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Jim Hinton has a stretch goal for the American Hospital Association — to commit to transforming the nation's care delivery system into the finest in the world. That, says the president and chief executive of Presbyterian Healthcare Services in Albuquerque, N.M., would be a bold statement that the AHA and the field are ready to accept the mantle of change during these challenging times. As Hinton steps into the role of AHA chair-elect in January, he brings a wealth of experience building the type of integrated delivery model that seems to be well-positioned to take on health care's next curve. He sat down for an interview with Hospitals & Health Networks Senior Editor Matthew Weinstock.

My family has deep roots in New Mexico. As a kid, I loved my grandfather's stories — true or not — about Pancho Villa raiding across the border of southern New Mexico where my grandfather had been a dentist.

My dad was a contractor who built homes, including some Frank Lloyd Wright houses in Albuquerque's Country Club area. My mom was a stay-at-home mom to three boys until I was in junior high school. She worked in a series of jobs in which she was a director of volunteers, first at a mental health center, then at Lovelace Health System, a local health care organization, followed by the University of New Mexico. From her, I learned a lot about the challenges of organizing and motivating a volunteer league.

As the youngest of three boys with two older and successful brothers, there were a lot of expectations of me. I really didn't know what I wanted to do. I studied economics and psychology at the University of New Mexico and liked the combination of the social sciences and business.

During my senior year, I worked in the admitting department at the University of New Mexico Hospital, which is the county hospital and now the state's Level 1 trauma center. My mother worked for the CEO, Bill Johnson. One morning he stopped by and asked what I was going to do. I said, "Mr. Johnson, I really don't know. I think I'm going to go to law school."

"Why the heck would you do that?" he asked. "Have you ever considered health care administration?"

Until that moment in my life, I had never given two seconds of thought as to who ran health care organizations. Bill connected me with someone who ran the health care administration program at Arizona State University and, although I'd already been accepted by a few law schools, I ended up taking the entrance exam.

The program had a residency requirement and I applied for spots around the country. Presbyterian, an Albuquerque health care organization, offered me a residency and, although returning to my hometown wasn't part of some grand design, I started at Presbyterian on Jan. 10, 1983, and have been here ever since.

By the way, Bill still lives in Albuquerque and when I run into him, he continues to take credit for all of my success.

Changing the World

Most people who grow up in Albuquerque know Presbyterian because they were either born there or have family members who have worked there. Presbyterian has been around since 1908, and thousands of people drive by the large, red brick building on the east side of Interstate 25 on their way to work each day.

When I got to Presbyterian, I was in a very traditional hospital administration residency track and, frankly, I wasn't that excited about it. It felt like the ruts in the road were pretty deep, and there wasn't motivation in the early 1980s to make big changes. Presbyterian had just completed a strategic planning process. One of the conclusions the senior leaders had reached was that hospitals would not exist because there wasn't going to be any money, and health systems had to go out and diversify.

I became business director of Presbyterian's diversification arm. We started a collections agency, trucking company, medical supply distributorship and a physician office computer system. We also talked about developing joint ventures with doctors to better link with the medical staff and build revenue. Over time, we got out of trucking and other side businesses and my role became the development of the physician arm, which we called Presbyterian Physician Resources. Although we started to brand and market physicians, we came to realize that the underlying business structure is what made the key difference.

At the same time, Presbyterian was one of the first health systems in the nation to jump on the managed care bandwagon. So Presbyterian was on a parallel track of developing the managed care arm and developing the underlying physician organization.

I really liked these new developments and it felt very entrepreneurial to me. There were no ruts in the road. In fact, there were no roads. But there was a lot of resistance to hospital systems like ours getting involved in physician practices. There was political pushback, and when you add in the managed care element, it was a very volatile environment.

The First Big Wave

Developing our managed care model may be the most influential change in our organization over the last 30 years. We started the health plan in 1985. The strategic planners on our executive team did an amazing job looking over the curve of the earth and realizing that the fee-for-service world ultimately was going to be unaffordable. One of our local competitors, Lovelace, had a successful prepaid program, and we were losing patients to them. The combination of losing patients and our forward thinking about fee-for-service models being too expensive fueled our desire to start a health plan.

The organizational immune system of a hospital, though, will try to eat a health plan and a medical group development effort because they are very threatening to the hospital and to the independent medical staff structure. In Presbyterian's case, our health plan and medical group have grown significantly more than our hospitals. In fact, we shed some hospitals around the state while we were making significant investments in growing our health plan and medical group. Today, we have the largest health plan and largest medical group in the state.

Burning the Boats

There's that metaphor of having one foot in the boat and one on the dock. Today, more than 60 percent of our revenue is budgeted — that is, prepaid or capitated. We got there because of our belief that many of the underlying incentives for hospitals and doctors in fee for service are not good for patients and members and are not affordable for employers and governments.

Many people, including members of the AHA, disagree with this point, but our evidence shows that we can deliver more care, that patients will be healthier and it will cost less money if we create a common view of a patient across the continuum and we align incentives.

More care is not always better care. In a fee-for-service world though, if you reduce utilization, you reduce revenue. No business is going to operate against its own best interests in the long term, so the key is to line up the best interests of the patient and the financial model.

Elegant Solutions

We have some very exciting things that we are working on at Presbyterian.

One is a program that we developed with Johns Hopkins called Hospital at Home. A physician makes a decision that a patient needs to be admitted, but in this program, we actually admit people to their own homes. That puts into motion a lot of activity to actually convert a part of the patient's home into a hospital room. It is not home care, but hospital-level of care. We bring in all of the technology and remote monitoring that's needed. The doctors round on the patients a couple of times a day. There are nurses and pharmacists who round as well — whatever the patient needs.
We do this for a handful of diagnoses, usually associated with a chronic illness — chronic heart failure, diabetes — or pneumonia. On average, it costs $2,000 less than a hospital stay, and the care is as good or, in many cases, better.
Right now, our health plan is the only one paying for this. Other payers say, "That's a great program; let's talk about it next time we renew the contract." We are a Pioneer Accountable Care Organization and have petitioned the Centers for Medicare & Medicaid Services to include Hospital at Home in our ACO, but the agency hasn't been willing to do so. Given that Hospital at Home is a relatively small test, CMS probably doesn't feel as though it is yet worth adjusting the regulatory framework. I predict that will change in a couple of years.

There's another program that may actually have more of an impact. One of the most vexing problems for any hospital in America is inappropriate use of the emergency department. We have developed a program called Emergency Department Navigation, or ED Navigation. If a patient presents in one of our EDs with a condition that is not truly an emergency — "I think I've got a sinus infection," or "My back hurts" — we do a medical screening exam, which is required for EMTALA, and then we navigate the patient to a more appropriate venue of care such as primary care or urgent care. We guarantee that the patient will have a follow-up primary care visit within 24 hours, which we provide through our own medical group or through a community-based federally qualified health center or other clinic. We will pay for the initial visit if patients are uninsured. Where Hospital at Home is only available to Presbyterian Health Plan patients right now, ED Navigation is payer-agnostic.

We are navigating about 10 percent of the patients who show up in our EDs every day. Only about 5 percent have tried to come back to one of our EDs with a similar, nonemergency problem. These patients are establishing relationships with primary care physicians, and that's better care.

One of the biggest issues we had to work through was with our emergency doctors. They are trained to take care of patients who come into the ED, not send them to other doctors. There were cultural challenges in creating a system that the physicians felt was safe and effective.

The other thing we did was go to the local news media to explain what we were doing and why. We went to the other hospitals and said, "We are not doing this to move uninsured patients your way. If you see this happening, let us know." We were completely open and transparent with the community. I think there's a lesson in that.

Hospital at Home and ED Navigation are two examples of what we call Integrated Care Solutions, which sits at the intersection of the health plan, medical group and hospital. It involves clinician input, gathering and examining data, and looking for ways to reduce costs and improve quality. This is the future.

A Bold Message

With [2013 AHA Chairman] Benjamin Chu, M.D., [group president, Southern California and Hawaii, Kaiser Foundation Hospitals and Health Plan] and then me, you'll have two people in a row who come from this integrated world. I've thought about that a fair amount. You can't just go out from the AHA perspective and say, "OK, hospitals, go build this." We have to advocate for fair payment in the current world and, at the same time, be clear that hospitals are ready to step up to the challenges that we face. I don't think there's a lot of sympathy for hospitals that simply want more money — or the same money — and aren't willing to make fundamental changes.

The most compelling argument the association can make is that it is committed to transforming the American health care system to be the finest system in the world. That would be a bold message that AHA is accepting the mantle of change during this very difficult time.

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