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