James LaBelle, MD, was named corporate senior vice president and CMO of San Diego-based Scripps Health in January 2013. As a physician who practiced emergency medicine for more than 25 years, Dr. LaBelle now leads Scripps' 2,600 affiliated physicians and helps drive systemwide efforts to cut unnecessary variation and costs while maintaining quality. It's a balancing act, and some of the hardest work Dr. LaBelle says he's ever encountered — but the work also comes with great rewards.
Cost-cutting is nothing new to five-hospital Scripps. For the past three years, the system has implemented performance improvements that totaled $77 million in savings for fiscal year 2011 and $64 million in fiscal year 2012. This year, Scripps hopes to save $66 million through new clinical initiatives, redesigned operational processes and workforce development.
More and more, Scripps physicians are leading these efforts and making important decisions on how to improve care delivery. The system has formalized eight clinical care lines, led by groups of physicians, for its main specialties to reduce unnecessary variation in care. Recently, it has also implemented a cardiovascular surgery initiative, in which surgeons identified best practices for diagnosis-related groups. Within one year, Scripps reduced the average length of stay for cardiac surgery patients by 0.8 days.
Here, Dr. LaBelle discusses his first six months as CMO of Scripps, how he views the emerging role of prices in healthcare and how he empowers physicians to take charge of improvements within the system.
Question: As someone who has served in the CMO role for roughly six months now, is there any advice you'd share with someone who was about to assume the CMO role with his/her health system? What are some lessons you've learned since January?
Dr. LaBelle: It's been the most challenging job I've ever had but also the most rewarding. I've never worked this hard in my life, with the exception of my internship, and that was in the time of 80- to 90-hour work weeks. It's a hard job.
I think the rewards, in terms of understanding and influencing policy and driving change, are profound and deep. They allow you to touch not just one patient at a time, serially, but multiple patients over time throughout San Diego County. I find two emotions from that: One is just a profound honor. The other is this scary obligation to get it right.
There is absolutely stuff that keeps me up at night. [We are] guiding the health system in a time of profound transition, and [must ensure] that transition is done without damage to the health system and its physicians. But most important is making sure we've maintained a safe health system that meets the quality expectations we hold for Scripps.
There have been a number of structural things we've done in the quality department. We spent a great deal of time to put in controls and monitors as we drive change, so there are deep, robust mechanisms monitoring clinical process performance and elevating risks to the appropriate level in a timely fashion. If I was a CMO coming in [to a new organization], I'd spend great time on due diligence in risk detection at that organization. The biggest risks are going to be clinical risks to patients.
Q. The national conversation about healthcare prices has really picked up steam in the past few months. An important component of this is that even physicians have a hard time learning the price of a treatment. What are your thoughts on how the system needs to be repaired, in this regard?
JL: Price is such a difficult thing. From a physician perspective, the price in a hospital's chargemaster is almost completely irrelevant as a measure of resource value. No one in any hospital understands how the price [for a service] got to be. Really, what is important is the cost. It's not the individual line item that's important, but how you knit the whole fabric together.
What I communicate is that we are used to competing by encounter. Hospitals are paid by admissions, and doctors [are paid] by the RVU and [patient] encounter. Neither one of us adds value to the patient that way. We only add value to the patient at the level of the medical condition over the full cycle of care.
[The goal is] this health system and its doctors managing the resources to take that person to their maximum functioning. Nobody should really care about price of cardiac catheterization. We should really care about price of maintaining cardiac health, and within that is price of cardiac catheterization.
We're fairly late in the entry into computerized physician order entry, and it's our absolute intention to communicate cost data to physicians as they do their orders. I think that data needs to be much more transparent to physicians, but it's probably not as important as being transparent around the cost of maintaining population health for a particular [health] issue. What are the actionable items that can manage a population's health?
Honestly, I don't think, under the current paradigm, [prices] should be compared. We need to compete in a different way, not through line items and chargemasters. We need a system that competes on outcomes. Why spend time fixing a system that, on its underpinnings, can't be fixed? We need to devote more attention to measuring meaningful value and resource allocation.
Q: Related to that, what work is happening at Scripps to either promote price transparency or cut healthcare costs? How do you communicate this to physicians?
JL: Physicians have to be full partners with the hospital system to engineer care. The cost of care needs to be evaluated and fed back to doctors in a way that is clinically relevant and meaningful. We've devoted a lot of resources to building an enterprise data warehouse to feed physicians real information about variation in care patterns across the system. [We have] clinical care lines that connect the fabric of care per condition. [We] drive conversations around [questions like,] how do we need to engineer care for that disease state?
For example, our cardiac care line has a workgroup for congestive heart failure. That group is responsible for engineering care [for cardiac patients in numerous care settings]. They need relevant cost data around the costs of those patients, and they need to look at patients across the enterprise in all populations — not just at congestive heart failure in a single site. This has to be managed over continuum of time.
We've built formal structures and formal physician leadership to support that. There are eight care lines: cardiology, neurology, women's health, children's health, primary care, behavioral health, orthopedics and spine. Within each are several work groups. Cardiology has congestive heart failure and percutaneous coronary intervention, for example. Neurology has workgroups for stroke and delirium.
[Within each care line,] four to five physicians play leadership role. They design the strategy and have conversations with one another about consolidating services. It's partly about those high-risk and high-expense interventions. Not only do we get better outcomes if we consolidate services, but we have lower costs. Physicians need to be having these conversations, not hospital administrators. If physicians have the same data as hospital administrators, they can end up at the same conclusions or better than hospital administrators.
Q: It sounds like, more and more, physicians are taking the lead in Scripps' integration efforts, as well as those to boost quality and cut costs. How have you empowered physicians to take the reins with these initiatives?
JL: Health systems that haven't been able to develop physician leadership — or give smart people the same information so they can come to the same conclusions — will be at a competitive disadvantage. Those systems that partner with doctors in decision-making and go through the hard journey of letting up control and trusting physicians as full partners will make early decisions around consolidation of services and [reap] not only financial rewards, but quality rewards that will drive volume in the future.
I think the partnership with your physicians is going to play a profound role in how successful [hospitals and systems] are competing in the marketplace. It will be more difficult for hospitals to do that, though, as they come under more financial constraints. It's a catch-22.
Q. What is your personal leadership style like with physicians? How do you empower them?
JL: Physicians are like everybody else. You have to invest in them and support them as they develop their ability to lead. It's important that you have a group, not just individual physicians, committed to developing others.
It's really important to understand a lot of physicians who haven't been fully developed don't have capabilities to lead alone. They need additional help or support as they develop their leadership style in meetings and as they learn from mistakes. The expectation shouldn't be, "These physicians will lead and learn lessons without making mistakes."
We have an investment in our physicians through our Scripps Physician Leadership Academy. It's a cohort of 60 physician leaders who meet monthly to work through some skills of leadership development, strategic planning, vision and marketplace [trends]. They translate those skills into tasks they [face] in medical group leadership roles, medical staff, system leadership roles and other leadership roles they're interested in. I think that's essential. You must have a well-developed physician leader [and] they have to learn how to think strategically.
Q: What about Scripps helps set it apart from other organizations in terms of physician engagement?
JL: I came into [the CMO role as a] partner with a CEO who had a deep philosophy around partnering with physicians. It's an interesting story, in that in talking to people, he's been that way his entire career. But it came to a head a dozen years ago when there was a vote of no confidence, and the former CEO of Scripps was asked to leave.
Chris Van Gorder came into the role and established our Physician Leadership Cabinet, where every important decision is aired in a spirit of partnership with complete transparency with CEOs from each hospital, the CEO of the system and medical staff leadership. That's set the tone for partnerships with physicians for leadership within the system. It's not new since I've been here. I've been the beneficiary of that philosophy. But it's funny how the right person for the right crisis [can have such an] impact for the organization and create a legacy.
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