‘The drug­store is a nice con­ve­nience. Your liv­ing room is the ul­ti­mate con­ve­nience’

Modern Healthcare - - Q & A -

In the spring of 2017, Fairview Health Ser­vices added to its pres­ence in the Twin Cities by ac­quir­ing HealthEast, St. Paul. Min­neapo­lis-based Fairview al­ready ran the Univer­sity of Min­nesota Med­i­cal Cen­ter and had a large health plan, Pre­ferredOne, which has 327,000 mem­bers. On the provider side, Fairview con­sists of 12 hospi­tals and med­i­cal cen­ters, more than 56 pri­mary-care clin­ics and more than 55 spe­cialty clin­ics. It reg­is­tered 1.8 mil­lion clinic vis­its in 2017. CEO Here­ford, who joined Fairview in 2016, re­cently met with James Mod­ern Health­care’s ed­i­to­rial board. The fol­low­ing is an edited tran­script.

MH: You’re a lit­tle over a year into the merger. How are things go­ing?

Here­ford: Some ini­tial con­ver­sa­tions had gone on be­fore I got to Fairview, but one of the first meet­ings I had when I came to Min­neapo­lis was with Kathryn Cor­reia, CEO at HealthEast. You didn’t have to be all that shrewd strate­gi­cally to see the ben­e­fits. We’re al­most a per­fect ge­o­graphic com­ple­ment. We didn’t re­ally have a sig­nif­i­cant pres­ence in St. Paul, so there was a nice logic to it. It was ac­tu­ally one of the eas­i­est deals I think I’ve ever been a part of in terms of it com­ing to­gether.

I’ve been in­volved with a cou­ple of deals where it made sense on pa­per, but then the two cul­tures are so dif­fer­ent that it feels like oil and wa­ter, and you’re al­ways talk­ing past each other. In this case, the cul­tures are so sim­i­lar—very com­mu­nity-

ori­ented and faith-based or­ga­ni­za­tions.

In­te­gra­tion is re­ally the chal­lenge. Tech­nol­ogy can pose lim­i­ta­tions. You can’t re­ally get to full in­te­gra­tion and get a lot of the syn­er­gies un­til you can get the tech­nol­ogy im­ple­mented. We made progress. We’re now on a com­mon en­ter­prise re­source plan­ning sys­tem, at least from the fi­nance and sup­ply chain side.

We’re still on two dif­fer­ence ver­sions of Epic. Over the next year, we’ll start in­te­gra­tion. So those things will be a nice cat­a­lyst.


You’ve been crit­i­cal of Epic in the past, say­ing that it ac­tu­ally in­hibits in­no­va­tion. Do you still feel that way?

Here­ford: In short, yes. The chal­lenge is we’ll spend a great deal of money in­te­grat­ing two ver­sions of Epic. It’s amaz­ing the costs that are as­so­ci­ated with try­ing to bring them to­gether. That is tens of mil­lions of dol­lars

that we won’t be spend­ing on things that re­ally cre­ate the kind of value—the kind of strate­gic in­vest­ment—you’d like to make.

MH: Do you think the en­trance of Ap­ple and Ama­zon and oth­ers from con­sumer tech­nol­ogy can make a dif­fer­ence?

Here­ford: It’s pos­si­ble. I don’t see it as a slam dunk. Ap­ple is more fo­cused on the con­sumer side. But they show very lit­tle in­ter­est at mov­ing be­yond the con­sumer side. I think Google, Ama­zon, Mi­crosoft are in­ter­est­ing in terms of what they could ac­com­plish if they re­ally put their en­tire heft into this.

For a lot of the tech com­pa­nies—and I’m old enough to have seen a lot of ver­ti­cals come and go— they don’t fun­da­men­tally un­der­stand what care de­liv­ery is like. Their strat­egy has al­ways been about dis­in­ter­me­di­a­tion. “Just get in there. The com­mon play­ers must not know what they’re do­ing. We’ll go in. We’ll go around them and cre­ate all this value.”

But it’s hard to go around the pa­tient physi­cian­clin­i­cal kind of ac­tiv­ity. And if you don’t un­der­stand what it’s like, it’s hard to re­ally make a lot of in­roads.

Those tech com­pa­nies are mak­ing a lot of strate­gic hires, and I think they’ve learned from past lessthan-suc­cess­ful at­tempts. I think they have a chance to in­flu­ence it sig­nif­i­cantly.

MH: Along those lines, you made some or­ga­ni­za­tional changes this sum­mer to fo­cus on more of a ser­vice-line ap­proach. Why?

Here­ford: Part of the ra­tio­nale was that we need to get or­ga­nized around our cus­tomers. Not or­ga­nized around our hospi­tals, or other build­ings, be­cause if you have con­ges­tive heart fail­ure, you have CHF whether you’re at home, an am­bu­la­tory clinic, an out­pa­tient set­ting or a skilled-nurs­ing fa­cil­ity. We have to be able to think and or­ga­nize our care around that con­tin­uum where the build­ings are a means to an end, not the end.

MH: At one point Fairview made a com­mit­ment to de­sign think­ing. Is it still in place? How is it work­ing out?

Here­ford: It’s work­ing out well. Like most things, it takes a while to get ac­cli­mated to it and feel com­fort­able with it. As with our Health Trans­for­ma­tion Cen­ter, we’re in a part­ner­ship with the fac­ulty at the Univer­sity of Min­nesota De­sign School and we are talk­ing about bring­ing the cus­tomer’s voice in.

We’ve done a lot of it with our pri­mary-care re­design, and need to do more. But, I like where we are at this point. I think it helps us ad­dress one of the prob­lems in health­care, which is we’re so self-fo­cused. We lis­ten to the cus­tomer and then make our own trans­la­tions around it. As op­posed to de­sign think­ing, where you’re re­ally watch­ing the cus­tomer, watch­ing the pa­tient use rapid mock-ups of the ideas that you’re try­ing to test, and you get im­me­di­ate feed­back and you re­spond to that.

MH: What’s your pri­mary-care re­design?

Here­ford: We have a good pri­mary-care model and I never want to den­i­grate it, but it’s a very clas­sic model.

If you think about pri­mary care as this con­tin­uum from con­ve­nience care on one end—a lot of the pop­ups in gro­cery stores and drug­stores, usu­ally staffed by a nurse prac­ti­tioner; I al­ways think of them as kind of an­tibi­otic ex­change cen­ters. They’re quick, right? They’re con­ve­nient. They’re in your neigh­bor­hood. You don’t have to sched­ule.

On the other end, you’ve got the in­cred­i­bly com­plex pri­mary-care pa­tients, with mul­ti­ple co­mor­bidi­ties. They usu­ally have so­ciobe­hav­ioral is­sues, and they don’t fit in a 15- to 20-minute exam slot. Yet those are the pa­tients who of­ten show up in our EDs or get in­ap­pro­pri­ately ad­mit­ted into the hos­pi­tal. And then in the mid­dle, you’ve got nor­ma­tive acute care, chronic disease man­age­ment.

We’ve been pretty good at that mid­dle sec­tion, not so good on ei­ther of the ends.

Two of our pri­mary-care lead­ers have taken on the chal­lenge of how do we re­design pri­mary care, in­fuse it with tech­nol­ogy, re­ally chal­lenge our­selves and our con­ven­tions, in all three of those use cases. We’ll pi­lot some ideas in the first part of the year.

“For a lot of the tech com­pa­nies … they don’t fun­da­men­tally un­der­stand what care de­liv­ery is like.”

MH: Are there specifics around how that model will change?

Here­ford: It’s go­ing to be much less de­pen­dent on the phys­i­cal visit, much more de­pen­dent on tech­nol­ogy. It’s go­ing to have as­pects that ad­dress all three of those kind of fla­vors or use cases in pri­mary care. It will be lever­ag­ing a lot more away from the clinic. Rather than try­ing to put up a pop-up clinic in ev­ery drug­store and gro­cery store, it will use vir­tual tech­nol­ogy much more. The drug­store is a nice con­ve­nience. Your liv­ing room is the ul­ti­mate con­ve­nience. ●

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