6 thoughts on the state of healthcare from Scripps' Chris Van Gorder

Faced with ever-changing rules and regulations, hospital and health system CEOs must constantly keep a pulse on the healthcare industry and be ready to alter their organizational strategy any day of the week. Chris Van Gorder, president and CEO of San Diego-based Scripps Health, talked to Becker's Hospital Review about some of the biggest challenges and successes that are currently top of mind.

Mr. Van Gorder has led Scripps, a $2.9 billion integrated health system, since 2000. He is a fellow of the American College of Healthcare Executives and served as the 2010 chairman of the association.

His exposure to healthcare began as a hospital patient when he was critically injured while responding to a family dispute. After a long recovery, Mr. Van Gorder started a new career in hospital security, eventually rising through the ranks of healthcare management. Today, in addition to serving as Scripps' president and CEO, he is a reserve assistant sheriff to the San Diego County Sheriff's Department, in charge of the Law Enforcement and Search and Rescue Reserves. He also is a licensed emergency medical technician (EMT) and an instructor for the American Red Cross.

Here, Mr. Van Gorder took the time to answer our six questions.

Note: Responses have been lightly edited for length and clarity.

Question: What's your No. 1 worry right now?

Chris Van Gorder: Maybe it's because I'm a CEO, but I always worry about the economics of healthcare as we pivot from fee-for-service to a reimbursement model based on value. The costs of retooling the organization are enormous. Reimbursement is getting tighter and hospitals are being penalized for quality and readmissions. While we want to be able to retool, it's very challenging economically.

I'm also responsible for ensuring there is always stability for our employees. We had a small layoff this year, and I see that as a massive failure. [Note: Scripps announced plans in March to lay off 69 employees.] I have to always be looking ahead to ensure we remain financially stable so our workforce stays motivated to help us change and move forward.

Q: What recent developments or progress are you most excited about?

CVG: At Scripps, we've been financially successful for 15 years in a row now. We've struck very important affiliations and realized great ambulatory growth. I'm pleased that we've had strong staff engagement that has resulted in our being on the Fortune "Best Companies to Work For" list for nine years. And we've developed good relationships with our physicians and strong physician leaders, which has been key as we've worked to constantly improve our performance. As a result, we have the best bond rating of any nonprofit health system in the state* and we're listed by Truven Health Analytics as one of the Top 15 health systems in the nation.

As an industry overall, I'm glad healthcare is trying very hard to do the right thing. We are really looking at ways to deliver higher quality care across the whole continuum. Hospitals are now thinking about expanding ambulatory care, being responsible for the dollars we are given and findings ways to deliver better care in low-cost settings. While consolidation may pose a threat, so do silos. As the industry continues to become consolidated, we are also more connected than ever before.

Q: What are the most important policy changes you want to see made in the next five years?

CVG: I would like to see a pause on all of the new regulations and programs coming out of states and the federal government so we can get this retooling done before we have to start changing it again. We just got our latest employee engagement survey back, and the most common thing people are peeved with is the constant change. The rapid pace of change is incredibly fatiguing on staff and physicians. Healthcare in this country is too expensive and we do need to find a way to lower costs, but many programs that may be important for society don't always take into account the impact on those who actually provide the healthcare.

Q: What trends are you keeping your eye on?

CVG: Healthcare CEOs have to keep their eye on everything. Payer consolidation and provider consolidation — payers are consolidating to get leverage over providers so they can pay us less, and providers are consolidating to get leverage so they can be paid more. It's not surprising that the government has challenged the mergers with Anthem, Cigna, Aetna and Humana, because at a certain point so much leverage on the payer side could potentially create a crisis.

I'm always watching quality, readmission issues, behavioral health issues and staff safety.

And I'm watching new regulations, such as [the Medicare Access and CHIP Reauthorization Act]. Even though the final regulations are not out yet, doctors have a short time to pick up the new methodology.

It's like alphabet soup with the regulations: HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems), OSHA (Occupational Safety & Health Administration), JCAHO (Joint Commission on Accreditation of Healthcare Organizations), CMS, CDPH (California Department of Public Health), NLRB (National Labor Relations Board).

Q: What are the most essential leadership traits for healthcare system CEOs today?

CVG: The No. 1 thing is being flexible because of all of the changes taking place. I learned a long time ago that strategy is not linear — it must be flexible as the market changes.

The next important thing is communication. I spend 80 percent of my time communicating in one way or another, and tied to that is being a good teacher. You have to be an advocate for your managers and employees and give them opportunities to learn. Otherwise they won't understand the reasons for all of the changes that are occurring.

These days, having experience in mergers and acquisitions is more important. One must also be a strategic thinker, and in fact, a visionary. It's a tall order to have that all in one person; a successful leader will have a team that brings together all of these traits and skills for the good of the organization.

Q: People are increasingly worried about violence and mass killings, and the rate at which violent events occur in hospitals seems to be increasing. What has been your response to this issue?

CVG: This issue is certainly top of mind right now. We've seen a lot of shootings involving law enforcement, and that very unfortunate shooting recently at Parrish Medical Center in Florida.

I want our people to feel safe. I told them I can't guarantee safety but we will do everything we can to make our hospitals as safe as possible: increase security, create more barriers. We have a great relationship with the police because of my role as a Reserve Assistant Sheriff in the San Diego County Sheriff's Department and terrorism liaison officer with local law enforcement, and they will move resources for us.

I'm currently exploring the concept of a rapid response team. While we wouldn't generally arm security, I've been thinking about having a small, highly trained response team of ex-law enforcement or former military police, put them through all the necessary screening and training and have them on call to respond to a threat anywhere in our health system. Introducing guns to a hospital increases risk for gun violence, but a small rapid response team doesn't carry the same risks as if you armed all security officers.

We don't want a situation where security personnel are shooting or injuring patients. If law enforcement shoots a citizen out on the street, that's different than a hospital security officer shooting a patient. And if you use a Taser in a hospital, you could be injuring someone with a heart condition. Same with using pepper spray on someone with a respiratory disorder. But at the same time, we have an obligation to protect people. There does seem to be an uptick in violence. I'm trying to find a balance between providing security with the tools they need to maintain safety, but not go so far as to increase the risk for patients in the hospital.

*Scripps has the highest bond rating of any nonprofit health system in California as of February.

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