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Hospitals in rush to reinvent their business

Providence Health, Novant push population health, tech and other options that are creating value and improving care.

Photo of Providence Health from <a href="">Wikipedia</a>.Photo of Providence Health from Wikipedia.

If hospitals are not going to be the future of American healthcare, as Scripps Health cardiologist Eric Topol has said, then executives like Providence Health & Services CEO Rod Hochman are on the right track.

“You have to disrupt your own business to be successful,” Hochman said at a forum hosted by the American Hospital Association on Tuesday.

The chief executive is trying to help the system reinvent patient care. Under Hochman’s watch, Providence has focused on the distinct areas of population health, personalization and entrepreneurship — eschewing fee-for-service reimbursement, investing in personalized diagnostics and genomics, hiring strategists from the likes of and starting its own $150M venture capital fund.

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In greater Seattle, “we’re the home of innovative companies,” like Amazon, Costco and Expedia, said Hochman. When leaders from those kinds of companies look at hospital systems, “they look at us like we’re absolutely insane in the way we deal with our patients and customers.”

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Serving Alaska, California, Montana, Oregon and Washington, Seattle-based Providence Health & Services is one of the largest providers on the West Coast, with 34 hospitals and a health plan. Hochman, a trained rheumatologist, was CEO of Seattle’s Swedish Healthcare Services and led its affiliation deal with Providence before becoming Providence CEO in 2013.

Bring retail, tech talent to healthcare

Providence’s last 10 major management hires, Hochman said, have come from Amazon, including Aaron Martin, the new vice president of strategy and innovation leading the $150M venture fund who worked on Amazon’s Kindle and its self-publishing platforms. Another is the new vice president of digital innovation, Mark Long, a former NASA engineer who worked at Amazon’s internal logistics services start-up.

The health system is going to invest $150 million over the next five years in early- and mid-stage companies in the areas of online primary care access, patient engagement, wellness, chronic disease management, clinician experience and data analysis.

Providence is also investing in advanced diagnostics and personalized medicine, hiring one of world’s wealthiest and more innovative physicians, Patrick Soon-Shiong, MD, to oversee what’s billed as the country’s first clinical genomic network for whole genomic sequencing.

Personalized medicine for rich and poor

As a Los Angeles surgeon in the 1980s, Soon-Shiong pioneered insulin cell transplants for Type 1 diabetics and then became a billionaire after inventing the cancer drug Abraxane. His new company, Nant Health, is pitching a suite of health IT and genomic sequencing processes that will be used across the Providence system.

“We think technology works for everyone” and “can bring it to everyone out there,” from patients in Anchorage to Los Angeles, said Hochman.

On the population health front, Providence is making forays into accountable care and sponsoring its own health plan. It recently inked deals to serve employees of Boeing and Intel through ACO-style, self-funded health plans.

Boeing's requests reminded Hochman of the features American healthcare consumers are increasingly seeking: retail clinics and online services, same-day or next-day appointments for primary care, online scheduling and review of test results, and telemedicine consults.

“Can my people get an appointment in the same day and get the information back in the same day?” he said Boeing requested. “It really had a lot to do with the way services would be delivered.”

Providence is also applying that strategy to its health plan, which covers Oregon state employees. Under Providence’s plan, Hochman said, patients have seen costs keep pace with inflation thanks to avoiding acute and emergency care, a mix of patient-centered services and aggressive case management of chronic conditions. 

“We’re a real believer that provider-based insurance is essential,” he said.

Giving patients and staff what they need and want

Novant Health, a hospital and clinic network serving Virginia, the Carolinas and Georgia, has been asking its patients what they want from healthcare provider to find ways to reform.

A key theme is cost transparency, said the health system’s Chief Consumer Officer Jesse Cureton, a newcomer to healthcare who spent 30 years in financial services and helped build Bank of America. Another theme is 24/7 access to urgent care and nurses, extended hours, and online health records.

For primary care, Novant has opened three walk-in clinics in a partnership with Target retail stores, staffed by Target-employed nurse practitioners overseen by Novant Health physicians.

Novant has also worked on improving its hospitals by connecting facilities digitally and trying to free up clinicians. In 2010, after learning that hospital nurses spent only 40 percent of their time directly serving or engaging patients, the system set a goal to have nurses spend 70 percent of their time in patient care activities.

Novant has largely met that goal, while also improving retention, with an 8 percent decline in nurse turnover in 2013 compared to 2012, and key aspects of hospital care that are increasingly linked to reimbursement. Sallye Liner, RN, Novant’s chief clinical officer, said many hospitals over the past few years have seen “fewer patient falls, reductions in serious safety events, and a reduction in medication overrides, a precursor to medication errors.”

Twitter: @AnthonyBrino