of caregivers, patients and the community during the COVID-19 pandemic. We also talked about operating margins for nonprofit health systems, updating the community through live streams and news conferences and how she communicates with the board of directors during the crisis.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

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In this Fireside Chat, we sat down with Dr. David Callender, President and CEO, Memorial Hermann Health System. We talked about the COVID-19 pandemic, lessons learned in crisis management, the importance of communication with state and local officials, and Memorial Hermann's growth strategy.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

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In this Fireside Chat, we sat down with Rod Hochman, M.D., president and CEO of Providence St. Joseph Health. We talked about the role of a leader in a crisis, the need for communication with the board of directors, flexing health delivery assets, and much more.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

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In this episode of Fireside Chat, we sat down with Michele Baker Richardson, J.D., Board Chair-Elect, AdvocateAuroraHealth, and President and CEO, Higher Education Advocates, LLC, to discuss how healthcare boards are handling the coronavirus (COVID-19) pandemic.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

Transcription

Michele Richardson 0:00

The first thing that we thought about again, we were just together, was the safety of our caregivers, the people who are our team members, and who are out there every day on the frontlines. That was the number one priority for each and every one of our board members and the safety of our patients who really entrust us with their care.

Gary Bisbee 0:22

That was Michelle Baker Richardson, Board Chair-Elect, AdvocateAuroraHealth, and President and CEO Higher Education Advocates, speaking about the board of directors top priority during the COVID-19 outbreak, which is ensuring the safety of caregivers, employees, and patients. I'm Gary Bisbee, and this is Fireside Chat. Let's now listen to Michelle and what she finds the most rewarding about serving on a health system board of directors.

Michele Richardson 0:47

You never get bored. There are great questions and you really have an opportunity to impact the lives of people and communities really at their most vulnerable.

Gary Bisbee 0:58

Governance of any healthcare organization has top priorities are protecting the organization and its assets, recruiting, retaining, and evaluating the CEO and working closely with management on the strategy and budget. During a crisis like the COVID-19 outbreak, the board is an all-important representative of the health system to the community. Michelle is experienced, thoughtful, and knowledgeable, and she has served as a health system director for 16 years. She's been a Board Chair of Advocate Health System, a predecessor organization to AdvocateAuroraHealth, where she is chair-elect. Let's welcome Michelle Richardson.

Well, good morning, Michelle. How are you?

Michele Richardson 1:39

Good morning, Gary. I am doing well. Just every day but the sun is shining. I'm happy to be here. So glad to be here with you this morning.

Gary Bisbee 1:47

Well, good for you. We were both talking before about how fast things are moving and you were saying that you had a board meeting a week and a half ago and it seems like a year since then. Things are moving so quickly.

Michele Richardson 1:59

Why That's exactly right. It's just about a little over 10 days and the world has certainly shifted under our feet. We are all adjusting to the new normal.

Gary Bisbee 2:08

Exactly. We'll get back to that in terms of your board work. Let's talk about you. You grew up in Queens and went to school in the East but you've lived in Chicago for 25 years. How do you view yourself as a Midwestern or an Easterner?

Michele Richardson 2:23

Well, you know, once an Easterner probably always an Easterner, but I have lived on the East Coast and grew up on the East Coast, originally from New York. Lived on the West Coast for a little bit of time, but I have spent more time in the Midwest than anywhere else. So I am certainly stamped with East Coast sensibilities but happy to have spent lots of time in the Midwest. I married a Midwestern- that's how I got here.

Gary Bisbee 2:48

Well, they are good people, aren't they?

Michele Richardson 2:50

They are, indeed. Salt of the earth.

Gary Bisbee 2:53

You went to Brown and then off to Yale Law School, why law?

Michele Richardson 2:57

So you know, it's a great story. I actually started out working in advertising and marketing, and we'll connect that to my current work. But I worked in New York on Madison Avenue for a division of Young and Rubicam, actually when I came out of school.

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Next up in our special COVID-19 series on Fireside Chat, we sat down with Stewart Dowrick, CEO of Mid North Coast Local Health District (MNCLHD) in Australia. We discussed the COVID-19 pandemic, which is tracking similarly in Australia and the United States.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

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Our host, Gary Bisbee, introduces a special series of Fireside Chat covering the coronavirus (COVID-19) pandemic. Don't miss previous conversations with Dr. Julie L. Gerberding and Dr. Mark McClellan and stay tuned for more episodes in the future.

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In this episode of Fireside Chat, I sat down with Dr. Mark McClellan, Director and Professor, Duke’s Margolis Center and former FDA Commissioner and CMS Administrator to talk about containment of the coronavirus (COVID-19) pandemic and response from the federal government and the private sector.

Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.

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In our latest episode of Fireside Chat, we sat down with Dr. Julie L. Gerberding, EVP and Chief Patient Officer, Merck & Co, Inc. and former Director, CDC. We talked about the coronavirus (COVID-19) pandemic and the importance of trust at the local clinical level.

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In this episode of Fireside Chat, we caught up with Peter Fine, President, and CEO of Banner Health. We discussed visibility, healthcare affordability, and using clinical data responsibly.

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In this episode of Fireside Chat, we caught up with Tina Freese Decker of Spectrum Health. We discussed physician leadership, the changing definition of healthcare, Spectrum’s integrated model, and her transition to CEO.

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In this episode of Fireside Chat, we spoke with Dr. Paul Rothman, Dean and CEO of Johns Hopkins Medicine. Dr. Rothman talks with us about precision medicine, AI, and technology in the future of healthcare.

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In our latest Fireside Chat, we sat down with Mike Butler to talk about scaling a healthcare organization, how deconstruction leads to growth and managing affordability. Mike Butler is the President of Operations and Strategy at Providence St. Joseph Health.

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In this episode of Fireside Chat, we sit down with Marna Borgstrom, CEO of Yale New Haven Health System. Marna talks to us about improving patient care, the price of healthcare, and academic medicine.

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In this episode of Fireside Chat, we sat down with Dr. Tom Mihaljevic, CEO of Cleveland Clinic. Dr. Mihaljevic took some time to discuss family culture, global expansion, technology in medicine, and Cleveland Clinic’s five-year plan.

Transcription

Tom Mihaljevic 0:02

I believe it is always challenging. But I think the underlying culture, the culture that attracted me to Cleveland Clinic that has been here pretty much since the inception of Cleveland Clinic has been pretty much a family culture. We're a very egalitarian organization. And so when I stepped into my role over two years ago, it was relatively easy to articulate, articulate the ethical framework for decision making in our organization and our ethical framework that anyone can relate to is fairly simple. We treat our patients and each other like a family, and we treat Cleveland Clinic as our home.

Gary Bisbee 0:44

That was Thomas Malevich, President and CEO of Cleveland Clinic and I'm Gary Bisbee. This is Fireside Chat. Dr. Mihaljevic was responding to a question about maintaining the Cleveland clinic's family culture in the face of its growth to 70,000 employees and medical schools. Cleveland Clinic will celebrate its 100th anniversary next year in 2021. It's a multi hospital multi country health system and one of the US is largest. Dr. Mihaljevic grew up in Croatia and he practiced as a cardiothoracic surgeon. He's in his second year as CEO, as you listen to the conversation, look for the three basic principles underlying the Cleveland clinic's five year plan, including what will not change, but also for his response to the question of leadership learnings from his international experiences. Let's join the conversation.

Well welcome, Dr. Mihaljevic. It's good to have you here. Tom.

Tom Mihaljevic 1:39

Thank you very much.

Gary Bisbee 1:39

Appreciate your time. I know you're exceptionally busy. So this is terrific. Well, why don't we get right into the podcast? Could you describe the Cleveland Clinic it's always fun to hear the CEO describe it because it's usually different than the printed material.

Tom Mihaljevic 1:55

Well, Cleveland Clinic is a wonderful organization. So coming from a CEO who's very bias. It is an international integrated healthcare delivery system. It is physician-led. It has always been physician-led. It is about to be 100 years old. We're one year shy of our centennial. And it has a very unique governance model. It is being led by a physician. It has a patient in a center. And it has one mission that consists of patient care, research, and innovation. It is an increasingly large organization that we care we employ 66,000 caregivers worldwide.

Gary Bisbee 2:39

A large organization is clearly the case a lot of people don't know. Actually, if the Cleveland Clinic was a listed company on a stock exchange, you'd basically be number 300 in the fortune 500. Which would put Cleveland Clinic the same sizes Xerox which is kind of a classic name. So, I bet when you started your career as a physician, you weren't thinking about leading an organization the size Xerox.

Tom Mihaljevic 3:07

Yeah, I couldn't no, definitely, definitely not. I could guarantee you that it was not ...never crossed my mind.

Gary Bisbee 3:14

But I know you've really focused on family culture if I could use that term. And I'm wondering how difficult it is leading a large super large organization, almost 70,000 people? How tough is it to keep the family culture with that, with that large an organization?

Tom Mihaljevic 3:31

I believe it is always challenging, but I think the underlying culture, the culture that attracted me to Cleveland Clinic that has been here pretty much since the inception of Cleveland Clinic has been pretty much a family culture. We're a very egalitarian organization. So when I stepped into my role over two years ago, it was relatively easy to articulate, articulate the ethical framework for decision making.

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On this episode, Gary sits down with Terry Shaw, President and CEO of AdventHealth.

Terry and Gary discuss how Terry rose from summer intern to CEO over a 35 year career, what his top challenges and lessons have been as a CEO, and how his team is driving AdventHealth to evolve and innovate ahead of the marketplace.

Transcription

Terry Shaw 0:00

All CEOs make the same three mistakes. And here's what I think they are, number one, the facts are we don't deal with HR issues soon enough. Number two, we allow the inertia of the organization to push back on our plan and we give up. Number three, we come to work and tend to focus on what we're comfortable with as opposed to what we really ought to be doing.

Gary Bisbee 0:24

That was Terry Shaw, President and CEO Advent health and I'm Gary Bisbee. This is Fireside Chat. Terry was responding to the question during your first three years as CEO what observations have you made about being a CEO? Advent health as a multi hospital multi state health system and one of the 10 largest not for profit health systems in the US. Comparable in revenue to Commonwealth Edison or Bed Bath and Beyond. Both public utilities and retail have significant relevance to healthcare delivery, as we explore with Terry. This wide ranging conversation offers affordability of health care for patients and consumers, the influence on health care of its largest payers, federal and state governments, the Advent health growth strategy, and much more. Let's pick up the conversation.

Well, welcome to the podcast. Terry.

Terry Shaw 1:13

Thank you very much, Gary.

Gary Bisbee 1:14

Good to be here in Orlando. I left washington dc three hours ago was 26 degrees.

Terry Shaw 1:20

Yes, a nice 70 outside today.

Gary Bisbee 1:24

I may not go back. I may just stay here. So Advent health is one of the 10 largest not for profit health systems in the country. Congratulations on that. In fact, I was wondering, when you started as a business intern over 30 years ago, do you have any recollection of what the size what the revenue would have been then?

Terry Shaw 1:45

When I started back in 85? I believe our combined net revenue was right around 350 million. So it's, you know, lots of change and the growth has accelerated and we've been very very fortunate to participate in that growth.

Gary Bisbee 2:02

So when you became CFO in 2000...

Terry Shaw 2:05

We were we were about 3 billion. And we grew from 3 billion to about 9 billion by 2016. And then the last three years, we've grown from nine to 12 billion.

Gary Bisbee 2:18

Yeah, amazing, amazing growth. Well, would you describe Advent health for us? It's always fun to hear how the CEO describes the health system.

Terry Shaw 2:28

Gary Advent health as a faith based consumer driven, clinical company. We pride ourselves and taking care of the whole person. And we're doing our best to with our new brand. Our tagline is to help you feel whole. Two thirds of our revenues are in the state of Florida. A third of our revenues are outside the state of Florida. We have the opportunity to have long lasting relationships, which allows Advent health to be relevant in markets that we wouldn't have without those partnerships. An example is Ascension health care is a partner of ours in the Chicago market. Common spirit is a partner in the greater Denver market, and Texas Health Resources as a partner in the Fort Worth market. And we've been blessed over the years to be in growing, stable markets. And we look forward to becoming a $20 billion organization over the next five years.

Gary Bisbee 3:28

So you've been CEO for three years, seems either longer or shorter, depending on your point of view

Terry Shaw 3:34

Actually seems like just yesterday.

Gary Bisbee 3:36

One of the things that I attribute to your leadership is the focus on the consumer. Maybe we'll have a few questions about that later. But is that fair, I mean,

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Fireside Chat is a weekly podcast discussing how leading health system CEOs and healthcare leaders are navigating the evolving healthcare landscape while leading high-performing teams and driving innovation across the industry.

Join Gary Bisbee, Co-founder and Executive Chairman of The Health Management Academy as he conducts weekly interviews with leading thinkers and executives in healthcare.

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