With 80% of its business tied to government-sponsored programs, Livonia, Mich.-based Trinity Health is projecting a $1.6 billion financial hit over three years from federal changes to Medicaid and Medicare.
Trinity President and CEO Mike Slubowski said the response requires more than cost-cutting.
“The impact of [HR 1] on us is about $1.6 billion over the three-year period, and so we have really put an initiative in place called repositioning, where we’re not just focused on cost, but how we can really serve our communities and also meet our financial stewardship goals overall,” Mr. Slubowski said Nov. 3 during a keynote interview at Becker’s 14th Annual CEO + CFO Roundtable.
Mr. Slubowski spoke alongside Sister Mary Haddad, president and CEO of the Catholic Health Association. Sister Haddad, whose organization represents 650 hospitals and 1,600 long-term care facilities as the nation’s largest group of nonprofit healthcare providers, said health systems will continue to absorb the cost regardless of patients’ coverage status.
“We know that they’re still going to show up at our emergency rooms, and we’re still going to provide that care,” Sister Haddad said. “With uninsured and certainly underinsured, our uncompensated care costs are going to go up dramatically. And there’s only so much that can be done with finite resources that we have.”
Mr. Slubowski offered additional context on repositioning’s shape at Becker’s Annual Meeting on April 13, saying Trinity Health’s community-based services, including outpatient and virtual care, already represent 62% of its revenue, with a projection of reaching at least 75% over the next three to five years. He described the initiative as focused on three areas: refining clinical service lines, expanding community-based care and reducing costs, with particular emphasis on administrative expense.
In practice, repositioning includes directing patients toward cost-effective primary care sites and working to connect those who qualify for coverage to it, Mr. Slubowski said in November. One longer-term element of that work is the Program of All-inclusive Care for the Elderly. Trinity Health operates 28 PACE programs in 12 states and is developing five more. The model integrates medical care, social services, transportation, adult daycare, rehabilitation, medications and hospital care for dual-eligible older adults who qualify for nursing home-level care, with Trinity Health assuming full financial risk for enrolled participants.
“It’s not easy to implement given the requirements of states agreeing to support the program and designating service areas, but it’s a really worthwhile program and really important given the aging of America and the number of folks that are living on the poverty line,” Mr. Slubowski said.
Trinity Health has also implemented artificial intelligence tools, including one application that has focused on reducing friction in the prior authorization process. Mr. Slubowski described the system’s approach as that of “not an early adopter, but a fast follower.”
The system has applied AI in clinical settings as well, and Mr. Slubowski noted that patients have expressed a preference for AI-generated response notes over those written by physicians.
“It does have the capability to create a sense of empathy, completeness in terms of responses, and can be very useful in that regard,” he said. “It is transforming care delivery and service.”
Mr. Slubowski also described Trinity Health’s involvement in Civica Rx — a provider consortium he said secured low-cost drug access during the pandemic and is now focused on expanding affordable access to insulin — and Truveta, an organization he described as using blinded health system data to advance research and development of new therapies. Beyond clinical operations, he said the system has established farms at several of its locations to grow food for patients and community members who lack access to fresh produce, and has provided seed funding for affordable housing development.
Sister Haddad said the Catholic Health Association has been developing a framework for how the sector should approach AI decisions, launching its Center for Theological and Ethical Framework for AI Adoption in 2024. An interdisciplinary white paper from the center is expected in January. She said the center’s standard for evaluating any AI application comes down to a single question.
“Does it elevate human flourishing? That’s your litmus test,” Sister Haddad said. “If we’re just doing it for the virtue of new technologies, then we have a problem because we have to look at keeping the patient at the center, and I will also include keeping our workforce at the center.”
When asked what they would tell Congress, Mr. Slubowski said he would tell lawmakers they “blew it” on cuts to the ACA and Medicaid, and laid out two priorities going forward: a basic floor of coverage for every American covering catastrophic care and primary care, and a framework that allows providers to take full responsibility for total cost of care and outcomes rather than routing through intermediaries.
“We know we can do it. We know how to do it. It just gives us the ability instead of working through middlemen, if you will, to make it happen,” he said.
Sister Haddad said her message to Congress would center on a foundational premise — that healthcare is not an earned benefit but a basic human right — and that building the country’s delivery system around that principle is how the sector moves forward.
