Executive Interview: Joel Allison’s Excellent Adventure

Creating a truly integrated healthcare delivery system is a process, not an event, says Baylor CEO.

If Joel Allison has a mantra, it is “safe, quality and compassionate care.” The words are an integral part of Baylor Health Care System’s formal vision. And, judging from the way Allison speaks, they’re an integral part of his personal vision for the IDN as well.

Allison, 57, is Baylor’s president and CEO. He entered hospital administration in 1972, serving as administrative resident (and ultimately, executive vice president and chief operating officer) at Hendrick Medical Center in Abilene, Texas. From 1981 to 1993, he served as CEO of three hospitals in Texas and Missouri. In 1993, he joined Dallas-based Baylor as senior executive vice president and chief operating officer. He was named its CEO in May 2000.

He had some big shoes to fill, succeeding Boone Powell Jr., who had formed the IDN in 1981 and served as its CEO for 20 years. Prior to Powell Jr.’s tenure, his father Ð Boone Powell Sr. Ð had led Baylor for 30 years.

Undaunted, Allison began redesigning Baylor into a truly integrated healthcare delivery system. It’s not a simple task. As Allison himself says, it is a journey. But one he seems to relish.

Founded as the Texas Baptist Memorial Sanitarium in 1903, Baylor today comprises 12 owned hospitals, one leased hospital, 18 ambulatory surgery centers, five short-stay surgical hospitals, 83 physician centers and practices, four senior health centers and the Baylor Research Institute. The IDN has 3,315 physicians across its system, including 400 physicians in HealthTexas Provider Network, which is owned by Baylor. Its flagship facility is 997-bed Baylor University Medical Center at Dallas.

Those are a lot of pieces to pull together. And new ones are being added all the time. For example, in December 2004, the IDN opened Baylor Regional Medical Center at Plano to serve North Texas’ growing Collin and Denton counties; in May 2005, the board approved the development of the Texas Heart Hospital of the Southwest, also in Plano; and in March 2005, Baylor broke ground on a 30,000-square-foot medical plaza in Keller, Texas.

Allison and the Baylor board are convinced true integration cannot take place without automation. That’s why the IDN has embarked on a seven-year, $140 million initiative, which it calls Ð simply but boldly Ð Clinical Transformation. When executed, the initiative will help Baylor pull together its patients, clinicians and systems, all in the name of providing safe, quality, compassionate Ð and consistent Ð care.

As part of the initiative, Baylor will implement evidence-based order sets, rules and alerts, so that patient care follows logical, proven pathways. The IDN also plans to seamlessly link information throughout its network of inpatient and outpatient sites. When Clinical Transformation is completed, each Baylor patient will have a secure, single electronic medical record retrievable by his or her care provider via a handheld or desktop computer.

Recently, The Journal of Healthcare Contracting spoke with Allison about Baylor’s vision of integrated healthcare.

The Journal of Healthcare Contracting: What is your vision of a truly integrated healthcare delivery system? What’s the biggest challenge in bringing that vision into reality?

Joel Allison: Boone Powell Sr. led Baylor University Medical Center. Then Boone Powell Jr. came on in 1980 and asked, “How do we create a multihospital system?” [That meant] growing from one location in downtown Dallas to a network of hospitals and outpatient centers. I joined the system in 1993, and we asked, “How do we create an integrated delivery care system that really focuses on the patient?”

Our vision today is to be very patient-centered, creating a model of care and redesigning the way we deliver it, so that the patient has an ideal experience, and that we deliver safe, quality, compassion care throughout our system. We want to make [healthcare] accessible and easy for the patient.

We have 123 access points across 12 counties. Through our Clinical Transformation Initiative, we want to create an integrated delivery system that delivers care at the right time, the right place, the right way, in the right amount. Using technology, we can connect all the different components of our healthcare delivery system.

We believe quality, compassionate care is cost-effective care. That’s why we want our outcomes shared [with the public]. We participate in the [U.S. Centers for Medicare & Medicaid Services] clinical-measures reporting program. We were part of a pilot program to work with the state of Texas in its first attempt to collect information through the Texas Health Care Information Collection Center for Health Statistics. We work with the local Dallas-Fort Worth Business Group on Health on outcomes reporting.

JHC: It seems that Baylor is continually introducing new medical technology. Some recent examples include MRI-guided breast biopsy; CT imaging for diagnosing heart disease; sentinel lymph node biopsy for breast cancer patients; a floor-mounted, flat-panel angiography suite; and a CyberKnife and Gamma Knife. How do you determine what technologies to bring in? Is it difficult to strike a balance between “keeping up with the competition” and providing cost-effective care for your patients?

Allison: Baylor has always been on the leading edge of healthcare [in terms of] new sciences and technology. We have three components Ð research, community service and, obviously, patient care.

We’ve been the leader in many service lines. For example, liver transplants came to this area because Baylor stepped forward. We’re doing exciting things in our Research Institute. One is islet cell transplantation [a process in which islet cells isolated from donor pancreases are injected into the liver of patients with Type 1 diabetes]. We make sure the research we engage in is clinically relevant and can be moved from our research arm to the bedside. We want to make sure we’re improving the quality of care for our patients and the community. Islet cell transplants are a good example. There are success stories of people who were insulin-dependent all their lives, but who no longer have to be on insulin.

JHC: What’s your perspective on healthcare costs in this country? Should we be alarmed?

Allison: Employers and patients are concerned about the cost of healthcare. But I truly believe we have the best healthcare system in the world. People have access to the highest levels of quality care and the most advanced science. And in many respects, it’s readily accessible.

JHC: Has managed care proven to be an effective way of lowering and improving health care costs?

Allison: It depends on how you define “managed care.” Is it capitation, fee-for-service or discounted fee-for-service? Is it case rates? It’s very important that employers are able to afford healthcare insurance. If there is a way that [providers and employers] can cooperate to manage care for patients, then that’s appropriate.

In our market, HMO/capitated plans have not been successful. The discounted fee-for-service/PPO model is the primary model, because it offers consumers more choice and control over their healthcare decisions. People want to be able to go to the providers that they perceive to be the best place for their care.

We’re also seeing a shift toward a consumer-driven model. Employers want their employees to participate more in the cost of their care. The goal is that they search for the provider who offers the highest quality care, judged by outcomes.

JHC: What are the true drivers of healthcare costs today?

Allison: One is the uninsured. Texas is particularly challenged, because we have the highest rate of uninsured in the country Ð 27 to 28 percent. Other drivers of cost include the capital necessary to invest in new science and technology, to build new facilities and to provide access to everyone.

JHC: In March, your CFO, Gary Brock, testified before the House Ways and Means Committee in favor of dropping the moratorium on specialty hospitals. He made the point that Baylor is involved in many relationships with its doctors, and said that “we cannot deliver on all aspects of that mission without aligning with physicians.” What is the future of specialty hospitals? What about many hospitals’ complaints that these facilities skim off the most profitable patients, leaving the more complicated, less profitable ones to public and other non-profit hospitals?

Allison: When you talk about specialty hospitals, again, you have to ask, “What’s the model?” and “What’s the definition?” In our case, we are a mission-driven, non-profit provider aligned with physicians for quality and economic value. Our heart hospital offers the highest outcomes and patient satisfaction.

The issue is broader than specialty hospitals. We’ve had them forever Ð rehab hospitals, children’s hospitals, etc. So much goes back to the relationship [the IDN has] with its physicians. Today, there are even discussions Ð which I support Ð about gain-sharing with physicians, which could help us deal with the issue of financing healthcare for the long term.

One critical success factor for healthcare organizations is their relationships with their physicians. Hospitals and healthcare systems and physicians must be aligned for quality.

We have 3,300 active physicians across the Baylor Health Care System, and we have a continuum of ways in which we work with them. Some want to be independent members of the medical staff, so we make sure we provide them a good environment in which to practice and admit patients. We have joint ventures, such as our ambulatory surgery centers, the heart hospital on our main campus and a second heart hospital in Plano. And we have a fully integrated model, in which we own physician practices. Our HealthTexas Provider Network comprises 400 physicians.

Our relationship with our physicians is a key to our success. It creates a better environment for patients and the healthcare team, and allows us to work in partnership to provide safe, quality, compassionate care. Our Clinical Transformation initiative is physician-led. Nurses have to be involved too.

JHC: Can you describe the opportunities and difficulties you have found or expect to find in implementing Clinical Transformation?

Allison: We’re very optimistic that an electronic health record will be achievable. We recognize it is a journey; it’s not something you can turn on with a switch. We’ve been working closely with our physicians for several years on this. Our Chief Medical Information Officer Peter Dysert and CIO Robert Pickton have worked to implement a physician portal [which allows physicians to access patient’s lab reports and demographic information, and to schedule surgery and discharge inpatients, from their offices or homes]. This is the first phase of our electronic health record. Now, we’re creating a total electronic health record, which will make it seamless for patients to move throughout the system.

Baylor has been recognized as being among the most wired facilities for the past six years. We’ve done some exciting things. At our Sammons Crest Imaging Center, patients can use the MediKiosk to electronically check in, sign consent forms, pay co-pays. [Baylor will roll out the MediKiosk e-clipboard technology to 15 additional locations within the next three years.] This enhances the patient experience, and is one of the building blocks toward the electronic medical record.

JHC: Baylor has implemented a program called “ABC Baylor” (for “Accelerating Best Care”), which your literature describes as a “rapid-cycle quality improvement education program, designed to help medical professionals and administrators improve clinical outcomes, patient satisfaction, financial outcomes and other areas of quality care by teaching clinicians and administrators about the cultural changes needed to improve quality and to give them the practical tools to accomplish their goals.” How does this program dovetail with the Clinical Transformation? Do your doctors resent being told “how to practice medicine?”

Allison: ABC Baylor was developed and designed by our physicians, who had an interest in developing safe, quality care. I’m in the class myself. The program helps people understand why we’re doing what we’re doing, and how it will help the patient have a much better experience at Baylor. In the classroom, you’ll find physicians, administrators, nurses, board members. It continues to maximize É the high trust level that exists among physicians, the board and the entire healthcare organization.

Do physicians resent being told how to practice medicine? No. It’s just the opposite. Physicians say, “I want my patients at Baylor, because I know [Baylor] is focused on the right strategy.”

JHC: As a shareholder of VHA, what’s your opinion of the scrutiny that Congress has paid to GPOs over the past three to four years? What is the role of the GPO in the future?

Allison: I believe group purchasing organizations do have a role in healthcare delivery systems today. I believe they bring value. If there’s going to be scrutiny, I have no doubt VHA will respond, and I’m comfortable VHA will always do the right thing.

As a group purchasing organization, VHA acts as a broker/agent of services Ð a business model that has been proven in many industries. But VHA is more than just a GPO. It offers nationwide collaboration among institutions on clinical improvement; high-quality educational opportunities; research in clinical practices and emerging technologies; and advocacy in public policy issues, to make sure we have a very good healthcare delivery system in this country. And they look at how they can bring innovative services to their member organizations that will bring value.

JHC: Baylor has a multiyear contract with Owens & Minor. How important is your relationship with Owens & Minor to your vision of creating an integrated healthcare delivery system?

Allison: Baylor values its partnerships. Owens & Minor is a key partner in helping us with supply chain management. From what I continue to hear and sense, they provide great service; they give us useful information on our supply chain program.

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