Cover Story – Goal Setters

Posted on Oct 1, 2014 :: Cover Story
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Posted by , Insight on Business Staff Writer
Holy Family Memorial Hospital President and CEO Mark Herzog, who plays recreational hockey in his free time, keeps an eye on “where the puck will be” whether he’s on or off the ice. Photos by Shane Van Boxtel, Image Studios.

Holy Family Memorial Hospital President and CEO Mark Herzog, who plays recreational hockey in his free time, keeps an eye on “where the puck will be” whether he’s on or off the ice. Photo by Shane Van Boxtel, Image Studios.

Hockey great Wayne Gretzky was talking about sports when he said “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”

But that same logic and thinking can easily be applied to business — get out ahead of the competition and figure out what customers need before they even realize it’s what they want, then move to take advantage.

It’s a thought process that serves the leaders of Holy Family Memorial Hospital well. Rather than play a reaction game of dump and chase, they have strategically revitalized a once-struggling provider with a model delivering increased health services at a lower cost while creating a sustainable network of providers. By anticipating patient health needs before they need the hospital, HFM has kept its community and bottom line healthier — all with some of the lowest hospital charges in the region.

“Our innovation is really homegrown and sustainable. It’s not some flavor-of-the-month or driven by corporate leaders, but it’s in each employee so it will continue to grow,” says Mark Herzog, president and CEO of the Manitowoc-based health care provider.

When Herzog joined HFM in 2001, the hospital was like many in small- or mid-sized cities — struggling to keep up with technology, rising costs, lower reimbursement rates and competition from other providers. But rather than join a larger health care system or stay stagnant and face potential financial ruin, HFM’s leadership made critical, transformative changes that not only improved the bottom line and improved quality, but empowered employees to help drive the change.

“Health care tends to be a conservative industry. We took a risk, not knowing how it would turn out,” says Will Casey, chairman of HFM’s board of directors. “We’re proactive, not reactive. It’s interesting to go to conferences and hear other health care providers talk about issues we dealt with five years ago.”

From 2001 to 2012, hospital charges in Manitowoc County were 34 percent lower than in Outagamie County and 97 percent lower than in neighboring Brown County. HFM’s initiatives kept patients out of the hospital by increasing outpatient care offerings, routing more patients to physician clinics for care that keeps them out of the emergency room, and helping patients with chronic diseases stay on top of their health concerns before they became acute and required hospitalization.

To get to that point, HFM borrowed some of ThedaCare’s lean initiatives and also brought in consultant Cheryl Perkins of Neenah-based InnovationEdge. “But it’s really our own philosophy,” Herzog says. “Yes, we utilize some lean techniques, but it’s really about shaping our culture to make employees more engaged and getting them involved with making improvements.”

Perkins agrees, adding that HFM’s board and Herzog had a vision “and built the roadmap to get there. They took the time to advance their culture so they can reach their goals — they just didn’t focus on process systems and tools.”

Incorporating HFM’s physicians into the process — a conscious decision made early on by HFM’s board of directors — was paramount to the hospital’s success, says Dr. Amy Stockhausen, a pediatrician.

“Physicians and administrators normally don’t work together, but the board came to us and asked for feedback and input and we’ve become invested in working on this,” Stockhausen says. “It wasn’t always easy to get that involvement, but they see what’s going on, where things are going and know this is what we need to do.”

And that means ensuring all of HFM’s 1,150 employees are working towards the same goal, Herzog says: “Our mission statement is to help people and the community become healthier and it’s something we live every day.”

Getting to that point hasn’t been easy, but as any sports fan or athlete knows, achieving success takes lots of dedication and practice — something Herzog, a former college hockey player who still plays recreational hockey and coaches youth teams, knows well.

A LONG ROAD

With Herzog, pictured here with Kim Schramm, at the helm, HFM has reduced reliance on the hospital for health care to only those acute cases where it’s necessary. The hospital has reduced the number of beds from 90 to 35, while increasing its medical providers from 35 to 90 using clinic-based service delivery. Photo courtesy Holy Family Memorial.

With Herzog, pictured here with Kim Schramm, at the helm, HFM has reduced reliance on the hospital for health care to only those acute cases where it’s necessary. The hospital has reduced the number of beds from 90 to 35, while increasing its medical providers from 35 to 90 using clinic-based service delivery. Photo courtesy Holy Family Memorial.

The Franciscan Sisters of Christian Charity started Holy Family Memorial in 1899 in response to local residents’ need for a hospital. The sisters — who also run Silver Lake College in Manitowoc — set the framework for the hospital’s role in the community and were also innovative in their own right by installing one of the first elevators in the Midwest in the new hospital.

When Herzog joined HFM after working at hospitals in northern Indiana, he found that the hospital and physicians at local clinics weren’t moving in the same direction. His first task was creating a network, connecting physicians at local clinics to the hospital.

“There used to be these two grain silos out there,” Herzog says, pointing out a window in a hospital conference room. “I like to use them as an analogy. When I got here, we were all in silos. If something was going to be done or changed, it had to travel all the way to the top of each silo to be done. We had to take those silos down and come together to create one culture.”

That’s something Casey, a Manitowoc-based financial advisor, says the board felt strongly about. “We realized the organization’s culture didn’t match what we needed to be successful. We needed to change the culture first, not assume the culture will come along,” he says. “But did we have the courage to do what’s necessary? That was what we needed to decide.”

The network culture — one hospital with its clinics moving in one direction rather than one hospital and multiple clinics moving in separate directions — was carefully put in place by focusing more on outpatient care and keeping patients out of the hospital rather than receiving in-hospital care. In a decade, HFM went from being a 90-bed hospital to a 35-bed hospital and increased its employed medical providers,  mostly at its clinics, from 35 to 90.

And like an athlete building upon his skills — a hockey player, for example, needs to be an excellent skater before improving his shot — once the network culture was in place, the next step was transforming how HFM did business. Hospital leaders cut out waste and improved patient care. Herzog invited Dr. John Toussaint, then CEO of ThedaCare in Appleton who now heads the ThedaCare Center for Healthcare Value, to visit HFM and share his thoughts on lean and continuous improvement with hospital leaders.

“We took a few of those ideas, but we really made it our own. We made our lean process more diffused — made our improvements less shallow, but very wide,” Herzog says.
With more than 70 percent of employees  (including physicians) participating in lean events by 2009, HFM’s culture of continuous innovation was born. “We’ve now created a process called SPUR (Strategic Program/Unit Review) that has us look at a program — let’s say it’s orthopedics — and give it a solid look every three years using the lean process and outside eyes and look at where we’re at,” he says. “We then need to make a decision: Do we grow the service, remove it or reposition it somehow? We call this the ideation phase and it forces us to make a conscious decision and look at what we’re doing and decide where we’re going.”

Herzog says it’s a forced discipline, one that can be a challenge. “We’re not committed to what we did yesterday. We need to anticipate what we need to do tomorrow today,” he says. “The result is that the community is getting better health care.”

Perkins says HFM, which won Insight Publication’s Innovation Award in the “people” category earlier this year, is good at evolving and taking its efforts to the next level. “They’re not afraid to bring in outside people to get the help they need and admit what areas they need assistance in,” she says. “They are poised to take another step forward and make a strategic breakthrough.”

MOVING FORWARD

As HFM was going through its cultural shift and lean transformation, it also faced financial issues, including lower Medicare reimbursement rates. In a city that’s already on the gray side — more than 18 percent are older than 65, compared to the state average of 14 percent — and only getting older, that’s a big deal.

At the same time, Herzog and HFM leaders recognized the financial hardships their patients were experiencing. As a community, the Manitowoc area has a lot of businesses that offer high deductible insurance plans to their employees.

HFM’s innovation efforts have kept patients out of the hospital by routing them to physicians in clinics for routine care and helping patients with chronic diseases to better maintain their health to prevent acute conditions and hospitalization. Photo courtesy Holy Family Memorial.

HFM’s innovation efforts have kept patients out of the hospital by routing them to physicians in clinics for routine care and helping patients with chronic diseases to better maintain their health to prevent acute conditions and hospitalization. Photo courtesy Holy Family Memorial.

“There’s a lot of different reasons for that, but the main takeaway is that patients may have $5,000 or $10,000 deductibles — the average, I think, is $8,000 — so you need to be cognizant of that and not go about ordering a bunch of expensive tests and procedures unless they’re really necessary,” Herzog says.

To help contain costs while improving patient care, HFM developed several innovative initiatives. RightCare is one idea that came out through the process. Boiled down, the RightCare philosophy means patients receive the care that’s right for them in the correct setting — whether that’s a clinic, hospital or their home — to get the best possible outcome. Herzog estimates RightCare has saved community members $28 million by providing the right level of care and not administering unnecessary tests or procedures. Herzog explains it this way: “If you come in with knee pain, we don’t automatically order an MRI and do a scope. We will probably do physical therapy first since that is not only less invasive and outcomes show that surgery isn’t always the answer, but it’s also makes more financial sense for the patient.”

Direct Access is another key initiative that allows patients to schedule their own lab tests, such as mammograms or bloodwork, or physical therapy sessions for a recurring injury. Herzog uses the example of plantar fascitis. If a person has it once and goes through physical therapy and it reoccurs — “Trust me, if you’ve had it once, you know when you have it again,” Herzog says — instead of seeing a physician to order physical therapy, the patient can go ahead and schedule the physical therapy on his own.

“The key point is not making a patient see a doctor — and be billed for an office visit — if it’s not necessary,” he says.

That way of thinking has not always been easy for medical providers to agree with, says Dr. Steve Driggers, HFM’s chief medical officer. “It’s a balancing act. People support what they create, but innovation is nothing if you don’t get outcomes,” he says. “We need to show everyone — the physicians, patients, the insurance industry — that what we are doing works and we’re improving care.”

One of the challenges with improvement and innovation is keeping it going. That’s where Jane Curran-Meuli, HFM’s new chief operating officer, comes into play. She joined the hospital in June after a long career with Affinity Health System in Appleton, including serving as chief operating officer for Affinity Medical Group.

Trained as a nurse, she hopes to more closely unite the clinical and administrative sides of HFM while maintaining the organization’s innovative energy. “I’ve been so inspired in my short time here how everyone — from the housekeeping staff in the hospital to the physicians — are focused on doing what’s right for the patient and open to making changes,” Curran-Meuli says.

Mary Maurer, HFM’s chief innovation officer, says part of HFM’s innovation success is recognizing that sometimes ideas don’t work. “The important thing is to keep it going and realize that for every one idea that doesn’t pan out, there are three or four that will and that it’s OK,” she says.

Patient safety and health remain at the heart of everything at HFM. For example, when the hospital looked to improve its Code STEMI process, it turned to all the employees who are part of the process. Code STEMI is the term used when a patient is having a heart attack. The American Heart Association set the goal of 75 minutes from the time a patient seeks medical help to having the balloon inserted in the artery. The longer a patient goes between the heart attack and angioplasty, the more the heart muscle is damaged. At HFM, that time can be as low as 20 minutes and averages around 50 minutes.

“That was huge. We had employees step up and say when the ambulance calls one in that they’ll hold the elevator open so the second the ambulance arrives, they can go right in and there’s no waiting,” Driggers says. “And then it was someone else saying that as soon as the call comes in, the radiology tech or someone else will immediately make sure the machine is turned on so it’s ready to go. It’s little stuff that really adds up.”

And if HFM didn’t have a cath lab available, the residents of Manitowoc County would have to travel to Green Bay for that service, which means it would take longer for them to receive the treatment.

“That’s a perfect example of a service we offer that’s critical to the community,” Herzog says.

Along with innovation, the word “community” comes up frequently in discussions with HFM leaders. Whether it’s the hospital’s religious roots or being one of the area’s largest employers, Herzog said HFM plays an integral role in the community.

“We provide high-quality, good-paying jobs,” Herzog says. “But it goes beyond that. Our employees are involved in different activities and organizations.”

Stockhausen says it all boils down to doing the right thing, whether in its business practices and treatment of employees or improving community health. The Robert Wood Foundation and the University of Wisconsin Population Health Institute documented a 52 percent improvement from 2009 to 2012 in Manitowoc County’s overall clinical care, moving the county from 31st to 15th among the state’s 72 counties.

“Keeping patients healthy and out of the hospital is good for the community and patient. We — the employees — are really part of the fabric of the community. I see parents of patients in the grocery store around town,” she says. “We’re really part of Manitowoc and feel it’s important to make decisions here that help create a healthier community.”

A CLOSER LOOK
Holy Family Memorial Hospital
» Founded: 1899
» Chief executive: Mark Herzog, president and CEO
» Number of employees: 1,150
» Services offered: Manitowoc-based health care provider with a hospital, walk-in care, 15 physician clinics, retail pharmacies, a home medical supply retail store, medically-based wellness center, and a state-of-the-art rehab center.
» On the web: www.hfmhealth.org