Why leaders should focus on creating a better, not bigger, healthcare system

In the recent earnings report for the second quarter of its fiscal 2020, CommonSpirit Health posted the first operating gain since it was created by a 2019 merger that combined Catholic Health Initiatives and Dignity Health. The Chicago-based health system reported $40 million in operating income on $7.5 billion in operating revenue for the quarter ended Dec. 31, a positive swing from the health system’s $87 million operating loss on $7.2 billion in revenue for the prior-year period. In June, Lloyd Dean will become the system’s only CEO after co-CEO Kevin Lofton retires. Dean said leading a 142-hospital not-for-profit system has been his riskiest move to date.

WHAT WAS YOUR RISKIEST MOVE? Creating CommonSpirit Health.

WHY WAS THAT RISKY? The scope of the merger was unprecedented. And with that scale comes outsized challenges and opportunities. Each organization had unique strengths and distinct care offerings. The challenge was bringing together our organizations to champion a new approach to healthcare that could work anywhere, an approach that is local, collaborative and customizable. We knew that we could take bold steps to build diverse care networks to serve urban, rural and suburban communities around the nation. Combining our health systems would also allow us to pivot our business model toward providing a continuum of healthcare services and taking on more risk.

WHAT WAS THE OUTCOME? We have seen great progress. We are already scaling a community health model that takes a more holistic approach to healthcare, prioritizes local partnerships, and emphasizes better outcomes and lower costs. We’ve seen quality improvements across the organization and grown our ability to take on risk, with 30% of our revenue now coming from value-based care. And we have improved our performance as we grow our services. We are increasing and diversifying our revenue and found hundreds of millions of dollars in savings. It will take time to fully realize our vision of a national healthcare system that is community focused while also leveraging the strengths of a national organization, but we are clearly on the right path.

WHAT’S THE RESPONSE FROM THOSE INVOLVED? Our doctors, nurses and other staff members are the ones delivering care in our communities every day, and they have told us over and over that they are excited to be able to have an even larger impact. We’ve also had a great response from our diverse group of partners, from social services organizations to entrepreneurial startups, eager to leverage our diverse care networks. The investment community has enthusiastically provided financial support for our growth plans. Both of our legacy organizations had been attractive to venture partners for other providers in pursuing new service opportunities, and that interest has continued to grow.

ADVICE TO EXECUTIVES IN SIMILAR POSITIONS: Every organization has to change and adapt over time, so leaders must always look for opportunities to grow. But to succeed, organizations must always stay true to their culture and mission. My advice for anyone considering a big decision is, “Is this the right thing to do?” And executives need to consider not just scale, but quality. I think Kevin and I, along with our respective boards, did a good job of keeping our focus on combining not to become bigger, but to become better.

DESCRIBE YOUR LEADERSHIP STYLE: An executive’s leadership style has to be consistent with the organization’s culture and values. When I go to work every day, I reflect on CommonSpirit’s mission-focused legacy and our brand promise of “Hello Humankindness.” I strive to communicate often with as many people as possible in our organization to see how our decisions impact those who work for us and those we serve. Ultimately a leader has to make difficult choices and decisions, but I hope my approach helps build consensus on our purpose and direction.