Pressure from purchasers will be 'painful' but 'beneficial'

Since 2002, Dave Blom has served as CEO of Columbus-based OhioHealth, a 12-hospital not-for-profit system serving south and central Ohio with $3.4 billion in annual revenue and about 22,000 employees. Blom joined the organization in 1983 and held a variety of management positions, including heading the system's major central Ohio hospitals, before becoming CEO. Modern Healthcare Managing Editor Harris Meyer recently spoke with Blom about the impact of Medicaid expansion, Ohio Gov. John Kasich's role in implementing that expansion, electronic health-record interoperability, and his approach to motivating employees. This is an edited transcript.

Modern Healthcare: How is your system doing financially?

Dave Blom: We had a good year. We were ahead of budget, with operating margin between 7.2% and 7.5%. That was even though we had a lot of one-time expenses from implementing our Epic Systems EHR across our entire system. Patient volume is up. We grew a little bit of market share. We manage our expenses carefully. And Medicaid expansion helped us out. The charity-care number dropped by almost half.

MH: What do you think of Ohio's proposal to require Medicaid beneficiaries with incomes below 100% of the federal poverty level to contribute to a health savings account?

Blom: I believe we're not going to reform healthcare without everyone having some responsibility for how those dollars get spent. But I do think it would be difficult for some of these folks to do what is being asked.

MH: What's your take on Ohio Gov. John Kasich's leadership on Medicaid expansion, since he is running for president?

Blom: I think he's done a remarkable job in leading the state into Medicaid expansion. Despite the Legislature opposing it, he figured out a way to get Medicaid expanded, and I believe that has been good for the state. I think that he believes that if the state has the ability to take care of additional folks, we ought to do that, and that's exactly what he did.

MH: Is your new Epic EHR system going to be interoperable with other local and regional systems so that you can share patient data when patients move between systems?

Blom: Clinical information belongs to the patient, and if the patient wants their information shared, we ought to make that happen. There's a module in Epic called Care Everywhere, and that is turned on with every installation that we have. Various places around the country have different practices on that. I believe as a country that's something we need to come to grips with.

MH: So you're going to have the Care Everywhere feature turned on and that will make the data available if patients go elsewhere?

Blom: Right. The patient has to sign off if that's what they want to have happen.

MH: What was the thinking behind OhioHealth opening a $300 million neuroscience center at Riverside Methodist Hospital?

Blom: Columbus is moving from a market with a lot of semiprivate rooms to private rooms. Many cities went through this a long time ago. Riverside was still almost 50% semiprivate. As we evaluated what we needed to do to go to private rooms to compete in this market, we were looking for an approach that made that financially feasible.

Riverside already had a large neuroscience program, and it appeared to us that neuroscience was on the cusp of new technology, new subspecialties and the ability to transform the care of neuro patients. We decided to make a big bet on neuroscience. We took almost 50 neuroscience doctors to visit Swedish Medical Center in Seattle and we benchmarked what they had versus what we wanted. We came back with a vision for what we wanted. Part of the business plan was the recruitment of additional physicians.

The real vision is neuroscience care in all of our hospitals. We have a stroke network and we have classes for movement disorders all over Ohio. We have increased our neurological care in our regional hospitals at a greater rate than even at Riverside.

MH: What are your system's expansion plans and competitive strategy?

Blom: Here in Columbus, there's a fairly aggressive movement among all the systems to build ambulatory facilities in neighborhoods around the city close to where the population lives. We just opened a comprehensive outpatient facility in suburban Pickerington. We'll have more of those here in Columbus within the next couple of years.

Regionally, we added three hospitals last year. We are very discerning. There are some communities where the ability for them to be successful has passed them by. In many communities, it's a tough decision for them to realize they need a partner. We work with them for almost a year before we finalize the deal. We plot out the next four or five years of their future together. So when we close the deal, everyone has locked arms with a plan for the future.

MH: Is OhioHealth participating in any of the ACA demonstrations such as accountable care or bundling?

Blom: The state has a bundling initiative that we are participating in. But frankly, there are a lot of those things that folks are trying. Some are working and some aren't. We are not involved in any Medicare ACOs or commercial ACOs.

MH: Every person employed by OhioHealth gets a quarterly report for corporate performance measures. Why?

Blom: Every associate of OhioHealth has some piece of their compensation at risk based on our balanced scorecard performance. So there's a direct line of sight from the boardroom to the front lines of all of our hospitals about how we are doing financially, on quality care, customer service, employee opinion, physician satisfaction, etc. We oriented our culture to be accountable and supportive, and it pays dividends when you've got everyone in the boat rowing in the same direction.

MH: What have you learned about leadership in your years as a healthcare executive?

Blom: Transformation cannot be directed from on top. It needs to be led throughout the organization, and every person needs to feel it, understand it and believe it. We have a meeting once every quarter that we call the OhioHealth Leadership Briefing. We bring 1,250 people together, and we talk for two to four hours about what's important and why it's important. We give examples. We have peers talking to their peers about it. That's a meeting where we get people's heads into the business. But then there's a part of motivating, where people feel a passion for what they do, how they connect what they do with how it benefits the community and their colleagues. I call that getting people's hearts.

If you line up people's hands, heads and hearts, you can make the organization much more nimble.

MH: Any broad thoughts about where we stand as a healthcare system today?

Blom: I'm very optimistic about where healthcare is going. We're getting to a point where the focus on quality, service, access and price is actually going to matter to healthcare purchasers. That transition, while painful, is going to be beneficial long term.