Jim Skogsbergh has been at the helm of Advocate Health Care since April 2002. During that time, the 12-hospital system, the largest in Illinois, has experienced or been at the forefront of nearly every trend now influencing providers, insurers, employers and patients nationwide. As he becomes chair-elect of the American Hospital Association, Skogsbergh acknowledges that each market will have different solutions to its challenges, but says there needs to be one common goal — the Triple Aim. He sat down for an interview with Hospitals & Health Networks assistant managing editor Matthew Weinstock.
The drumbeat that we pound day in and day out is that we are first and foremost a safe clinical enterprise. It is all about the care that we give our patients. It’s never been about growth. The growth that we’ve experienced has been wonderful, but it has not been aggressively sought.
I arrived at Advocate in 2001 as chief operating officer. I remember one of my first meetings. The system had basically broken even, so there were some significant challenges. The board wanted us to center our energies on getting our house in order.
I became CEO 15 months later when Richard Risk retired. During that first phase, we focused on finances and operations. After that, we were able to look out on the horizon. Our biggest criterion for looking at growth opportunities is: “Do we see the world the same way?”
If an organization is as focused on safety and health outcomes as we are and is as committed to making health care as affordable as we are, then we think it might be a good fit.
So, yes, we’ve had some good luck. Some organizations have turned to us so that they might more quickly get to an end point. For instance, our managed care and clinical integration capabilities have been fairly unique until now. And we’ve identified a number of organizations that we think would be great partners, and we’ve let them know: When the time comes, if there is an interest, we’d love to talk to you.
One of those ships has come in.
We have long admired NorthShore University HealthSystem. It does everything well. There’s a commitment to excellence and it has unbelievable quality outcomes. The leadership team is first-class.
It is not insignificant that NorthShore also is in a geographic market where we lack a presence. The managed care companies that we work with have been direct with us, saying that we need to fill some of our geographic holes. So, geographically, the NorthShore merger works perfectly, but that wouldn’t have been enough. They also bring organizational strength.
They have a large employed physician group totaling almost 1,000 doctors. We have about 1,300. We are both committed to physician alignment. The difference is that we have a larger percentage of aligned physicians who are not employed.
I think both organizations, though, believe that this is about being provider-based. It is not hospitals versus doctors. It is about all of us getting on the same page. Therein lies the core similarity, and it’s one of the reasons we believe this partnership is going to work so well.
We have really great physician leaders and we are going to turn them loose. It’s about saying, “Here are really good data. If they result in better outcomes at a lower cost, let’s embrace them.” Nine times out of 10, people will agree with that theory.
We fundamentally believe that if you reduce variation, you’ll get not just better health outcomes but a lower cost as well. We are committed to making health care more affordable and we have a track record that has demonstrated it.
We need to look at the data, figure out what they are telling you and find ways to fix them. The readmissions penalty under the Affordable Care Act is an example. Some of our hospitals have been penalized. Let’s not spend the next several months debating it. We’ve moved off of that and said, “Where do we need to get better?”
We have an objective view of ourselves that is constantly in play. Then the questions become: Who has a great outcome in this area? What can we learn from them? What pieces of their approach are easy and make sense for us right now and what pieces don’t work for us? What you did today may not provide you with the best results tomorrow.
The Value Equation
I happen to be a big proponent of fee for value rather than fee for service. I understand that not everyone in the field agrees with me. One size does not fit all.
The notion that Advocate is so committed to value-based contracts doesn’t mean that everybody needs to go there. Not everyone has the infrastructure to accomplish that. Nonetheless, I feel strongly that the fee-for-service approach is one of the reasons that we face our current financial situation. Moving away from that is in the best interest of everyone.
In 2011, we entered into a unique shared savings contract with Blue Cross Blue Shield of Illinois. Leading up to that, we had been in a quite public dispute with them. As is often the case, when you peer over the edge into the abyss, you realize that you don’t want to go there.
A couple of other things helped to facilitate the unique partnership. Karen Atwood, who had been at BCBSIL for a while, became president. Its chief medical officer was a former Advocate doctor. And, BCBSIL leaders, I think, were anxious about conversations taking place over legislation to create health insurance exchanges. They had just completed an audit and it wasn’t clear how they were going to get there.
Combine those factors with the fact that we had this public dispute, which neither side wanted, and it was time to change the conversation. We didn’t want to have the same debate every two or three years over how much we were getting paid.
Both sides agreed that it was time to flip the switch — “Pay us for better health outcomes if we lower costs.”
One of the things we’ve learned during the past couple of years is that even our partnership needs to advance and mature. The contract pays us if we continue to beat the market, but as the market keeps improving and rising, it becomes more difficult to do that. We need to move to something else and we are having those discussions.
Meeting Community Needs
Every market across the country is approaching this differently. There’s a lot of variation in the field about, No. 1, the ability to take on more risk, and, No. 2, the willingness. I think providers in large markets need to learn to take on risk. The population health movement is not going to go away. In other markets, mostly in states where the population is lower, that may not come to them for quite some time.
I worry about some of the smaller hospitals in the field. I can’t imagine taking on some of these challenges without the kind of resources that we have, which is why I think we’ll continue to see consolidation. I know that’s of great concern to some people.
I’m amazed when I hear some of my peers say that their No. 1 priority is to stay independent. The No. 1 priority ought to be to provide great health care for your community. How you do that can be a source of great debate in the boardroom and at town hall meetings, but the focus ought to be how you are meeting the needs of your community, not about being independent.
Independence may not be the right word. It is how you partner with others to get the resources you need. It doesn’t need to be a full-asset merger. There are lots of different partnerships.
Matthew Weinstock (firstname.lastname@example.org) is assistant managing editor of Hospitals & Health Networks, Chicago.
Running a Faith-based Organization
In 2000, I was in Des Moines, Iowa, with Iowa Health System, which is now UnityPoint, running the flagship hospitals — Iowa Methodist, Iowa Lutheran and Blank Children’s Hospital — and I received a phone call from a search firm that was trying to recruit the No. 2 position at Advocate.
I remember my interview with the search committee. The first question they asked wasn’t “Could you tell us about your physician relationships?” or “What about the last building that you built — was it on time and on budget?” or “How do you allocate capital at the Iowa Health System?” No, the first question was, “How comfortable are you leading a faith-based health care system?”
That absolutely hooked me and I’ve never looked back.
I love that our personal faith and our work are inextricably intertwined. We are talking about God. We are talking about loving our fellow human being. We are talking about serving all day long, and I love that. It’s one of the things that makes it very meaningful for me.
The patient fits into the center of all of that. It is about serving health needs. We believe that there’s a spiritual side of healing, as well as emotional and physical. We realize that some people reject that, and that is fine. We are not here to convert people, but we are here to express God’s love in the way that we care for our patients.
I attended Iowa State University, where I had an opportunity to play baseball. I was a pitcher. Academically, I was undeclared for three years. Initially, I thought I’d want to teach or coach.
It was my mother who got me thinking about health care administration. She was a nurse and I remember her suggesting that I consider hospital administration. I didn’t know what it was.
During my junior year, there were a couple of gentlemen who were kind enough to let me interview them about the field. I loved the way that they described the work. Health care is very personal. It’s not about making widgets. And I was impressed by the complex nature of hospitals. They also explained how no two days are the same. That was enough for a fairly young kid to find interesting.
So, for the first time in three years, I went to my academic adviser and asked how I could graduate. I got my degree in physical education and applied to graduate school. I graduated on Aug. 18 and started in the master of health administration program at the University of Iowa on Aug. 20.
I had a summer experience in a Catholic hospital in my hometown. It was specifically the one where my mother did not work. One of the sisters there took me under her wing. I loved it, but things really clicked for me during my administrative residency, which is now a postgraduate fellowship.
I was fortunate enough to go to South Bend, Ind., and work for Steve Ummel, who was president and CEO of Memorial Health System. He became my mentor, and I couldn’t have been more fortunate.
Steve had a very successful career and ended up helping to create Advocate Health Care through the merger of two Chicagoland health systems.
He did everything as a mentor. He allowed me to observe and participate. He promoted me early in my career and gave me some wonderful opportunities. He was an outstanding role model as a health care executive, a father, a husband and a human being.
Maintaining Unity in the Field
I have the privilege of serving as the American Hospital Association’s chair-elect next year and chairman in 2016. I see my role as coming alongside the association’s leadership and assisting them where and when needed. I don’t want to minimize the role of the chairman, but it is not about my agenda, it’s about the AHA’s agenda.
The biggest concern of the board members is field unity. As the Affordable Care Act continues to roll out and other pressures come to bear — and they are coming, especially economic — there is the possibility of more divisiveness in the field.
There are many different interests in a field this broad, but we are much stronger united than divided. Our concern is that sometimes people forget that.
I’d love to see us be more deliberate about telling the good story of the AHA. There are so many things that go unnoticed — for instance, highlighting the behind-the-scenes work that goes into fending off a bad piece of legislation.
With the economic pressures ahead of us, the AHA is going to have to be nimble. That’s what “redefining the H” has been about — that notion that there may be several paths to the same end. The AHA needs to be able to assist organizations as they take those different paths.
We can provide some direction for the field, but make no mistake: It is about the Triple Aim — better health care, better outcomes and lower costs. You don’t get to choose which one of those you want; it is all of those things.