Becker's Hospital Review

11 CEO / STRATEGY Trinity Health CEO's plan to drive 75% of revenue from community-based care By Alan Condon L ivonia, Mich.-based Trinity Health is accelerating a sweeping transformation of its care model, one that shis the center of gravity away from hospitals and toward outpatient, virtual and home-based services. Getting there requires overhauling a hospital-centric mindset that still shapes how most large health systems think, invest and operate, while also closing a $1.5 billion financial gap stemming largely from Medicaid funding cuts through H.R.1. e strategy is not new, but the urgency behind it has intensified amid mounting financial pressures, policy uncertainty and rising costs, according to Mike Slubowski, president and CEO of Trinity Health. "Our primary strategy has not changed. And it's the movement from hospital centric to community based services," Mr. Slubowski said during an April 13 fireside chat at Becker's Annual Meeting. "Our medical groups, ambulatory surgery centers, freestanding imaging centers, virtual and home care, hospice and PACE programs — that's where we're focusing our investments right now. "Our community-based services, outpatient and virtual, represent 62% of our revenue, and I see that going to at least 75% of our revenue over the next three to five years." e $1.5B problem driving the strategy Behind Trinity Health's transformation is a widening financial gap, and one that continues to grow as reimbursement lags behind rising costs. Trinity Health already enters every budget cycle with a structural gap to close. e spread between annual cost increases and reimbursement rate growth runs $1 billion to $1.4 billion each year, which the system has learned to manage through operational discipline and continuous improvement. at baseline pressure has become the cost of operating at scale in nonprofit healthcare. "We invest $2.9 billion a year in community impact. at's 11% of our revenue," Mr. Slubowski said. "And every year, the gap between revenue increases, price increases and cost increases widens." Recent federal policy changes have added even more pressure. "[H.R.1] adds an additional $1.5 billion to our health system, so we're in the throes now of how we're going to close that gap," he said. Even beyond that legislation, the financial headwinds persist. "Anyone following what's happening with the federal government right now — even on the Medicare side — knows it's still 'death by a thousand cuts.' So we have to be even more efficient," Mr. Slubowski said. To combat this, Trinity Health has launched Repositioning Trinity Health focused on three core areas: refining clinical service lines, expanding community-based care and aggressively reducing costs. "It's a focus on both sharpening our focus on clinical programs that we're supporting, continuing to grow what we call our community based services, and a heavy focus on cost management — especially administrative expense," Mr. Slubowski said. e health system has already identified a significant portion of the savings needed. "Of that $1.5 billion, we have identified about $850 million and we're working on the other part of it to move forward over the next two years," he said. From hospitals to communities: Building the 75% model At the center of Trinity Health's long-term strategy is a deliberate shi in where and how care is delivered — moving away from inpatient settings and toward a distributed, community-focused model. "You have to start with a strong primary care base, which we continue to build. From there, every one of our communities is different in terms of the physician makeup and the needs of the community," Mr. Slubowski said."Everybody knows the basic service lines — cardiology, oncology, neurosciences, etc. What's the right mixture for each market that we're in? at's really what we're focused on getting right." e system is prioritizing investments that are less capital-intensive and more flexible than traditional hospital infrastructure. "We've called them asset-light investments rather than big brick and mortar," he said. "We're doing a lot in both the virtual space and in the freestanding space." at includes growth across ambulatory surgery centers, imaging, home care, hospice and PACE — an area where Trinity Health is the largest nonprofit provider in the country. "It is truly a full at-risk program," Mr. Slubowski said of PACE. "We manage their care and the social needs that they have within the fixed budget." He sees the model as increasingly essential as the population ages and alternatives to institutional care become more critical. "It's great for seniors who want to still live at home," he said. "With the challenges in the nursing home industry and everything else that we're facing, we've got to have options for people to live their whole life and do it within a cost effective way." As community-based care expands, the role of hospitals will evolve rather than disappear. "e role of the hospital will be important, but more narrow in scope," Mr. Slubowski said. "And for any of the remaining hospital-based ambulatory services … we've got to be more efficient at how we deliver that." Epic, AI and the discipline to execute Executing on this transformation at scale requires not just strategy, but operational discipline — particularly around technology. Trinity Health has standardized on a single Epic EHR instance across the system, a move Mr. Slubowski said is already delivering meaningful efficiencies. "Before we moved to a single instance, we had 20,000 order sets. Now we have 600 because our clinicians work together on what were the optimal order sets," he said.

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