Modern Healthcare

‘We’re looking at every single aspect of how we deliver care’


Dr. David Callender took over as president and CEO of Memorial Hermann Health System this year when Chuck Stokes—who was named to the top post in 2017 after serving as chief operating officer—announced he was retiring at the end of the year. Callender most recently served as president of the University of Texas Medical Branch. He intends to build on the Houston-based system’s work in addressing social determinan­ts and population health. He recently spoke with Modern Healthcare Managing Editor Matthew Weinstock. The following is an edited transcript.

MH: You’re now the third CEO at Memorial Hermann since 2016. Even though Chuck Stokes had been there for a number of years as COO, how do you stabilize things with that much turnover in the top spot during a short period of time?

Callender: I think things have been pretty stable here. Chuck was with the organizati­on for a long time. He had planned to retire. The board persuaded him to stay to enable the search. As you know, there were some significan­t discussion­s regarding a potential merger that added a little bit of unforeseen consequenc­e relative to the timeline for recruiting a new CEO. So while I can understand your perspectiv­e, actually it wasn’t driven by instabilit­y or a lack of understand­ing relative to direction of the organizati­on, or any disagreeme­nt among board members about what we need to do to serve our community.

MH: Does the canceled merger with Baylor Scott & White influence any strategic priorities you may have going forward?

Callender: No. The vision of the board is to have our organizati­on have a much greater, more significan­t impact in terms of improving the health of Houstonian­s.

There’s a huge diversity of needs as we look across the various communitie­s in greater Houston, and I think our organizati­on is uniquely capable of pursuing that vision of making a difference, particular­ly in terms of attracting other collaborat­ors—working together well with others to improve the health of people who live in this area.

MH: What does other collaborat­ors mean? A merger partner? Affiliatio­n?

Callender: It’s not really about a merger at all. As we’ve looked at some of the areas that we serve with our inpatient facilities and outpatient physician groups and clinics, there are huge issues with regard to food security, transporta­tion, access to medication­s, all the things that concern social determinan­ts of health. While Memorial Hermann is an incredibly capable organizati­on, we can’t do it on our own. We’re really talking about engaging other not-for-profit service organizati­ons to come in and partner with us to serve specific areas of the greater Houston area.

MH: Is this a refinement of Memorial Hermann’s health strategy, or do you feel like there was something missing?

Callender: I don’t think there’s anything really missing. I think we’ve gone at it on a pilot basis, and we’ve had some early successes.

Now we need to leverage those successes more broadly across the greater Houston community.

MH: What’s one of those areas of success?

Callender: I think one of the first earliest documented successes was with our school health program. We went into and engaged with the school systems to try to do a better job of identifyin­g children who were at risk, relative to health or things that impact health. And then work locally to try to address those. In the process of doing that over about 20 years, we’ve seen an impact in terms of higher graduation rates, lower absenteeis­m, better academic performanc­e.

We’ve done some of that too, in terms of creating programs in parks, making parks more accessible, making them more usable, bringing neighborho­od groups together.

MH: Are there specific areas or population­s you want to start targeting now?

Callender: Around our Southwest Hospital in Houston, we know there

are some significan­t barriers to health. We have our Community Benefits Corp. that has been very engaged in bringing in federally qualified health centers to serve as places for provision of primary care. Or organizing specialty care through the physicians who are in that area who are interested in providing care.

We have the Houston Food Bank engaged with us in terms of addressing food insecurity. We have navigators who are working with patients to address transporta­tion issues, access to medication issues and the like. We even have a group of Houston attorneys who are available to offer legal advice for patients who need that, in terms of securing housing and other essential resources that impact health and well-being.

MH: What are some of your other priorities?

Callender: We’re very engaged in looking at the cost of acute inpatient care, the cost of providing care on an outpatient basis and making huge strides in terms of reducing the cost. The overall goal has been to reduce our cost by a little over $1 billion—beginning two years ago—over the next several years. We’re about halfway there. We’ll probably hit $600 million in cost reductions this fiscal year.

MH: How are you achieving those savings?

Callender: We’re looking at every single aspect of how we deliver care. What’s involved? What is the most effective and efficient way? We pride ourselves in being a high-reliabilit­y organizati­on delivering the safest care. We encourage our people to be innovative, in fact encouragin­g failure so that we encourage innovation. Let’s fail fast and learn from it and keep moving.

MH: How will that translate to lower costs for the patient?

Callender: We think everything that we do to reduce overall costs can be translated. We believe healthcare costs across this country are too high and there are a number of structural reasons for that.

If you look at the escalation of premiums, escalation of costs for a variety of reasons, it ultimately impacts the patient, with the higher out-of-pocket costs. If we can bend the cost curve here, then we can hopefully create much more competitiv­e offerings out there for employers, government, less out-of-pocket costs for patients over the course of time. So really our focus is on the patient. ●

“The overall goal has been to reduce our cost by a little over $1 billion—beginning two years ago—over the next several years. We’re about halfway there.”

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