Leading a hospital or health system through change is an exceptional challenge. As systems move from volume- to value-based care and focus increasingly outpatient instead of inpatient procedures, it takes a tactical leader to build a strong foundation for success.
Rob Casalou, president and CEO of the five-hospital Saint Joseph Mercy Health System based Livonia, Mich., knows the challenge well. He took the helm at St. Joe's in 2015 and reset the system's strategy to focus on community needs.
Here, Mr. Casalou discusses his leadership philosophy, strategy and what he expects to see in the hospital of the future.
Question: What key leadership philosophy has helped you most throughout your career?
Rob Casalou: The word authentic gets used a lot, but for me that means treating everyone I work with as a teammate and colleague and not a subordinate. I've been lucky to have opportunities to have some great leadership roles, but I've succeeded with them because everyone I work with sees themselves as a partner and teammate; that builds trust and relationships. It doesn't matter to me what time it is or who is coming to speak with me, if someone wants to see me they'll have access.
Q: What key leadership philosophy do you impart to other hospital system executives, administrators and managers?
RC: Integrity is an often-used word, but I see it violated in today's world. Do what you say you are going to do and behave the way you expect others to behave. We are in an industry, rightly or wrongly, where we spend many hours away from our families. It's a sacrifice, and if you are going to spend as much time at work as we do, it should be fun. I try to have a good sense of humor. If, as leaders, we put the goals and successes of the organization and the people we serve above our own personal successes, we have the ingredients of a good leader.
Q: How do you approach developing strategy for Saint Joseph Mercy Health System?
RC: I've been in the healthcare industry for 27 years — I was in the automotive industry for 10 years before that — and I've marveled at the healthcare industry because it's really unusual in many ways compared to other industries. Healthcare has been chasing and designing itself after legislation and laws for decades, many of which determine how providers get paid. But did we ever ask ourselves whether we are providing a service that consumers want to buy?
Healthcare has created its own demand in some ways; doctors refer patients and order tests. Imagine if car companies could create their own demand, set prices and make people purchase their products. The strategies up until today have been designed around maximizing the state of affairs, and then the ACA came along and every hospital tried to get into an ACO. Our strategy right now, regardless of how the laws of the land may change, is to sell the product people want to buy: wellness, prevention and keeping people out of the hospital.
Q: As a leader of your organization, how do you develop and implement your vision? What do you do to create culture?
RC: I first came to St. Joe's Ann Arbor hospital nine years ago as CEO and it took time to change the culture. People create their culture, which is really about "how" they do things. I focused on shifting away from a consensus-driven mentality. Though everyone was usually happy when a decision was made, the problem was that decisions were made too late or not at all because not everyone could agree. I recruited a new team of people who were prone to making their own decisions swiftly and moving forward. You can't overthink every decision that is made and keep an organization nimble while moving quickly with the market.
You build a culture through people, as I've tried to build my team here. I started by surrounding myself with some of the best and brightest leaders. If you can do that, you are off to a great start. Then, I expect the same thing from them with their own teams. Within southeastern Michigan, we have 400 supervisors, front-line workers and C-suite executives who all have the same expectations: integrity, authenticity and servant leadership.
Q: What happens when that strategy needs to change based on internal or external forces?
RC: No matter what they do in Washington, D.C., our focus will always be on our mission. When I look at external forces, I'm not looking at D.C. or the Michigan state capital for guidance; I'm looking at what the community is telling us. It is our evaluation of community needs that inform us to deploy our resources for wellness programs and to make investments to deal with the social determinants of health such as homelessness, behavioral health and food access.
We made a seismic change in our strategy in 2009 and we haven't veered off that one bit. When people are constantly changing their strategy, it's very disruptive for the organization and doesn't give you a true north. Now everyone in the organization knows our true north. Tactically we may change things, but the strategy hasn't bent at all.
Q: What are the biggest challenges facing the healthcare system and how are you preparing to overcome them?
RC: Most of the answer to this question is environmental. What impacts the world around us? One challenge we have is that there are fewer people choosing careers in the medical field or healthcare industry. I talk to doctors who feel like their love of medicine is gone. Fathers and mothers are encouraging their children to do other things instead of being a doctor, nurse or other health professional.
At the same time, we have an unhealthy country with a high obesity rate leading the risks. I'm concerned about our labor force of the future [and our ability] to develop new leaders and take the reins. We do have a few bright stars coming up, but I don't see enough. We need to reinvent the attractiveness of a healthcare career.
Q: Where do you see health systems headed over the next five to 10 years?
RC: I'm an economist by background and a big believer in the laws of economics. Our country spends too much on healthcare and it's a drag on our economy. When a country is spending 20 cents on the dollar for healthcare, there is something wrong. We won't be successful if that continues to rise. Those of us working in healthcare are the solution, not the government. We have to drive costs down.
A lot of the pilot programs on ACOs, bundled payments and value-based care are taking us in the right direction. At the moment it looks like we are throwing darts at a dart board with some providers owning health plans and trying different arrangements. There will be a speeding up of efforts to drive costs down and provide value, and I think there will be a downward pressure on rates. I try to create a sense of urgency with our physicians and everyone at the health system because we don't have a lot of time to organize and be successful.
Q: What does the hospital of the future look like?
RC: I've been running hospitals most of my healthcare career and hospitals may be the product nobody wants to buy but something everyone needs. They need to be accessible and provide flawless care. If you look across the country, we have to make the right number of hospital beds accessible for the population we are serving. We have uneven access across our country with many urban areas being saturated with hospitals and [patients in] other more rural areas having to drive long distances [to access care]. This problem needs to be solved.
The hospital of the future is leaner, smaller, high tech and higher risk because of it. They are getting smaller but more intense in the procedures. More care also can be done in the ambulatory center, including minimally invasive total joints, which cuts the cost in half and patients can be discharged home instead of to the skilled nursing facility. That will be the future: pushing cases into less intense environments, lowering costs and keeping people out of the hospital to deliver better quality outcomes.
St. Joe's is already taking steps in that direction, as we sold a community hospital in a town where we had three hospitals but the population could only support one or two. When you make a decision like that, it's very unpopular, but it needs to happen in communities across the country.
The other futuristic thing I see is with physician employment; there are still a lot of independent physicians who love their independence and are good at maintaining their practice. There will always be a role for independent physicians, but I think healthcare delivery systems of the future will be tightly integrated and clinicians will be leading the hospitals.