‘My bias is that we talk about the wrong things’

From the way medical students are selected and trained to how policy debates are framed, Dr. Stephen Klasko. healthcare needs an overhaul, according to The CEO of Thomas Jefferson University and Jefferson Health in Philadelphia speaks passionately about his belief that disruption will be the key differentiator between provider organizations that survive and those that go the way of Borders. Under Klasko’s leadership, Jefferson has grown from a three-hospital academic medical center to a 13-hospital system with $5 billion in annual revenue. Klasko has spurred Jefferson to embark on unique affiliations, including recently with Philadelphia University, a leading fashion and design school. Klasko met with Modern Healthcare’s editorial board. The following is an edited transcript.

Modern Healthcare: Can you talk about the gaps you see in medical education today?

Dr. Stephen Klasko: In the age of artificial intelligence, what is a doctor? I mean, if you think about it, we still accept students based on their science GPA, MCATs and organic chemistry grades, and we’re amazed doctors aren’t more empathetic, communicative and creative. The whole premise of how we select students is faulty.

At the medical school we started when I was at the University of South Florida, we chose based on selfawareness and empathy. We actually took them to an art museum and showed them an abstract painting with a woman in a white dress, a guy in a black turtleneck and a snake, and we’d say, “What do you see?” And you get

these really smart students saying, “I see a woman in a white dress, a guy in a black turtleneck and a snake.”

“No, but what’s it telling you?”

“It’s telling me there’s a woman in a white dress, a guy in a black turtleneck and a snake.”

“But what’s it emoting to you?”

“Um, it’s emoting to me there’s a guy in a black turtleneck, a woman in a white dress and a snake.”

You also get other students who right away will tell you that story.

Well, physicians will say, “Why does that matter? I’ve delivered about 2,000 babies.”

And it’s medically easy delivering a normal 7.5-pound baby to a normal 25-year-old. It’s incredibly hard delivering

an unscheduled Down syndrome baby. And every single time that you do that, the first question will be, “Doctor, what does this mean?”

I’ve watched really good obstetricians say, “Well, it means your 21st chromosome … ” or, “Your baby will get pulmonary fibrosis.”

“What does it mean?” always means “What does it mean to my image of a perfect baby?”

The reason I’m bringing that up is that those 30 seconds in my career are the entire difference of how that mom and dad imprint with that baby. There’s no AI that will be able to interpret “What does that mean?”

MH: How do you use that philosophy to select students at Jefferson?

Klasko: The medical school in Florida we started had 56 students a year that we chose totally based on selfawareness and empathy. We erased all of the objective criteria once they reached their minimums.

We are now employing that for a cohort at Jefferson. We take 290 students a year and we’re choosing students based on holistic criteria—again, self-awareness, empathy, communication skills—and some cohorts, they don’t have to take the MCATs to get into the program. In Florida, without really trying to increase diversity, we about tripled it.

We don’t have all of the data from Florida yet, but what we found was that students chosen on holistic criteria are going to do worse on those U.S. medical license exams, but they kicked butt on their rotations, on their clerkships, because they actually could talk to people. By the end of the four years, they were pretty much in the same place both ways as their other cohort, so they caught up on the cognitive side.

“What’s frustrating to me is that we are at a point in time when, if we were any other industry and didn’t disrupt ourselves, we’d go bankrupt.”

MH: Are there other areas of innovation?

Klasko: We started an Institute for Emerging Health Professions. What jobs are going to be needed 10 years from now that don’t exist today? If you think about healthcare transformation, there’s going to be a lot of new jobs and if you think about those new jobs and we start now, when they are undergraduates, it takes almost 10 years. So we went to people like Judy Faulkner at Epic and she went to her 15,000 employees and said, “What are we going to need?” They came back with things like, “You’re going to need a master’s in forensics, genomics and population health.”

So we started to create those. One of those things we created was a master’s in cannabis medical education and research. We got a $5 million Lambert Foundation grant out of Australia. They started something called Ecofibre, which is not using cannabis, but it’s using hemp. It turns out, as luck would have it, that hemp is a really good fabric and material for wearables, which are going to be the next big frontier. Turns out that Philadelphia University—now part of Thomas Jefferson University—has three researchers who are doing the most work on hemp as wearables.

So the combination of looking at design, not just as the human experience, architecture, etc., but design and taking an entrepreneurial approach, led to stuff like that.

The reason we started with the innovation and philanthropy pillars and invested so heavily in them is I went to my faculty senate and said, “Look, NIH funding is a source of revenue, does anybody think that’s going up any time soon?”

“That’s OK, because we could always make it up on just lots of profits from having an urban academic medical center and our clinical piece,” is the typical response.

“Medicaid and Medicare, oh, that gig is up.”

“Oh wait, it’s OK, because we could always charge 12% more tuition a year.”

Students have figured that out now. Really, those are our three sources of revenue, so at this point our optimistic future is based on our innovation of philanthropy pillars.

MH: You’ve also talked about the need to reframe the overall debate surrounding healthcare.

Klasko: My bias is that we talk about the wrong things. The Affordable Care Act, we have to get over this.

I got to meet with one of President Donald Trump’s national policy advisers. I said, “What you guys need is a 9/11 commission for healthcare. Let’s get some really smart people here.”

When I look at the ACA, it’s very hard to be nonpolitical, but it did exactly the job that we asked it to do. It gave a lot more people access to a broken, expensive, inequitable and occasionally unsafe healthcare delivery system and then frankly, prayed that the healthcare delivery system would transform. Now, my biggest argument would be they sort of declared victory, like President George W. Bush declared victory in Iraq. You had Nancy Pelosi and Barney Frank and President Barack Obama declaring victory. “We did what 15 administrations hadn’t done.”

No, you really didn’t. You passed a bill, but you didn’t do anything about pharma, end-of-life issues, etc.

By the way, there are so many opportunities in technology that we haven’t used.

MH: Can you give some examples on how technology should be playing a larger role?

Klasko: Medicaid. Almost everybody has a cellphone—get on your cellphone. You’d have an app and get connected to virtual triage so that whenever you have something, you know who is available in your area. You could then monitor them like Amazon does.

What’s frustrating to me is that we are at a point in time when, if we were any other industry and didn’t disrupt ourselves, we’d go bankrupt. We are going through a once-in-a-few-generations change from hospital companies to consumer health entities. I don’t want to be all telehealth because I do a good job of being an academic medical center, but I don’t want to be defined by that academic medical center, just like I think what you’re finding is Walmart doesn’t want to be defined by their stores anymore.

The real “aha” moment for me was when I got a chance to spend some time with Apple in a very, very cool year—2000. I got to spend some time in that culture and it was just such a wow moment for me, because if you think about the year 2000, Apple stock was $15. That was about 27 splits ago. Sun Microsystems was going to buy them out for $13 a share and the shareholders wanted $17 a share.

In 2000, cool things were laptops and operating systems. Steve Jobs recognized that they were moving from computer companies to digital lifestyles, a once-in-alifetime change, and he said, “Look, this is all I can do, but I’m putting my stake down.”

So to me, if we know that 10 years from now owning a hospital is going to be, “Oh yeah, I own one of them, too,” we ought to be thinking about that; or if we know that there’s going to be a Google Brain or an IBM Watson next to me, we ought to be thinking about what defines a doctor. To not do that and know those things are going to change puts us in the Gateway and ● Dell mentality.