Lahey CEO Dr. Howard Grant talks about rising costs, ACOs, saving community hospitals

Dr. Howard Grant has been president and CEO of the not-for-profit Lahey Health System in Burlington, Mass., since 2010. In 2012, Lahey Clinic Foundation and Northeast Health System formed Lahey Health, serving eastern Massachusetts and southern New Hampshire. Grant previously served as executive vice president and chief medical officer at Geisinger Health System and served as CMO at Temple University Health System. Modern Healthcare reporter Andis Robeznieks recently spoke with Grant about rising healthcare costs in Massachusetts, his opposition to the continued expansion of Partners HealthCare and his system's accountable care efforts. This is an edited transcript.

Modern Healthcare: How has the national Obamacare experience compared with Massachusetts' Romneycare experience?

Howard Grant: We are fortunate to have about 98% of the residents of the commonwealth insured. The most striking difference is that healthcare costs have continued to escalate in Massachusetts, where the average cost of care is 40% higher than the national average. We've got a disproportionate amount of care being delivered in higher-cost academic hospital settings. Now that state law has capped the growth of total medical expenses, it's incumbent on everybody in the commonwealth to figure out how to lower the cost of care. We think we've got a real good recipe for doing that at Lahey.

MH: What is your recipe?

Grant: When Lahey Clinic came together with Northeast Health System, we made a commitment to do everything we could to keep patients in the community hospital setting whenever possible and only have patients come to the higher-cost setting, Lahey Hospital and Medical Center, when absolutely necessary. Our system, which added Winchester Hospital several months ago, is already seeing a significant increase in the amount of care delivered in the community setting, and only patients that absolutely need to be in the tertiary setting are coming to Burlington for that care. It's resulted in superb quality at lower cost.

MH: You recently helped put together a coalition to protest the expansion of Partners HealthCare. What has that coalition done and why?

Grant: When the original proposed settlement was announced between Attorney General Martha Coakley and Partners, most providers in the commonwealth were stunned by the proposed scope of Partners' growth. We spent the next month talking with health plans, consumer groups, religious groups and employer groups, trying to understand the settlement. It became clear the settlement would result in the cost of care continuing to go up at an accelerated rate and that the growth of Partners would be even more pronounced. So the coalition of providers came together and tried to educate the public about it. A judge recently decided to put off any final resolution pending an opportunity to further investigate the many comments from various groups. She noted that this was not just the coalition that might have a competitive concern, but also other disinterested parties that were concerned about the implications for costs. The next stage of the process was put off until Nov. 10, after the election.

MH: What challenges and successes has Lahey's accountable care organization experienced?

Grant: Population health is where most healthcare providers need to move as quickly as possible. The great challenge all organizations face is moving to risk in accountable care while still participating in the care of many patients in the old fee-for-service structure. And it's a big challenge coming up with the resources necessary to build the infrastructure for managing a population of patients better.

We're investing probably $200 million in the installation of an Epic Systems electronic health record. We've had some success in our risk contracts, though we did not have as much success as we would have liked in one component of the organization in the first wave of the Medicare Shared Savings ACO. Our initial predictions for 2014 suggest much better performance.

MH: How does Lahey's collaboration with the CVS MinuteClinic retail clinics fit into the ACO plan?

Grant: We're pleased that CVS also is in the process of installing an Epic EHR system so we'll have easy communication between the CVS sites and Lahey's primary-care physicians.

MH: How do you integrate hospitals under your governance model?

Grant: We made a commitment at Lahey to share in equal governance with the board members of the legacy Northeast Health System. We wanted to create a new vision for the system and not have it be a competitive posture between the members of the new board. As other organizations join us, we've made a similar commitment that they, too, will be able to participate equally in governance. This governance model is not typical when larger organizations merge with smaller organizations. It has served us well to keep our focus on the communities that we serve.

MH: What have you done to advance patient safety at Lahey?

Grant: Priority No. 1 in every aspect of what we do is keeping our patients safe. In our organization, we attempt to start every meeting with the discussion of patient safety and quality. It doesn't matter if it's a clinical conversation or a financial conversation or a manager's meeting on any subject. We try to talk about safety first. We try to build an urgency for every manager and every front-line staff that gives them the confidence that if they've got a concern about a patient's safety, everybody's got both the ability and the responsibility to raise a question. We have committed as an organization to pursue top 10% performance in every objective quality metric in those areas where we haven't yet achieved that.

As CEO, it's my responsibility to make sure that safety and quality are top of mind for every leader in the organization, for the goals we establish, and for incentive compensation. Quality and safety always represent over 50% of the goals and incentives.

MH: What is the future of community hospitals?

Grant: Within Lahey Health, we've been able to demonstrate that we can deliver much more care in our community hospitals. As a result, Beverly and Addison Gilbert hospitals are busier than they've been in decades as a result of keeping patients close to home and serving them at considerably lower cost and with greater convenience without compromising quality.

Over half of the hospitals in Massachusetts have closed in the last 20 years. In every community where a hospital has closed, it has been the source of reasonably priced healthcare, emergency services and jobs. We have to stop the tide of community hospitals being closed as more and more care is being delivered in a higher-cost setting. As a system, Lahey Health is completely committed to making sure that doesn't continue.