Reinventing a Hospital's Philosophy: Q&A With Dr. Ronald A. Paulus, President and CEO of Mission Health

Ronald A. Paulus, MD, has big goals and an even "bigger" aim. As the first physician CEO of Asheville, N.C.-based Mission Health, Dr. Paulus oversees a $1.2 billion integrated delivery system — the sixth-largest in the state. Prior to his current role, he served as executive vice president of clinical operations and chief innovation officer at Geisinger Health System in Danville, Pa. Dr. Paulus takes national problems in healthcare delivery and breaks them down to  a micro-level, analyzing how they affect the specific region Mission serves and how to most effectively respond.

Shortly after assuming his position at Mission in 2010, Dr. Paulus launched a renewed philosophy for the five-hospital system, called the "BIG(GER) Aim." The goal? To get each and every patient to the desired outcome — without harm, without waste and with an exceptional experience for both the patient and family. Here, Dr. Paulus shares insight on patient engagement, physician alignment and the philosophies under which he is leading Mission Health.

Q: What are your greatest challenges locally at Mission and what do you see are the greatest challenges on a national scale?

Dr. Ronald Paulus: I really see the greatest challenges locally as a microcosm of the national landscape. For Mission, our key challenges are our demographics, the regional political landscape and the need to transform from a hospital focused on best-in-class care to a health system focused on meeting the needs of our community to produce the best outcomes at the lowest possible cost.  

First, our demographics: western North Carolina is older, poorer, sicker, less insured and has less access to care than state and national averages. We are the safety-net hospital and health system for the region. More than 75 percent of our patients are covered by Medicare and/or Medicaid, or have no insurance. Given that, along with the obvious federal and state budget challenges, we know that reducing the cost of our care delivery is absolutely essential. But we can't do that by reducing access or care quality — just the opposite.  

Second is the political climate. Western North Carolina is a proud region, fiercely independent and skeptical of outsiders — much like where I grew up, in a similar mountainous area of central Pennsylvania. Many of the difficult changes occurring nationally, like the pressure to reduce costs and the ongoing transformation of physician relationships, have begun much later here, so the timeline for change is shortened and the sense of pain is greater. Nationally, I think the issues are largely the same: How do we do more with less? How do we partner with our physicians to deliver better care at a lower cost? Simply put, how do we not just fix, but actually rebuild the airplane in mid-flight?

Q: What is your overall philosophy for Mission's operations? What role do you see Mission Health playing on a local, regional and national level?

Dr. Paulus: At Mission, because of our size, resources and role, we must lead this change in a way that produces the maximal benefit for citizens throughout western North Carolina. Mission needs to lead by example. It isn't for us to "tell others what to do," but to articulate the core issues and challenges for our region and address them head on. Our motto is: "Care as close to home as possible, so long as it is safe and effective." There is tremendous fear that we want to "control the market." That is completely untrue. What we want is to meet the needs of the region, and that requires proper access to care, clinical cooperation throughout the region and an acknowledgment of what we are each good at and [what we] are not. We also have a special role as an economic engine for the region, since we're the largest employer west of Charlotte.

Q: Prior to serving as CEO, you served as executive vice president of clinical operations and chief innovation officer at Geisinger. What systems have you introduced to Mission that you implemented at Geisinger?

Dr. Paulus: First, let me say Geisinger and Mission Health are two very different places. Geisinger has a nearly 100-year history as a spin-off from the Mayo Clinic, and is one of nation's premier integrated delivery systems that includes a health plan. Mission Health has a century-long history as a best-in-class hospital. Both are terrific at what they do. That said, there are similarities, and I have introduced some of the same approaches we used at Geisinger.  

The first is an absolute focus on quality. Shortly after my arrival, we adopted something we call our BIG(GER) Aim: to get each and every patient to the desired outcome, first without harm, also without waste and with an exceptional experience. That aim guides who we are, what we do and how we do it. My first hire was a remarkable individual, William Maples, MD, an oncologist formerly with the Mayo Clinic [who has] unique quality expertise. Working with Bill and the team, we have already begun to transform our approach with some pretty spectacular results in reducing infections and falls, shortening ICU ventilator days and length of stay, and dramatically improving patient satisfaction.  

A second focus is on innovation, with the recognition that what we have done in the past will not get us to where we need to be. Innovation is hard, and it requires the ability to test new ideas and make mistakes. That is counter to much of traditional healthcare. A third emphasis is on hard-wiring process changes via information technology. Recidivism to past behavior, even after change, is all too common; hard-wiring those changes reduces the [recidivism] rate and enables ongoing measurement of the new process.  

Lastly, and perhaps most important, is physician engagement. At Geisinger, a group practice employment model, physicians didn't feel like "employees," they felt like they ran the place. It wasn't just a feeling — it was real. They were jointly accountable with management for quality, cost and outcomes. I'm trying very, very hard to recreate that mindset here and borrowing from the physician-business dyad model that has served Geisinger, Mayo and other leading places so well.

Q: You're the first physician-CEO at Mission. How has your background influenced your relationships with physicians? How has your physician background helped with your physician alignment at Mission?

Dr. Paulus: I do believe being a physician has been, and will always be, an advantage for me. First, it's who I am and how I think about myself. I view problems first and foremost from the lens of a clinician [with] the goal of the patient in mind. Those views are not exclusive to physicians, or even clinicians, but it helps me. With regard to physician alignment, physicians are smart, driven and intensely engaged with their patients. It isn't obvious to them why "aligning" with management is necessarily a good idea. They have to be treated as partners, with joint accountability. That's the approach I've tried to take, and the early results are promising.

Q: You have said engaging patients in their own health and wellness is key to a successful healthcare system and community. How are you doing that at Mission Health?

Dr. Paulus: Yes, absolutely! Engaging patients and their families is a critical part of transforming care. Because we have a less extensive ambulatory network compared to Geisinger, we have begun on the inpatient side. Engagement and empowerment is crucial for our staff as well as patients. We recently kicked off a "Great Place to Work" initiative to empower staff to drive their own success and to meet the needs of our patients. Part of that is to ensure patients are supported, educated and activated. Do they know what drugs are given to them in the hospital? Do they have a daily itinerary? Do they know discharge instructions? Are they willing to speak up if their needs — whether physical, environmental or emotional — are not met?  

Most exciting, we have begun to embed patients directly into our redesign teams. We now have patients sitting side-by-side with physicians, nurses, managers and others as we seek to change our care processes and design our campus of the future. Let me tell you, the conversation about what we need to do and how we need to do it is completely different with patients at the table. It's just a start, but it is exhilarating!

Q: How has the recent shift from fee-for-service to an outcome-based model of care delivery changed the way you approach care delivery at Mission Health?

Dr. Paulus: We've had less of that change in western North Carolina than some parts of the country. That said, we are actively engaged in building the infrastructure — data, analytics, physician engagement, management accountabilities — for those changes to come. We have also begun some significant work in telemedicine outreach, currently with telestroke and telepsychiatry, with other disciplines pending. In our mountainous area, 20 miles may mean 90 minutes of travel, depending on weather. That work also supports our care as close to home as possible so long as it is safe and effective motto. Our BIG(GER) Aim is the guiding force in how we approach that work, and I firmly believe we have significant opportunity to accommodate and develop fundamentally new models of care.  

Q: Your background is that of a physician, but you also have an IT background. [Dr. Paulus co-founded CareScience, a company that pioneered the country's first Internet-based quality management software in 1996 and is now part of Premier Informatics.] How do those two very different skills sets influence what you're doing at Mission Health?

Dr. Paulus: I view the intersection of clinical care and IT as the quintessential skill set for care transformation. For me, it's really hard to think about one without the other when seeking to achieve improved quality at lower cost. To reengineer care, you begin with what can be eliminated entirely, then move to what can be automated, then to what can be delegated; all supported by active patient and family engagement. In each of these steps, IT is crucial. But technology is not an end to itself. As caregivers, we're here to keep people healthy when we can, heal them when they're sick and care for them, with grace and dignity, when healing is no longer an option. Technology enables that service with reliability and efficiency, but human trust and touch is the essence that keeps it whole.

Q: How are you, and Mission as a whole, responding to local news reports questioning North Carolina non-profit hospitals' commitments to charity care?

Dr. Paulus: Each day at Mission, we strive to balance the dual imperatives of providing world-class care for everyone in our community regardless of their ability to pay, with the necessity to operate a sustainable business so that we ensure care for the generations to follow. The issues raised in the article series are all important and merit serious consideration, but rather than focus on any particular issue of the moment, I try to remain focused on our BIG(GER) Aim. It's our privilege and an honor to serve our community, regardless of our local demographics.

With that said, I do think that in exploring these issues, it is important to paint a more complete picture of any hospital's charitable care record. In general, it's important to remember that there are multiple metrics that may be used to measure a hospital's "community benefit" or "charity care." In addition, hospitals differ on how they define a "poor person," which inherently affects their level of "charity care." Let me give you a few examples of how simple local differences can yield wide variation in these measurements.  

One critical factor is whether the hospital operates in a demographically challenged — often rural — or more lucrative market, which is usually urban or suburban. In the poorest communities, more residents qualify for Medicaid coverage. By comparison, residents in mixed but overall more affluent communities often do not qualify for Medicaid. Yet based on typical "charity care" definitions, services provided to the working poor who can't pay for medical care do qualify as charity care, but services provided to Medicaid patients don't qualify — even if one hospital receives more reimbursement from the self-pay patient than the other does from Medicaid.

It's unfortunate that this Medicaid burden is not included in this definition of "charity care," because it is incontrovertible that the hospital isn't paid close to the actual cost of caring for the patient putting aside any "profit." The same principle is true with Medicare. Medicare does not pay the actual cost of delivering [care] to seniors. So, given that the percentage of patients who have Medicaid or Medicare varies widely across hospitals, even by a factor of two to three times, it simply can't be true that care provided to self-pay patients is the sole determinant of "charity."

There is also limited consistency in charity care reporting, so comparisons are often difficult and potentially misleading. This is often the case when comparing smaller "subsidiary" hospitals to larger "flagship" hospitals, where the apparent amount of "charity care" can be a function more of cost allocation methodologies than actual practice. Reporting standards for tax-exempt organizations are set by the Internal Revenue Service via its Form 990. "Community Benefit" is a key metric reported on the [form]. It's broader than the so-called "charity care" item, being an aggregation of a variety of charitable-type expenses, such as charity care, expenses for medical education, community development and other similar items. It is often expressed as a percentage of the hospital's total expenses or total revenues. Based on IRS data, Mission's total community benefits expenditures as a percentage of total revenues was above the national median. So again, it depends on which metrics you want to include in your report.

Q: What is Mission's philosophy for charity care, and how does it help the community's poor and uninsured?

Dr. Paulus: Mission's policy is that we treat all people without regard for their ability to pay.  We use a declining discount scale that begins at 100 percent discount and trends down to a 25 percent discount for those who earn up to 300 percent of the federal poverty guidelines. Our policy is posted on our website and financial counselors are available to help those in need. We also financially support legal services to ensure that those who qualify for federal or state program benefits actually receive them. Mission's combined community benefit for 2010 was nearly $74 million.

As I stated before, Mission has a terrific record on charitable care, but we must continue to explain the multitude of ways that we support our community without getting paid. We must also do a better job of explaining the challenging circumstances in which we operate. Mission has one of the most challenging payor mixes of any major hospital in North Carolina, and so a large component of our community benefit results from Medicare and/or Medicaid services.

Beyond that, we recognize that the continually rising cost of healthcare is unsustainable. Our charity care provisions allow us to treat patients without them having the lifelong burden of debt that too often has become associated with medical care. Ultimately, there is a need for a better system — we recognize that. The better system will require input and collaboration on the part of many. Political leaders, patients, businesses, payors and providers will all need to be a part of the conversation and ultimately will need to be active participants in the solution.

Q: Can you share one piece of advice or one lesson you've learned throughout your career?

Dr. Paulus: Wow, now that's a hard question. Not to be too simplistic, but I guess I would say the most important thing is to remain focused on what is best for the patients we serve. There are so many pressures and so many challenges that it is easy to be distracted by other factors like costs, the competitive landscape, the political environment and so forth. But we didn't enter the healthcare profession to serve ourselves, we did it to serve others. Our focus is and must remain on the patient-consumer. If we remember that simple rule, we'll do the right thing.

More Articles on Hospitals and CEOs:

Pursuing Affiliation for Community and Patient Care: Q&A With Alan Channing, CEO of Sinai Health System
Community Hospital CEO Panel: 3 Leaders Share Insights on the State of Community Hospitals
The Connected Communicator: Robert Garrett, President and CEO of Hackensack University Medical Center

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