Healthcare leaders face the daunting task of managing their organizations through the coronavirus pandemic while also trying to sustain efforts to adopt new care delivery and payment models. Jim Hinton, CEO of Baylor Scott & White Health in Texas, has long been an advocate of testing new models of care. He spoke with Modern Healthcare Managing Editor Matthew Weinstock about some of the ways the industry can evolve when it emerges from the pandemic. The following is an edited transcript.
MH: There is likely to be a new justice on the Supreme Court before the Nov. 10 hearing on the Affordable Care Act. What are your thoughts about the potential for the law to be overturned?
Hinton: Here are some things we have to think about: Not only has the economy been shaken to its core, but the healthcare industry has been shaken to its core. And the one thing we don’t need right now is uncertainty around payment and coverage. We’re in a state that has not expanded Medicaid. And during the height of the COVID shutdowns of businesses and of parts of our industry, parts of our healthcare system, the number of uninsured in Texas went up to nearly 30%.
It is a crisis of coverage and when people don’t have coverage, they’re less healthy. The cost gets shifted onto somebody, somewhere, somehow. It just seems like we can do better than that in this country. And I’m just hoping that however this thing plays out, we can get to a system where there is more certainty around healthcare coverage, mostly for the people who are covered; secondarily, for those of us who care for them; and third, for policymakers who have to make these budgets work.
MH: Shifting to the pandemic—the impact has been pretty dire, especially on finances. Many systems, including Baylor Scott & White had furloughs and layoffs. How can the industry start to come out from under this?
Hinton: Around America, there has been a pretty good rebound. And of course that varies from community to community. We are fortunate to be in a state that has great economic vitality, so the odds of a rebound in the economy and the beneficial impact on healthcare is likely. Our system has had a pretty good rebound, and I think a lot of the big systems around the country have. The question is: What has caused some systems to rebound and some systems to struggle? There’s an old proverb that the best time to plant a tree is 20 years ago and the second best time is today. My general view of the systems that have had the quickest rebound, but also performed the best during the height of COVID, are those that have been in a state of continual readiness and have looked at their assets, have made sure that they’re running what they need to be running and they’re not running what they don’t need.
They’re making the tough decisions about their internal costs, about leadership capabilities and making the changes they need to make along the way. There are a lot of micro lessons for the industry around adequate personal protective equipment, staffing agencies and all the standby capacity issues that we dealt with. But I think the bigger question is: How are you running your healthcare system today to ensure that (you are ready for) whatever comes down the pike? Are you in a state of continual readiness, because something like this might happen again. Or it might be more subtle in the case of continued pressure on payment, on regulatory change or the ACA. Are you continually ready? That’s the question for leaders in this field.
MH: How do you rethink staffing going forward?
Hinton: We have been able to bring back 100% of those we furloughed, and I think that speaks to the wisdom of the furloughing process. There were some financial and benefit support approaches that allowed them to not be working, but be available to us. And we were so glad that they were all able to come back.
In the layoff category, A) they were small; B) they were part of our ongoing efforts to make sure that we’re not carrying people that we don’t absolutely have to carry because we can’t afford it. No one is going to pay us for standby capacity and no one is going to pay us for tasks or people or approaches that are not adding value. It’s always tough to let people go … but out of our 42,000 employees, it was just a little over 1,000 and has allowed us to move forward in some other ways.
MH: You’re a big proponent of moving to value-based payment models. Can the industry continue to adapt new payment models in the middle of a pandemic?
Hinton: I think it’s inevitable that the payment model is going to change more rapidly. It’s been changing more incrementally, but I think a couple of facts support this. No. 1 is … the deficit at the federal level has skyrocketed as this country has reached out to try to stabilize the economy. And if there was ever any wiggle room in the federal budget, it’s certainly gone now. And so we should expect that from CMS, there’s going to be continued pressure on the Medicare program. The ACA and Medicaid—all of that is a question mark, but again, I believe that this country is going to step up and say, “We have to have a coverage solution that is more systemic,” but those will be federal-state partnerships that are also very price-sensitive because local voters in states like Texas want to pay a fair tax, but not anything more than that.
Then you have employers, some of whom have done exceedingly well, but even (they) have said, “There’s got to be a better way for us to pay for healthcare and to make sure that we’re getting what we need and no more.”
I think all of those roads lead to different payment models that provider systems are going to have to accept and are accepting in many creative ways. Sure the push to outpatient has been with us for 30 years now, and that will continue. Maybe there is no physical dimension to healthcare in the future. Maybe it’s largely a digital transaction, so it doesn’t matter where you are. You can be on vacation, you could be at work, you can be in your home, and you’re getting healthcare.
A value-based model would push more of those creative solutions to the fore—the role of the home in healthcare. A lot of companies are now saying “We’re going to push healthcare into people’s homes in some new and creative ways.” We’re not going to do heart transplants in people’s homes, and we’re not going to do heart transplants digitally. We did 60 heart transplants during the last seven months. Those services don’t stop. It’s going to be a continual adjustment, readjustment, but I think the direction of this is crystal clear.
MH: What do you see as the future for telehealth? It’s expanded rapidly due to the pandemic, but that doesn’t necessarily mean the payment model has shifted.
Hinton: As long as the incentives are to bring people into a physical environment for care, then that’s what our health system will do. DoorDash, Uber, Amazon have proven that that’s not what customers want. Customers don’t want to go to the store. I don’t want to go down and pick up dinner. I want the dinner delivered to me. So this convenience push from customers is undeniable. I think payers have to suit up in this and we’re a payer, we have a health plan. We’re looking for ways to create the right incentives for the change that will be better for those we serve.
MH: As we head into flu season and a potential second COVID wave, what kind of key lessons are you taking away from the first six, seven months of the pandemic?
Hinton: It’s fascinating, isn’t it? You’ve read all the comparisons with the previous flu seasons in this country. And if you lay that side-by-side with what have been the most impactful changes in healthcare, that have increased the lifespan of human beings on this planet, a lot of them have been public health in nature. A lot of them have been around sanitation and clean water and those types of things. The lesson learned … is to remember the old lesson, and that is if people wash their hands and if people will wear a mask and if we will appropriately distance and take advantage of some of the new testing methodologies that are out, we can help ourselves, our families, our health systems.
Now, people need to get a flu shot just as they’re going to need to get the COVID vaccine whenever it is widely available, but these viruses have been with us. They will continue to be with us. And I know this isn’t a popular thing to say, but wearing a mask might be a part of the rest of our lives in some manner. And if what that does is protect our families and reduces the burden on a very expensive asset called our healthcare system, then I think that’s a small price to pay. Not everyone would agree with what I just said.
MH: Many healthcare systems require employees to get the flu shot. What do you think the industry is going to do in terms of a COVID vaccine?
Hinton: Some of it will depend on the availability, the timing of the vaccine and what the science says around efficacy and safety.
The annual flu shot is a pretty low-risk proposition. But even with that, a lot of people still don’t get a flu shot. Our system requires a flu shot unless you have a qualifying exemption. I would imagine most hospitals and health systems have a similar approach. We will probably evolve that way as we know more about the vaccine. There’s a lot of sociological and political and behavioral questions floating around out there. We can only control what we can control and then try to influence and help shape a broader conversation on health policy in this country.