The lone creative CEO in healthcare wants company: Dr. Stephen Klasko on the industry's underrated skill

Stephen Klasko, MD, president and CEO of Philadelphia-based Jefferson Health was the only hospital executive named among Fast Company's Most Creative People in Business for 2018, which he attributes to a fundamental problem in the healthcare leadership pipeline.

Dr. Klasko wants to not only change the way healthcare is delivered and paid for, but alter the industry's DNA through a number of innovative research, educational and clinical initiatives. He earned his bachelor's degree from Bethlehem, Penn.-based Lehigh University, his medical degree from Drexel University School of Medicine in Philadelphia and his master's in business administration from the Philadelphia-based Wharton School of Business at the University of Pennsylvania.

Dr. Klasko took the time to speak with Becker's about the lack of healthcare representation on the Fast Company list and what he has done at Jefferson to be considered among the most creative people in business.

Editor's note: Responses have been edited lightly for length and clarity

Question: What does it mean to you to be included on the Fast Company Most Creative People in Business list?

Dr. Stephen Klasko: This is really more exciting than anything else because a big part of what I've spent the last 15 or 20 years talking about has been trying to understand why healthcare can't be disruptive and join in the consumer revolution. Instead of having start-ups led by Warren Buffett, Jeff Bezos and Jamie Dimon saying they're tired of their employee healthcare being stuck in the 90s, why can't we be the ones causing that disruption?

My inclusion on the list is really a testament not as much to me but to Jefferson as a whole. I always say we want to be a 195-year-old academic medical center with a start-up mentality. I think Fast Company was impressed with seeing a university healthcare system taking a no-limits approach to taking risks and being innovative. Systems like us tend to be so risk averse. We changed our vision from the classic goal of being the best healthcare center with the most NIH funding to re-imagining healthcare education with our own parallel values. The fact that the preeminent publication about innovation would honor our collective efforts to create change in healthcare and design is great.

Q: Why don't you think more hospital CEOs are on this list alongside you?

SK: The way people become leaders, especially in academic medical centers, maybe made sense in the 90s but probably doesn't in 2018 or beyond. It used to be you moved up your academic or clinical career by being a brilliant medical doctor or a very good administrator. You work to appear in academic publications or fill hospital beds, and by the time that person is in a leadership position, you have a health system that's risk-averse and wants to stick to the old game plan. We have gone from an operational world to a strategic world to a visionary world. Today, the way we select and educate leaders is the same way we select physicians — based on GPA, MCATs and organic chemistry grades. Then we're surprised our leaders aren't more empathetic and communicative.

When I graduated from Wharton, I got a grant to look at what makes physicians different than other people as leaders. And based on the way physicians are selected and educated, we join a cult around four biases: competitive, autonomy, hierarchal and non-creativity. Physicians are taught to memorize complex equations, not necessarily taught to be creative.

We did a survey and asked entrepreneurs what got them to where they are. Creativity was either ranked one, two or three in 95 percent of the cases. On the other hand, when we asked physician and hospital leaders the same question, creativity was not in the top three. When you think about where healthcare was, that approach was fine, but the world is changing. If you're not creative, then you're going to fear change and retreat to your shell.

Q: Do you think creativity is properly valued in healthcare?

SK: I absolutely believe it is not.

One of the studies I'm doing now is looking at what health systems say about their future compared to how the hospital's CEO is incentivized. This may not surprise you, but they're not the same. The websites and billboards say the hospitals are all about quality, community engagement and creativity, but how does the CEO get incentivized? Usually the incentives are more aligned with EBITDA, patient census and whether you have a bigger MRI than the hospital across the street.

In Philadelphia, a place with fantastic academic medical centers, we have one of the greatest discrepancies in life expectancies across zip codes in the country. I challenged the board chairs of the nonprofit health systems here to say, "You know if that's what you care about, then 25 percent of each of our incentives ought to be determined by what's happening in Philadelphia — not what's happening in our hospital."

I don't think boards look for creativity when they search for CEOs, and that is going be increasingly important and will change healthcare a lot in the coming years.

Q: What about your experience or perspective do you think sets you apart as a healthcare leader?

SK: I guess starting with my personality, I'm not afraid to take risks. I fly planes, I jump out of planes; I've always been more of an instinct than an operational person. I started out in a very different way than leaders of most academic medical centers. I started out as a private practice OB-GYN in a relatively small town in Pennsylvania. And I built a private practice from six births a month to almost 60 births a month just by doing some creative things that frankly didn't seem that creative to me — like seeing people when they wanted to be seen. It's now called patient-centered care.

And I actually went into academic medicine for a really unusual reason. The most performed surgery in the country in the 80s was the hysterectomy. I was at a conference listening to an academic physician talking to students about hysterectomies, saying that taking out a uterus is no big deal after a woman passes her childbearing age. Well I happened to be at a bookstore that night and four of the top 10 non-fiction best sellers were about how terrible hysterectomies were, and I realized what we were teaching these students was wrong. I went into academics to do some of the work around psychological and emotional effects of hysterectomies, and from there I moved up in my academic career.

I've been able to take some risks and take a no limits approach in my whole career. The other thing that's different is that I'm not afraid to challenge all that's wrong with healthcare in America. It sometimes doesn't make me a lot of friends. I call out insurers, providers and pharmaceutical companies, because I think we are all part of a fragmented, expensive inequitable and occasionally unfair healthcare delivery system.

Q: Of the Jefferson Health patient engagement initiatives mentioned by Fast Company, which are you proudest of? Which was most difficult to implement?

SK: In some respects, the achievement I'm most proud of is that we started something called Digital Innovation in Consumer Experience, which is a group of about 45 app developers. They're young folks that come from all sorts of industries that aren't outside contractors, they report to me. They're there to solve our problems in a way you would solve them in other consumer industries. That led to the virtual rounds team, which started when we said it doesn't make a whole lot of sense if you have a mom or dad in the hospital in 2018 that you still call them later that day asking what the doctor said. We said the technology's there, it's not a technology problem, so we sent video conference software out to families and they are now part of rounds.

We usually talk about patient-centered care like it's a marketing campaign, but figuring how to use technology to actually be more human is what I'm most proud of. We have 36 hospitals that use us for neurosurgery and, because of a partnership with InTouch Health, we can do many of those post-op checks at home. Using robotics, we can actually get a more human experience and the patient doesn't have to drive for three hours.

I would say the most difficult things have been those we've been really early adopters of. I decided we were going to be all in on telehealth in 2013, and people thought I was on drugs. I wanted to be the only telehealth program in the country fully staffed by our own ER clinicians so every doctor on our telehealth platform would be a Jefferson doctor, which we did by aligning incentives and goals.

I really am passionate that we have to do a much better job of working of how we train physicians. We've done a great job of training doctors to be really good robots, which was great when we didn't have robots, but three years from now we're going to have robots that are going to be a hell of a lot better at memorizing genomic formulas than I am and it's really important that we emphasize the human aspect now.

At Jefferson, we've totally transformed our curriculum more around communication skills, equity, quality and safety. Our selection process is much more focused on self awareness, empathic communication skills and cultural competence, and it's led to an incredible increase our diversity. Changing the DNA of healthcare through the physicians and nurses we bring in is as important as anything else we do.

 

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