Wright Lassiter III took the reins of Henry Ford Health System on Jan. 1 from retiring Nancy Schlichting, its longtime CEO. Lassiter was recruited from Alameda Health System in Oakland, Calif., to run the six-hospital system two years ago. Henry Ford recently acquired Allegiance Health in Jackson, Mich., and HealthPlus, a state insurance plan. Will the dramatic political shift now underway affect the health system's expansion and other strategies? Modern Healthcare reporters David Barkholz and Maria Castellucci recently spoke with Lassiter about those and other questions. This is an edited transcript.
Modern Healthcare: What are your one or two top priorities in 2017?
Wright Lassiter III: High reliability (of care) is a really big focus. We went through an assessment during much of 2016. We'll be rolling out in 2017 a plan for high reliability.
High reliability is both a science and a culture you'll find in aviation, the nuclear industry and chemical manufacturing, where there are very, very low tolerances for failure. You can't get it right 98.5% of the time because getting it wrong that 1% can cause a meltdown.
In healthcare, it's different. The failure rate, or error rate, is much higher than in those industries. So we spent the better part of 2016 assessing our organization around how we could begin instilling a high-reliability culture at Henry Ford Health System because it will continue to enhance the quality and safety of the care we provide. We'll be rolling out the staff and leader training to move us down that path.
Over the years, we've won a lot of quality and safety awards. We've won a (Malcolm) Baldrige (National Quality) Award. But how quality and safety is defined today is different than what it was five or 10 years ago. We just want to move to the next level.
MH: Are you talking about standardizing practices more than you have? What are some of the elements?
Lassiter: Yes. It's about standardizing practices across the system. We implemented safety huddles across the organization last year. Like on a submarine or a nuclear power plant, there is a daily meeting meant to raise the bar. Can we expect 100% success today? What could be some of the issues that could allow failure to enter into that setting? It's that and teaching the science around high reliability that will allow our clinicians to operate at a high level with less errors.
MH: Why are you pursuing a statewide footprint with your Allegiance Health and HealthPlus of Michigan acquisitions?
Lassiter: When I first arrived here two years ago, besides learning the organization, my job was to give guidance to the board around a strategic growth strategy. We established three priorities: Establish ourselves as a leader in value-based care in the state of Michigan; ensure that we had local market essentiality (high market share) in our traditional service area in southeast Michigan; and establish a distributed statewide network of care. We needed to establish partnerships beyond the seven counties of southeast Michigan.
But we also wanted a partnership that would drive the first goal of establishing ourselves as a statewide leader in value-based care. So the Allegiance partnership fit two of those three criteria very strongly. It is a sole provider of a fairly decent-sized geography 75 miles west of Detroit. The region was outside our geographic halo, so it gave us the ability to have a delivery system component that is outside of our primary base.
It gave us new markets for our insurance company, Health Alliance Plan, to begin marketing to consumers. It gave us a partnership with the health system that has done a lot of things well and has a lot of shared values – a commitment to quality and patient safety, and a commitment to serving its community as broadly as possible.
We are looking for other opportunities for partnerships where it makes sense. Henry Ford has not just been a hospital operating company. We have hospitals but we have a large ambulatory footprint as well so we're not just looking for hospitals to join our organization. We're really looking for opportunities where we can serve new communities.
Bringing HealthPlus in allowed us to grow our Medicare Advantage lives by about 30% to 70,000. It allows us to grow our insurance plan up in Genesee County and the Flint area where we didn't have a lot of insurance presence. So while our insurance plan is the second-largest in Michigan, we're still only one-seventh of the size of Blue Cross Blue Shield of Michigan.
MH: Is Detroit and Michigan fully consolidated now?
Lassiter: If you look solely at Detroit and southeast Michigan, I'd call it 95 to 98% consolidated. You really have three systems in Detroit – us, Tenet and Ascension. Then beyond Detroit, you have Beaumont, which is almost as large as we are. We're a shade under $6 billion in revenue and they're about $5.5 billion. And inside southeast Michigan, you have McLaren and Trinity. There aren't any unaffiliated hospitals anymore.
If you look statewide, you have some unaffiliated rural hospitals, but also a number of small systems, which at some point have to decide whether they want to operate with $500 million in revenue in a state with large national and regional players and stay independent. There's still a lot more consolidation that could occur across the state.
MH: How did your time as CEO of Alameda Health System prepare you for your role as CEO of Henry Ford?
Lassiter: Any leadership role prepares you for the future because you get battle- tested in multiple ways. The opportunities are very different. Alameda had significant strife as an organization. It had lots of leaders so it had some leadership instability. It had a very different board structure. It had a lot of financial challenges that were deeper and broader than what Henry Ford has faced in its near term.
At Alameda, I had the opportunity to lead a financial turnaround and focus on being very lean. That is always a helpful experience. We also had opportunities there to focus on how you raise the bar on quality and patient safety and reducing harm.
MH:Given the changes in Washington, what are challenges Henry Ford faces as one of Detroit's safety net providers?
Lassiter: We just don't know what will happen with the new administration and what will and won't happen for both Medicaid and the exchange. But Henry Ford is positioned very well to meet the needs of underinsured populations because we have a large number of ambulatory sites in many locations throughout southeast Michigan.
We plan to add ambulatory sites so we improve the amount of access that we have to primary care and to higher level care. So we are evaluating very carefully where we should expand our footprint within our market to make sure that access is at an acceptable level. It's not just the uninsured. We serve Medicare, Medicaid, dual-eligible populations and, obviously, commercial populations. So we're looking very critically to create new access points.
We are also ramping up our telemedicine capabilities so you don't always have to come to Henry Ford sites to get access to your doctor. We have piloted online scheduling appointments so you don't have to pick up the phone for an appointment. We are looking at ways to offer support for individuals with transportation challenges to get access to Henry Ford.
MH: What are your thoughts on repealing and replacing the Affordable Care Act?
Lassiter: I'm not one who believes that if a law gets passed, and the law isn't perfect, that you just get rid of the law. My view is the law had good intentions and had some positive effect. Let's figure out ways to improve it.
I'm concerned about the rhetoric of repeal and replace, because I don't know what replacing it is. I don't know if it makes sense to react to any individual's plan, whether it is Tom Price's plan or anyone else's, because you don't know if any of those will prevail under the Trump administration.