Navigating healthcare economics and system growth demands nimble leadership that is both mindful of market constraints yet sensitive to patient needs. To meet these demands, Joseph Bosco III, MD, of New York City-based NYU Langone Health, counts intelligent integration and providing access where patients live as key strategies in achieving the system's goals.
Dr. Bosco serves as vice chairman for clinical affairs of the NYU Langone Department of Orthopedic Surgery. He is also professor of orthopedic surgery at the NYU Grossman School of Medicine.
In conversation with Becker's, he shared his approach to sustainable growth, explained his strategies for achieving it, and offered insights on the key economic forces that will shape the future growth strategies of health systems.
Editor's note: Responses were lightly edited for length and clarity.
Question: As a leader navigating system growth in a rapidly changing healthcare landscape, how do you define sustainable growth for your organization in the current economic environment?
Dr. Joseph Bosco III: We've seen some of our colleagues grow for the sake of growth in an unsustainable fashion. What I mean by that is that they're acquiring places that are really impossible to integrate. We feel that acquiring without integration is not helpful because you don't get any of the benefits. And so, what I mean by integration is when you acquire a place, you integrate them into your overall strategy, you integrate them into your value analysis and product categories in terms of purchasing.
If you bought a group or a hospital and they insisted on using Zimmer implants and your network doesn't use Zimmer, they use something else and aren't willing to change, that can be problematic. We'll have a deal with Zimmer or we'll have a deal with another implant company, and they insist on using expensive implants that they refuse to change. That's not sustainable.
Or they don't use the same pathways, or they don't practice in the same way. So, there has to be a similarity in culture, or at least a willingness for them to change their culture a little bit. We believe that integration is the key to sustainable growth, that you have to be able to integrate whatever hospital or group that you purchase.
Obviously, that means different things for different people, depending on where you are geographically. In the New York City marketplace where we are, it's still a fragmented marketplace, so there's ample opportunity to grow in and around the New York metropolitan area. We don't have to go overseas or anywhere else. We do have a small footprint in Florida, but most of our growth is looking in the New York metropolitan area, where we feel the care is still highly fragmented and there are ample opportunities.
Q: How does NYU Langone orthopedics sustain growth in research and innovation while managing financial sustainability in a highly competitive market like New York City?
JB: I don't think New York City is any more competitive than anywhere else. I've consulted and been around other places in these nice little towns and cities that are very friendly, but there's still a competitive marketplace. So, I don't buy the fact that New York City is more competitive than anywhere else.
Having said that — and I'm going to just frame my answer for academic medical centers — you have an academic medical center that is anchored by a hospital. It used to be that people would drive hundreds of miles to see the experts at the academic medical center. To a certain extent, some of those patients still exist because they have very complex problems, but that's not where academic medical centers make their margin. They make their margin on bread-and-butter cases done in an excellent fashion.
So, what we see is that we're training our residents and fellows, and as former president of the American Academy of Orthopaedic Surgeons, I'm here to tell you that there are a lot of excellent orthopedic surgeons out there in the community giving great care. People don't have to drive into New York City. They live in some of the outlying suburbs. If they want to come into the city to see us, they'll drive past 10 competent orthopedic surgeons. And as time goes by, fewer and fewer want to do that. They'll get competent orthopedic care in their own community. So, what we've decided is to go into the communities to increase our accessibility.
We've made a conscious effort not just to include high-net worth communities. If you read some of the playbooks on how to grow your margins, they suggest going to the zip codes with the highest net worth and plopping down an inventory center. We go where our care is needed, whether it's rich or poor areas. What we've done is establish outpatient surgery centers and orthopedic care centers where the people live and staff them with our physicians, so they don't have to come into the city or drive 50 miles to access our care. With orthopedics now being primarily an ambulatory subspecialty, we can do many of our surgeries at surgery centers, whether it's joint replacement, sports or even spine. There are very few patients who have to drive into the city to get specialized care.
We feel that increasing accessibility by establishing outpatient care centers in the communities where patients live is going to be our sustainability. I tell my folks, it's like we're in a fort and surrounded by our enemies, who are really our competitors. Even our own residents who love us go out into the community and practice, and they're great. So, why should someone come to me for an ACL reconstruction when they could see someone we trained who lives in their community? That's the key to sustainability. You can't just sit in your academic ivory tower and expect patients to come to you anymore.
Q: Partnerships are crucial for growth. How is NYU Langone leveraging collaborations to navigate economic challenges and foster expansion?
JB: When you look at someone like Warren Buffett, the CEO of Berkshire Hathaway, he would always meet the owners before buying a company to see if there was a cultural fit. I think that's what we do too. We have to look and see if there's a cultural fit. NYU has not done many partnerships; we mostly do full mergers or acquisitions. It's a full-asset merger under the NYU heading. But we take the best of what each institution has because we believe the sum of the parts is greater than the whole. When we acquire an institution, we don't go in saying, "This is the NYU way." We pick and choose the good things they do and incorporate them into our practices. We learn almost as much from the institutions we acquire as they learn from us. It's a give and take.
Q: Looking ahead to the next five years, what do you see as the most significant economic forces or trends that will shape the growth strategies of health systems, and how are you positioning your organizations to adapt?
JB: We've gone over the consolidation in the healthcare industry, and we have to continue consolidating. For academic medical centers, the model has always been to focus on three missions: clinical care, research, and education. For years, academic centers would only operate with residents to teach them. Now, some of our folks operate with PAs because, as we expand and consolidate, not everyone operates with residents. There aren't enough training spots, and not everyone is involved in teaching. That's okay, as long as their clinical care is excellent and aligns with our standards. We have a big tent now, including community surgeons who do a great job but aren't focused on research or teaching.
People view academic centers as places for innovation and cutting-edge technology, but this technology is expensive. In an era of value-based care, you need to be thoughtful about what innovations you adopt. New technology is rarely less expensive, so you have to consider the incremental cost-benefit. If it's more expensive, you need to know how much it improves outcomes.
Hospitals across the country, whether academic or not, are facing rising expenses that outpace revenue. Controlling expenses is key, and it's something the healthcare industry has never done well. We've often focused on innovation without considering costs, and then just raised prices. But at some point, that will end. We're seeing the end now. More of our patients are covered by government payers like Medicare or Medicaid, which pay a flat rate. It doesn't matter if you use an expensive robot for a joint replacement; you can't bill extra for it. As more patients are covered by government payers, we need to be more mindful of costs and ensure that our spending is associated with improved outcomes.