‘We're mov­ing peo­ple out of the hospi­tal ORs, mov­ing peo­ple out of the hospi­tal EDs'

Modern Healthcare - - Q & A -

From blow­ing up Hartford Health­Care’s gov­er­nance and man­age­ment struc­ture to El­liot Joseph cre­at­ing new care mod­els, is con­vinced that health­care or­ga­ni­za­tions must dis­rupt them­selves from the in­side. Joseph took over as CEO of the large Con­necti­cut in­te­grated delivery sys­tem nearly 10 years ago. Dur­ing that time, he’s pushed to tie ex­ec­u­tive pay to dis­rup­tion, formed joint ven­tures that ul­ti­mately will move pa­tients to low­cost am­bu­la­tory set­tings and launched in­no­va­tion cen­ters. But the trans­for­ma­tion hasn’t been without its stum­bles. Joseph re­cently sat down with the Mod­ern Health­care edi­to­rial team to talk about dis­rupt­ing the in­dus­try. The fol­low­ing is an edited tran­script.

Mod­ern Health­care: You were part of a panel dis­cus­sion at the Amer­i­can Col­lege of Health­care Ex­ec­u­tives’ lead­er­ship congress on ty­ing ex­ec­u­tive com­pen­sa­tion to dis­rup­tion. Talk about how you’ve ap­proached that idea at Hartford.

El­liot Joseph: We're clearly go­ing through a very dis­rup­tive phase. The in­dus­try has been tra­di­tion­bound for a cen­tury, and most peo­ple see that it's un­af­ford­able. It's not as suc­cess­ful. It's cer­tainly not dig­i­tal by any stretch of the imag­i­na­tion. And it's bound up in in­sti­tu­tional-based think­ing.

When I ar­rived at Hartford 10 years ago, we had a great ter­tiary hospi­tal. But we lacked sys­tem think­ing. For the past 10 years, we've been build­ing this very tightly in­te­grated delivery sys­tem and there isn't much we've left un­touched. We worked to build a com­pen­sa­tion for­mula that fo­cused on both main­tain­ing the core busi­ness and be­ing more trans­for­ma­tive.

And we es­tab­lished, among other things, what I call an at-risk pro­gram. I don't like the word bonus; I don't like the word in­cen­tive. This is pay atrisk. And we did that for prob­a­bly two, three or four years and then re­al­ized that the trans­for­ma­tive changes that were re­quired were longer-term.

We be­came an or­ga­ni­za­tion that said, “Here are some three-year tar­gets” and it was truly at-risk. Most of our at-risk goals were set around wher­ever you call home in­side the sys­tem. So what­ever in­sti­tu­tion or part of the or­ga­ni­za­tion I sat in, if we suc­ceeded, I suc­ceeded. And seven years later now, ev­ery­body who re­ports di­rectly to me is 100% tied to sys­tem goals. The other se­nior ex­ec­u­tives across the en­ter­prise are 70% sys­tem goals and 30% func­tional or site-spe­cific goals. And it's re­ally changed the per­spec­tive in a very pos­i­tive way.

MH: What’s an ex­am­ple of how that at-risk ap­proach has helped the or­ga­ni­za­tion trans­form?

Joseph: The cre­ation of a new com­pany we built called In­te­grated Care Part­ners, a clin­i­cally in­te­grated net­work. It has 2,000 providers in it. We've built a tremen­dous ca­pa­bil­ity with care man­agers, pa­tient nav­i­ga­tors and data an­a­lyt­ics. And we cre­ated an ac­count­able care or­ga­ni­za­tion as part of that.

We took ad­van­tage of the fact that we're the largest be­hav­ioral health provider in the state of Con­necti­cut, and through In­te­grated Care Part­ners, we changed a lot of the care mod­els. The best ex­am­ple was em­bed­ding be­hav­ioral health ex­perts di­rectly into pri­ma­rycare of­fices. It has made a tremen­dous dif­fer­ence for pa­tients. And we set up some three-year goals around get­ting ICP off the ground. They in­cluded the num­ber of providers we wanted and the num­ber of cov­ered lives—and this is where we over­reached a bit—we wanted to take re­spon­si­bil­ity for. There were other goals em­bed­ded over each suc­ces­sive three-year pe­riod.

The de­bate we had in­ter­nally was that 90% of the man­age­ment team was not in­volved in ICP, so in essence they couldn't af­fect it. The truth is, to change the care model, a lot of peo­ple across the en­tire en­ter­prise had to get on board.

MH: Are there other ex­am­ples where you think Hartford was ahead of the in­dus­try?

Joseph: I'll talk about two moves. One from a hold­ing com­pany to an op­er­at­ing com­pany and the great integration we

had, and then mov­ing from a hospi­tal com­pany to a sys­tem-of-care com­pany. Those are two tracks that we’ve strate­gi­cally been push­ing very hard. On the am­bu­la­tory side, we’re mov­ing care out of the hospi­tal proac­tively. Some­times at our fi­nan­cial peril, but we also re­al­ize that’s where it’s go­ing any­way and it’s go­ing to go with us or without us.

We have joint ven­ture op­er­a­tions with a pri­vate equity part­ner to build ur­gent-care cen­ters. We have about 10 up al­ready and we’re putting 18 up over a year and a half. We just ac­quired about 20 di­ag­nos­tic imag­ing cen­ters. I be­lieve we have the state’s sec­ond­largest home-care com­pany.

MH: Who is the pri­vate equity part­ner?

Joseph: We’re work­ing with GoHealth, which is funded by pri­vate equity. We’re mov­ing peo­ple out of the hospi­tal ORs, mov­ing peo­ple out of the hospi­tal EDs, we’re mov­ing peo­ple out of the hospi­tal imag­ing de­part­ments. For us that’s real dis­rup­tion. That’s one side of it.

The other side is this move­ment from a hold­ing com­pany to an op­er­at­ing com­pany. I be­lieve we’re one of the most tightly in­te­grated delivery sys­tems in the coun­try.

We cre­ated one par­ent board, and we now have four re­gional boards. The re­gional boards are re­spon­si­ble for qual­ity and safety, and they’re re­spon­si­ble for lo­cal ad­vo­cacy, fundrais­ing, com­mu­nity health sta­tus and com­mu­nity health needs anal­y­sis, and med­i­cal staff cre­den­tial­ing.

We did this with man­age­ment be­fore we did gov­er­nance. We elim­i­nated hospi­tal pres­i­dents, we elim­i­nated in­sti­tu­tion man­age­ment teams, and we cre­ated, at the time, three re­gional teams. We elim­i­nated 20% of our man­age­ment vir­tu­ally overnight.

We cre­ated our own op­er­at­ing model called How Hartford Health­Care Works, a mix­ture of all of our in­ter­nal ex­pe­ri­ences on im­prove­ment with Lean man­age­ment, with 10 very spe­cific lead­er­ship be­hav­iors that we’ve trained all 19,000 peo­ple in. It’s the way we op­er­ate.

MH: How much op­po­si­tion did you get from em­ploy­ees?

Joseph: One of the huge mis­takes in set­ting our at-risk goals is we said, “We’re go­ing to re­struc­ture man­age­ment, and we also are go­ing to im­prove our em­ployee en­gage­ment scores at the same time.” That tells you how en­thu­si­as­tic we were. Huge, huge mis­take.

There was op­po­si­tion, but, again, we tried to base it all on where we were go­ing.

MH: As you trans­form how and where care is de­liv­ered, are you struc­turally ready to deal with the fi­nances of in­creased am­bu­la­tory ver­sus hospi­tal care?

Joseph: A num­ber of small for-profit com­pa­nies have fig­ured out how to make ad­e­quate mar­gins from the am­bu­la­tory space. I mean that’s an area where ev­ery­body’s at­tack­ing the in­dus­try, right? So you if you look at an Op­tum, for ex­am­ple, it’s hard to dis­tin­guish their strat­egy from ours on the am­bu­la­tory foot­print growth strat­egy. So there’s ac­tu­ally mar­gin in that space.

What we’ve had to do while we do that is be much more ag­gres­sive on mar­ket share growth on the in­pa­tient side in select tar­geted ar­eas. And we have had tremen­dous suc­cess in that arena. Con­necti­cut is a dead zone for pop­u­la­tion growth. There is no growth. And the past 24 months of in­pa­tient sta­tis­tics show our or­ga­ni­za­tion out­pac­ing ev­ery­body by a long mar­gin in terms of growth. We’ve done that through what we call our In­sti­tute Strat­egy. We’ve cre­ated six in­sti­tutes around can­cer, neu­ro­sciences, bone and joint, urol­ogy, be­hav­ioral health and car­dio­vas­cu­lar.

We’ve struc­tured them across the en­tire en­ter­prise so they’re not just fo­cused at our ma­jor aca­demic ter­tiary cen­ter. They’re fo­cused around the pa­tient’s en­tire jour­ney. If you have Parkin­son’s disease, for ex­am­ple, and you’re a pa­tient of our neu­ro­sciences cen­ter, that team of peo­ple is re­spon­si­ble for your en­tire health. And they can use ICP as a co­or­di­nat­ing mech­a­nism.

MH: You just had a con­tentious ne­go­ti­a­tion with An­them.

Joseph: That was one of the worst mo­ments of my 30-year-plus ca­reer. We were out of net­work for a lit­tle over two months. No one wins in those cir­cum­stances, and they are ex­cru­ci­at­ingly painful.

“We’re clearly go­ing through a very dis­rup­tive phase. The in­dus­try has been tra­di­tion-bound for a cen­tury, and most peo­ple see that it’s un­af­ford­able. It’s not as suc­cess­ful”

MH: What did that do for your pa­tients as far as just in­form­ing them about what was hap­pen­ing?

Joseph: It was ter­ri­ble. Our staff took the brunt of the heat. Peo­ple call­ing up who were be­ing de­nied ser­vices, and we did a lot of face time with our staff who were an­swer­ing the phones, and of­fice re­cep­tion­ists who were deal­ing with ap­pro­pri­ately an­gry and frus­trated pa­tients.

What you dis­cover in these cir­cum­stances, and it’s the worst thing to dis­cover, is the pa­tients are in the mid­dle. And both sides are us­ing the pa­tients to lever­age against one an­other. Both sides typ­i­cally try to work to­gether on con­ti­nu­ity of care. So if you’re a can­cer pa­tient and you’re get­ting care, or if you’re an OB pa­tient and you’re in the mid­dle of treat­ment, there are mech­a­nisms to al­low that care to con­tinue. But be­yond that, it’s a free-forall, and it’s a tremen­dous amount of mis­in­for­ma­tion adding to the anx­i­ety. The politi­cians get in­volved be­cause their folks are talk­ing to them say­ing, “Solve this prob­lem for me.” And there’s no short­age of heart­break­ing sto­ries that go along with it. I don’t have any­thing good to say about it at all. ●

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