‘My po­si­tion is, when it comes to the risk side, you’ve got to part­ner’

Modern Healthcare - - Q & A -

An­thony Ter­signi, the CEO of As­cen­sion, over­sees a sprawl­ing em­pire of 141 Catholic hos­pi­tals in 24 states and the District of Columbia with 150,000 em­ploy­ees over 2,500 care sites. At a time of po­ten­tially far-reach­ing po­lit­i­cal changes, the $21 bil­lion or­ga­ni­za­tion is go­ing through its own tran­si­tion, hav­ing re­cently tapped Chief Op­er­at­ing Of­fi­cer Pa­tri­cia Mary­land to suc­ceed Robert Henkel as CEO of As­cen­sion Health, the hold­ing com­pany’s largest op­er­at­ing di­vi­sion. Dur­ing Jan­uary’s J.P. Mor­gan Health­care Con­fer­ence in San Fran­cisco, Mod­ern Health­care fi­nance re­porter Dave Barkholz spoke with Ter­signi about the drama in Washington over re­peal­ing and re­plac­ing the Af­ford­able Care Act, what the na­tion’s largest not-for-profit health­care group has planned re­gard­ing merg­ers and ac­qui­si­tions and the tran­si­tion un­der­way at As­cen­sion. The fol­low­ing is an edited tran­script.

Mod­ern Health­care: Have hos­pi­tals muted their voices in speak­ing out about a re­place­ment for the Af­ford­able Care Act?

Ter­signi: I don’t think so. I can tell you we’ve been very proac­tive in speak­ing out. For us it’s been no dif­fer­ent than when the Af­ford­able Care Act was be­ing talked about. We were very proac­tive in mak­ing sure that there were cer­tain things we be­lieved needed to be in­cluded.

From be­fore the be­gin­ning of this year, we’ve been meet­ing with the tran­si­tion team, meet­ing with the Repub­li­can lead­er­ship. We plan to meet with the Repub­li­can lead­er­ship to say, “You know, there are cer­tain prin­ci­ples we be­lieve that we need to pro­tect.”

I fully un­der­stand they’re go­ing to re­peal and re­place. I’m a big boy. So we say, “OK, let us help you by be­ing a re­source.” That’s re­ally how I’d like peo­ple to view As­cen­sion in this health­care de­bate—as a re­source. We are a mi­cro­cosm of the Amer­i­can health­care sys­tem. If some­body has a pol­icy idea, we can let them know what the im­pli­ca­tions of that pol­icy idea are for tak­ing care of pa­tients.

MH: How much would As­cen­sion be hurt by a re­peal only of the ACA?

Ter­signi: When you say re­peal, I don’t know what that means with all of the fine points of what hap­pens in the re­peal. That’s what I’m talk­ing about in terms of us ad­vo­cat­ing for cer­tain spe­cific things. For ex­am­ple, we ad­vo­cate for ac­ces­si­ble and af­ford­able care. Our slo­gan is we want 100% ac­cess, 100% cov­er­age for ev­ery man, wo­man and child in this coun­try. That’s some­thing that so­ci­ety should sup­port.

We be­lieve ac­com­plish­ing men­tal and be­hav­ioral health re­form is very im­por­tant. We’ve made some in­roads in that re­gard. This is very im­por­tant be­cause the No. 1 con­cern from our pri­mary-care physi­cians is what they can do when some­body presents them­selves in their of­fice with a men­tal/be­hav­ioral is­sue. Where do they re­fer them to? We’ve be­gun to use tele-be­hav­ioral medicine to fo­cus in that area.

The other thing we’re pas­sion­ate about is re­mov­ing bar­ri­ers to the in­te­gra­tion of fed­eral pro­grams that ad­dress so­cial de­ter­mi­nants of health. When we look at a pa­tient who presents in a hospi­tal set­ting, many times their health is re­lated to some­thing other than health­care. We’d like Pres­i­dent Trump to es­tab­lish a task force of these var­i­ous agency lead­ers, to­gether with con­sumers and providers, to fig­ure out if there are ways for us to in­te­grate the ef­forts so that peo­ple stop fall­ing through the cracks.

MH: Turn­ing to M&A ac­tiv­ity, the not-for-prof­its are lead­ing the way right now, while some

“I be­lieve that con­sol­i­da­tions will con­tinue, whether it’s in the hospi­tal busi­ness or it’s in the clinic busi­ness or the in­sur­ance in­dus­try.”

of the for-prof­its are ac­tu­ally di­vest­ing. Have we seen the shift where M&A is now more of a strate­gic play than a fi­nan­cial play?

Ter­signi: It’s al­ways been a strate­gic play for us. When you look at our sys­tem, any ac­qui­si­tion is re­ally di­lu­tive from a fi­nan­cial per­spec­tive. We be­lieve that we have the where­withal to bring the ser­vices nec­es­sary to make those fa­cil­i­ties more ef­fi­cient. If you look at our most re­cent ac­qui­si­tion, Wheaton Fran­cis­can in Wis­con­sin, you’ll see we’ve al­ways had a good pres­ence in Wis­con­sin. Wheaton just makes it much more ro­bust for us to care for that pop­u­la­tion. That was a strate­gic play, not a fi­nan­cial play.

MH: How does it make you more ro­bust hav­ing them in the sys­tem?

Ter­signi: There are clearly more ac­cess points and the level of ser­vices avail­able in that com­mu­nity is greater. Be­cause if we’re mov­ing to­ward fee-for-value and we’re mov­ing to pop­u­la­tion health, it’s im­por­tant to us to have that.

MH: But you also di­vested a cou­ple of hos­pi­tals.

Ter­signi: We go through a process we call min­istry con­fig­u­ra­tion. It’s a port­fo­lio anal­y­sis. We look at our as­sets and we look at whether we are re­ally pro­vid­ing value to that as­set in that com­mu­nity. Or, is there a bet­ter part­ner for that? You have to be ma­ture about this, and you’ve got to be hum­ble about ad­mit­ting that, even though we’re the big­gest non­profit in the coun­try, we may not be able to pro­vide the nec­es­sary as­sis­tance.

A per­fect ex­am­ple is what we did in Tuc­son. We own three hos­pi­tals there. They were strug­gling. Tenet was in the mar­ket. Dig­nity is in that mar­ket. We came to the con­clu­sion that the com­mu­nity could be bet­ter served by a dif­fer­ent struc­ture. So we cre­ated a part­ner­ship with Tenet and Dig­nity, with Tenet as the man­ag­ing part­ner. Those three hos­pi­tals will sur­vive and thrive.

MH: Given the on­go­ing talks be­tween Dig­nity and Catholic Health Ini­tia­tives, is As­cen­sion go­ing to play a role in fur­ther­ing the con­sol­i­da­tion of Catholic health­care sys­tems?

Ter­signi: I be­lieve that con­sol­i­da­tions will con­tinue, whether it’s in the hospi­tal busi­ness or it’s in the clinic busi­ness or the in­sur­ance in­dus­try. Our goal, as As­cen­sion, is to make sure that we’re do­ing what­ever is nec­es­sary to strengthen Catholic health­care in this coun­try. I don’t want to look back 10 years from now and say, “Tony, you didn’t do enough to keep some Catholic health sys­tems alive while you were in charge.”

MH: What are your top pri­or­i­ties right now?

Ter­signi: We’re clearly con­tin­u­ing to move to fee-for-value, which means we have to con­tin­u­ously grow, cover lives and fo­cus on our ca­pa­bil­i­ties for as­sum­ing risk. That’s an area where we be­lieve we’re go­ing to have to part­ner with some­body who re­ally un­der­stands risk. Many of us tried it in the ’90s when man­aged care was here and many of us lost our shirts be­cause we truly didn’t un­der­stand risk.

We have three choices. We can build it our­selves; we can buy it; or part­ner it. And my po­si­tion is, when it comes to the risk side, you’ve got to part­ner. These in­sur­ance com­pa­nies have put a lot into un­der­stand­ing risk and be­ing able to iden­tify it. I don’t want to re­place Aetna or An­them. My in­tent is to part­ner so that we can, in fact, take care of de­fined pop­u­la­tions.

MH: Will you con­tinue to buy physi­cian prac­tices?

Ter­signi: We let the mar­ket drive. We’re in 20 states and the District of Columbia, but our em­ployed physi­cians are only in 16. We know that the pri­ma­rycare physi­cian is crit­i­cal to the con­tin­uum of care. So we con­tinue to look at the mar­ket dy­namic to see if buy­ing prac­tices is ap­pro­pri­ate.

MH: Any other pri­or­i­ties?

Ter­signi: The other big pri­or­ity for us is to en­hance be­hav­ioral/men­tal health. The last piece is re­ally to prove our value by con­tin­u­ing to lower our costs.

We’re go­ing to take cost out of that struc­ture that’s pure over­head. We’re brand­ing our­selves as one As­cen­sion through­out the coun­try start­ing in Michi­gan and Wis­con­sin. We’re brand­ing our­selves as a na­tional sys­tem that re­ally wants to pro­vide ser­vices to na­tional em­ploy­ers.

The minute you move into that area, you can’t have vari­ance in qual­ity, cost, or out­comes. And so, this is a path that our clin­i­cians have been on for the last cou­ple of years. They have done a great job in de­vel­op­ing ev­i­dence-based pro­to­cols. We’re be­gin­ning to look at how to take that across the coun­try.

MH: Can you talk about mov­ing the Rev. Den­nis Holtschnei­der, the pres­i­dent of DePaul Univer­sity, from his post as As­cen­sion board chair­man to an ex­ec­u­tive po­si­tion?

An­thony Ter­signi: Fa­ther Den­nis is go­ing to come in as chief oper­a­tions of­fi­cer and is go­ing to be re­spon­si­ble for our Min­istry Ser­vice Cen­ter, which is our en­ter­prise re­source-plan­ning sys­tem, our in­for­ma­tion tech­nol­ogy op­er­a­tion strat­egy, and ad­vo­cacy. I’ve been so im­pressed with Den­nis and his pas­sion for the poor and what he’s done at the univer­sity. He’s a very cre­ative, en­tre­pre­neur­ial in­di­vid­ual.

MH: It must be hard to re­place some­one like Bob Henkel, who spent decades with As­cen­sion and be­fore that Daugh­ters of Char­ity.

Ter­signi: He and Pat (Mary­land) are work­ing very closely to­gether in tran­si­tion­ing. Over the last three or four years, As­cen­sion has re­ally fo­cused on suc­ces­sion plan­ning. We started with my of­fice of the pres­i­dent. Ev­ery mem­ber of the of­fice of the pres­i­dent has worked hard over the last three years to iden­tify im­me­di­ate suc­ces­sors in case some­thing hap­pened to them.

As you know, health­care is of­ten slow to come to a party, and in suc­ces­sion plan­ning, health­care hasn’t done it as well as other ma­jor in­dus­tries. So we’re re­ally pleased where we are to­day. We’ve been groom­ing Pat to take Bob’s place since she got to As­cen­sion cor­po­rate.

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