Holiday Message

I know that just turning on the TV or picking up a newspaper lately can be disheartening. The U.S. and even around the world seems to be filled with coverage of a fluctuating economy, financial bail-outs, home foreclosures, a rising number of unemployed and the like.

It is in the midst of all these challenges that many of us at CHRISTUS celebrate the season of Advent, which helps us prepare for the birth of Jesus. In fact, many religions celebrate a holy season as the days grow shorter and the darkness seems to increase.

I heard someone say once that “it gets darker and darker, and then Jesus is born.” The Advent season is really about looking forward to the coming of our Savior, the true light. It is about pausing in the midst of darkness and waiting for the light to come. It is about showing up when we are needed and carrying the love of Christ to others who are hurting. It is about sharing the stories of Miracle Moments in our own lives in order to bring hope to others. It is about accepting our present challenges as opportunities for change and performance improvements.

It is no accident that Advent comes in the coldest, darkest season of the year, when we might begin to wonder if Spring will ever come again, if the challenges will ever go away. But while we sit and wait, we also have a chance to be thankful for the blessings we have received, especially our call to work in the sacred ministry of health care and being part of the CHRISTUS family.

The Advent season is one of waiting as we prepare for the birth of Christ, but it is followed by Christmas, when we take time to rejoice in the Christ’s birth and spend time with those we love while reflecting on a brighter future. It is my wish on behalf of the entire CHRISTUS Health Senior Team that blessings of Christ’s love be yours now and forever. Have a wonderful holiday season, and may the new year bring each of you much peace and happiness.

Health Care Reform: Wellness Programs and Prevention

As you may recall, I believe that one of the building blocks of health care reform should be wellness and prevention. (You will notice that the seven determinants of health lean heavily toward wellness, especially through education.)

If the U.S. is to provide health insurance for all, wellness and prevention aspects must be covered. This will assist us in keeping Americans out of our hospitals and Emergency Departments, the most expensive ways to deliver care.

You can read more about the building blocks of health care reform here.

Health Care Reform: The Seven Determinants of Health Care

Earlier in the year, we spent some time in Canada, learning about their socialized health care system. They provide insurance to cover basic health care for all registered Canadians, which includes not only hospital and primary care, but all of the seven determinants of health.

These determinants include:
1. Primary outpatient locations
2. Schools
3. After school programs for working parents
4. Appropriate housing
5. Appropriate nutrition
6. Appropriate psychological and psychiatric services
7. Hospitals/acute care

While it is true that Canada’s health care system is not perfect, I believe they have the right idea where the seven determinants of health are concerned. If health care reform in the U.S. is to be successful, we have to address all the issues that affect overall health, not just hospitals/primary care.

You can read more about Canada and the seven determinants of health here.

Health Care Reform: The Primary Care Crisis

I blogged last week about the hidden barrier to U.S. health care reform: the primary care provider crisis.

We have seen this clearly displayed recently in the state of Massachusetts. Through recent reform, Massachusetts has enough money to provide care to its residents, but is lacking the primary care providers to care for the patients who now have insurance coverage. This problem is present across the U.S., and will need to be addressed if we are to provide access to health care for all Americans.

This issue does not seem to enter into many discussions pertaining to health care reform, so I wanted to address it first in my series of video posts. You can read more about the issue here.

Health Care Reform: CHRISTUS' Response to Obama

It has come to my attention that President-elect Barack Obama and Vice President-elect Joe Biden have been soliciting Americans’ thoughts on all sorts of issues on their transition website, change.gov. One of the issues receiving much attention is health care, and members of the transition team have posted video discussions on this very important topic.

We at CHRISTUS want to join in the discussion, so I thought it would be appropriate to post some video blogs for the next few weeks on my ideas regarding health care reform. I will tie these videos back to previous posts where you can gather more information on topics that interest you, and hope that my experience as a physician and health care leader will aid us in framing this very important discussion in a helpful way.

So let’s get started.

The Hidden Barrier to U.S. Health Care Reform

We know that because of the priorities of the incoming Obama/Biden administration, there is a great possibility that health care reform in the U.S. may be designed and (hopefully) implemented in the next several years. We also know that the major barrier that any potential reform will face is the cost and who will pay.

There is no doubt that this is a key question which must be answered. But because of the overuse of medical services, the duplication of many health care product lines and expense associated with the reworking of procedures that were not done correctly the first time, there are dollars that could be significantly saved and redirected to care for the large number of under- or uninsured. These issues must be addressed if we are to provide basic health care for all.

This undoubtedly will take a strong collaborative effort between all constituencies--including health care providers, the government and insurance companies--in order to develop an equitable source of funds for this expanded coverage.

We do know that both president-elect Obama is aware of the Massachusetts plan which, although unique, has successfully put together a multi-tiered and multi-participant funding program which is creating the dollars necessary to deliver care for all in that state. However, closer inspection of the Massachusetts plan and its results over the last 6 months uncovers a significant issue which I call “the hidden barrier” in making health care reform possible.

Although Massachusetts has enough money to provide the care, their issue now is the lack of primary care providers to see the patients who now have insurance coverage. This issue is present throughout the U.S. and will clearly come into focus to everyone who has the ability to pay for care that they either think they want or clearly need, regardless of their method of payment.

At the present time, less than 2 percent of all medical school graduates are entering family practice or internal medicine, which serve as the primary caregivers for adults in this country. For years these residency programs have been challenged to fill their open slots with American-trained medical students; therefore, the majority of those training slots in these specialties have been filled with foreign medical graduates.

We find ourselves in this situation primarily because primary care is not seen by the reimbursement bodies as significantly important in the health care continuum, and therefore these physicians have been the lowest on the reimbursement scale for many years. Their low payment rates for services provided are not only causing fewer people to enter the field, but most recently are causing family practitioners and internists who have been practicing for many years to decide that they can no longer continue as independent practitioners. This exodus from primary care is prevalent everywhere, but is mostly exaggerated in rural communities, where--in fact, if reform occurs--the needs will be greatest.

In addition, American health care has not rapidly embraced non-physician health care providers such as nurse practitioners, midwives and physicians’ assistants. This lack of support for these important professions has also been exaggerated recently because of declining reimbursement. Therefore these professionals have become very threatening to primary care physicians, who see any decline in volume as the result of treatment by others as a significant blow to their ability to survive.

I believe that our ability to increase the quantity of primary care providers to care for all of the uninsured in America might be more critical than finding ways to financially support this important undertaking.

So what are some of the possible answers to this dilemma?
1. Both federal and state governments must restructure their payment scales through the Medicare and Medicaid programs so that primary care reimbursements move closer to the payments that some specialists are receiving.
2. Medical school faculties must encourage their students to consider primary care residencies as valuable and exciting as those for surgery.
3. Incentive programs must be developed to entice medical students to enter primary care residencies. This could be done through loan forgiveness programs or providing perks and benefits which might be different than those offered to residents who will eventually go into high-paying specialties.
4. The American Medical Association must do a strong marketing/public awareness campaign to educate the public on what an important role primary care specialist play in maintaining the health of communities throughout the U.S.
5. Health systems should undertake similar awareness programs to make sure primary care physicians know that there are opportunities to enter medical groups. This would provide guaranteed salaries and opportunities to serve in multiple positions (including acting as hospitalists), which would give them the ability to not only make an adequate living, but have a better balance of their personal and professional lives.
6. Health systems, hospital associations and physician societies should understand the appropriate use for well-trained ancillary providers and create opportunities where they can be utilized appropriately to fill in the voids that are created by this low number of primary care providers. There is adequate proof, based on sound research, that midwives, physicians’ assistants and nurse practitioners can work in independent duty stations with clear guidelines that are formulated and overseen with physicians’’ input. These groups of people must be seen as adding value to rather than competing with physicians.

If health care reform is to be successful, not only will the question of affordability have to be answered, but perhaps even more importantly, the question that will need much more deliberation will be, “Who will be providing this care once we make it affordable?” The sooner we address the latter question, the greater chance we will have of being successful in creating some meaningful health care reform that will have permanent sustainability.

Discussing Health Care Reform

As President-elect Obama and his transition team prepare to take control, continue to fill important leadership positions and discuss issues of top priority to their administration, U.S. health care reform remains a significant issue to those of us who are blessed to work in health care. Therefore, I thought this would be a great opportunity to gather my blog posts about the U.S. health care system and health care reform together in one place so they are easily accessible. It is my hope that this will help us continue to dialogue about this important issue.

Health Care Reform (7.11.07)
Health Care Reform – Who Should Come to the Table? (7.18.07)
No Common Voice in Health Care (12.5.07)
Tort Reform in Texas (12.11.07)
Futures Task Force II Journeys to Canada (4.16.08)
Canada's Health System and the Determinants of Health (4.30.08)
The Importance of Advocacy (5.28.08)
Redesign of the U.S. Health Care System (7.2.08)
Could segmented health care be part of the solution? (8.6.08)
Competition and Collaboration (8.11.08)
The Hidden Barrier to U.S. Health Care Reform (12.3.08)

Giving Thanks for the CHRISTUS Family

We at CHRISTUS Health have much to be thankful for this year, especially the opportunity to care for people who turn their most precious gift—their lives—over to us.

However, it may be more difficult for many of us to stop and give thanks this holiday season. It is true that over the past year the CHRISTUS family has endured hurricanes, tough economic times, turmoil in the world at large and other valleys on our Journey to Excellence.

But I believe that tough times make clearer the importance of celebrating our incremental victories and giving thanks for the blessings we do have in our lives, both personally and professionally. As we journey toward our 10th anniversary in February of next year and as many of us prepare to spend the holiday season with our families, we pause to appreciate the blessing of being a part of the CHRISTUS family.

I continue to be incredibly proud to be a part of this wonderful family, which works together during good times and bad to support and care for each other as well as extend the healing ministry of Jesus Christ to our patients and residents each day. I was once again humbled this year that as we faced multiple hurricanes targeting our regions, every CHRISTUS Associate continued to go above and beyond the call of duty in their responses to the hurricanes and their willingness to serve our patients and their fellow Associates.

Every day, in each of our facilities, services and programs, members of the CHRISTUS family are creating Miracle Moments by bringing hope and health to people who are scared, sick, vulnerable or just need a helping hand. May God bless each of us as we continue this sacred work.

An Innovative Solution for Those with Mental Illness (Part I)

As we discussed in my last blog post, Catholic Health World, a publication of the Catholic Health Association of the United States, recently published an article on CHRISTUS’ practice of using Community Health Workers (CHWs) to help patients access behavioral health services in Texas.

We originally used CHWs to help patients get through the health care system as expeditiously possible and provide them with resources that permit them to monitor their health care status at home, hoping that they will require less costly health care services in the future.

In the city of Corpus Christi, Texas and other rural communities in the area where CHRISTUS facilities are located, CHWs are participating in a pilot program to help patients with mental illness. It is clear that limited resources are allocated to mental health, especially in remote rural communities.

These CHWs are tasked with making sure that seriously mentally ill patients get their medical and dental needs met and that medical patients get screened and treated for situational depression, debilitating anxiety and substance abuse. To be considered for care by a CHW specializing in helping clients with mental illness, a patient must have had two psychiatric hospitalizations in as many months or had three psychiatric admissions within 12 months. Patients are also usually uninsured and can’t be currently enrolled as clients of the state’s Community Mental Health and Mental Retardation system, which provides medical services exclusively to people with bipolar disorder, schizophrenia and major depression. Patients generally stay in the program for three months.

They are offered the Aggressive Community Treatment program (ACT), which is reserved for patients who have no resources, poor life skills and nowhere else to turn. ACT is free to patients. In this way, it addresses not only poor mental health, but many of the contributing factors that exacerbate it.

Some of these CHWs meet candidates for the program while they are patiens in the behavioral health unit at CHRISTUS Spohn Hospital Corpus Christi – Memorial. They then offer to help the patient with some of the factors that fueled the chain of events that led them to a hospitalization. Eventually, the CHW will hand these patients totally to the care of the state’s mental health system, but in the first 90 days after psychiatric hospitalization—a critical time—the CHW works to stabilize a patient on medication as directed and aid in securing everything from sobriety programs, housing aid and job hunting assistance. Many times, the CHW will check in on new patients daily.

We have seen this pilot program bring impressive results in South Texas. One of the best measures of success in the treatment of serious mental illness is the measure of time that patients can successfully function in the community. Only six of approximately 40 individuals in the program in the first year were readmitted to the hospital.

It is important as CHRISTUS continues to care for our patients in these increasingly tough financial times that we remain committed to our mission and ensuring that we have the resources to sustain this care for years to come. One of the ways we do this is by creating new programs that care for our communities in cost-effective ways.

It is my belief that in a system the size of CHRISTUS Health, someone, somewhere has devised a best practice for almost every action we undertake in our facilities. That is why we are so committed to our Touchstone Awards—which annually recognize best practices throughout our system. This Community Health Worker program is just one of the examples of innovation at work in CHRISTUS Health, and I am hopeful that we will continue to collect data and share this as a proven best practice in the future.

An Innovative Solution for Those with Mental Illness (Part I)

Catholic Health World, a publication of the Catholic Health Association of the United States, recently published an article on CHRISTUS’ practice of using Community Health Workers to help patients access behavioral health services in Texas.

I have said before that I believe the health care industry has failed miserably in the delivery of behavioral health.

As recently as ten years ago, many inpatient behavioral health facilities were cleared and closed, driven especially by the rapid decline of reimbursement by both governmental and private insurers. (In addition, it was believed that the rapid development of medications to treat psychiatric illnesses would clear our inpatient mental health facilities, which has not been the case.) Consequently, our streets became filled with people unable to work or care for themselves, which has added to the growing number of uninsured and underserved in our country.

Therefore, CHRISTUS is working on innovative and cost-effective solutions to aid patients in difficult situations when the resources available to them are few.

The Catholic Health World article summarizes Texas’ problem well, as it is the state “with the highest number of uninsured residents and one of the smallest per-capita public investments in mental health services in the nation.”

Therefore, CHRISTUS is working to strengthen the safety net for these seriously ill patients—many of whom are homeless--by helping them access a number of needed services in addition to mental health assistance, such as housing and job search help.

We do this in South Texas by utilizing Community Health Workers (CHWs), who we have historically used to help clients with high-ED utilization to access health resources at the appropriate level of care, find medical homes and help to prevent and manage chronic illnesses.

These original CHWs were part of an innovative pilot program started in the CHRISTUS Spohn region, and generally do not have a background in health care. However, we provide them with training and then assign them to 9 or 10 chronically ill, uninsured people.

The CHWs really become navigators for these people, to get them as expeditiously through the health care system as possible, but also provide them with resources that permit them to monitor their health care status at home, hoping that they will require less costly health care services as they continue life’s journey.

Our initial data from studying the patients cared for by these general CHWs show that their ED visits have been reduced drastically, the medications they have taken could be eliminated or reduced also, and their activities of daily living are enhanced.

Now, CHWs are being used to assist those with mental illness as well, which I will examine in more depth in my next blog post.

Being aware of the signs of failure

Recognizing the reality and concerns expressed in last week’s blog post related to the volatility of the market and the global economic crisis that has ensued, it is undoubtedly important for all health care institutions, including CHRISTUS Health, to be more cognizant of the signs of failure than ever before. I would suggest that there are six clear signs of failure which, if seen early, can hopefully be minimized and also serve as energizers to make sure that incremental successes are cancelling out the failures as quickly as possible.

1. How is your performance measurement, and therefore, your performance credibility? As I believe I have shared before, one of my greatest mistakes in my early leadership years was not having metrics for everything that I was doing or leading in the organization where I worked. You have undoubtedly heard me discuss many times our Journey to Excellence and the metrics associated with our Four Directions, hallmarks of all of our regions and programs both in the U.S. and internationally. Hence, by monitoring these metrics on a daily, weekly or monthly basis, it is very easy to determine if the measurements are being met. If not, then we can reaffirm that there are clear action plans in place to ensure that these metrics are going to be reached in as timely a fashion as possible.

2. Are you focused on the basics of execution? Leadership teams must always demonstrate the ability to do good strategic planning and to articulate the tactics to bring these plans to reality. However, where teams most often fail is the ability to execute these tactics and, more importantly, to hold people in the organization accountable to bringing these plans to fruition. Again, by monitoring metrics as outlined above, one can determine if the execution is successful or not. If the latter is the case, one can quickly reaffirm the need to improve them to the responsible party, or remove the responsible party and replace them with someone who understands the urgency of the day and is willing to take not only the responsibility, but the accountability to fully implement the tactical plans for improvement.

3. Is bad news coming to you regularly? Is each day filled with an array of emails, written communications, telephone calls or personal interactions which indicate that something unexpected--and more importantly, negative--has been occurring more frequently than would normally be the case? In addition, are people presenting these reports without quickly articulating the action plan which they have already put in place to assure you that the problem will quickly be ameliorated? Bad news is expected in the complex health care environment in which we function today. But good leaders in good times never present the bad news without the action plan to turn it around.

4. Is your own team disconnected? In bad times, weak teams become weaker. Finger-pointing is accentuated and excuses run rampant. The resolution of problems in challenging times can rarely be carried out by a single individual in a single department, program, or region, and therefore the cohesiveness of the team and the ability to act in a collaborative and connected way is essential. If this is not happening, then it is most appropriate to pause and do some basic team building exercises, for the solutions that are reached will parallel the effectiveness of the team.

5. Are you unable to confidently predict your outcomes daily, monthly or quarterly? It is imperative that during challenging times, an increase effort be placed on processes to predict at mid-month what the month-end operational margins will be. Likewise, it is important to monitor labor and supply costs on a daily basis and create as much variable budgeting in these two areas as possible to parallel the predicted revenue that they are generating. The degree to which these predictions can be made accurately will be the degree to which the proposed solutions will be successful in addressing the reality of the market volatility.

6. Are the things that you were doing well becoming now the things at which you are failing? Perhaps more important than a snapshot of today’s metrics is the trend of these metrics over the last several months or year. Recognizing, as we have stated before in prior posts, that health care change is never linear, we expect some ups and downs as normal variability as we climb from the valley to the top of the mountain. However, if the trends are showing that the peaks we’ve reached on our climb are no longer in view and we are standing at a much lower level on the mountain for a prolonged period of time, we should be honest with ourselves and understanding that what we thought was hard-wired into our improvement plans was in fact extremely transient, therefore new performance plans must be devised and implemented to replace those that are not working.

Yes, it is imperative that we accept the volatility of the market as what will probably be a longer-term reality for us. But we also must accept that our mission, vision and values cannot be altered during this period of time, and that in fact we must continue to energize ourselves to maintain our Journey to Excellence as our highest priority. These times may require different approaches, different tactics and innovative methodologies to create change, and if we are successful by clearly monitoring the signs of failure and correcting them as quickly as possible, it seems reasonable to expect that reaching the top of the mountain is still extremely important and very possible.

Health Care's Response to the Volatility of the Markets

The never-ending fluctuations in the U.S. equity and debt markets over the last several months—which of course have been particularly intense in the last several weeks—have caused all health care leaders to pause to review their investment portfolios.

Although historically the income from investment portfolios has not been used to support operations, but rather to fund capital expenditures, the declining operating margins in U.S. health care over the last several years has changed this dependency somewhat. Therefore, the decline in the values of investment funds is not only putting capital projects at risk, but will also be affecting the operations of hospitals and health systems throughout this country.

Practically every CFO--including ours at CHRISTUS Health--thinks the changes we are seeing could never have been predicted and certainly fit into the totally “unexpected” category. This volatility clearly supports a recent projection by the American Hospital Association that approximately 1,200 hospitals in the U.S. may be forced to declare bankruptcy this fiscal year, a position that is supported by the Health Care Financial Management Association. Perhaps there is no better time in history to pause and see the advantage of being part of a larger system that began this market decline with moderate operational results and extremely strong balance sheets.

Although both have declined in recent years and months, the very size of health care systems and their accompanying balance sheets allow them able to tolerate such declines for a much longer period of time. The reality of this situation is clearly visible to CHRISTUS Health, in that three hospitals have already declared bankruptcy in several of our regions, with two already closed and the other participating in a due diligence process with us, contemplating a sale to CHRISTUS Health in the near future.

What can we do, then, in this period of time to remain focused on operations and create stability in our systems while stability, however long, is re-established in the markets? To begin, we need to take the long-term view, and--based on the history of market’s ups and downs--recognize that some time in the future the markets will re-establish themselves at an acceptable level.

However, because this time frame for stability is unknown, a health system leadership team should rethink their building projects and their capital expenditures. CHRISTUS Health prepared itself for this higher level of scrutiny two years ago by establishing a system capital allocation committee, which meets three times a year to determine how the capital will be distributed to our regions and programs in order to support their capital budgets and master building plans. With the volatility of the market, this process can be quickly controlled by determining the capital which can be safely spent and limiting the building projects to those that are already in progress and hopefully financed with bonds. All this is being done at CHRISTUS Health as we speak.

And finally, four years ago, CHRISTUS established an Investment Committee, a subcommittee of the Finance and Strategy Committee of our board, to provide outside expertise to our financial leadership team so that our portfolio is reviewed on a regular basis. During this period of time, the investment committee has been engaged at an even higher level with more frequent discussions and reviews to determine if CHRISTUS Health is doing everything possible to decrease its investment risks, including the reduction of our risk premiums on our debt obligations. One of the key responsibilities of both management and leadership is to serve as stewards of our resources. Although careful scrutiny of our operating and capital budgets is an ongoing process by management and the fiduciary overview of the system is an ongoing responsibility of the board, these extremely volatile economic times require that both scrutiny and oversight be taken to a higher level, which is characterized by more frequent conversations between leadership and governance as well as more frequent sharing of data relating to our financial and investment performance.

As we have repeatedly said, transparency is a key part of the CHRISTUS brand, and it is our commitment to complete openness and honesty that will serve us well as we continue our Journey to Excellence while creating new and different action plans to address these economic challenges.

My Viewpoint

I was recently interviewed for the first edition of CEO Viewpoint, a publication produced by the Scottsdale Institute. The institute is a non-profit association that serves executive teams in leading health care systems, and they asked me to respond to a variety of questions that address many of the topics we’ve talked about here, including the challenges of the U.S. health care system today, including declining reimbursement, the volatility of the market and whether the health care industry’s toughest challenges will change under a new administration in Washington.

I thought you might be interested in reading the interview, so in lieu of a full post today, I encourage you to peruse the first edition of CEO Viewpoint, which is available here.

The Global Economic Crisis’ Implications for CHRISTUS Health and our Response

Because of the recent events in the global economy and the uneasiness it has caused at home, we recently provided our Associates with an update CHRISTUS Health and our ministry’s response to the global economic crisis.

The downturn in the equity markets last week has had, as we would expect, a negative impact on our portfolio. However, because of the diversification of our portfolio, the current crisis did not impact us as heavily as it did the equity markets. In the last few days, our portfolios lost 3 percent on average, while the Dow and Standard & Poor’s 500 lost approximately 9 percent each.

Obviously, for our Associates and CHRISTUS employed-physicians, the status of our retirement funds, including the Cash Balance Plan and the Matched Savings Plan, are extremely important. Since CHRISTUS Health was formed, the leadership team has made a conscious effort to ensure that the U.S. and Mexico retirement accounts are funded adequately to meet the projected needs of retirees not only for this year, but those projected to occur in future years based upon our individual ages and years of service. CHRISTUS Health has always used an external actuarial service to make the determination of what these payments in future years would be.

An actuarial is a company whose staff has the responsibility to look at the workforce, and based on its age and years of service, they determine the amount of retirement that will need to be paid out on a rolling 10-year basis. We then fund both retirement plans on a monthly basis according to the actuarial’s best estimates. Funding at the 100 percent level has been a primary goal of CHRISTUS Health. For the Cash Balance Plan, this is done through investment policies overseen by the Investment Subcommittee of the CHRISTUS Health Board of Directors. It is important to note that our Associates control the investment categories for their Matched Savings Plan.

It also should be reassuring to know that these funds are annually audited by an external auditing firm, and this report is reviewed and approved by the Audit Committee of the Board. Again, CHRISTUS Health has made an attempt to keep this retirement fund as close to 100 percent of the actuarial projections as possible and alters its monthly fund contributions in order to achieve this goal.

Obviously, with the volatility of the market, the Cash Balance Plan fund, along with the operating fund and the Emerald Assurance fund, have been affected somewhat negatively. But again, because of the diversity of our investment portfolio, the current market crisis has not as significantly affected CHRISTUS Health as it has other health systems and businesses. As the market is rebounding, it is hopeful that these losses will be partially or fully recovered quickly so as to maintain our goal of reaching 100 percent funding.

In addition, it is important to note that the retirement funds – both our Cash Balance Plan and Matched Savings Plan – are totally reserved and can never be used to support financial or operational challenges.

Because our Matched Savings Plan is an important benefit for all CHRISTUS Associates, our senior leadership team has supported our HR leaders to develop communications to encourage Associates, particularly those in the lower paid positions, to sign up for this program.

Overall, CHRISTUS Health now has nearly 30,000 Associates in our international ministry:
Full- and Part-Time Associates in the U.S. – 20,265
Per Diem Associates in the U.S. – 5,364
Mexico Associates – 3,600

In Mexico, the CHRISTUS Muguerza system is mandated by law to have a success sharing program with all their Associates. We have replicated that program on a smaller scale in the U.S. campuses, driven by patient satisfaction metrics.

In addition, in the U.S., 44.3 percent of the full- and part-time Associates contribute to the Matched Savings Plan along with 8.3 percent of the per diem Associates, resulting in an overall participation of 36.8 percent. This has grown from 8 percent over the last 10 years as CHRISTUS has continued on its Journey to Excellence.

As we review our 10-year history moving towards our 10th anniversary in February of 2009, we clearly see that CHRISTUS Health has faced many challenges. In response to these challenges, the CHRISTUS family has designed and implemented many changes which have resulted in significant progress in all of our Directions to Excellence. The market volatility we are experiencing in recent weeks is just one more challenge which we are currently addressing. We recognize that market volatility is normal and in reviewing history, we know that it must be expected periodically. To minimize the risk of this volatility both present and in the future, we rely both on our internal knowledge as well as external expertise, of our investment consultants, Investment Subcommittee, external auditors and bond rating agencies. This integrated program hopefully gives our Associates a greater sense of comfort as we travel through these challenging times.

Is Being a Health Care Leader Really Worth the Work?

I am often asked by leaders both inside and outside CHRISTUS how I got where I am in my career, and if I had to do it over, would I take the same path? I think the reason why this question enters the minds of many people in health care today is because the time and energy it takes to be a leader in our field is enormous.

This is probably evident by the short life that CEOS have in health care, particularly in large systems which average a 5-7 year span. In addition, the complexity of health care often creates challenges for leaders in balancing their personal and professional lives. Consequently, they ask frequently, “Is it really worth it to be a health care leader in 2009?”

For me, the answer to this question throughout out my entire nearly 40 years in health care leadership has been yes. Although I might say that my leadership journey officially began when I was selected to be the chief surgical resident during my last year of residency and was elected president of the house staff association during both my junior and senior years of residency. However, my leadership experience truly began during my secondary education, when I found myself taking on responsibilities that led me to become the editor of the newspaper, the assistant editor of the yearbook and the president of my class.

Because I believe that some leadership skills are innate, the characteristic I saw in myself early on which really did not need any development was the desire to facilitate the correction of problems or to fill voids by taking leadership responsibilities which no one else readily wanted.

Assuming these leadership roles early in my career caused me to understand that I really enjoyed taking on these responsibilities. Therefore, as I continued my college, medical school, residency and two years of military service, I again found myself seeking leadership opportunities which gave me the ability to say that I was truly making a difference in the environment in which I was living and working.

However, it was not until I returned to civilian life and was working in my first health system in the roles of the Chair of the Department of Emergency Medicine and the Director of the Surgical Educational program that I found myself reflecting on the question, “What are the competencies of a successful leader in health care?”

This reflection was motivated by two major factors. First, I found myself dissatisfied with the leadership of some people to whom I reported, and therefore had to ask the question, “What were they doing or what skills did they lack that I found unpleasant?”

Second, people began asking me how I became a physician leader, which then caused me to analyze the art of leadership (often those innate and interpersonal skills which one possesses) vs. the science of leadership (those skills and talents which can be taught and learned).

As a result of these reflections, I determined that there were lists of both curriculum and operational competencies which every health care leader needed to develop a leadership team that would be willing to follow his/her direction. Consequently, as I was promoted to the Senior Vice President and Medical Director of the Geisinger Health System in Pennsylvania, I immediately partnered with Susquehanna University to offer a health care leadership course which was required for all clinical as well as administrative leaders in the system. This one-year course made up of 12 three-day sessions consisted of required readings, lectures from external and internal faculty as well as problem-solving projects. In essence, this course provided the experience equivalent to a mini-MBA program and significantly increased my commitment to the ongoing development of leadership competencies as well as to life-long learning, since health care is an ever-changing environment.

Throughout this entire process, I continued to find that assuming leadership roles and developing educational opportunities for future leaders was as enjoyable and satisfying as it was for me to train surgical residents to assume the future surgical practices in America.

An additional question that parallels those listed above is whether or not I found the physician leadership role in administrative matters to be as satisfying as the clinical leadership roles which I had engaged in throughout my career.

Clearly, in the early ‘80s, I needed to pause and reflect on whether or not leaving a full-time surgical practice and melding administrative responsibilities with emergency medicine responsibilities would present me with career fulfillment. I decided to make this transition, believing that although I was improving the health of each individual I operated on in my clinical roles, as a physician leader, I would be improving the life of communities of people as well as training competent future health care leaders.

I have always believed that both tracks are equally important, but I am content that choosing the route to perhaps influence a greater number of people through my leadership responsibilities in health systems has been very beneficial and rewarding.

So in closing, my advice to people who are pondering the questions, “Should I take the clinical or administrative leadership track?” and “Will it ultimately be worth it?” My answer is very simple: follow your heart and do what you believe you will enjoy the most; make sure you have the competencies for whatever track you decide to take and remember: whatever role you play in health care, is a sacred role and if you are happy and if your loved ones are happy, it will be worth it.

More Lessons from the Storm: The differences between Ike and Rita

As we are now on the other side of Hurricanes Gustav and Ike, it is appropriate to reflect on what were the differences between these most recent hurricanes and Rita, which we experienced three years ago and spoke about in a recent post.

For CHRISTUS Health, the main differences can be articulated as follows:
1. The management process in the hurricanes from both the system and regional command centers was much more organized, and at no time did the leadership team feel that the situation was out of control. This was because we spent a great deal of time and energy debriefing after Hurricane Rita and created tools and processes for improvement as a result.
2. The regions were much more proactive in determining the potential effects of these hurricanes and made plans to move their patients more quickly throughout the CHRISTUS system. It appears that a total of 13,859 patients were transferred or discharged (on their own care or to other facilities) over the Hurricane Ike period (Sept. 9-Sept. 15) from five of our sites as well as four long-term acute care facilities. Many of these were transferred to other CHRISTUS facilities, which created significant comfort for the patients and their families and expedited the knowledge of the new caregivers regarding the patients’ conditions and treatment plans.
3. Generators large enough to support an entire facility were in place much earlier and helped prevent much of the major discomfort which results in the almost immediate loss of electricity and water sources after a major hurricane.
4. Hurricane Ike covered a much greater cross-section of the Gulf Coast and had more intense strength in key areas for us including Houston, Lake Charles, La. and Beaumont, Texas. Consequently, we sustained about $125 million in damage to our facilities due to water intrusion. This is almost three times the damage we sustained in Hurricane Rita. In fact, the damage from Rita was mainly due to power interruptions and some water damage, whereas the damage in Hurricane Ike was due to predominately roof damage.
5. A larger number of our Associates were affected by Ike. We estimate that over 200 of Associates lost their homes due to the damage from intense flooding, and almost every Associate in our CHRISTUS Health Gulf Coast and CHRISTUS Health Southeast Texas regions (at least 2,000) along with our physicians and volunteers were without electricity for approximately 10 days after landfall. In addition to the personal burdens, which we are working to help alleviate, we understandably are experiencing some staffing issues because these people cannot quickly resume their work responsibilities.
6. It is our observation that the federal, state and local governments did a much better job in understanding their roles and responsibilities in this hurricane compared to Rita. There was much more clarity in their directions and much less overlap or disagreement about what each of their expectations were. However, again, the major problem that was similar to Rita was that the state would often report that supplies from the federal or state government were due at a certain time or were already in a specific location, and unfortunately we found that in numerous cases, this was not the case.

These were, then, the significant differences between hurricanes separated by only three years. The short timeframe between these occurrences is extremely concerning to us and other health care systems that have facilities and assets in the Gulf Coast, because since 1996, this frequency was unheard of for almost 50 years prior to Rita. In addition, weather forecasters are predicting a very warm 2009 summer, which is always the precursor to an aggressive hurricane season.

Therefore, based on our lessons learned and the predictions for more frequent hurricanes to potentially hit Lake Charles, La. and the Beaumont/Houston and Corpus Christi regions of Texas, CHRISTUS Health is undertaking three major activities as we continue our Journey to Excellence:
1. We will extensively and intensely debrief regarding our responses and processes in Hurricane Ike in order to make our future control centers more effective going forward.
2. We will continue to prepare our facilities in the potential paths of hurricanes so they all have generators and fuel supplies permanently in place to run their entire facilities so we do not need to depend on generators moving into these locations when a hurricane is predicted, which is usually less than a two-week timeframe.
3. As we renovate our buildings that were significantly damaged, we’ll take the opportunity to reflect on the best uses for those buildings gong forward and what programs should be grown and strengthened in them.

Although we have had devastating results from our hurricane experiences in the last several years, excellent organizations walk through these times with positive attitudes and utilize these events as significant learning opportunities to accelerate the Journey to Excellence. This is exactly what CHRISTUS has done in the past and will continue to do in the future.

Adding to the CHRISTUS Family

As we discussed last week, we believe the development of our brand, which is centered around our Journey to Excellence and our commitment to transparency, has propelled the significant growth we’ve had in the system over our decade of existence as CHRISTUS Health.

This growth, of course, has occurred mainly in the two traditional ways that growth happens. Using the analogy of a family, this includes having our own babies (building hospitals, clinics and programs from the ground up), and going into an orphanage and adopting an adolescent (taking on a facility either through management, partnership or ownership which has been in existence for at least 20 years).

The first category, building our own, would recently include CHRISTUS Santa Rosa Westover Hills in San Antonio; CHRISTUS Muguerza Hospital Reynosa in Reynosa, Mexico; CHRISTUS Muguerza Sur in Monterrey, Mexico; the outpatient center at CHRISTUS Hospital - St. Elizabeth in Beaumont, Texas and the new inpatient/outpatient tower at CHRISTUS St. Frances Cabrini in Alexandria, La. Adopting an adolescent has recently played itself out in the acquisition of CHRISTUS Santa Rosa - New Braunfels in New Braunfels, Texas; our management contracts in five communities across the U.S.; our partnership with CHRISTUS St. Vincent Medical Center in Santa Fe, NM and our entire CHRISTUS Muguerza operation.

Although both of these methodologies for growth are extremely positive and beneficial, they likewise have their own set of challenges. When adopting a 16-year-old, you at least know what the last 16 years has created, compared to having a newborn when the next 16 years are extremely unknown. However, with the newborn, you have the advantage of molding the next 16 years, which is like creating new cement, while with the adolescents, you must chip away at the old cement if you wish to put in its place a new behavior.

More specifically, you can compare these two models in four different aspects: First, the amount of orientation you need regarding the system that they are joining. If you are building a new program or facility, this orientation can be slower and can evolve as the structure is being built. However, if you are merging or taking over the management of an older organization, the orientation must be more intense and in real-time.

Second, these models differ in the relationship building skills they require. When you are building something from the ground up, you are usually doing so in proximity to a present region which has a well-established administrative structure. Therefore, the leadership of the new structure can quickly be integrated into the already-established team. If you are acquiring an organization, however, you are dealing with an entire group of people who are not familiar with your history. Therefore, you will need to spend much more time while the partnership is being negotiated to develop strong interpersonal relationships with this team.

Third, building a shared culture is a much different process in each of these models. When building a new program or structure close to an existing regional structure, the culture can be grown as the program/structure is being built, and can be modeled by the team that is already in place. When a long-standing facility or program is being merged into CHRISTUS, the culture must be created within that smaller organization, which is a much more challenging task. This is aided by bringing that leadership team into the CHRISTUS leadership development programs. This process is even further enhanced if CHRISTUS Associates and leaders are willing to move into this older organization and assume leadership there when it is merged into CHRISTUS Health.

And the fourth aspect would be focus of time and energy. Although at first it might seem that it would take less time to acquire a facility or program than build one, it has been our experience that both methods require equal amounts of time and energy. Building a new structure requires focused facility planning, new hiring, ordering supplies and intense tactical planning to make sure that everything and everyone are in the right place for the day of opening. This somewhat compares to the amount of energy that it takes to do the 2 o’clock feeding until a baby reaches approximately one year of age. With the well-established facility, an equal amount of effort is utilized by transitional team meetings and creating extensive plans relating to salary and benefit changes, policy and procedure differences, branding with signage and logos and articulating the CHRISTUS-like processes that are mandated by being part of a larger family.

In essence, growth is an essential part of a vibrant organization, and occurs either by building your own or acquiring and merging with others. CHRISTUS has elected to take both pathways as opportunities became available. It is important to recognize that each of these are beneficial but have a set of challenges which, if understood and addressed appropriately, will create success in either case.

The Importance of a Strong Brand

As I have previously mentioned, we are in the process of making regional visits both in the U.S. and in Mexico to all of our campuses, facilities and programs to review our progress on our 10-year Journey to Excellence as we approach or 10th anniversary in Feb. of 2009.

During these regional trips, we are reviewing the following in detail:
1. What we have carried through from the prior two organizations that came together to form CHRISTUS Health;
2. What were some intentional strategies which were implemented immediately when CHRISTUS came together in 1999;
3. Where we are on all of our metrics embedded in our Journey to Excellence;
4. The importance of Futures Task Force I during this first 10-year journey and
5. What will the next 10 years potentially look like for CHRISTUS Health?

In this blog post, I would like to discuss the first two issues. I have reviewed where we are on our journey thus far already, and will certainly provide an update on that subject closer to our 10th anniversary in February of next year. We have also reviewed our Futures Task Force I process, and will be sharing with you in more detail what Futures Task Force II recommends in the February 2009 timeframe also.

Because the two organizations that came together to form CHRISTUS were over 133 years old when CHRISTUS was formed, we needed to make sure we reviewed their history and carried forth into those elements which were an important part of their culture. As a result of this review, the mission of these two organizations remains the mission of CHRISTUS Health: to extend the healing ministry of Jesus Christ.

However, as I have recently observed the Associates, patients and residents in a variety of settings in the U.S. and Mexico, it is clear to me that this mission is more vibrant and robust than it was when we began in 1999. We are a much more diverse organization with regard to our ethnicity, gender, age, religion and even talent. Our ecumenical profile has indeed expanded in all these aspects, and it is clear that Jesus would support embracing all people and therefore the direction we have taken. Also, the equality of all people and every individual is embedded in the incarnational spirituality of our founding congregations and their two health systems; consequently, this also supports the ever-expanding profile of the CHRISTUS family as well as the people we serve.

The values of the two prior organizations were also extremely strong, so they were carried forth into CHRISTUS Health with only minor revisions. We added excellence to our core values as well, because as we are taking care of people and their lives, excellence is a necessity and not a luxury. Therefore, excellence must be expressed consistently and constantly in our values, whether verbally or in writing. And more importantly, they must be seen as living behaviors in our activities every day.

Of course, both prior organizations had visions, but when combined, these were not deep enough for CHRISTUS Health. Consequently, by working with our system governing board and leadership team in we created and adopted our present vision statement that indicates we will provide exemplary processes, programs and people in local, regional, national and international communities so that all may experience God’s healing presence.

As I pause and look at these three important foundational elements of CHRISTUS Health, it is my belief that they will continue to be our mission, vision and values long into the future.

So as CHRISTUS Health came together in 1999, undergirded by these 3 profound documents, forming our firm foundation, the Senior Team intentionally did two important things.

First, they committed immediately to the importance of having the CHRISTUS name on all buildings and programs both present and future, and indicated that this would represent our brand. Subsequently, this brand has been developed and is characterized by two important characteristics: our Journey to Excellence, and transparency. Our continuous and nonwavering commitment to having metrics in our four directions to excellence and our willingness to have those available on our website as well as to our internal audience so we can be honest about where we are and committed to action plans to get us where we want to be are the heart and soul of CHRISTUS Health. In fact, as we knew it would be our brand that would cause other people to ask whether or not they could become part of the CHRISTUS organization. It is this brand that has given us the ability to acquire what is now CHRISTUS Santa Rosa - New Braunfels hospital, become partners with St. Vincent Regional Medical Center in New Mexico and expand from two hospitals to seven in Mexico.

It is our brand which causes the state and federal governments to call us periodically to ask us what we think about an issue upon which they are deliberating. It is our brand that is behind the waiting list for people who want to work in various CHRISTUS regions and programs. It is our brand that has caused us to be named in some locations as one of the best places to work. It is the commitment to our brand that has caused us to face the challenges of the last 10 years, to implement the changes that were required to address these challenges and to make the progress that we have made in all four directions to excellence during this 10-year journey.

And it is our brand that has caused hospitals looking for buyers or partners to select us over other bidders that would have paid more and promised more from the for-profit segment of health care.

We are one of the few large international systems that utilizes a system name which is visible on buildings, stationary, vehicles and advertisements and represents the consistencies that are present in all CHRISTUS facilities and programs whether in a rural community a large city, academic program, or school-based clinic. This branding was done intentionally, and we believe has been an essential factor in the building of our culture of excellence and our opportunity for expansion internationally.

However, we also recognized in 1999 that the miracle moments which would improve the health of our patients, residents and their families would not occur in the Dallas system headquarters or within the system logo or brand. Rather, these moments would be created by the members of the CHRISTUS family who are serving in our regions and facilities, and that is why our branding strategy includes the region as well as the local facility or program, i.e., CHRISTUS Santa Rosa Children’s Hospital, CHRISTUS Spohn Health System, CHRISTUS Muguerza High Specialty Hospital.

It is the balance between the system consistencies and the local customization to meet the community needs in our regions and programs that guarantees success for the many, varied communities we serve both in the U.S. and Mexico. It’s the appreciation of the need for this balance that truly has made us successful during this first decade of our journey.

Balancing the consistency throughout all of our regions with the local strategies and tactics has given us the ability to grow from 22,000 Associates to almost 30,000, to grow our net revenue from $3.3 billion to $4.7 billion, to grow our physician family from 6,200 to 6,800, to grow our foundation philanthropy programs from $12 million to almost $30 million and to grow our volunteer numbers from 900 to 1,800.

This growth in and of itself is not important. That is, being big just to be big should never be a goal. But to be able to serve a larger number of people so that the mission, vision and values that we carried forth could be extended to others is. That we are continuing to improve the health and well-being of a greater population is the appropriate outcome.

Growth is important if it is done right, for a non-growing organization often lacks the energy, enthusiasm, optimism and innovation that is required to be filled with a culture of excellence. CHRISTUS Health intentionally carried forth the important items from the past and immediately put forth key strategies which appear to have created the ideal recipe for a successful CHRISTUS Health in its first decade, and hopefully has created the building blocks for strength to go forward into the future.

Lessons Learned from Hurricane Rita

In the aftermath of Hurricanes Katrina and Rita, CHRISTUS Health leaders were asked to debrief and share learnings of how we could be better prepared to address hurricanes or other natural disasters going forward.

We witnessed many wonderful examples of our Associates simply doing whatever it took to extend the healing ministry of Jesus Christ during the hurricanes and afterward. These incredible efforts involved overcoming challenges of nature, bureaucracy and some of our own processes. Therefore, while our memories were still fresh, we took time to look at what we did right and what we could improve upon. The debriefing work also helped us approach our government advocates regarding storm relief efforts and future planning.

To organize their thoughts, leaders were asked to reflect on 11 areas:
1. General hospital operations and community preparedness
2. Evacuation issues, including staff evacuation
3. Before, during and after storm patient care and transfer, and patient tracking
4. HR and staffing issues, including Associate housing
5. Communication: CHRISTUS internal; CHRISTUS entity and governmental; intergovernmental; public safety
6. National Disaster Medical System (NDMS) and Federal Emergency Management Agency (FEMA) issues
7. Logistics, Materials, Supply and Transportation
8. Financial and Claims: tracking expenses; reimbursement; funding for storm costs; documenting and valuing insurance claims
9. Regulatory issues, including waivers
10. Decision making: authority, leadership at CHRISTUS, local, state and federal levels
11. Public health issues

A hurricane debriefing report was compiled from over 30 sources and comments in an effort to identify commonalities. Based on this report, an extensive planning document that detailed important duties relative to emergency preparedness and the local/regional responsibilities and system responsibilities in response was prepared, and has been very helpful in our ongoing preparations.

We were also able to identify areas that would probably be issues during and after major storms in the future. These included many activities which must be coordinated through other entities (such as state and federal agencies), like transporting patients, power concerns (including securing generators as well as fuel) and transporting necessary supplies to our affected facilities following a storm. In addition, we know that staffing may be a concern, as many of our Associates were ready and willing to come back to work, but unable to return to the area because of blocked or damaged roads. In addition, if the affected area is without power, we must find a way to provide housing, food, etc. to Associates who stay or return immediately following a storm.

In addition, our Risk Management department has also devoted much time to the study of our response to Rita. As a result, we have gathered many resources and materials that have been on hand during the following hurricane seasons and have implemented disaster preparedness training as well as an alert system.

Obviously, in any disaster or large-scale emergency, much of our planning will be rendered ineffective, no matter how well thought-out it may have been. However, it is ultimately the resourcefulness and commitment of our CHRISTUS leaders and Associates that allow us to continue our mission of extending the healing ministry of Jesus Christ even under the most difficult circumstances.

Hurricane Gustav: Another Valley

I have recently mentioned CHRISTUS’ experiences at the top of the mountain and the bottom of the valley in a period of two-and-a-half months. On one hand, we successfully separated conjoined twins at CHRISTUS Santa Rosa Children’s Hospital, while on the other we experienced a heparin incident in our NICU at CHRISTUS Spohn South. We talked about the importance of an organization on a Journey to Excellence being able to successfully experience and address those issues in the valley, and through those learnings, gain the knowledge and expertise to move toward the top of the mountain once again.

We predicted that other valleys would present themselves to CHRISTUS Health as we continued our Journey to Excellence for the next 10 years of our history. Indeed, such was the case five days ago when Hurricane Gustav directly aimed itself to several of our hospitals in the Gulf Coast region.

Just as we experienced in Hurricane Rita several years ago, we had to evacuate four of our hospitals in the direct line of the storm: CHRISTUS Hospital - St. Elizabeth in Beaumont, Texas; CHRISTUS Hospital - St. Mary in Port Arthur, Texas; CHRISTUS Jasper Memorial Hospital in Jasper, Texas and CHRISTUS St. Patrick Hospital in Lake Charles, La. In addition, we had to determine the potential consequences of the after-effects of the storm on our hospitals in close proximity, including CHRISTUS St. Frances Cabrini Hospital in Alexandria, La.

Because we are an organization that debriefs after our valley experiences, we learned a great deal from the challenges which Rita presented. Therefore, this time we were much better prepared both at the system and regional level, because our Risk management department has since made efforts to improve our disaster preparedness throughout the U.S.

Consequently, all of our regions, including Mexico and our newest region in New Mexico, participated in system-wide conference calls and made themselves available to take evacuees from the affected regions and to also provide supplies and staff as requested.

The affected regions were able to evacuate their patients smoothly and in an orderly fashion, so when the storm reached its peak, we had few or no patients in the four campuses that were in the line of the storm. However, all of these four campuses agreed to keep their Emergency Departments open and operational so that they could continue to serve their communities.

What leadership skills are necessary and were demonstrated to help us successfully walk through this most recent valley? I believe that there are seven critical skills to highlight.

First, organizational skills. All hurricanes and most other crises in valleys naturally create chaos and disarray. Our leaders demonstrated the ability to minimize this chaos and create plans, next steps and to-do lists which resulted in hour-by-hour plans that accomplished the goals which had been outlined several days before the hurricane hit.

Second, analytical skills. It is clear that every problem or issue during such crises cannot be identified in advance, and our leaders demonstrated their ability to quickly analyze the problem, create a rapid solution and implement it promptly.

Third, team building. Because crises such as hurricanes play out over a prolonged period of time of (often four to six days), one small group of people cannot provide the leadership which is required to come through a crisis successfully. Therefore, the breadth and depth as well as strength of team is vital during this period of time, so that several sub-teams can be assigned to work and then rest, rotating with other teams that will do this in reverse. Great team-building during Gustav was demonstrated throughout the CHRISTUS system, both in the U.S. and internationally.

Fourth, innovation. Unfortunately, during crises, some routine solutions do not address the issue successfully, and therefore the ability of the leadership team to innovatively think of new and potential solutions rapidly is essential. There were many examples of innovation during our recent crisis, including cross-staffing and opening up a daycare center with the faculty from our school-based health centers as two examples.

Fifth, flexibility. Traditional roles and responsibilities often do not suffice and create success during a crisis; therefore, all members of the leadership team must be flexible to do whatever is necessary to address the urgent challenges they face. Clearly, during a crisis in a valley, the responsibility at the end of each of our job descriptions, “other duties as assigned” should probably become the lead responsibility during this period of time.

Sixth, optimism. Walking through valleys like living through hurricane Gustav is a devastating experience under the best circumstances. Often, whatever can go wrong does go wrong, and occasionally even the best thought-out plans to address the issues are not successful. However, if leadership becomes discouraged, they will then become ineffective, and all the best-laid plans will quickly deteriorate, adding to the general chaos mentioned above. Consequently, a leader must make sure at all times--particularly when seen publicly or making public announcements--that optimism is visible or embraced in the words used in both verbal and written communications. This is of course helped by rotating schedules so that excessive exhaustion is avoided, and is also aided by celebrating the incremental victories as these crises unfold. That is, making sure the successes are communicated as widely as the challenges. We have discussed celebrating incremental victories in the past as necessary to re-energize leadership to move to the top of the mountain, and this is never more important than when one is in the valley.

Seventh, resilience. After several days of in being in the midst of a crisis, the team will often find themselves “hitting a wall,” much like a runner experiences in the 21st mile of a marathon. Unfortunately, crises are often not over when the wall is in sight, and therefore leadership must find the resiliency they need to continue the journey with the strength and energy that is required. Resilience was seen continuously during our recent experience, as our system and regional leadership teams were fully present and enthusiastically participated in our regular conference calls.

As we have discussed in the past, leadership skills and competencies are essential if an organization is to reach excellence and sustain themselves at the top of the mountain. But in reality, these skills are even more important as one’s organization is experiencing a walk through the valley.

The Mountains and Valleys of Leadership

In a recent blog post, I discussed the implications of the mountain and valley that CHRISTUS Health experienced recently with regard to the separation of conjoined twins at CHRISTUS Santa Rosa Children’s Hospital and the heparin incident in our NICU at CHRISTUS Spohn South. In that post, I talked about the leadership requirements necessary to travel over mountains and into valleys.

The importance of this discussion was indeed re-emphasized to me on my visit to our Texarkana region recently. At our Touchstone awards in 2006, we presented a Leadership award to the Texarkana team because they had reached all their excellence goals for several years and had demonstrated that they knew how to sustain excellence in all four of our directions on our Journey to Excellence. (This was the first and only time we have presented this award to a team of regional leaders.) The Senior Leadership Team at CHRISTUS talked about them frequently, indicating that by improving clinical quality and service delivery while maintaining a strong emphasis on community value, they had proven that they could create business literacy throughout their region. We even said they had “cracked the code,” and we published several papers based on their performance.

However, as they moved through FY07, they had some major challenges, particularly with their business literacy, and therefore lost focus on their clinical and service measurements, causing their metrics to decrease. This obviously caused us to pause and ask the question, “Did they really deserve the Leadership award in 2006?” Did we think they had some of the right qualities for being an outstanding leadership team, but in fact were they missing some of the more important ingredients which we failed to notice?

These questions deserved and have received much reflection, because we as the Senior Leadership Team, the coaches and mentors of these regional leaders and many of the future leaders of CHRISTUS Health, must make sure that we are teaching the right leadership competencies to be successful not only today, but long into the future.

When I visited this region recently and specifically spoke about their successes in FY08, it was clear to us all that we had made the right decision in giving them the first and only Leadership award, because as a result of their outcome metrics in 2008, they are now once again the best region of the 13 in CHRISTUS with regard to our directions to excellence. They have demonstrated that an excellent team is able to reach the mountaintop, but can, if faced with a perfect storm, find themselves in a valley. When they find themselves in this valley, they can quickly reenergize themselves, develop and implement corrective action plans and move forward out of the valley to the mountaintop once again.

This team has demonstrated the resilience, the optimism, the strong integrated teamwork and the intense focus that is required to journey from the valley to the mountaintop once again. These are necessary in addition to the traditional competencies of financial knowledge, conflict management, strategic planning and others which are essential to be designated as an excellent team. These are the qualities that must be learned by all present and future leaders in health care both in the U.S. and internationally. These are the qualities that must be taught in our Masters of Health Care Administration programs and must be role modeled and be re-emphasized throughout CHRISTUS, including through our mentoring programs. These qualities need to be identified in the applicants for our management excellence and leadership academy trainees as we prepare the future leaders to succeed us in this future health system.

In summary, we were right. The Texarkana team had those qualities and deserved the Leadership award. And more importantly, they never lost those qualities when they found themselves in the valley.

The Value of Relationships

Having completed visits to six of the CHRISTUS Health regions as part of our plan to spend time in every region, site and business unit both in the U.S. and internationally as we move toward our 10th anniversary, I have been reflecting on the value of relationships in creating a culture of excellence in an organization.

In these last 10 years, before each trip to a facility or program the senior team has asked the question, “Are we doing the right thing by taking the time of the local leaders to facilitate our visits?”

We questioned whether they had more important things to do than planning an agenda for our visit, which obviously involves the time and efforts of members of their teams. And as much as we would hope they would not make special preparations, we always know that they will be made, and we will be fed well during our visits. Obviously, this is not only a time but an expense issue as well. So is it really worthwhile?

During these visits--as we have done in the past--we instruct the local teams to utilize our time as effectively as possible, making sure they know we are available as early as 6 a.m. and want to fill our day completely until 9 or 10 at night. We ask them to make sure that as we come to give our updates, they create forums for us to reach as many Associates, board members (both governance and foundation), physicians (including medical leadership) and volunteers as possible. For our visits over the last two months, they have done just that. In our most recent regional visit, I had the opportunity to interact with over 2,500 Associates, 12 governance board members, 20 foundation board members, 30 members of their medical staff and over 200 volunteers. I was amazed at the attendance at the various forums, the attentiveness during my presentations, the thoughtfulness of the questions posed during the dialogues and the constant comments by many of how beneficial these interactions were.

These comments included:
* “I can’t believe you spent the time to come and visit us.”
* “I cannot believe that you know our journey so well that you can speak to it without looking at notes.”
* “We are truly appreciative of having a better knowledge of what the entire CHRISTUS system is doing.”
* “It is great to understand how we as a department, business unit or clinical service fit into the regional strategies and how that strategy then fits into CHRISTUS Health system strategy.”
* “We are so proud of being part of the CHRISTUS family because we now know better what other family members are doing, particularly as you shared the stories of Santa Rosa and Spohn as being at the top of the mountain and in the valley in the last several weeks as well as the work occurring in the CHRISTUS Stehlin Foundation in Houston.”
* “We are pleased to see your passion and enthusiasm, which gives us the energy and the focus we need to continue the Journey to Excellence in our specific areas.”

In the past, if you asked many CEOs in health care what their major role in their organization was, they would tell you it was to be the external face of the health care system. That would mean that they thought most of their time should be spent in Washington, at the state government, attending national and state association meetings and addressing local groups such as Rotary and Lions clubs regarding the status of the health care system they were leading.

Although these external activities are still important today, with the challenges we are facing in health care, it is my belief that much more attention must be placed on creating the internal face of the leadership team for all the Associates, physicians and volunteers who are part of the CHRISTUS family. It is clear to me that the Journey to Excellence is only attained if the people believe and work in a culture of excellence. And it is more clear to me than ever after six of these regional meetings that the culture of excellence can only be created, energized and sustained if the CEO and the leadership team are there to speak to it and to demonstrate by behavior that it is a way of life in CHRISTUS Health and not a mission, vision and value statement framed on a wall or embedded in a series of policies in a book that is rarely read by anyone.

We all know at CHRISTUS that these trips take an enormous amount of time and effort on the part of the leadership team, the communications team who plans the agenda and the local leadership team who carries out the implementation. But at the end of each trip, the value of these efforts are reinforced and remind us that although we might believe that our greatest asset in health care and particularly in CHRISTUS Health may be the $4.7 billion we have on our balance sheet which represents the amount of buildings and technologies that we own and operate, in reality our greatest asset is our people. And people are motivated by people who have developed relationships with them and who demonstrate by the way they walk and talk that they are committed to excellence. This can only be transmitted by face-to-face forums through these regional visits, and must be seen as one of the most important things we do. So often we attempt to resolve crises in health care quickly and efficiently and fail because we have not established the appropriate culture or relationships prior to the occurrence of the crisis.

The challenges in health care are great and the changes we must make to address these challenges are even greater, but at the end of the day, if we expect to make the progress necessary to provide excellence for every person who comes through our doors, we must believe that relationships and the culture of excellence that comes from them is the essential ingredient to be sure that our people create an excellent environment in both clinical and quality services so that the care that is rendered is worthy of the CHRISTUS brand.

Competition and Collaboration

I’m sure that many of you have read the recent article published by the American Hospital Association in which they predict that 1,200 of the 5,200 hospitals in America will most likely go bankrupt in 2009. One would expect our first response to that news to be elation, in that some of these hospitals may be in our markets and this would eliminate our competition and make our Journey to Excellence easier.

However, this first impression may not, in reality, be the ultimate effect of these closures. In CHRISTUS Health, we are living out this experience in real-time as hospitals in two of our regions in the U.S. have announced bankruptcy, and one of the two is being auctioned off in the next several weeks.

Obviously, during this period of time, the institutions are rapidly downsizing their census, and many of their patients are being seen in our facilities. But because both of these hospitals are in two of our most challenged regions where the number of uninsured or underinsured is extremely high, the shift of patients to our facilities is not paralleling a significant rise in collectible revenue, but is increasing our expenses significantly. Consequently, these closures are ultimately having a negative effect on our bottom line. It seems that this scenario will be the most likely one playing out in all of the markets where these bankruptcies may occur, given that bankruptcies are most likely to take place in challenging markets that have a higher-than-average number of uninsured and therefore a large bad debt.

If, then, our response is not elation and we expect negative results, what should our response be? First and foremost, in good times and bad, we should always work to develop open communication with our competitor to make sure we are meeting the needs of the community in the best possible way. In fact, if collaborative planning was always a high priority for health care delivery systems, perhaps the appropriate services could be separated into each of the facilities in a community, preventing unnecessary duplication and causing each hospital to be much more profitable or at least to absorb fewer losses. Unfortunately, most economists and governmental officials in the U.S. seem to believe that a competitive model that works in other industries will successfully work in health care, which is truly a service industry open 24 hours a day, 365 days a year, where all those who seek treatment must be served (at least for emergencies).

Unfortunately, because of the highly regulated nature of health care, the fact that the majority of our payments are provided by the cumbersome governmental entities of Medicare and Medicaid and the polarity between physicians/providers and hospitals/health systems, theories from Economics 101 have never and will never work. In fact, the competitive nature that has resulted between different providers in the same community all over the country has caused an extreme duplication of services and technology, which ultimately do not create profitable product lines and may even result in the overuse of treatments and procedures.

Although we offered to collaborate with the hospitals in the two regions I mentioned above, our offers to have those conversations were never accepted, and the resulting outcomes are evident. Therefore, we are now faced with the closure of these hospitals, and must determine the best way to quickly absorb an increased number of patients and hopefully develop efficiencies and effective processes to do this in a way that will minimize our losses and eventually produce business stability along with these increasing volumes.

But because this cannot be done in a proactive way over a defined period of time, but rather has to be done in reaction to a crisis, bankruptcy or foreclosure, often the initial solutions create short-term challenges which require significant effort to turn into positive values in the long-term.

The reality is that what might seem like a joyous occasion initially actually becomes a significant issue and often a burden when the realities of the situation are fully understood. So as we stand here in this moment in time, it would be best to reflect upon the best ways to prevent these foreclosures and bankruptcies from occurring, rather than being forced to stand idly by while the additional nearly 1,200 closings occur.

Could segmented health care be part of the solution?

It is obvious that the major agenda topics for the new president will increasingly come into focus prior to the elections in November, and we hope that the redesign of health care will be high on this agenda. We all know that the health care system in the U.S. is broken, based on all four aspects of our Journey to Excellence: the overall quality is mediocre, the service delivery recently reported through HCAHPS is lacking, the business literacy is in jeopardy as the AHA predicts 1,200 hospitals will go bankrupt this year and the community value as represented by the level of charity care provided by non-profit hospitals and health systems is under scrutiny by the IRS and congress as we speak.

We all know that the redesign of American health care will most likely be evolutionary rather than revolutionary. However, it is imperative that all of us who are working in this industry spend significant time looking at the pieces of the puzzle that could be put together to create a new delivery process which would easily be able to significantly improve the low scores in the four directions outlined above. As I am in the midst of my travels to CHRISTUS regions, I have spent time in planes and sitting in airports reflecting on some of these pieces more thoroughly, and today I’d like to share what I think may be the most important one.

I am proposing that we need to get increasingly comfortable with segmented health care as one of the primary solutions to our dilemma. Our experience in Mexico with segmented health care gives me even more reassurance that this would be most helpful, but it is only added to the knowledge and experience I‘ve gained by reflecting on my medical school, internship and residency training experiences where I practiced in segmented delivery systems.

First, what do I mean by segmented?

For me, segmented health care means that you provide the health care in different settings and with different amenities according to the patient’s or family’s ability to pay for such services.

I know that many people initially react to this idea by asking, “Dr. Royer, are you proposing different levels of health care for the poor and the rich?” Obviously, based on what you have read in my blog before and knowing that I am the team leader for a Catholic, faith-based health care system that is founded on incarnational spirituality, that is not the case. We have proven in Mexico that you can provide equal clinical quality of care and service delivery while providing different locations and amenities for various populations based on their economic status. So in reality, my proposal is to provide equitable health care for all from the clinical and service perspectives, but not providing equal amenities to all.

It is clear to me now as I have reflected on my early years in health care and have reinforced these experiences with my observations in Mexico in the last seven years of our Journey to Excellence that our failure in the U.S. to control our costs and to reduce our bad debt is primarily from the fact that we are providing amenities/private rooms, flat screen TVs, free telephone access, free internet connections, menu selections and private bathrooms to people who cannot afford them. These amenities obviously have to be built into our overhead costs for providing health care, and therefore have increased our expenses. As a result, we are increasing our revenues to potentially address these expenses, but because people cannot pay, the prices that are driving our revenues are increasing as well as our bad debt.

This is in reality also what has happened to Starbucks, which I mentioned in my post last week. I indicated that they significantly increased their prices for a 20-cent cup of coffee in order to have the monies to rapidly expand their shops throughout the world. But they, like health care, have reached a point where the differentiation between the price and the cost are so distant that the value added is no longer present.

I am sure that many people reading this blog would say “Can we safely go back to ward medicine or four-bed suites with the infectious disease issues facing us today and with the expectation by most Americans that they need the private room and the amenities described above?”

To me, the answers are clear. We will need to continue to undertake a re-educational process for American citizens to inform them that we are committed to equal quality and service, but just as in any other industries, you cannot buy amenities associated with your purchase if you cannot pay for them. By creating a segmented system, we will thereby be able to decrease the cost for health care and better care for the large number of uninsured who are getting no care in the U.S. We will need to remind them that clinical and service quality are what they need and want, and that for the short period of time they’re in our outpatient, inpatient, senior campus programs or hospice and palliative care programs, the amenities add no value to their care and certainly can be minimized and not missed during those episodes.

A key example of this would be when we go into a car dealer to buy a car. Adequate transportation is the expected outcome. But indeed, some of us can only afford a used car, and some can afford a luxury automobile. But transferring this analogy to health care, I believe we are giving sunroofs, high-class stereo systems and GPS systems to everyone, even those who can only afford the cheapest of models. Therefore, we are creating a cost structure that has proven to not be sustainable, and if we continue it, we’ll fail in the future.

Again, we must remind people over and over that we are not sacrificing quality or service, but in fact the package in which that care is delivered will need to be wrapped differently for different people based on their ability to pay or not pay.

Second, with regard to patients who need special care either because of the intensity of their illness or infectious issues, we had the answers years ago, and we still have them today. If the severity of their illness is significant, they can be moved to our cardiac care units of ICUs, whose physical layouts I would suggest need not be changed, since the value of the amenities there are mainly focused in the high technology required or the visibility required by the nurses and physicians who are caring for them. With regard to infections, we always had this issue in ward medicine in the 1960s and ‘70s, and that’s why we created infectious private rooms close to the wards where these patients could be placed when they needed to be isolated. Because these rooms were different, my belief that we may have paid even more attention to the infectious disease and isolation precautions than we do today.

Because everyone is now in a private room which can be changed to an isolation room by merely putting a sign outside the door, I wonder if we are not as diligent to our infectious disease precautions because, in fact, that room does not look that much different from any other room that we might have. Segmented medicine requires that different types of care will be rendered in different settings, and this may in fact positively affect the level of care delivered.

In closing, I readily admit that this proposal as one piece of the puzzle for health care redesign may seem radical and may be interpreted by many as a step backward rather than a step forward. But based on significant reflection on my training and the segmented system in Mexico where those who can pay are treated in one series of our hospitals and clinics and those who cannot pay are treated in another network of short-stay hospitals and clinics, I am convinced that a segmented health care system is at least worth putting on the table for reconsideration by the task force for health care redesign.

Learning from Starbucks and Ford

I have recently been reflecting on discussions we have had at our annual leadership retreats over our 10-year-history regarding the characteristics of successful companies and great leaders. At our first leadership conference in June of 1999, I indicated that I believed Ford Motor Company and Starbucks were beginning downward spirals which, if not reversed, would cause them major difficulties in the future. Today, it appears this prediction was correct. Therefore, I think it might be beneficial for us to review why we predicted for the last nine years that these “Journeys to Mediocrity” would occur, and the continuous learnings and implications for CHRISTUS Health.

Based on my experience at the Henry Ford Health System and my early visits to the Henry Ford company, I saw and then reported that I had concerns about several things:
1. They were touting quality as “job number one," and yet were recalling about 400 cars a week for poor quality at that time (1993). The number of recalls have steadily increased since then. I have always been concerned that they were not being honest with themselves nor looking at the data which--even in the 1990s--was showing that Toyota and Honda were gaining market share in the U.S.
2. They were blaming all their expense increases on their health care expenses, and I reminded them that they should also be looking at what I deemed excessive benefits for their employees and retirees (i.e. 230 days of rehab services a year for alcoholics). I also reminded them that in 1996 they had an equal number of retirees and active employees with a significantly under-funded retirement program.

With regard to Starbucks, in 1994 I began to see a significant and rapid elevation of their charges (i.e. almost $3 for a cup of coffee which they reported only cost them 20 cents). I assumed that someone would finally be able to produce an even better cup of coffee and make the pricing much more reasonable. (We do that now in our Healthy Living coffee shops.) Their drive to increase their profits was based on their desire to open more and more stores in the U.S. and the world at large. My concerns were:
1. Their "family" was growing too quickly and they were not taking time to create the Starbucks culture in each of their new locations.
2. They were implementing the same price increases that we saw were slowly destroying health care. For example, a Complete Blood Count (CBC) now costs us 6 cents to perform, and we still charge between $12-$24 (and some heath systems charge much more). As these processes have become more automated, the cost to us has decreased, but our price has not. The rule that your pricing structure must in someway parallel your cost structure or eventually you will reach an impasse is being violated in this case.
3. Also, I saw Starbucks continuing to not only grow the family excessively but diversifying the family too quickly by getting in the food business and the music business and therefore losing focus on the Journey to Excellence in the coffee business.

So what are the implications and learnings for us from Ford Motor and Starbucks?
1. We must never decrease the intensity of our focus and work on our Journey to Excellence.
2. We must continue to be transparent with all of our metrics, both internally and externally. This means we must never think we are better than we are, and will give us an opportunity to continue to share best practices from the best performers and continue to develop actions plans to reach our outstanding goals.
3. Our work to diversify our portfolio to include 1/3 acute care, 1/3 non-acute care and 1/3 international care must continue with health care and wellness programs, making sure we have the diverse leadership and expertise to lead these ministries which all connect.
4. We must continue to seek further understanding of our cost structures and increase to parallel our pricing structures to them. We must remember that you can not continue to fund growth with prices that a majority of people will be unable or unwilling to pay.

As move toward our 10th Anniversary on Feb. 1, 2009, we must maintain our commitment to being a “learning organization,” making sure we continue to transition CHRISTUS Health to being one of the best and future-looking health care systems in the world. Pausing to reflect on our conversations about the Ford Motor Company and Starbucks over our 10-year-history and reflecting on where they are today and the resultant learnings is an important part of our continuing Journey to Excellence!