Leaders From Texas Health, Baylor, and StratiFi Discuss Independent Physicians, Community Care, and Microhospitals (Panel Recap, Part II)

Yesterday, we ran part one of our two-part recap from last week’s D CEO Healthcare Breakfast Panel, featuring Barclay Berdan, CEO of Texas Health Resources; Gary Brock, chief integrated delivery network officer at Baylor Scott & White Health; and Dr. Christopher Crow, CEO of StratiFi Health and president of Catalyst Health Network.

Today, we get to the second half of our panelists’ remarks, most of which come in response to questions from the audience. Comments have been edited for length and clarity. Let’s get to it:

Crow on consolidation and the importance of independent physicians:
“Consolidation in America in healthcare raises prices, period. You don’t get economy of scale. There has not been an example of that across the country—big mergers creating economy of scale. It’s passed down to you, as business owners, or you, as consumers. Your deductibles have gone up. Your prices have gone up.

So, what’s behind that? It’s money. It’s price control. Which gets into what’s really important—that you understand how important independent physicians are. In the world of the future, we have to be collaborative. Catalyst and its 500-plus physicians in North Texas can’t do it alone. We absolutely have to have partners that are hospitals. But at the same time we don’t think it’s good for the community to end up in a two-horse town. Otherwise—and hopefully nobody is here from AT&T or Verizon—but you end up with that type of experience.”

Berdan on aligning with all physicians:
“Too often, we draw these lines in the sand—employed, independent, employed, independent. We have, in our system, physicians that relate to us from all kinds of different perspectives economically. We purposely have a pluralistic approach—you can be employed, you can be independent, you can be an investor. The important thing to focus on is how can providers align together to focus on the key issues we have today so that we’re all pulling in the same direction.”

From left, Shinneman, Berdan, Brock, and Crow at the AC Hotel Dallas at the Galleria during the D CEO Healthcare Breakfast Panel.

Brock on how to provide better care at the community level:
“From my perspective, there’s a lot of other social agencies and providers of care and information in this community. Back in May, we brought a lot of those folks together through a program we are calling Connect the Dots, to say, what are we all trying to do? Where is there overlap? Where can we work together to depend on you to help us and us help you? We have to work more, I think, integrating ourselves with the community and with other community providers. None of us can do it all alone. I think there is a lot of good work going on, but it’s not organized across the system. A lot of these agencies are run through donations and grants and other things and have short budgets. Working better as a community in the future is going to mean connecting together all those organizations with all of us so that you can elevate those outcomes.”

Crow on the diverse needs of the population:
“Just like we talk about healthcare as fractured, all the social services—the county and the city and not-for-profits—are super fractured, as well. There’s a lot of good work going on in silos. But just like a human being with three or four chronic diseases, someone who is in poverty doesn’t just have transportation issues or doesn’t just need to have food today and go to a food pantry. They have a diverse set of needs and yet a lot of times these social services are siloed into a thing, whether it’s healthcare or food or transportation.”

Brock in response to a question on whether systems seek to change outcomes via control and ownership, versus influence.
“It is all about relationship, trust, and influence. We don’t really have a lot of interest in trying to control something. Can we influence something? Can we get you engaged? How do we best partner with you to do that? If we look at the net revenue of our system, most of it comes from joint ventures that are not controlled and that we’re partnering on, and I think that continues to change the dynamic. It is all about influence.

We see over 800,000 patients a year going through our 50 hospitals’ emergency departments, and a lot of them get treated and sent home. But they have underlying health issues that we’re seeing. We’re following up with those folks the next day and trying to influence them to take care of (the underlying issue). They got their urgent issue solved, but they still have other things to be done. Maybe one day we’ll have good enough virtual health tools that we can push data to them on a more frequent and timely basis.”

Berdan responding to the same question:
“I would add to Gary’s comment that if that’s the impression you came away with, I think you’re mistaken. We have many, many partnerships. We focus on reliability. The real issue here is how can we together be more reliable, reduce variation, predict cost better, and predict outcome better together with everybody that we partner with. We have not had an approach that says we have to own everything for the last decade. In fact, a lot of what we work with, we don’t own a majority of. But we do influence it, as Gary said.”

Berdan responding to a question on Texas Health’s Prosper location and whether the system is interested in the microhospital model:
“The facility you’re referring to in Prosper is what we call a community health and wellness center. It’s a model we’ve deployed in about four or five different situations. It’s all ambulatory. It does have an emergency room. It also has outpatient services, imaging, laboratory, all the therapies. We’ve incorporated fitness centers into all of them, which face the community. They have physician offices. And some of them have pretty good juice bars, too. We chose, so far, not to add beds to those campuses.

They’ve all been designed to where if we want to add beds, we can. At this point, we’ve said microhospitals from a business model don’t make a lot of sense to us. We’re not trying to create a hospital-based environment. We’re trying to create an outpatient, ambulatory environment. They’re all based in communities that are growing, whether that’s Willow Park west of Fort Worth, the west side of Burleson, Prosper, as examples. These are all areas that may support a hospital of some kind in the future or may support an ambulatory surgery site on that campus at some point in the future. But it’s an ambulatory footprint.”

Brock on Baylor Scott & White’s microhospital strategy:
“All of these microhospitals that we’re currently building are built off the Kaiser (Permanente) model. We’ve studied other people that have done this and we’re really focusing on minimizing the layered expense inside these facilities by doing things that are more functionally adjacent to how physicians and nurses are serving the patients and interacting with the patients. These hospitals in Austin—the big medical office building that’s attached will be staffed by Scott & White clinic physicians, so it’s a totally integrated approach and model. We believe that inpatient beds for observation and short stay are going to be necessary to support the primary care physician in their clinic environment.”

Crow in response to a question from Cigna North Texas And Oklahoma President LaMonte Thomas on what audience members can do to assist providers—such as the panelists—in bringing down healthcare costs:
“I’m going to answer it in terms of a benefit design because I’m assuming a lot of you are leaders in your companies, as this is a D CEO breakfast panel. The number one thing you can do—other than personal accountability that we all talk about—is to change how you are designing your benefits at your companies. If you are a CEO or CFO of your company, I don’t care if you’re a yoga studio or in the trucking industry, you’re running a healthcare company inside of your business. It’s the second largest expense line.

You need to think about that, and then you need to think about the benefit design. You’ve got to get rid of the PPOs. PPO is like a buffet where you go and you eat all you want, and you eat a lot of stuff that’s bad for you. You’ve basically given all your employees a corporate credit card and not asked them to have any accountability around it: Just go spend. We’ve talked about relationships a lot: Make sure every one of your employees gets connected to a primary care physician—put it in the benefits. That’s focusing up stream.”