Becker's Hospital Review

Save the Date: Becker's Hospital Review CEO Strategy Roundtable - Nov. 5, 2014 - Chicago 48 J ohn Toussaint, MD, CEO, led Appleton, Wis.-based ThedaCare for eight years before becoming CEO of the ThedaCare Center for Healthcare Value, a resource hub dedi- cated to performance improvement, transparency and payment reform. Dr. Toussaint took some time to discuss what he is seeing CEOs grapple with most, why he some- times feels frustrated with industry conversations about accountable care, and how he's seen one health system reduce its patient wait times by 47,000 days over four years. Question: Over time, have you seen any- thing different about the health system CEO role that maybe you didn't notice while you were in it? Dr. John Toussaint: I think these are some of the more complicated times if you think about the problems health system CEOs are facing today. The payment system is rapidly changing, and what are you supposed to do in that new world? That's a challenge. Revenues are going down sig- nificantly. We cannot just charge more and get away with it. I think from a financial manage- ment perspective, there's a new set of pressures. I talk to a lot of CEOs, and they are really feeling it. I don't think we had these kinds of financial pressures [before] — a country going bankrupt because of increasing healthcare costs, Wall Street Journal headlines continuing to highlight how high healthcare costs are. We have good evidence that you can dramati- cally improve the cost and quality of healthcare in this country. I've published quite a few articles about that, just in the last year. It's not as if we don't have anything we can do. There's a lot we can do. I think that's the challenge now for health- care CEOs — what are you going to do? You can't just wait for the insurance company to agree to a more lucrative contract. That's not going to work anymore. Q: Does that frustrate you ever? That you feel that there is evidence, but [account- able care] is still up for debate a lot? JT: I said it this morning in my talk, I published in the Journal of the American Medical Association in October an article that showed the Bellin Theda- Care Pioneer ACO reduced the total cost of care by 4.6 percent for 20,000 people and improved quality at the same time. So it's not like this can't be done. Now we know it can be done. Why aren't more people doing it? I'm a bit frustrated. That's why I come to meetings like ACHE and talk about it and talk to young [people] so they can try to fix the system. Most people I talk to on the delivery side think that the ACO is the right experiment to run. It is forcing us to work together and build a process that will, over time, improve care. We need to have the payment system redesigned though, for this to work. If you don't have a methodology to improve throughout the organization, you're not going to be as likely to improve. The method of lean is what I published in JAMA. It's not the manage- ment flavor of the day; it's actually a system. Q: What are some issues you're seeing CEOs grapple with most? JT: I think it's unclear what the right structure needs to be for the ACO. You're seeing a lot of mergers and acquisitions, so systems are getting bigger. I'm not sure bigger is better. The bigger or- ganizations get, the harder it is to build a culture of continuous improvement. You're bringing all these cultures together that are very disparate. I think that's a real dilemma. Is bigger really better? If it is, how big is big enough? One of the problems, and this is a problem the government handed us, is an organization must have at least 15,000 Medicare beneficiaries to be considered for the [Pioneer ACO] program. Well, ThedaCare I think had around 13,500, so it needed to partner with another organization. So that drives more of this bigger-is-better concept. The answer is definitely not in on that issue. I'm concerned that bigger is not better, especially with the operational components of what we have to do, which is improve the quality of care and re- duce the costs. It requires teams to do that, and by bringing in all these disparate organizations, it's more difficult to create team behavior. Q: The common argument is that by own- ing more of the continuum, [providers] will keep things… JT: More integrated, is what they're thinking. "If we own it, we'll integrate it." I can guarantee you that ownership doesn't necessarily lead to inte- gration. It's creating an aligned culture [that] is the hard part. If you look at any merger, one of the hardest things about that work is integrating the cultures of the organizations. In many cases, performance goes down before it goes up. I think that is part of the problem with bigger is better. The other question is — are we just going to end up with a few monopolies in different markets? And are those monopolies going to be used to set prices in the commercial market? I think there's a real risk there. Q: And what about the issues CEOs are most excited about? JT: I think there is some excitement around the fact that we can improve the system. I think the more forward-thinking people who actually know that we spend too much money on healthcare want to change it. And I think there are plenty of leaders in the United States today who think that's true. They'll be the ones to run these experiments and see if we can fix some of these problems. The Bellin ThedaCare Pioneer ACO is one of those experiments. They were one of the lowest- cost Pioneers to begin with, and to reduce costs by 4.6 percent on top of that means there is a huge amount of waste in the system. Even if you're good, you can improve. The highest cost Pioneers were around $16,000 per Medicare beneficiary per year — Bellin ThedaCare is at $8,000. There clearly is huge room for improvement. Q: A big criticism has been that all the Pioneers that have positive results were high-spenders to begin with, so they're getting back to normal. JT: But Bellin Thedacare was the third lowest to start with and moved to the lowest, so the point is Why Some Health Systems Aren't "Systems" at All: Q&A With Dr. John Toussaint, CEO of ThedaCare Center for Healthcare Value By Molly Gamble John Toussaint, MD

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