7 thoughts from CHI's Michael Rowan

As president of health system delivery and COO of Englewood, Colo.-based Catholic Health Initiatives, Michael T. Rowan is leader with one of the nation's most extensive healthcare systems. With a presence in 19 states and 103 hospitals, CHI generated operating revenues of $15.2 billion in fiscal year 2015. During a recent visit to Chicago, Mr. Rowan took some time to sit down with Becker's Hospital Review for a discussion about managing numerous markets and people, diversity in Catholic healthcare and CHI's strategic plan to focus on wellness and lifestyle improvements.

1. On what energizes and motivates him 
"The industry is changing so fast that there is always something new. There are so many exciting things that we have the opportunity to do in healthcare that we are so absolutely far behind in. We felt like we needed a more comprehensive understanding of our demographics — who our patients are, the needs of our communities, how we can improve care, customize care and make that care as high-quality, cost-effective and convenient as possible. We brought in some people in from Target to engage in a conversation and for insight into how they identify and serve their customers. People tell me stories all the time about being in their mid-30s and they'll start getting unsolicited circulars from Target for baby stuff. Six months later, they're having their first kid. Target has so figured out the demographic that they can figure out you're going to have a kid before you figure it out. I hear those stories all the time. In healthcare, are we anywhere near that? No."

2. On a management truth he's learned
"The truth is, historically, you spend more time with people who aren't doing well. You probably tend to spend more time with those struggling. But I'm starting to understand that you need to actually spend your time with people who are doing the best. I'm starting to do this more. We have regions that have operating EBIDA margins of 5 percent, and we have some regions with a margin of 9 or 10 percent. Turns out, the regions with the largest margins tend to be the largest regions. The truth is, those places earning 9 percent ought to be earning 12 or 13 percent. You got a lot more in moving an 'A-' person to an 'A' than you get in moving a 'C' person to a 'C+.'"

3. On one of CHI's 'firsts'
"I think CHI has been more innovative and faster to new things. Eleven years ago, we centralized all of the system's human resources, accounts payable, benefits management and supply chain into a service center with its own building in Denver. We were one of the first to do that."

4. On relevance ruling strategy
"Payer strategy is important, but in the end, the other strategy we've been engaged in over last five years that is actually paying most dividends is the strategy of being relevant in the market. The bigger you are, the better your contracts are. But just as important as solid contracts are in sustaining your mission is the ability to create a truly effective clinically integrated network across the entire continuum of care to better serve our patients and create and sustain healthy communities. This is another way we're moving away from fee-for-service to the value-based delivery of care — it's the transformation of our health system from 'ill care' to 'well care.'"

5. On diversity in Catholic healthcare
"I like the social mission of Catholicism, and I wanted to get into Catholic healthcare. At the beginning, that wasn't really happening. I would tell you that before about 2000, we didn't have many minority executives in Catholic healthcare. When I was mid-career, it was hard to break into Catholic healthcare. Today, it's much better."

6. On wellness and its ties to the Catholic mission
"We want to be doing well enough and positioned such that we're really focused on wellness, not just healthcare. If you understand the Catholic mission, that's where we're supposed to be. The determinants of health in a community are not hospitals, doctors and nurses, but quality education and healthy lifestyles, and other things. We want to be positioned to help address these social determinants of health. I think Catholic healthcare has the opportunity to be involved with Catholic social services and charities. We think this value-based healthcare and some of this direct-to-employer activity and population health has the potential to provide some of the funding for us to address lifestyle changes, which are not capital-intensive things."

7. On post-M&A integration
"We just went through five years of major acquisitions all over the place. We had the 'Noah's Ark' effect. You put two things together, you have two of everything. You do nine acquisitions, you have nine of everything. We don't need seven giraffes. We're in that process now of really integrating and rationalizing what we have and picking up those synergies that will help us be more effective."

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