Peter Banko has some pretty big shoes to fill. Banko last month took the helm at Centura Health after Gary Campbell retired as CEO. Campbell, who moved into an advisory role, was Centura's longest-tenured CEO. During his decade at the top, Centura grew from 11 to 17 hospitals in Colorado and Kansas and revenue doubled from $1.8 billion to more than $3.5 billion. Banko, who previously served as chief operating officer, appears to be poised to continue Centura's trajectory. He envisions broadening partnerships with physicians and payers, especially as the system looks to lower costs for consumers. Banko recently spoke with Modern Healthcare Managing Editor Matthew Weinstock. The following is an edited transcript.
Modern Healthcare: You are stepping in for a long-time CEO. How do you continue the legacy that has been there, but also chart a new path for yourself?
Peter Banko: Gary hired me 10 years ago at Catholic Health Initiatives, so we have had a long-standing relationship. He brought me on board at Centura little over a year ago with the thought that he was planning to retire, and if everything worked out, and I didn't mess up too bad that I would be the person to replace him. So, it was really a very thoughtful transition. Gary and I made very clear how we were going to work with one another and how we were going to show up publicly, and then, when we formally announced it in May, we had about a 120-day transition or so. But we had been talking about it over the course of the year.
MH: From the style standpoint, can you articulate a little bit what your style may be versus his, and maybe even what you've learned from him over the years?
Banko: He is really good at using questions and not making statements. And I think that is an important skill for a CEO. He is a really patient leader, thoughtful, deliberate and understanding. I am a little bit more action-oriented, but I've borrowed from his patience. I am very team-oriented. I am hyperfocused on talent and team and how we gel as a team. Over the summer, we started making some shifts in the team and redoing our organizational meeting structure to focus on having the whole team around me and not just a couple people.
MH: Can you talk about your plans for the organization? Obviously, we are in a transition from volume to value, and moving toward different reimbursement models and outpatient care.
Banko: I think there will always be a component of fee-for-service, regardless of how much we push to value. But for me, there are four universal truths to help us manage this transformation.
The first is to be the system of choice for our communities. We need to be the No. 1 brand and the top choice and the partner for life for individuals in the communities we serve.
We need to be the employer of choice for our associates and physicians. Bricks and mortar are great, but we have 21,000 associates and 6,000 physicians and we need to be the place that they prefer to be so that their potential is fulfilled, so they can fulfill their personal mission.
We are going to shift ourselves a little bit as an organization and flip our thinking and not be a traditional hospital system, but think of ourselves more as a physician organization that runs hospitals. And understanding that we are in this with physicians, and alone or separate, we can only get so far.
The fourth one is being vibrant, youthful and growing: Growing our services so that individuals and communities will drive by two of our competitors to find what we have. Growing our geographic footprint, because we feel like health and healthcare and value are better in the communities because we are there. And another piece is health value.
We are not going to own a health plan. We are not going to buy a health plan and we are not going to start a health plan. But we are going to partner with existing payers in our market to change the way insurers, hospitals and physicians work with one another and offer something different that is more consumer-focused in the marketplace.
And then just delivering value for our community and our sponsors. So, consistency-wise, right now you could pay $53,000 for a joint replacement in one of our hospitals or you could pay $16,000, and that's not right going forward. So, we need to deliver more consistent outcomes, service, convenience and cost.
MH: When you talk about changing the mindset to become a physician organization that runs hospitals, are you talking about more physician leadership or is it more affiliations with your physicians? How does that manifest itself?
Banko: I would define it as connecting with physicians the way they want to connect with us; finding ways to align with them. So inviting more physicians into leadership, inviting physicians to drive strategy for the organization, inviting physicians to play a greater role in our decisionmaking. We started on some of that in April, gathering physicians to talk about helping us craft a plan. I like to say the physicians design the strategy and it's leadership's job to execute it.
MH: You are not looking to become a clinic-type model, right?
Banko: No. I would say employment for the sake of employment in terms of physicians is dumb. We can't employ every doctor, nor does every doctor want to or need to be employed. So we have to figure out ways to partner with them. It could be joint ventures. It could be just that we are a great place for them to practice medicine or surgery.
MH: As you talk about growing services in your geographic footprint, does that mean expansion or more ambulatory services?
Banko: It means partnering with physician groups in markets where we don't need or want a hospital.
We have developed a concept called neighborhood health center, where we break our geography into defined neighborhoods and dig deep into the demographics and define what's needed there. It could be just primary care. It could be a surgery center. It could be imaging. It could be an urgent-care center. Going into markets where we don't have a hospital or a physician group, we develop a neighborhood health center and then it could be partnering with hospitals.
Growing could be acquiring, but it also could be offering them information technology and revenue cycle and supply chain support; things to help that facility but also help them remain independent.
MH: You referenced negotiations and your conversations with payers. What are you moving toward?
Banko: We have quarterly meetings with all of our payer partners. We are trying to have a different conversation to change the way things are done—so integrating the payer with our clinically integrated network of physicians and our health system and doing something different for the consumer. We want to provide a different consumer experience—better care coordination; access to not just a doctor, but can you access the doctor via text or email or video; and then trying to develop products and services that are 5% to 10% below what the market is doing because we know there is concern around affordability.
MH: Do you have anything that looks like that now? How is it different?
Banko: We have a relationship with Bright Health around the insurance exchange, which started this past year. It is an exclusive network to Centura. We are transparent with data back and forth. And we are very deliberate about what services the health plan offers and we offer. So we both aren't doing care management. The data exchange on a real-time basis allows us to deliver a better product that is more cost-effective together.
MH: What concerns do you have as debate over the marketplaces and the Affordable Care Act continues to unfold in Washington?
Banko: We are a Christian organization and our mission is to extend the healing ministry of Christ, so what bothers me most is taking people off Medicaid and diminishing access. The goal of health reform was to make healthcare more accessible and affordable. I still don't think it is affordable, but I think it is unconscionable to take people off. We will be rather strong with our leaders in Washington. It needs to be fixed. What we originally got wasn't perfect, but we don't need to throw the baby out with the bathwater. It needs tweaks and it definitely needs to be more affordable, but we can't take 20 million Americans off.
MH: Beyond the mission as a Christian organization, what kind of planning have you done for various scenarios?
Banko: It is going to have a financial impact. We are a $3.5 billion organization, and we've got healthy financial performance. Will we have to make modifications? Yes, but it won't be damaging to us as a system. We can take a hit of $75 million to $100 million on a $3.5 billion base; there are things we can do. And we have been planning. We need to take cost out of the system, so we are always on a cost journey. For smaller, independent hospitals in Colorado and Kansas, it will be devastating. I am more worried about them.