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DMC's new president survived Romneycare, ready for Obamacare

With 20 years' experience working at for-profit hospitals — seven of those years with Vanguard Health Systems Inc., the parent of the Detroit Medical Center since 2011 — Joe Mullany was hired in April by DMC CEO Mike Duggan for the newly created new position of president.

At the time, Duggan said that a big reason he brought in Mullany was his knowledge of managing hospitals in Massachusetts under that state's 2006 health care reform law, championed by then-Gov. Mitt Romney. The Massachusetts law was the a predecessor to of the national Patient Protection and Affordable Care Act of 2010, championed by President Barack Obama. The federal law fully goes into effect Jan. 1, 2014.

As the DMC's No. 2 executive, reporting directly to Duggan with a dotted-line relationship to Vanguard executives in Nashville, Mullany, 48, oversees operations of all of the DMC's eight hospitals and is developing a stronger outpatient care network. Duggan spearheads the DMC's physician integration strategy, including the medical center's Michigan Pioneer Accountable Care Organization.

Before arriving in Detroit, Mullany was president of Vanguard's New England region. where for the past seven years he oversaw MetroWest Medical Center in Framingham and St. Vincent Hospital in Worcester. Earlier, he was president of the Mississippi division of Naples, Fla.-based Health Management Associates. from 1999 to 2002.

Mullany has a degree in chemistry from Wake Forest University and an MBA and master of health science degrees from the University of Florida.

Mullany was interviewed by Senior Reporter Jay Greene.

What is your background and why did you get into healthcare?

I was born in western Massachusetts in a small country town of Great Barrington. My family was all in health care — doctors, dentists, nurses. I went to college at Wake Forest in North Carolina, where I got a degree in chemistry. I worked for Alcoa for a year and realized while I loved the education of chemistry, I did not like the professional life.

I wanted to do something different in health care. I moved to Florida, where my parents had retired, and went to the University of Florida, where I got an MBA and a master of health sciences.

Why did DMC CEO Mike Duggan hire you, and why did you want to leave Boston for Detroit?

Mike and I have worked together the past several years and have seen each other at various Vanguard meetings. It was always very exciting when Mike gave a presentation because he and DMC were always on the cutting edge. DMC is at the vanguard of health care in our company.

I also have a working knowledge of how Massachusetts health care reform was implemented in 2006. Mike thought I would be able to help implement Obamacare at DMC.

The other reason is that Mike wanted someone here who had a background in for-profit hospitals. Not a lot of people here in Detroit or in Michigan can say that. He felt it would be easier for the organization to assimilate under Vanguard with me here.

For my part, it was an exciting opportunity to come to Detroit, a city on the rebound, with growth potential, excellent academics, heavy in construction (the DMC's capital plan calls for $850 million to be spent through 2016), a quality medical staff and good quality life for my family (wife Cori and three daughters ages 13, 8 and 3).

What challenges did hospitals in Massachusetts have in implementing Romneycare?

The main challenge is providing enough access points for patients to receive care. We needed more primary care physicians and nurses to expand access. But there are three phases to the reform bill that we went through as hospital executives.

The first phase involved expanding coverage to the uninsured. More than 98 percent of residents are insured now.

The second phase, which is still continuing, is to increase access. The majority of people in the city limits of Boston had to wait six months to get a primary care physician appointment.

Once we began to expand access, we moved in the third phase — reducing costs. Bills have recently been approved to address the cost side (by using ACOs, malpractice reform, expanded use of physician assistants and nurse practitioners, and grants to hospitals to encourage conversion to electronic medical records).

Because of five medical schools and associated academic medical centers, Massachusetts is the 49th-highest state in the nation for health care costs.

Nationally, 25 percent of patients receive care at teaching hospitals, where care is more expensive because of additional tests for physician training and extremely high-tech and cutting-edge services. In Massachusetts, however, 47 percent of care is delivered in big academic medical centers. More of that care could be delivered in community settings. They are working on that now.

How did you increase access points in Boston, and how do you plan on doing that in Detroit?

We did that by purchasing practices, hiring young physicians right out of residency programs in Boston and recruiting private practice physicians or contracting with them.

We needed access points for primary care and for post-hospital care like home health and rehabilitation. After discharge from the hospital or emergency department, it was important to move people into lower-cost settings to be seen by physicians and nurse practitioners.

We are trying to do all these things in Detroit.

What is your physician recruitment strategy at the DMC?

There isn't one strategy because when you recruit one physician, that is one physician. Everyone has different needs.

We are known as a health care system that is most appealing and friendly to private physicians. Our goal is to make their way of life easy for the delivery of care. We see physicians as important, and this distinguishes ourselves from others in the market.

DMC employs 110 physicians and has about 3,000 on its medical staffs and 1,120 in its physician-hospital organization.

What are the similarities and differences between the Boston and Detroit health care markets?

It is true that Detroit does not have a dominant health care system (each of the seven health care systems has about 10 percent to 15 percent market share). Boston's Partner Healthcare (which includes Massachusetts General Hospital) has a 30 percent market share and is the dominant provider. Partners grew over time as hospitals decided to align themselves together.

I see consolidation happening in Southeast Michigan over the next three to five years because hospitals have to work together to achieve efficiencies.

Another difference is that the majority of care is delivered downtown in Boston because of the strong academic medical centers. People come downtown for care. (In Detroit, Henry Ford Hospital and the DMC are trying to develop specialty referrals and marketing plans to attract more patients downtown.)

Hospitals are more competitive in Boston because of their proximity together. We have that downtown with Henry Ford, but the geography is more spread out (in metropolitan Detroit) and there are overlapping services.

How do you assess the Southeast Michigan health market?

Systems have done a good job specializing in certain areas. DMC is the dominant provider in pediatrics with Children's Hospital of Michigan. It makes sense for one provider to be the beacon in the community.

We are also very strong in cardiovascular care with DMC's Cardiovascular Institute opening soon.

I am not sure if there will be consolidation in the market right away. Outside forces will compel systems to work more closely together over time.

What is the DMC doing to compete in the market to take advantage of Obamacare?

We are doing three things. One is to be physician-friendly and supportive. We also have an accountable care organization — Michigan Pioneer ACO — that is taking care of 13,500 Medicare fee-for-service beneficiaries with 293 physicians. We are not just a hospital company. We are a full-spectrum health care company. Our tagline is "Health For Life." We preach that with employees and in the community.

Our ACO is an attempt to take care of the health of a population. It is a very small percentage of our total patients. But because their average cost is $18,000 a year, if you can care for that population, you can do it for everyone. You can replicate this care model for everyone.

DMC also benefits from being a part of Vanguard. We have economies of scale in purchasing, supply chain management, things you don't see that doesn't touch patients but lowers the costs of care dramatically and positively. We share best practices with 30 other hospitals across the country. Vanguard has more than 30 experiments going on. DMC has made a very big impact on Vanguard's other hospitals.

We have lowered patient days, length of stays, emergency department door-to-physician time and overall patient care costs. For example, DMC Children's Hospital physicians see patients within 29 minutes in the ER 94 percent of the time now, up from 73 percent. (Mullany declined to provide other statistics, citing Vanguard confidentiality.)

Can you give an example of a best practice that was recently imported to Detroit?

Last month, Children's Hospital adopted a split-flow model in the emergency department. It allows nurses to segregate patients based on acuity level, or sickness. The more seriously ill patients are taken in for expedited care. Less serious patients are evaluated, tested and monitored until they are seen.

We have reduced the time it takes to see a physician to under 30 minutes. The throughput (average for successful message delivery over a specific communication channel) in the ER has improved. Under split flow, nurses immediately evaluate patients in the ER and determine where they should be treated.

What is the DMC's ambulatory care strategy?

We are developing one. DMC has done phenomenal things in institutions, but they don't yet have an ambulatory mind-set. A lot of care is done in that setting. Part of what Mike is trying to do is organize that care that includes home health, rehabilitation, ambulatory surgery and cancer.

Earlier this year, Vanguard created a separate organizational structure for ambulatory care. We are starting to focus on that here and in our other markets.

(DMC currently has 87 outpatient centers, up from 62 in 2009. The centers include physician offices, primary care, rehabilitation, surgery, urgent care, radiology and other freestanding health care facilities.

Will Vanguard acquire hospitals in Southeast Michigan?

Vanguard is looking to grow in Southeast Michigan. Development is handled out of Nashville. There is a wall between operations and development. If Vanguard is talking with a hospital in a market, they don't want the local operators to know. I don't need to know.

(He declined to confirm talks that Vanguard has conducted with Crittenton Hospital Medical Center in Rochester Hills and Garden City Hospital. CEOs for those hospitals have acknowledged being approached but have said they are not interested in selling to Vanguard.)

Why did Vanguard DMC acquire Detroit-based ProCare Health Plan?

I am very happy about that. I can't talk about it now because it hasn't been approved (by the Michigan Office of Financial and Insurance Regulation).

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