Q&A: 'We were one of the catalysts to get Detroit going again'

Since 2013, Joe Mullany has served as CEO of the Detroit Medical Center. It's a nine-hospital, $2 billion-a-year system acquired by Tenet Healthcare as part of its merger with Vanguard Health Systems, which had acquired DMC in 2010. During Mullany's tenure, Tenet has invested $850 million at DMC in new facilities and technology, expanded emergency departments and ICUs, and built the new DMC Heart Hospital. Before going to DMC, he served as president of Vanguard's New England region, and in executive positions with Essent Healthcare and Health Management Associates. Maureen McKinney, editorial programs manager for Modern Healthcare, recently spoke with Mullany about how his system's Medicare Pioneer ACO has achieved successful results and the challenges and rewards of operating in economically troubled Detroit. This is an edited transcript.

Modern Healthcare: How did your Medicare Pioneer ACO do in the recent CMS results?

Joe Mullany: I have been pleasantly surprised. We were one of the original Pioneer ACOs and we've stayed in it through three full years. When the results came out this year, we were able to lower our cost curve by $17 million over a prior-year spend. The year before was roughly $13 million. So we have consecutive years of changing the way we treat this population to the point now where our physicians are excited that we have enrolled an additional 12,000 people for next year. We think the model allows us to provide the right type of care and do it at a lower cost.

MH: How are you are tackling chronic disease management with Detroit's challenging patient population?

Mullany: Detroit has had high unemployment, so our population has a lot of unserved needs. Historically, they have gotten their treatment through emergency rooms. We see over 100,000 patients a year in our three emergency rooms. Through an innovation grant, we are baking into our emergency rooms basic primary-care clinics, which include social work, behavioral health, primary-care doctors and nurse practitioners. Once patients come into the ER, they get moved over into a primary-care type setting, get worked up, and then all future care gets referred out to primary care in our community.

MH: What has been the impact of Tenet acquiring DMC?

Mullany: Having the financial backing of Tenet and a lot of their best practices has been very good for DMC. The system had been run very well but had a lot of opportunity. Tenet has been able to take the best practices of its 80 hospitals and bring them to Detroit. That is playing out in our population- health strategy. We are well-positioned due to the assets that we have from the hospital side, but more importantly, on the ambulatory side. We have over 40 ambulatory sites in the greater Detroit area, so we are trying to take healthcare out to where the patients are.

MH: Are you hoping to set up ACO-style agreements with private insurers as well?

Mullany: Yes. I think it's going to happen at its own pace. We believe due to our learning curve through the Pioneer ACO, we are well-positioned to take on the risk of treating patients in their totality and have better outcomes. Our readmission rates are down considerably. Our quality scores have improved every year. And we have done that at a lower cost to the system. We would like to expand that as much as we can.

MH: How has your system identified high-quality, lower-cost post-acute providers, and how has that contributed to your ACO's success?

Mullany: The Michigan Pioneer ACO has rated post-acute providers on a variety of factors and tracks specific benchmarks. We give this information to our primary-care physicians and also share it with the post-acute providers to let them see how they compare with the competition. The attention paid to patients after they leave the hospital has improved patient health and contributed significantly to our ACO performance by reducing readmissions, average length of stay in skilled nursing, and unnecessary home health costs.

MH: How has your system used financial incentives with primary-care physicians to drive the ACO's success?

Mullany: We work closely with our primary-care physicians to help align goals. In the Pioneer ACO, our incentives are based on quality scores. The scores set by CMS include achieving both meaningful use and patient satisfaction. We share this information with our primary-care physicians to facilitate education and performance among peers.

MH: How has your system addressed the issue of ACO patients roaming to other provider systems?

Mullany: We continue to work closely with our physicians to reduce roaming rates. We're focused on enhancing care coordination and educating our patients about how they benefit from this enhanced partnership.

MH: What are your views on high-deductible health plans and how they are affecting patient care?

Mullany: I'm not a fan of high-deductible plans. The ACO model is geared more toward empowering the patient through education, communication and prevention, all of which improve care and help reduce costs in the long run.

MH: What have been your system's most effective strategies for reducing hospital readmission rates?

Mullany: Detroit, like a lot of inner cities, has a built-in higher readmission rate. Ours was around 30% when we first started tracking it, much higher than the national average. We have found a direct correlation if we can get patients into a primary-care provider within the first seven days of discharge. Then their likelihood of being readmitted is substantially lower, to the point that our current rate for readmissions in 2015 is around 16%.

MH: Do you think Detroit is making an economic comeback?

Mullany: We believe we were one of the catalysts to get Detroit going again. We made a commitment to invest over $850 million in new construction in Detroit since 2011. We have built a new heart hospital and have put substantial renovations in all of our existing assets. That has created a nice hub of excitement in the midtown area.

We also offer housing subsidies for any of our employees to relocate into the city. There are over 2,000 units of housing under construction right around DMC, which will come on board within the next 24 months. Our market share continues to grow in a city that really feels like it is on the cusp of great things.

MH: How effective do you think the population health management model is?

Mullany: It's making a bigger difference for the community than past technological and other innovations I've seen. All people want to be healthy. Supporting the ACO model of providing what is best for the patient through improved coordination, engagement and education allows us to strengthen our scope of services provided to not just include those with chronic conditions, but to also help improve the health status of the community we serve.