Mark Rich, President and Member of the Board at Steward Health Care System

Summary

Becker’s Healthcare Podcast: In-Depth Conversation with Mark Rich, President and Board Member at Steward Health Care System

Release Date: July 2, 2025
Host: Scott Becker
Guest: Mark Rich, President and Member of the Board at Steward Health Care System

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Introduction

In this episode of Becker’s Healthcare Podcast, host Scott Becker engages in a comprehensive discussion with Mark Rich, a seasoned leader with over four decades of experience in the U.S. healthcare industry. Mark, currently serving as the President and a Board Member at Steward Health Care System, delves into his extensive career, the evolving landscape of value-based care, critical capacity constraints in healthcare, and offers invaluable advice for emerging leaders in the sector.

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Guest Background: Mark Rich

Mark Rich opens the conversation by sharing insights into his illustrious career spanning 40 years in healthcare. He highlights his expertise in leading turnarounds, overseeing significant mergers and acquisitions totaling approximately $6 billion, and his pivotal role in restructuring Steward Health Care System.

“I’ve spent most of my career, 40 years in the healthcare industry, leading turnarounds and doing big deals, about $6 billion of deals and fixing systems in trouble.” [00:47]

Mark emphasizes the success of Steward’s recent restructuring efforts, which involved saving and transitioning 29 to 31 hospitals to new ownerships, preserving 99.8% of jobs, and maintaining consistent quality of care throughout the process.

“During that restructuring, 29 to 31 hospitals were saved and transitioned to new owners... nearly all 99.8% of the jobs have been preserved.” [00:58]

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Current Focus and Trends in Healthcare

Value-Based Care (VBC)

Mark passionately discusses the shift towards value-based care as a transformative trend in healthcare. He underscores its importance despite recent negative press and highlights its measurable benefits, particularly in reducing costs and improving patient outcomes.

“Value based care is a passion... Medicare has saved $3,500 per beneficiary since 2019 on MSSP and some of the other and reach.” [02:18]

Mark elaborates on the effectiveness of Accountable Care Organizations (ACOs), citing a significant reduction in average length of stay without compromising quality of care. He notes that ACOs can cut the length of stay by approximately 33%, thereby alleviating some of the capacity constraints faced by healthcare facilities.

“ACOs really have a huge impact on average length of stay without an impact on quality... sometimes 18% of the length of stay.” [04:05]

Capacity Constraints in Healthcare

Addressing the pressing issue of capacity constraints, Mark acknowledges the looming challenges if current trends persist. He points out the inadequacy in expanding capacity due to limited staff and financial resources, emphasizing the necessity for innovative solutions.

“There is a theoretical capacity problem coming. We won’t have the capacity, we can’t build fast enough.” [04:34]

Mark advocates for leveraging value-based care and technological advancements to mitigate these constraints. He asserts that innovations in technology are essential to streamline processes and enhance efficiency, as traditional human-centric approaches are insufficient to meet future demands.

“All the rest has to be solved through technology. Frankly, there's no other way to do it.” [05:00]

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Innovation in Healthcare

Mark highlights the critical role of innovation in addressing the evolving challenges within the healthcare system. He emphasizes that value-based care not only improves patient outcomes but also optimizes operational efficiency, thereby addressing capacity issues.

“Innovation trains kind of left the station. I think there is a model out there that does it.” [04:40]

He discusses the importance of integrating technology to enhance care coordination, reduce waste, and improve overall healthcare delivery. Mark also touches upon the need for community hospitals to reassess their strategic positions, whether to align with larger vendors or join ACOs to remain competitive and sustainable.

“Community hospitals have to rethink. Are they going to be vendor like Optum would like them to be or are they going to join ACO?” [06:53]

Furthermore, Mark underscores the emerging significance of behavioral health within the value-based care framework, projecting its growth as an integral component of comprehensive healthcare delivery.

“Behavioral health component adds 10% to the cost of every stay... better inpatient behavioral health setting and partners.” [08:15]

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Advice for Emerging Leaders

Drawing from his extensive leadership experience, Mark offers strategic advice for current and aspiring leaders in the healthcare sector:

1. Capital Management:

   • Challenge: Leaders must rethink how they approach capital acquisition and deployment.
   • Insight: Many hospitals are holding substantial cash reserves to maintain financial stability but need to strategically invest these funds to foster innovation and growth.

   “We’re going to have to see some deployment of that cash and people are going to take more risks with capital and they're going to have to reinvent the way that they spend money.” [09:11]

2. Embracing Innovation:

   • Emphasis: Leaders should actively engage with emerging technologies and innovative practices to stay ahead.

   “Jump on this innovation train that's leaving the station and get caught up because you just don't have the capital to invest.” [09:50]

3. Entrepreneurial Mindset:

   • Opportunity: The new generation brings entrepreneurial skills that can revolutionize healthcare operations.

   “The entrepreneurial skills that this generation is bringing... is going to be really game changer.” [10:20]

4. Consumer-Centric Approach:

   • Strategy: View healthcare through a consumer or retail lens, focusing on patient engagement and ease of access rather than solely on traditional metrics.

   “Think about more about patient engagement and... think of it more as a consumer business or a retail business.” [10:55]

Mark warns against the commoditization of healthcare services and stresses the importance of enhancing the patient experience through improved access and quality of care.

“Focus on the fact that the process of choosing care is going to change and... driven by ease of access.” [11:25]

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Conclusion

Scott Becker wraps up the episode by expressing gratitude towards Mark Rich for his profound insights and unwavering commitment to innovation and value-based care. Mark’s perspectives offer a roadmap for healthcare organizations striving to navigate the complexities of modern healthcare delivery, emphasizing the critical need for strategic investment, technological integration, and a patient-centric approach.

“You've got a brilliant perspective, unabashed believer in innovation and value based care. Just a pleasure to visit with you again.” [11:50]

Mark reciprocates the appreciation, reinforcing his dedication to advancing healthcare systems for the betterment of communities and the industry at large.

“Thanks, it's been my honor. I appreciate it.” [12:06]

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Key Takeaways

• Value-Based Care is pivotal in reducing costs and improving patient outcomes, with ACOs playing a significant role in optimizing hospital operations.
• Capacity Constraints require innovative technological solutions to ensure healthcare systems can meet future demands without compromising quality.
• Leadership Advice emphasizes strategic capital management, embracing innovation, fostering an entrepreneurial mindset, and adopting a consumer-centric approach to healthcare delivery.
• Behavioral Health is becoming increasingly important within the value-based care framework, highlighting the need for integrated mental health services.

Mark Rich’s expertise and forward-thinking approaches provide invaluable guidance for healthcare leaders aiming to drive sustainable growth and excellence in patient care.

Transcript

[A]

This is Scott Becker with the Becker's Healthcare podcast. We're thrilled today to be joined by a brilliant, innovative leader. We're joined today by Mark Rich. Mark is going to talk to us a little bit about his career, about leadership trends he's watching and a lot more. Mark, can you take a moment and tell us a little bit about your thoughts? Then I'd love to talk to you some about value based care and innovation and a lot more. Mark, let me let you tee up and tell us about yourself.

[B]

Thanks, Scott. I appreciate it. I appreciate the opportunity to be on the podcast and I love, I love your podcast. So this is a great opportunity for me, something I was quite surprised to be asked for. And I like the brilliant part. You can say that over and over again.

[A]

We'll work on it. My mom says about me, that's the only person, but thank you.

[B]

Well, you're number two for me too. That's nice. I do appreciate it. Yeah, I've spent, bub. I've spent most of my career, 40 years in, in the healthcare industry, you know, leading turnarounds and doing big deals, about $6 billion of deals and fixing systems in TR trouble, 25 years in the C suites, doing a bunch of different things. Recently I've been associated with steward healthcare as its president through its restructuring. You know, I think the one thing I'm not gonna. Don't want to talk a lot about steward, but I do want to just say that, you know, that during that restructuring, 29 to 31 hospitals were saved and transitioned to new owners, which is great for the unique communities that stewards serve. And nearly all 99.8% of the jobs have been preserved. So in that respect, it's an extremely successful restructuring. And there was no, no blip in care basically anywhere. But the rest of it. I've done a lot of M and A. You know, I built out an ACO back when that wasn't even an ACO thing, it was just an idn, I guess we called it back then. And right now I'm in that semi retired space advising some investment firms, working with executives as an advisor and working on some boards.

[A]

Thank you. Take a second, Don. What are you most focused on and excited about currently when you watch healthcare today? What trends are you watching and what are you most excited about?

[B]

You know, the trend that I keep watching and I'm a broken record on this for sure, is, is value based care and the shift to value based care. You know, I was at your last meeting where one side was the Insurer. The other side was the providers. And I was lucky enough to be a reviewer for both. So I could go back and forth. And you had the insurer saying value based care is here, that's the model, we're doing it. And on the provider side you said, well, we think it's kind of coming, but we're not sure and we gotta do a lot of innovation to get there. So, you know, this thing is changing fast, this payer landscape changing fast. And I'm really trying to stay up on that and watch that. Value based care is a passion. It's why we created Stuart. I was one of the founding members of actually that organization 2010 as a value based care engine. It's been in, you know, the. Why, why am I so big on BBC? Because I know it's had some negative press in the last year or two, but if you, if you think about ACOs and you look at Medicare as a model, you know, Medicare has saved $3,500 per beneficiary since 2019 on MSSP and some of the other and reach, both of which are kind of sub rows of plans, right. MSSP patients don't even really know they're in it. So if you think about it as a more active, you're assigned to it, you agree to it, like an MA plan or a commercial plan, the benefits should be a lot stronger. And you know, the other thing that I think ACOs really don't get enough press on is that they have a huge impact on average length to stay without, without an impact on quality. So you've got the quality, you've got a real inaction of that right space, right time for the patient and you cut out a lot of waste by eliminating, you know, sometimes 18% of the length of stay. So that's a pretty big number, especially when we're looking at capacity constraints going forward, 100%.

[A]

What do you see about capacity constraints in the country? It seems like we're headed towards the debacle in terms of capacity constraints. What's your sense of that?

[B]

I think that that's a really good question. And it is something that's tying into kind of the whole theme that I think about a lot and start to talk to other people about future, is that we do have a theoretical capacity problem coming. There's no question about it. You know, if things stay the same, we won't, we won't have the capacity, we can't build fast enough, we can't expand fast enough, and there isn't the staff nor the money to do it. So we've got to think about different ways to do this. And you know, a lot of people use the word. The buzzword now is innovation. I think the innovation trains kind of left the station. I think there is a model out there that does it. And I think value based care helps us with our, with our capacity constraints as well. It does decrease length of stay, you know, by probably a third. It decreases overall length of stay, including post acute care by 2.8 days on nine. So that's 33%. So you've got a huge opportunity through coordination of care, I think to take some of the capacity constraint questions off the table. That won't solve it. All the rest has to be solved through technology. Frankly, there's no other way to do it. Innovating processes, human processes, is only going so far. And I know there are hotels that save a lot of money on it, but it's not enough to fuel capital. Needs are going to come for this innovative period.

[A]

100%. And talk a bit Mark, about like post a situation with Stuart. Where are you most focused and excited today? I know you talked a little bit about this, but what excites you today? Where are you most focused?

[B]

Well, I am most focused on kind of that transition to value based care and people finding a home within it. So not just, just, not just how do you do it if you're a hospital, but where do you fit in it and what role are you going to play? And it, it requires a real new look at the strategic vision for hospitals. You know, in my world, in my head, when, in 2030 when Medicare has 100% of its patients in some kind of BBC program, there's going to be a realignment of the stars and more acute community acute care hospitals which I've served on the boards of and advised for years and years and years, nonprofits and for profits, they, they like to think of themselves as the purveyor of care, all care for all people in their area, which I think is a noble cause and something to be celebrated. Unfortunately, we're not funded like that anymore. So community hospitals have to rethink. Are they going to be. Are they going to be vendor like Optum would like them to be or are they going to join ACO like the hospitals that join steward in their h. In their aco? You know, the risk of being a vendor is that you become commoditized commodities compete on price. So I don't think that's where people want to be. However, if you're the most efficient hospital provider in town. I think that you've got a pretty good space as the vendor operator of hospitals. I mean still 70% of the cost. So you're going to play a big role. I also think that as we look at this, you know, there's always make versus buy and everything. I think we'll see post acute providers becoming more defined in what they do and what role they play. And I think you'll see the role for behavioral health, which is one of the biggest capacity constraints that nobody talks about much. Start to see there'll be more emphasis on that. We'll start to see that. I think that space grow actually as we progress in value based care. Because that mental health, behavioral health component adds 10% to the cost of every stay. I've seen numbers higher but say 10% of the cost. So if you can, if you're thinking about value based care and coordination, there's 10% of the cost. You could start to work down by having better perhaps inpatient behavioral health setting and partners.

[A]

Thank you. And Mark, take a second. You've had this great overall leadership career. What advice would you give to evolving leaders? What do you think when you think about advice you'd give to evolving and emerging leaders?

[B]

I think that the biggest challenge that people are going to have, particularly in the acute hospital space is, is how they think about capital and where they get and what the source of that capital is. The average daily cash on hand in this country is like 260, something like that, $35 billion, something like that it represents. Or 635 billion. Sorry, that mistake there. 635 billion that represents. And we see a lot of hospitals that preserve unrestricted cash on their balance sheet to shore up their ratings, which I think is important and noble again. But we're going to have to see some deployment of that cash and people are going to take more risks with capital and they're going to have to reinvent the way that they spend money. I mean ACOs and VBCs spend more money, spend 80% more of their IT spend on population health in analytics and about 80% more on patient engagement and care coordination as well. So if you think about that broadly, you're going to be challenged, I think, to jump on this innovation train that's leaving the station and get caught up because you just don't have the capital to invest. So for leaders, particularly people coming up and coming into the industry, particularly with this generation, I think that there's an opportunity to be bold. I think the entrepreneurial skills that this generation is bringing out of school and out of their lives into this space is going to be really game changer. And I think the last thing is try to view the business through a different lens. Think about more about patient engagement and not just patient engagement as we measure it now, but think of it more as a consumer business or a retail business. I don't have a lot of fans and I call healthcare retail business or hospitals retail business. But you know, they're getting there ed times, wait times on an app. You know, we are commoditizing ourselves a little bit. So I think you've got to figure out where you are in the BBC equation and be careful of being commoditized in that respect. But focus on the fact that the process of choosing care is going to change and I don't think it's going to be driven by price transparency overall. I think it's going to be driven a lot by ease of access.

[A]

No, I think that's right. The ease of access continues to be everything and quality to an extent too, we hope. But I think price transparency is the consumer so far away from that quite frankly still that it's hard to see that be the real driver of where people make their choices and so forth. Mark, I want to thank you for joining us. Just absolutely brilliant. You've got a brilliant perspective, unabashed believer in innovation and value based care. Just a pleasure to visit with you again. Mark Rich, tremendous leader. Thank you for joining us today on the Beck Healthcare podcast.

[B]

Thanks, it's been my honor. I appreciate it.