Learn how some successful physician leaders have done things differently for better results from these reports from the front lines and the C-suite.
Working in a swirl of change and challenge, physician leaders know creativity — which manifests itself as the successful implementation of fresh ideas in an unpredictable environment — is needed now more than ever.
But the health care industry is slow to change, even if a concept has documented evidence in its back pocket. Creative ideas — unproven and outside the norm — feel risky, and implementing them in a risk-averse culture is its own challenge.
So where does creative leadership come from? We spoke with physician leaders who have been credited with championing creative ideas, nurturing them to take hold, and benefiting health care itself — first in their own organizations, then throughout the industry.
THE BIRTH OF BUNDLED PAYMENTS
Few people were talking about bundled or episode-of-care payments in 2006 when Geisinger Health System started accepting flat-rate payment for a predetermined set of services to address a specific medical situation.
That includes Glenn D. Steele Jr., MD, PhD, who had moved to central Pennsylvania five years earlier to become CEO of a struggling health system and its affiliated health plan. It was an element of Geisinger’s ProvenCare program — now famous as a pioneer in payment reform — but it was not the innovation he was most excited about.
Steele arrived at Geisinger at a difficult point in the organization’s history, and he needed to find a way forward. Hundreds of meetings later, he and his leadership team hit upon their idea: Devise protocols to consistently deliver better patient outcomes, thereby reducing the high costs of complications from suboptimal care. ProvenCare’s price guarantee was almost an afterthought.
“A lot of people focus on the single price, but that was less important than the actual commitment to fundamentally change so that we adhere to accepted care pathways for high-frequency, high-cost, highly variable ways of taking care of patients,” Steele says.
Because Geisinger’s delivery system and health plan have the same owner, leaders seized the opportunity to pay for better care in a new way that would be financially rewarding to both payer and provider. “At the time we started to think about using payer and provider together to attack total cost of care, that was a radical, radical concept,” Steele says.
Geisinger branded that concept — adherence to evidence-based care pathways for specific interventions or chronic care management in exchange for a guaranteed price — as ProvenCare. Within a year, the New York Times touted the idea in a story that began “What if medical care came with a 90-day warranty?”
Thus was born one of the first — and most promising — payment-reform ideas, spawning new thinking that is reshaping health care payment across the country.
Today, Steele chairs xG Health Solutions, a Geisinger affiliate that is spreading delivery-improvement strategies throughout the industry. He and xG’s chief medical officer, Steve Pierdon, MD — formerly Geisinger’s long-time chief medical officer — recalled how the idea was hatched.
Were you confident the ProvenCare idea would work?
Steele: Everything I did as a leader at Geisinger was hedged; I always thought about whether it would work or it wouldn't work. But, regardless of whether the ProvenCare name caught on or not — and it caught on much more than I would ever have expected — I was convinced that a huge amount of what we did in health care did not bring benefit to the people we served, and, in some cases, actually hurt them.
I was convinced that the re-engineering — if we could take out 15, 20, 25 percent of what I call the “crack” in health care — would help our patients.
So this was a top-down strategy?
Steele: The question we were asking is, would we improve outcomes — both near-term and long-term — and would we be able to decrease cost? Only after all of that was settled as a concept did we ask our men and women in the various multidisciplinary service lines — they're now called institutes at Geisinger — to give us their targets for what they wanted to improve.
So, it was a top-down strategic imperative, but the actual choice of what ProvenCare was targeting was done by the doctors and the nurses who are in the trenches. They were the ones that picked what the innovation targets should be. And we in central administration tried to enable the data flow and enable the ability to actually do the health care re-engineering.
Geisinger helped explore new thinking for compensation. By delivering better patient outcomes and reducing the high costs of complications, payment for better care in a new way would be mutually rewarding to both payer and provider.
How did you get Geisinger clinicians to support this idea?
Steele: The context is important here. Geisinger had just come off of a three-year failed merger, so there was a general morale problem and operations were awful. If you're going to try to fundamentally transform something, that's a perfect near-death baseline. It's very difficult to transform something when the organization is doing pretty well.
Everyone was going to have to work much, much harder than during the malaise of the dysfunctional merger. So if people didn't agree with what was essentially a different social contract that we needed, we replaced them.
The big bet here was whether we could recruit to the middle of central Susquehanna [Valley]. Because if we couldn't recruit new people, it would have been a disaster. But we got early success, and it became easier and easier to recruit people because they wanted to be at a cool place that was doing stuff that other places weren't doing.
I'd say we turned over a little bit more than 50 percent of our leadership, both clinical and administrative, in a fairly short period of time.
Payer/provider collaborations are somewhat common these days but, when ProvenCare was in the idea stage, that wasn’t the case. Was it easy to see that the common ownership of the health system and the health plan provided an opportunity?
Steele: The consultants were running around telling most of the insurance company/provider organizations that they needed to split up. But we personally had the idea that we might be able to do this kind of transformative arrangement and, instead of being adversaries, we could work together.
Only 50 percent of our revenues came from the Geisinger insurance company. We applied what came to be the re-engineering for a huge amount of our care, no matter who the payer was. But the financial arrangement and the sweet spot to really do the innovation and share the data and share the commitment was only between us as a payer and us as provider.
Pierdon: One way this partnership proved itself is that, as we started redesigning primary care, we were able to develop the metrics and workflows that made us more reliable, so we could actually move the health plan’s HEDIS [Healthcare Effectiveness Data and Information Set] metrics.
We worked with the health plan to have them select metrics in their HEDIS profile that they wanted us to improve. Because we represented 50 percent of their patient base, our performance improved the entire health plan's quality scores. So it became a very collaborative and positive relationship.
What were some of the challenges of implementation?
Pierdon: In primary care, we chose diabetes and preventive care as our first two processes. We were really focused on developing metrics that demonstrated that we were doing everything that was recommended for all the patients.
Most of the time, recommended-practice metrics are individually reported — 70 percent of patients got this, or 60 percent of patients got that. Our cultural shift was measuring, “What percentage of patients has gotten everything that's recommended?”
Getting to that philosophical rigor and developing the support needed to deliver best practices was really the hurdle.
What were the success factors in making it work?
Pierdon: In our service line, we had a leadership forum that occurred every month, where we actually would have dialogues and debates about this. That provided a lot of testing and pushback from the intermediate leaders of the organization relative to ideas on a lot of things. I think that was a big help for us to troubleshoot in advance.
Steele: There were a lot of things that did not work, or there were things that had to be modified along the way. So, in retrospect, it sounds like a very smooth story, concept to transaction. It was not.
Pierdon: I can vouch for that.
DISRUPTING FROM THE INSIDE
When Providence St. Joseph Health, one of the nation’s largest not-for-profit health systems, sought a new chief financial officer last year, it recruited Microsoft’s managing director for business development and growth strategy.
“He had never spent a day in health care,” says Rod Hochman, MD, chief executive officer at the $24 billion health system. “He's really forcing us to look at things a little bit differently than we have in the past.”
Which was, in fact, the point behind hiring Venkat Bhamidipati. “What we've tried to do is employ into our organization people who think differently and help us really change what we have to do as a health system,” Hochman says.
That strategy started about four years ago, as Hochman and his colleagues scanned the landscape for lessons learned from other industries. Kodak and Blockbuster fell to history, proving that external factors, if ignored, can cut down even iconic organizations. People will always want photographs, but they no longer need film. And they will always need health care, but every health system is threatened by new entrants, new technologies and new consumer demands.
That’s why, starting four years ago, Providence made three outside hires, all with “executive vice president” job titles, giving them major roles in the health system’s future.
Amy Compton-Phillips, MD, was named chief clinical officer for Providence Health & Services after spending more than 20 years at the tightly integrated Kaiser Permanente health plan and provider organization.
Providence St. Joseph Health made it a point to bring in some leadership voices that don’t speak from a health care background. The idea was to “shake up some of the assumptions that you’ve had before,” the system’s CEO says.
Rhonda Medows, MD, served as chief medical officer for United Health Group, one of the largest for-profit health plans, before joining Providence St. Joseph as executive vice president of population health. In that role, she is responsible for physician services, payer strategy and contracting, care management, the Providence Health Plan, population health informatics and more.
And Aaron Martin came to Providence St. Joseph as its chief digital officer from Amazon, where he helped develop the Kindle — a direct challenge to Amazon’s original business model of selling books online. “With the digital revolution, we said we'd better get someone who's living in that world, someone who knows how to disrupt, to come into our organization,” Hochman says. “Otherwise, we won't stand a chance.”
Among other things, Martin — who also had no previous health care experience — is responsible for driving innovations that increase convenience, lower cost and improve quality.
“When you bring in someone from the outside, they help change your culture because they shake up some of the assumptions that you've had before,” Hochman says. “As you know, people from Amazon look at their customers a lot differently than we have in traditional health care.”
BETTING THE FARM
Gary S. Kaplan, MD, was just two years into his tenure as chairman and CEO of Virginia Mason Health System in Seattle, Washington, when he heard Paul O’Neill, the former U.S. Treasury secretary and Alcoa CEO, who was the keynote speaker at the Institute for Healthcare Improvement’s annual meeting, refer to his work.
“He said, ‘Virginia Mason … is taking a bet-the-farm, strategic approach to quality,’ ” Kaplan recalls. “Now, I was in the audience, and I knew that it might be a bet-the-career move, but I didn't know it was bet-the-farm.”
In the years since, hundreds of health care organizations have adopted Lean manufacturing principles and other systems-engineering approaches as a continuous improvement strategy. But in 2002, the idea of having a management system was unheard of, let alone one adopted from the manufacturing sector.
“This had never been done in health care, so there was a fair amount of anxiety,” Kaplan says. “But we knew that the status quo was not working. We were willing — which really was not being done in the industry, either — to admit that we didn't have the answers.”
The Virginia Mason Production System, now famous for its pioneering approach to quality improvement in health care, was developed as a solution to that challenge.
Shortly after Kaplan took the helm in 2000, the Virginia Mason board and executive team had developed a new strategic plan with a big goal: to be the quality leader in health care. “So we got very clear about quality as our core driving aspiration, as opposed to market share or size or revenue enhancement,” he said. “We needed something that's going to ensure that we can execute on an organizational aspiration around quality.”
As their search for that “something” began, Kaplan and his colleagues were introduced to the Toyota Production System by leaders at the aerospace company Boeing, another major Seattle corporation. Intrigued by the possibility that Toyota’s Lean management principles could be applied to patient safety and quality improvement, the health system experimented with a few rapid-process-improvement events. Then the Virginia Mason executive team flew across the country to see a small factory in Hartford, Connecticut, that had embraced the management philosophy wholeheartedly.
“What we heard from the front-line, blue-collar workers was, ‘Since this has been in place at this company, I can mistake-proof my work, I can ensure that there are no defects in the products that I'm delivering and I can help design the next workflow,’” Kaplan says. “They kind of blew us away.”
The team returned home convinced that health care’s front-line workers could be empowered to identify the root causes of suboptimal care and re-engineer processes to improve quality. The pushback was inevitable — patients are people, not cars; “standard work” means standard mediocrity — but Kaplan kept a focus on the strategic plan: The status quo was not going to improve quality.
Recognizing that many staff members would consider the Toyota philosophy to be a fad that would fade away, Kaplan focused first on convincing Virginia Mason’s most senior leaders that this was the way forward. “So much of quality improvement flourishes in the middle of the organization where you have your front-line champions, but they butt up against the C-suite, who are working on things that, in their minds, are more important,” Kaplan said.
That’s why, in the summer of 2002, he took the entire executive team to Japan to learn about the Lean manufacturing principles at a Toyota plant. “We came back and declared that Toyota Production System is our management system and we declared that we would call it the Virginia Mason Production System.”
In the years since, that management system has become embedded in Virginia Mason’s culture. The health system sends a team to Japan almost every year — Kaplan made his 16th trip this summer — for training and inspiration. And the philosophy has been baked deeply into the organization: Every board member must go on one of the Japan trips during his or her first three-year term to be eligible for a second term.
Kaplan, now more than 18 years into his tenure as chairman and CEO, says the commitment from the board and executive team has been the most important success factor for the Virginia Mason system. “That keeps our organizational feet to the fire,” he says.
CREATIVE OR CRACKPOT?
In some fields, creativity is associated with flash, fads and an eye toward fame. Medicine is not one of those fields.
“People get into trouble in their physician executive roles if they are selected because their leading traits are charisma, extroversion and excitement,” says Joel Reich, MD, a Connecticut-based physician leader for nearly 35 years.
Other creative-sounding red flags: slavish devotion to consultants, business-speak and buzzwords.
Physician leaders are successful only if they can lead physicians. And the most creative idea in the world will not fly if physicians are pulling their weight against it.
Reich, a chief medical officer at provider and payer organizations for nearly two decades, identifies two professional attributes that are essential to creative leadership:
- “It means that you deal honestly and directly with the upside and downside of situations and don’t sugarcoat bad news,” Reich says. “It enables trust and allows people to feel safe following you as the leader.”
- Continuous learning in clinical medicine and the business of health care. You can’t put forth a creative idea if you don’t know what you’re talking about. “When you go to meet with the finance people, you need to understand how shared savings contracting works, and you need to understand how the health system budget works,” Reich says. “It's not good enough to just know medicine.”
That’s why Reich completed master’s degree programs in medical management and in health/medical informatics. The latter helped him communicate the day-to-day challenges of clinicians to the people who buy, design and change the technology they use in their work.
“It’s a way of having your physician colleagues recognize that you are really able to represent them and not just come back and say, ‘The tech guys decided this …’ ” he says.
Lola Butcher is a freelance health care journalist based in Missouri.