Since 2000, Mark Laret has served as CEO of UCSF Medical Center in San Francisco, which reported operating revenue of $2.4 billion and an operating surplus of $159.4 million for the year ended June 30, 2014. He formerly served as chair of the California Hospital Association and of the Association of American Medical Colleges. Before joining UCSF, Laret was CEO at UC Irvine Medical Center, Sacramento, Calif. Modern Healthcare reporter Beth Kutscher recently spoke with Laret about how academic medical centers need to change and achieving success in capital fundraising. This is an edited transcript.
Modern Healthcare: How did you turn around the ship when you arrived at UCSF?
Mark Laret: UCSF had just had an ugly divorce from Stanford and the organization was in a bit of chaos. The most important thing was redefining our mission, our vision, our values, redefining a strategic plan and making sure everybody was aware of why we were focusing on certain programs and not on others. It created a sense of unified purpose. It took us two years to get into the black, but it has been a solid ride since then.
MH: What are the challenges that academic medical centers face as they confront the question of how to deliver value?
Laret: Academic medical centers have prided themselves on being at the forefront in clinical-care delivery, clinical research and new models of education. But academic medicine is still evolving its approach to funding each of the three missions. Academic medicine is well-positioned to be a part of the solution to the next generation of healthcare delivery. But it also has to overcome some long-standing traditions about how it has carried out that work. Those traditions are sometimes costly and inefficient, and often are physician- and learner-centered, not patient-centered. This is a time for us to think differently about how we deliver that care.
MH: Are you experimenting with new value-based payment models such as ACOs?
Laret: Yes. We have been involved with the CMS' hip- and knee-replacement package-pricing initiative. We are involved in a couple of ACOs or ACO-like models for commercially insured patients. We recently announced a partnership with John Muir Health, a major community hospital system in the Bay Area. That's going to be the foundation on which we put together a regional accountable care effort, with the idea of partnering with health plans. We want to be able to go to the market and offer employers an insurance product and a delivery network that rivals what Kaiser Permanente does in the Bay Area. Kaiser has been phenomenally successful in integrating how care gets delivered and doing it in a seamless, patient-centered way. The rest of us who are fragmented really need to change our mindset. So with John Muir Health and UCSF working with 15 or 20 other physician, hospital and other providers in the region, we are looking to be able to take financial risk for the care of populations, starting as soon as 2016.