Carl Armato, president and CEO of 14-hospital Novant Health, has worked with the system's employed and affiliated physicians to put them at the center of decisionmaking, a model he says has facilitated a systemwide embrace of electronic health records. Armato, who joined the Winston-Salem, N.C.-based health system Novant in 1998 and has been the top exec since 2012, recently spoke with Modern Healthcare Southern Bureau Chief Dave Barkholz about that physician-administrative partnership, Novant's effort to improve its hospital operations and North Carolina's efforts to provide price transparency for healthcare consumers. This is an edited transcript.
Modern Healthcare: What differentiates the way Novant Health operates from other health systems?
Carl Armato: A physician-administrative partnership. And there's an assumption that everybody does it. Let's start with the Novant Health Medical Group, which has a vast ambulatory-care footprint. Probably 10,000 providers, all using the same technology platform. In the medical group alone, we have 1,300 physicians and 700 advanced practitioners. And 60% of that base is primary care. You hear a lot of systems talk about patients being at the center of care. But we place key physician leaders in partnership with administrators at the market level and submarket level. We have physician leaders in every business decision, financial statement reviews, decision about how and where to deploy capital, decisions about how and where to deploy ambulatory clinics. So there's a culture of physician engagement and transparency.
MH: What's an example of how you've used that to your advantage?
Armato: Let's start with electronic health records. Those physicians came together, agreed we were going to go with Epic. And not only go with it, but utilize it fully and built it through the eyes of the patient. We have a large number of patients, 600,000, who interact with us directly through MyChart (Epic's patient portal). That's 600,000 people who manage their healthcare, interact with their healthcare teams, schedule appointments and get prescriptions filled. We started that process five years ago. Now we have all 445 clinic sites and all 14 hospitals. All the ambulatory-care centers are connected through Epic. Our physicians turned on everything possible for our patients immediately.
MH: Are you seeing higher patient satisfaction scores?
Armato: We're scoring with the medical group in the 85th percentile. With the system, we have 14 hospitals in different markets. Some of our smaller facilities are in that 85th to 90th percentile. Some of our larger flagships are struggling. Where that has occurred we've had some pretty significant transformation.
MH: How so?
Armato: Over the past five years, we've taken about $450 million in cost out of the system. With that, we've had nurses helping redesign nursing models. We figured going in that in 80% of that transformation we'd be on point. But that 20% we'd have to adjust and course-correct. As part of that redesign, we only gave them three criteria: Practice at the top of your license; we wanted 70% of a 12-hour shift spent directly on patient care; and we wanted an improvement in efficiency of 20%. I believe it's had a little impact on our patient satisfaction, where we've seen this dramatic transformation. Obviously, it's a new system. Nurses are getting used to it. And we're having to do some of that course correction with their advice. It's happening now but it may have caused a little dip on satisfaction. Basically, they transformed what was being done outside the room to be done inside the room with the patient. So with electronic health records, they are at the bedside with patients doing shift changes. They are no longer in the break room. They are talking about medications with patients and their families inside the room. A lot of the hunting and gathering is being done more efficiently. They've eliminated a lot of the wasted time. And because they are practicing at the top of their licenses, we have more CNAs doing roles that we had RNs doing before. We're up to 76% of a 12-hour shift is on direct patient care in the room. As a baseline, we used to be at 40%. We've prevented patient falls by 30%. We've reduced medication errors by 35%. Financially, those changes in one year saved us $55 million.
MH: How is the new price transparency law in North Carolina affecting you?
Armato: First of all, we've always been committed to price and quality transparency. So we have proactively invested in technology and software that gave our revenue-cycle people the capability to help people understand their individual pricing component. We also created a website that not only put our reported quality data out there but nonpublic data as well. So we support that concept. If you look at North Carolina's price-transparency law, it's been very ineffective. Most consumers want to know what it's going to cost them as an individual. What we created internally takes into consideration individual benefits and services that each person has. The state website doesn't provide that kind of information. The site is about cost and it's really focused on hospitals. So there's a gap in understanding physician costs or other providers that they may come in contact with in understanding the total cost of an episode. The one database out there that has been effective is the one from Blue Cross Blue Shield of North Carolina. They put a price database on 1,200 episodes both inpatient and outpatient. It still doesn't cover the individualized consumer's out-of-pocket cost. But it does give them a relative total cost, though not a cost of episode of care.
MH: Are you concerned that North Carolina and Virginia have failed to expand Medicaid?
Armato: I'm concerned. It has kept 370,000 people from gaining Medicaid status in the two states. North Carolina is the fourth largest coverage gap nationally after Texas, Florida and Georgia. North Carolina had 244,000 people who are not covered and are in that gap. Right now, they fall under our financial assistance policy. Anybody at or below 300% of the federal poverty level does not get a bill from Novant Health. They continue to receive services without reimbursement. Last year, we provided $125 million in assistance. We've had that 300% policy even before the 2008 economic dip. It's been helpful for people who have fallen into those gaps.
