Charging Healthcare's Uphill Battles: Q&A With North Shore-LIJ CEO Michael Dowling

Michael Dowling talks the way you'd hope a 16-hospital system president and CEO would talk. His vocabulary void of jargon, Mr. Dowling confidently cuts straight to the point. He recognizes pressing problems in healthcare, but opts to handle them as opportunities rather than disasters. He has worries, but he also has a remarkably clear vision for where Great Neck, N.Y.-based North Shore-Long Island Jewish Health System is headed. He does not hesitate in his discussion of plans.

Mr. Dowling's leadership style is one that grows from a multidimensional career. He has been with North Shore-LIJ since 1995, serving as the system's COO before assuming the president and CEO role in 2002. Before stepping into the provider side of healthcare, Mr. Dowling was a senior vice president with Empire Blue Cross Blue Shield. He also worked in government for a dozen years, spending time as the director of New York Health, Education and Human Services and deputy secretary to former Governor Mario Cuomo.

North Shore-LIJ has been making large strides in its strategy, with plans to expand into the payor realm, strengthen its ambulatory care offerings and keep people healthy — and out of the hospital. Here, Mr. Dowling talks about the one word he has banned from his vocabulary, the "addiction" hospitals need to break and how he hopes his organization will work with insurers in the next decade.

Question: What healthcare issue has weighed most heavily on your mind as of late?

Michael Dowling: Well, I think the biggest issue is the cost-cutting issue overall. I don't think I'm much different from other places in trying to be innovative with how to manage the transition from how we do business now to how we should do business in the future. That involves a lot of organizational change, culture change and enhancing alignment with physicians. It involves where you should deliver care — not only in hospitals.

I think [hospitals] should be in the center of reform efforts, because it will only be done successfully if done at the local delivery level — not in Washington, D.C., or state capitals, but at the local level. As we look to improve outputs and outcomes, which we have to deliver, how do you make that comprehensive change over the next five to 10 years?

Q: A recent New York Times article highlighted the way providers in New York are responding to a recent hospital closure, and their approach is largely hinged on outpatient and walk-in clinics. Is it wise for hospitals to continue viewing these settings as "threats?"

MD: I don't ever look at things as threats. As difficult a situation may be, I see it as an opportunity. There are a lot of different ways of delivering care in the community. In Lower Manhattan, a delivery system closed after more than 160 years. [Note: St. Vincent's Hospital in New York City closed in May 2010 due to bankruptcy.] When one door closes, another one opens. Healthcare providers, elected officials and community leaders are figuring out how to fill the void. A number of private physician practices moved into Greenwich Village to make up for gaps created when (St. Vincent’s) closed. I think that's wonderful. We’re investing $100 million to develop a Comprehensive Care Center that will be anchored by a 24-hour emergency center and other medical services that we determine are needed in the community.  

I think that, at the end of the day, the healthcare providers that win are those that provide the best quality and customer experience. Some probably won't survive, but new providers and new models of care will emerge. How do we deliver care in a different and better way? The [New York Times] article debated the different approaches that providers are taking to fill the gap and fill the void. That's something we're looking at, also.

Hopefully, we will fill the void by being more innovative than others. There will be winners and losers, and that's what is exciting. Local competition is good. Competition makes everybody better. Without competition, you lay back, put your feet up on the couch and become lazy.

Q: The article also quoted you speaking about hospitals' "addiction" to inpatient beds. Can you expand on that a bit more?

MD: If you look at healthcare in general, there has been a major focus on mergers in the past decade. Most of the attention was on the care delivered in hospitals. We got paid for making sure people were in hospitals. The model has to change. Hospitals are important, and there will always be a need for inpatient beds, but there are too many people in hospitals who do not need to be there. We should be striving continuously for alternative means of providing care.  

We also need to pursue different ways of financing healthcare. When we look at metrics, it's about hospitals being full, hospitals' case mix and volume. In the future, I think the metrics will be different — it will be more about an alternative place to give care so you don't have to go to the hospital. But as I said, it's tied to how you are reimbursed.

In our health system, we've already reduced hospital bed capacity over the last 10 years. We'll be doing more of that in the future. There will be much more outpatient care, and patients who are now being treated in hospitals will receive care in outpatient settings. We're continually looking for better ways of caring for people in different environments.

Q: There has also been word of North Shore-LIJ's plans to expand into the payor side of operations. Is there any more information you can share about that? In general, what do you think the new wave of provider-payor relationships means for healthcare?

MD: Basically, for healthcare systems, it means we should be taking more risk in terms of payment. We should be getting a greater share of the premium dollar or total premium dollar, have the infrastructure to provide the best holistic care and not be driven by fee-for-service. We are building, within our organization, an insurance infrastructure because most of our contracts with payors in the future will be risk arrangements — bundled payments and capitation arrangements.

It's quite probable that we will have our own insurance license in years to come. That doesn't mean we won't be working with insurance companies. Probably, the way a lot of it will work is [we'll] have a hybrid. We'll take on more risk while having partnership relationships with payors. It is part of an effort to get paid differently for treating illness and promoting health. I want to be in the health business — not just the illness treatment business.

Q: Have you noticed any changes in the relationships between hospitals in New York? Have hospitals that were fierce competitors five, 10 years ago adopted a new tone at all?

MD: A lot of hospitals have joined health systems. A lot of hospitals that were independent were having financial problems. Many of the hospitals that joined us were losing money and struggling to maintain high quality. Five or six hospitals would have had to close had they not joined [North Shore-LIJ]. Those communities wouldn't have had hospital access.

In New York, you're ending up with three or four big health systems, and it's very competitive. The competition is more robust today than it has ever been before. That's good. I want to do better than them and they want to do better than me. As a result, everyone gets better. That's a dynamic we have to maintain. When there’s too much government control, you're going to lose competition and stifle innovation. That's not the way we should be moving.

Q: What do you think makes the most remarkable leaders in healthcare — the real movers and shakers? Is it a matter of mentoring or disruptive thinking?

MD: A core characteristic for strong leaders is having a very positive and optimistic attitude — believing things can be accomplished. Eliminate 'can't' from your vocabulary. Also, promote change. You need leaders at all levels to promote change that is transformational. Leadership is about managing the present, selectively forgetting the past and creating the future.

People don't have to come from healthcare [to lead]. Healthcare should be mining talent from other industries and creating talent within their own organizations. We have a sophisticated process of doing that here. Just because you're not in healthcare doesn't mean you can't become a leader in healthcare.  

Q: Specifically, what have you found to be your biggest passions throughout your career? When do you find yourself the most enthusiastic or fiery?

MD: Well, I'm Irish. [Laughs.] I love challenge. I love getting up in the morning and not being exactly certain about how to accomplish something. If you get up and know how you're going to accomplish something, you're not learning anything new. You're doing what you did yesterday. [I love] the excitement of being entrepreneurial and moving the ball uphill, continuously.

I like canoeing the rapids, not a flat lake. That's what gets your heart rate up. That's when you say, 'Holy crap, I don't know if I can make this,' and then you look back and say, 'That was good.' But if it's a flat lake, that's very boring. You're just cruising around and everything is the same. You need that every so often, but we're in the middle of the rapids right now in healthcare.

A couple more things: If you look, every industry is going through change. When people say, 'Healthcare is going through such phenomenal change!' Well, that's true for every industry. Your industry: I just read the news about Newsweek ending its print publications. That's enormous change.

Also, people in healthcare should be very proud of what they accomplish every day. There is too much negativity out there. All the politics — there's an avalanche of negativity. 'This won't work, that won't work.' But there is also tremendous success. Acknowledge the positive to keep up morale, but understand things can still be dramatically improved. There needs to be more balance to the discussion.


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