Joseph Swedish, president and CEO of Livonia, Mich.-based Trinity Health, discussed his transition from the provider to payor side of healthcare at the American College of Healthcare Executives' 56th Congress on Healthcare Leadership Monday in Chicago.
Indianapolis-based WellPoint, the largest managed care branch within the Blue Cross and Blue Shield Association, named Mr. Swedish as its CEO in mid-February. Mr. Swedish will leave for his new position as Trinity merges with Newtown Square, Pa.-based Catholic Health East, which will create an 82-hospital system across 21 states.
During his presentation Monday, Mr. Swedish talked about some of the challenges he anticipates in his move to the payor side, particularly to a publicly traded company. "Everything we do is transparent and well-written about and stands [to receive] criticism daily, or even by the minute. It's an organization that, if you follow some of the literature, has struggled as of late," said Mr. Swedish, noting that there's been "somewhat of a leadership vacuum" at WellPoint.
A major hurdle he faces is figuring out whether the current WellPoint team has contributed to silos within the organization or if the disconnect is simply the result of trying circumstances in the industry. "Given changes in the marketplace, what talent is necessary to prop up the organization and take us to places we never thought possible? You can have all the IT systems in place and other moving parts that make an organization work, but if you can't have the right leaders in place, none of it works."
A Congress attendee asked Mr. Swedish whether payors will become providers' biggest competitor down the road. "I was asked three times this weekend, 'How many providers are you going to buy?'" said Mr. Swedish, laughing. "Certain payors have different agendas, and I can't speak for them, but my view is that the provider community does a darned good job doing what they've developed for decades. Why would payors come into a market and try to acquire a provider network and spend a lot of strategic capital that could be applied elsewhere or applied for a [provider-payor] partnership?"
"From WellPoint's vantage point, I just don't see that happening in short order," said Mr. Swedish. "It's very market-specific. So I think the best way to answer your question [about acquiring providers] is to say, 'It's a definite maybe.'"
Another attendee gave Mr. Swedish a good-natured teasing by suggesting he was switching over to the dark side. Mr. Swedish said he's thought about that very phrasing a lot lately.
"I always said payors were on the dark side...and I'm certain that on the other side, payors would say health providers are on the dark side," he said. "But I'm trying to figure out this conversation. If there's a dark side, there's a light side. Quite frankly, I'm not too put off by the term 'going to the dark side.' If that's the side I'm on, we need to marry dark and light. It sounds philosophical, but I think it represents where we're going as an industry."
In addition to discussing his move to WellPoint, Mr. Swedish discussed trends he's observing among healthcare providers and mistakes he doesn't want to see the industry make again. "We're making new bets every day," he said, especially in regards to health exchanges, low-cost healthcare, actuarial talent, branding, pricing and new employment models. "We've never been called to task in this way before."
Mr. Swedish named a number of challenges and opportunities facing providers. He's nicknamed health insurance exchanges "jump ball opportunities," noting that if health systems do not adapt, they'll be left behind. He also noted the influence these models will wield on providers' pricing and branding campaigns. "We think about exchanges as government [phenomena], but the reality is a number of large-scale employers want to move employees to private exchanges," he said.
He said exchanges have also breathed new life into healthcare consumerism. He forecasted that through 2017, there will be an "incredible push" to move beneficiaries to take on more risk, if not all. "I think it will happen quickly because of exchanges starting next year for individuals and small employers," said Mr. Swedish.
The transition to value-based payment models is one that must be done in one leap, said Mr. Swedish. "How many of you lived through managed care agreements in the 1990s? We can't make that mistake all over again. What happened is simple — we priced everything backwards. We priced it at an average cost [and] somehow put prices in terms of revenue at a revenue rate below our average costs. My fear is that will happen again as organizations pursue risk-contracting [arrangements]." He said Trinity Health has brought on talent from the payor side and embedded those experts in its senior management to improve pricing.
Despite the wave of innovation enveloping healthcare, Mr. Swedish acknowledged that healthcare is prone to incremental change. He recalled a conference he attended last January, in which approximately 250 healthcare executives were asked how they planned to respond to the Patient Protection and Affordable Care Act. Roughly 40 percent of them said they did not plan to do anything differently in face of the PPACA. "This year, to that same question, 25 percent of people said they're not doing anything differently," said Mr. Swedish.
Mr. Swedish named the seven C's, or imperatives, he thinks drive leadership characteristics in organizations: consumerism, culture, consolidation, consistency, collaboration, coordination and cost. He called upon leaders to change their mindsets and business models to drive success. "It takes masterful strokes of leadership to reach out to new spaces, quite frankly, in a way many other people wouldn't go to, due to fear or whatever it may be," said Mr. Swedish.
Sally Jeffcoat, president and CEO of Saint Alphonsus Health System in Boise, Idaho, shared this session with Mr. Swedish. To read about Ms. Jeffcoat's presentation, click here.
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Indianapolis-based WellPoint, the largest managed care branch within the Blue Cross and Blue Shield Association, named Mr. Swedish as its CEO in mid-February. Mr. Swedish will leave for his new position as Trinity merges with Newtown Square, Pa.-based Catholic Health East, which will create an 82-hospital system across 21 states.
During his presentation Monday, Mr. Swedish talked about some of the challenges he anticipates in his move to the payor side, particularly to a publicly traded company. "Everything we do is transparent and well-written about and stands [to receive] criticism daily, or even by the minute. It's an organization that, if you follow some of the literature, has struggled as of late," said Mr. Swedish, noting that there's been "somewhat of a leadership vacuum" at WellPoint.
A major hurdle he faces is figuring out whether the current WellPoint team has contributed to silos within the organization or if the disconnect is simply the result of trying circumstances in the industry. "Given changes in the marketplace, what talent is necessary to prop up the organization and take us to places we never thought possible? You can have all the IT systems in place and other moving parts that make an organization work, but if you can't have the right leaders in place, none of it works."
A Congress attendee asked Mr. Swedish whether payors will become providers' biggest competitor down the road. "I was asked three times this weekend, 'How many providers are you going to buy?'" said Mr. Swedish, laughing. "Certain payors have different agendas, and I can't speak for them, but my view is that the provider community does a darned good job doing what they've developed for decades. Why would payors come into a market and try to acquire a provider network and spend a lot of strategic capital that could be applied elsewhere or applied for a [provider-payor] partnership?"
"From WellPoint's vantage point, I just don't see that happening in short order," said Mr. Swedish. "It's very market-specific. So I think the best way to answer your question [about acquiring providers] is to say, 'It's a definite maybe.'"
Another attendee gave Mr. Swedish a good-natured teasing by suggesting he was switching over to the dark side. Mr. Swedish said he's thought about that very phrasing a lot lately.
"I always said payors were on the dark side...and I'm certain that on the other side, payors would say health providers are on the dark side," he said. "But I'm trying to figure out this conversation. If there's a dark side, there's a light side. Quite frankly, I'm not too put off by the term 'going to the dark side.' If that's the side I'm on, we need to marry dark and light. It sounds philosophical, but I think it represents where we're going as an industry."
In addition to discussing his move to WellPoint, Mr. Swedish discussed trends he's observing among healthcare providers and mistakes he doesn't want to see the industry make again. "We're making new bets every day," he said, especially in regards to health exchanges, low-cost healthcare, actuarial talent, branding, pricing and new employment models. "We've never been called to task in this way before."
Mr. Swedish named a number of challenges and opportunities facing providers. He's nicknamed health insurance exchanges "jump ball opportunities," noting that if health systems do not adapt, they'll be left behind. He also noted the influence these models will wield on providers' pricing and branding campaigns. "We think about exchanges as government [phenomena], but the reality is a number of large-scale employers want to move employees to private exchanges," he said.
He said exchanges have also breathed new life into healthcare consumerism. He forecasted that through 2017, there will be an "incredible push" to move beneficiaries to take on more risk, if not all. "I think it will happen quickly because of exchanges starting next year for individuals and small employers," said Mr. Swedish.
The transition to value-based payment models is one that must be done in one leap, said Mr. Swedish. "How many of you lived through managed care agreements in the 1990s? We can't make that mistake all over again. What happened is simple — we priced everything backwards. We priced it at an average cost [and] somehow put prices in terms of revenue at a revenue rate below our average costs. My fear is that will happen again as organizations pursue risk-contracting [arrangements]." He said Trinity Health has brought on talent from the payor side and embedded those experts in its senior management to improve pricing.
Despite the wave of innovation enveloping healthcare, Mr. Swedish acknowledged that healthcare is prone to incremental change. He recalled a conference he attended last January, in which approximately 250 healthcare executives were asked how they planned to respond to the Patient Protection and Affordable Care Act. Roughly 40 percent of them said they did not plan to do anything differently in face of the PPACA. "This year, to that same question, 25 percent of people said they're not doing anything differently," said Mr. Swedish.
Mr. Swedish named the seven C's, or imperatives, he thinks drive leadership characteristics in organizations: consumerism, culture, consolidation, consistency, collaboration, coordination and cost. He called upon leaders to change their mindsets and business models to drive success. "It takes masterful strokes of leadership to reach out to new spaces, quite frankly, in a way many other people wouldn't go to, due to fear or whatever it may be," said Mr. Swedish.
Sally Jeffcoat, president and CEO of Saint Alphonsus Health System in Boise, Idaho, shared this session with Mr. Swedish. To read about Ms. Jeffcoat's presentation, click here.
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