Michael Rowan, COO of 73-hospital Catholic Health Initiatives, shares the organization's plans for virtual care, its $1.2 billion investment, and its stance on same-sex visitation rights.
Q: Needless to say, this is an interesting time for healthcare. What challenges does CHI anticipate in the year ahead, and how do you plan on overcoming these hurdles?
Michael Rowan: Well, you know, the challenges that hit us are the same that have hit others. First, we are reacting to, and preparing for, decreased reimbursement. Healthcare is a low-margin business, so that's always a challenge. We like to believe that as an organization, we need to generate more than 3.5 percent to sustain and do better than survive. That's a challenge in the healthcare industry.
The other challenge is simply the evolution of the healthcare business. In the past year, leading up to reform, there was a lot of conversation that healthcare was trying to be reimbursed by providing diagnostic and treatment procedures at a high volume. The thought process was just to do more, more, more, and there was a significant lack of coordination in the healthcare field in the treatment of any patient. We're trying to evolve into a business where incentives change and we're paid for keeping people healthy rather than only taking care of them when they're ill.
We're also beginning to see the difficulty of shortages, the challenge of having the available human workforce to be able to provide care. We've started to address all of these challenges by understanding that healthcare has evolved into a data-driven business. It’s about gathering data-driven information — clinical as well as business/administrative.
To become more data driven, we're committed to investing 1.2 billion in clinical IT systems over the next 5 years. Our ambulatory systems are already being put in place for physicians. We're also about to proceed down the path of installing clinical IT systems on inpatient side to better manage the patient treatment process and experience. For us, specifically, that means we're putting all our facilities on advanced versions of Cerner and Meditech.
We're not just working to put in clinical info systems, but given the evolving nature of healthcare, we must also prepare in terms of having available population-based data. Everybody's talking about ACOs. In order to do that, we have to develop population-based information we can use to make decisions.
Q: A recent Thomson Reuters study on 255 health systems in the country found Catholic and other church-owned health systems provided more efficient care than for-profits. Why do you think that is?
MR: Over the last 5 years, CHI has become much more sophisticated. In general, Catholic hospitals have become more sophisticated in the way they manage resources.
We've evolved and improved as an operating company. CHI sets standards and has clear expectations system wide, and that alone raises performance levels on the business side. But I also think this begins to improve the quality of care we provide.
Also, we have a different kind of focus compared to for-profits, one that isn't so mono-dimensional. For-profits focus on shareholder value, which can take your mind off why you're in healthcare. The need to distribute profits to shareholders means that you've got to be taking resources away from the ability to reinvest in your organization, whether better staffing, new equipment or other improvements.
Q: Besides the system's geographical breadth, what else makes CHI's hospitals exceptional? What value does a Catholic healthcare system offer that others may not?
MR: We are a very mission-focused organization. That's not to say others aren't mission-focused, but ours is very clear. We're focused on improving the health of the community. As an organization, we try to go beyond only providing hospital services. We try to participate in the communities we're involved in. CHI has provided grants to communities and funded projects, sometimes focused on social issues in the community.
For example, right now CHI is focused on addressing violence prevention in the communities we serve. If you look back at patient data, many admissions are related to violence — gang violence, domestic violence. We provide grants to address these issues and move beyond treating sick people and toward keeping them healthy and away from injury.
We have about 73 hospitals and about 40 long-term facilities in 20 states. We're able to take advantage of significant economies of scale. Our national headquarters, located just outside Denver in Englewood, Colorado, is apart and distinct from our hospitals. That office allows us to look at the 45 markets we're in, step back, remain objective and get away from being crisis oriented. We see and understand the trends taking place. We can take learning from one market and share those findings with another. We can do two things at once — notice trends and prepare for those trends in other markets.
Q: How is CHI approaching the new CMS rules for same-sex domestic partners and visitation rights?
MR: We're very clear there. CHI supports basic rights for all patients — we've supported that for several years. In terms of visitation rights, people who are sick deserve to make their own decisions. It shouldn't be a legal issue.
Q: What are CHI's largest plans for the year ahead?
MR: Obviously, our biggest plan is related to clinical IT. We're also trying to prepare ourselves for other aspects of healthcare reform related to ACOs.
We're also beginning to think about shortages, those that are going to hit us very soon. CHI is considering the use of technology to offset workforce shortages and raise quality of care across the country. We're in all sorts of markets. We're in rural, midsized, metro areas and across the board.
Obviously, these hospitals have different capabilities. But we're starting to believe that if we leverage technology, specifically telemedicine, telepharmacy and teleradiology, we'll be in a position to use the highly sophisticated resources of our largest facilities to provide a level and quality of care in our midsized, rural markets that they would not be able to afford on their own.
How do we provide higher, more sophisticated level of care to those rural hospitals with less than 20 beds? We may be able to take X-ray films, digitize them and transport them over HIT to a more resource-rich hospital. They can read the films real time and provide a diagnosis back to that physician in the small, rural hospital.
The same could be said for trying to address workforce shortages. More and more, we're finding these small, rural pharmacies can't afford 24-hour pharmacists. Electronically, we have ability to take pharmacy orders and electronically transport them to our 800-bed facility. CHI is positioned to do that, and we believe there is more and more opportunity to lessen workforce shortages and improve quality of care by being innovative the process of caring.
Learn more about Catholic Health Initiatives.
Read other Q&A's with hospital leaders:
-The Future of Healthcare Delivery and Your Hospital: Q&A With Johns Hopkins Medicine CEO Dr. Edward Miller
-Departing Froedtert CFO O'Connell Discusses 30-Year Career and Healthcare Finance Trends (Part 1 of 2)
-Departing Froedtert CFO O'Connell Discusses Healthcare Finance Trends (Part 2 of 2)
Q: Needless to say, this is an interesting time for healthcare. What challenges does CHI anticipate in the year ahead, and how do you plan on overcoming these hurdles?
Michael Rowan: Well, you know, the challenges that hit us are the same that have hit others. First, we are reacting to, and preparing for, decreased reimbursement. Healthcare is a low-margin business, so that's always a challenge. We like to believe that as an organization, we need to generate more than 3.5 percent to sustain and do better than survive. That's a challenge in the healthcare industry.
The other challenge is simply the evolution of the healthcare business. In the past year, leading up to reform, there was a lot of conversation that healthcare was trying to be reimbursed by providing diagnostic and treatment procedures at a high volume. The thought process was just to do more, more, more, and there was a significant lack of coordination in the healthcare field in the treatment of any patient. We're trying to evolve into a business where incentives change and we're paid for keeping people healthy rather than only taking care of them when they're ill.
We're also beginning to see the difficulty of shortages, the challenge of having the available human workforce to be able to provide care. We've started to address all of these challenges by understanding that healthcare has evolved into a data-driven business. It’s about gathering data-driven information — clinical as well as business/administrative.
To become more data driven, we're committed to investing 1.2 billion in clinical IT systems over the next 5 years. Our ambulatory systems are already being put in place for physicians. We're also about to proceed down the path of installing clinical IT systems on inpatient side to better manage the patient treatment process and experience. For us, specifically, that means we're putting all our facilities on advanced versions of Cerner and Meditech.
We're not just working to put in clinical info systems, but given the evolving nature of healthcare, we must also prepare in terms of having available population-based data. Everybody's talking about ACOs. In order to do that, we have to develop population-based information we can use to make decisions.
Q: A recent Thomson Reuters study on 255 health systems in the country found Catholic and other church-owned health systems provided more efficient care than for-profits. Why do you think that is?
MR: Over the last 5 years, CHI has become much more sophisticated. In general, Catholic hospitals have become more sophisticated in the way they manage resources.
We've evolved and improved as an operating company. CHI sets standards and has clear expectations system wide, and that alone raises performance levels on the business side. But I also think this begins to improve the quality of care we provide.
Also, we have a different kind of focus compared to for-profits, one that isn't so mono-dimensional. For-profits focus on shareholder value, which can take your mind off why you're in healthcare. The need to distribute profits to shareholders means that you've got to be taking resources away from the ability to reinvest in your organization, whether better staffing, new equipment or other improvements.
Q: Besides the system's geographical breadth, what else makes CHI's hospitals exceptional? What value does a Catholic healthcare system offer that others may not?
MR: We are a very mission-focused organization. That's not to say others aren't mission-focused, but ours is very clear. We're focused on improving the health of the community. As an organization, we try to go beyond only providing hospital services. We try to participate in the communities we're involved in. CHI has provided grants to communities and funded projects, sometimes focused on social issues in the community.
For example, right now CHI is focused on addressing violence prevention in the communities we serve. If you look back at patient data, many admissions are related to violence — gang violence, domestic violence. We provide grants to address these issues and move beyond treating sick people and toward keeping them healthy and away from injury.
We have about 73 hospitals and about 40 long-term facilities in 20 states. We're able to take advantage of significant economies of scale. Our national headquarters, located just outside Denver in Englewood, Colorado, is apart and distinct from our hospitals. That office allows us to look at the 45 markets we're in, step back, remain objective and get away from being crisis oriented. We see and understand the trends taking place. We can take learning from one market and share those findings with another. We can do two things at once — notice trends and prepare for those trends in other markets.
Q: How is CHI approaching the new CMS rules for same-sex domestic partners and visitation rights?
MR: We're very clear there. CHI supports basic rights for all patients — we've supported that for several years. In terms of visitation rights, people who are sick deserve to make their own decisions. It shouldn't be a legal issue.
Q: What are CHI's largest plans for the year ahead?
MR: Obviously, our biggest plan is related to clinical IT. We're also trying to prepare ourselves for other aspects of healthcare reform related to ACOs.
We're also beginning to think about shortages, those that are going to hit us very soon. CHI is considering the use of technology to offset workforce shortages and raise quality of care across the country. We're in all sorts of markets. We're in rural, midsized, metro areas and across the board.
Obviously, these hospitals have different capabilities. But we're starting to believe that if we leverage technology, specifically telemedicine, telepharmacy and teleradiology, we'll be in a position to use the highly sophisticated resources of our largest facilities to provide a level and quality of care in our midsized, rural markets that they would not be able to afford on their own.
How do we provide higher, more sophisticated level of care to those rural hospitals with less than 20 beds? We may be able to take X-ray films, digitize them and transport them over HIT to a more resource-rich hospital. They can read the films real time and provide a diagnosis back to that physician in the small, rural hospital.
The same could be said for trying to address workforce shortages. More and more, we're finding these small, rural pharmacies can't afford 24-hour pharmacists. Electronically, we have ability to take pharmacy orders and electronically transport them to our 800-bed facility. CHI is positioned to do that, and we believe there is more and more opportunity to lessen workforce shortages and improve quality of care by being innovative the process of caring.
Learn more about Catholic Health Initiatives.
Read other Q&A's with hospital leaders:
-The Future of Healthcare Delivery and Your Hospital: Q&A With Johns Hopkins Medicine CEO Dr. Edward Miller
-Departing Froedtert CFO O'Connell Discusses 30-Year Career and Healthcare Finance Trends (Part 1 of 2)
-Departing Froedtert CFO O'Connell Discusses Healthcare Finance Trends (Part 2 of 2)