With a focus on research and training, academic medical centers have long prided themselves on being a destination for complex care. But they aren't always organized around the patient. In fact, academic medical centers are traditionally very provider-centric, according to Dr. Steve Narang. That's why he is so bullish on a reorganization he led at one Banner hospital. Under Narang's leadership, Banner Good Samaritan Medical Center affiliated with the University of Arizona College of Medicine Phoenix and in 2015 rebranded as Banner-University Medical Center Phoenix. But that wasn't all. Narang, who became the hospital's CEO in 2013, embarked on a reorganization that sought to break that provider-centric model. He's creating a dozen specialized-care institutes where care for patients is better coordinated across the continuum. Narang recently spoke with Modern Healthcare Managing Editor Matthew Weinstock. The following is an edited transcript.
MH: What inspired the transition to an institute model?
Narang: When I got here in 2013, it was pretty obvious as you looked around the national landscape that teaching hospitals that are midmarket were going to face tremendous pressures financially.
We had to totally transform this community teaching hospital to be able to not only thrive in the academic forefront, but also to be financially sustainable. So one of the things we knew we had to do was affiliate with a university.
It took about two years to go through that negotiation with the University of Arizona College of Medicine Phoenix. We became Banner-University Medical Center Phoenix in 2015. However, it became even more clear to me and our team that if we didn't change our structure to improve clinical outcomes and meet our research and education objectives, we would absolutely struggle. We had the opportunity to start from scratch because this is a new academic medical center. So we said, “Let's develop a model that really meets the needs of our consumers and still leverages the strengths of what academic medical centers do.”
MH: When you talk about meeting consumers' needs, what were you hearing from your patient population that they weren't getting from Banner at the time?
Narang: There's a couple elements to this. Banner has traditionally been a hospital company. We have hospitals throughout the market and that has served the company very well for the last 17, 18 years. But as we know, in the past decade healthcare has changed. And it's not about hospitals. We're trying to keep patients healthy, we're trying to keep patients in their homes and in their communities, we're trying to keep patients in lower-cost settings. And the hospitals are our last resort.
We also want to leverage those hospitals when people really need access to make sure we have highly specialized, coordinated care for the most complex diseases. And we want to harness the capabilities of an academic medical center to find new ways to deliver better care and improve the healthcare delivery model.
Academic medicine can be the destination for that 20% of the population that's responsible for 80% of the cost. Academic medicine can create these focused factories, centers of excellence, that can reduce costs and improve outcomes for the most complex conditions. And academic medicine can meet the needs of our consumers, meaning the individual who is looking for those centers, employers who are looking for lower-cost care for complex diseases, and the individual research scientists who want to be in a place to improve healthcare delivery, and the students who want to learn.
MH: Those are things that AMCs have always professed to do. What makes your transition different?
Narang: There's no doubt that the culture of the AMC certainly resonates with those four pillars. With that said, the AMC does not necessarily meet the demand of the consumers across those four.
Traditional AMCs have research and education as their top two missions, as well as clinical care. So the structure isn't set up for easy access to affordable care. It is set up to advance the science of medicine, to find the newest and greatest discoveries.
That is not necessarily by itself going to meet the needs for the consumer today, which is, “OK, we have advanced the science of medicine through these departmental structures, but I can't access this. I can't get it easily, and I can't afford it. How do I know that the care that you give is actually better than the care I can get in the community medical center?”
Instead of saying, “We have a department of medicine and a division of gastroenterology and a section of hepatology,” we say, “Well, how does that speak to the consumer?”
We've essentially tried to collapse the departmental structures and create team-based medicine. Easy concept, hard to execute. So that if you come to visit the center for esophageal disease in the Digestive Institute, you're seeing a team. They can be gastroenterologists, they can be speech therapists, they could be pulmonologists. And more importantly behind the scenes, there are engineers, process designers, data analysts, along with traditional bench scientists to say, “How do we improve the delivery of care for esophageal disease?”
MH: One of the issues for teaching hospitals is bridging the gap in medical education so physicians think about that coordination and the value equation, too, right?
Narang: Absolutely. I was in a meeting recently in our Orthopedic & Spine Institute where we blinded all of our orthopedic surgeons and their cost per case for supplies. It was a great opportunity for the surgeons across similar disciplines to learn from each other, but also for the residents then to see, “Oh, wow, my attending is gonna change his or her practice based on this data.” When I trained at Johns Hopkins, essentially my learning from Hopkins was “Well, I learned it from my attending, that's how he did it, that's how she did it.” That's a very different dynamic than today saying, “Well, this is our data, and look at the outcomes.”
MH: You said you're bending the cost curve. What kind of data can you share?
Narang: We're very interested in benchmarking ourselves with other academic medical centers using the most reliable data tools. We've been very excited by the IBM Watson data analysis. We're in the top 1% of academic medical centers for all outcomes. Specifically, I was excited to see under efficiency and financial measures, we finished in the top 5% in inpatient expense performance. The average hospital costs $7,970 in this database for the AMCs, per inpatient. And we cost $5,938.
We saw the same thing with length of stay and Medicare spending per beneficiary. That's across the disciplines.
MH: Are you seeing similar results with quality measures?
Narang: Absolutely. We're seeing decreases in patient mortality. We have some opportunities in complications and made tremendous improvements in readmissions. The thing that's most exciting about it is that because of the engagement providers on the front line have every day around this journey, we're seeing our patient experience go up, too.
MH: You are doing some major construction projects, too. Can you put that in context of the push toward more outpatient services and addressing the consumer needs you mentioned earlier?
Narang: The Banner board spent a lot of time the last few years thinking about wise investments because traditionally we spend most of our capital on buildings. And in the last five years, Banner has spent a lot of that on other ways to engage the consumer—virtual technologies, etc. At the same time, you're correct, this downtown campus will benefit from over $500 million of new investment.
We had one of the oldest hospitals on the market. We're downtown where most people don't live. Most people in Phoenix live in the periphery where newer private hospitals are being built, not only by Banner, but by other systems. And we still have rooms that are not private. One of the biggest strategies was if we were going to build these world-class destinations and transform delivery and become the destination for the most-complex care, we at least have to have private rooms.
We're opening up this new tower that will add about 30 or 40 beds, but it's really a private-room strategy, and also expands our opportunity to care for the ICU patient or the progressive care patient.
Secondly, we took all of our employed subspecialists who were in five different office settings around the community and said, “Let's bring them into two big buildings; let's organize them around those institute models. So you may be a gastroenterologist, but if you work mostly with pulmonologists, you'll work in the Lung Institute.” So we built two new buildings that house 13 institutes for the ambulatory clinics. And the tower will be the inpatient setting for the institutes.
We're also building a rehab facility as a joint venture with Select Medical. We're about to announce the opening of the Banner-University Medicine Campus integration with MD Anderson Cancer Center. They'll open an ambulatory-care center for oncology. And we're opening an ambulatory surgery center for patients who need a cheaper, faster solution for their surgical needs, and an imaging center.
All those things will be part of our campus and all part of the same message, which is, “We're going to have comprehensive, value-based care in one location.” We need a high level of infrastructure to support that.