← Becker’s Healthcare Podcast
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- [00:02]
A
Every year, Becker's annual meeting brings healthcare leaders together to unpack the most pressing issues facing the industry. And every year, those conversations shift in profound and unexpected ways. This April, more than 3,500 healthcare executives will return to Chicago for Becker's 16th annual meeting. 795 elite speakers will offer new lessons, new case studies, and predictions about what comes next. Join us April 13th through the 16th for the agenda and event details. Visit Beckershospitalview.com and click on the events tab in the upper right.
- [00:38]
B
This is Alan Condon, back with another episode of the Becker's Healthcare Podcast. And today I'm delighted to be joined by Michael Stern, president and CEO of Tower Health in Pennsylvania. Michael, a real pleasure to have you on the podcast with us today. For those of our listeners who might be as well acquainted with Tower Health with yourself and the fantastic work that you and your colleagues, do you mind giving us a little bit more insight into your background and your experience at the health system?
- [01:06]
C
Sure. I have been at Tower Health since the fall of 2022. I came in as the executive vice president, chief operating officer for the first almost two years and then transitioned into the CEO role February of last year.
- [01:26]
B
Okay, fantastic. So fall 2022 in as the chief operating officer, I believe, succeeding Sue Perotti, who had the pleas interviewing a while back as well. So, Michael, I think Tower a fantastic story in terms of no doubt pushing up against some real challenges not unique to Tower Health. Expect a very tough and challenging year across the board for this year into next. When we think about what happened with the ACA federal Medicaid cuts, a real tough challenge for safety net providers there, which we might dig into a little bit later. But to kick things off to your point, came in as fall 2022 at Tower Health, as COO, now in that CEO role for a little bit of time. Looking back, can you take us back in terms of tell us, what are the lessons that you carry over from your time as COO and president that now really shape your decisions as CEO of the overall health system?
- [02:16]
C
Well, you know, I would say, you know, years ago the chief operating officer role and the chief executive officer role were very different. Right. You had the CEO who was taking the system at a much higher level, really not dealing with the day to day and the COO responsible day to day, the operations and those two roles have melded to not having that much gapping between them anymore because you really need to be able to, you know, manage what's going on in the moment while also ensuring that you are prepared and ready, ready for the future going forward because things are moving so much more quickly than they have historically and obviously. And actually, when I took over as Chief Executive Officer, I did not replace myself as Chief Operating Officer simply because I wanted a much tighter connection to the operations, to our different presidents of each of our enterprises. So that there was a direct understanding of what was happening on a day to day basis, what the needs were, what they were seeing, as well as me being able to share more timely what I was looking at going forward, what was going to be impacting us, what's more down the road. So really bringing that operations and executive positions into a much tighter environment.
- [03:28]
B
Yeah. I'm wondering, Michael, if you could maybe just expand on or elaborate on the decision to not replace yourself as coo. I think we've seen at other health systems across the board over the last couple of years some similar thinking in that regard in relation to the COO role.
- [03:44]
C
Yeah, I think that, you know, it's a layer that I think in a different time it worked. And I was a Chief Operating officer prior to this role at my previous position. And, you know, it was a little bit of a different environment where we're now, when, you know, at Tower Health, where we have, you know, presidents of each hospital and presidents of the provider enterprise, we have these, you know, mini CEO CEOs that are underneath the system CEO position. So they're operating in both of those roles, running their enterprises. So there was really no need for that additional layer. And you're right, the C suites are definitely getting tighter, which requires broader skill sets at each of the positions, you know, that you're in. So that our president of the provider enterprise also plays a strategic role for the, for the provider enterprise. And the president of Reading Hospital is also looking at that role in a much more strategic mindset than historically just focusing on, you know, getting through each day and making sure that, you know, each day's patients are taken care of. They're looking at it from a much broader perspective, you know, way beyond the historic position descriptions.
- [04:53]
B
Got it. No, I think it makes a ton of sense when you talk about kind of moving away from the focusing on that day to day operations, but really kind of taking that broader strategic look across the health system. So digging into Tower Health a little bit in terms of the last couple of years and what's ahead. I know Sue's credited you last time I spoke with her, I believe maybe last year, the year before, in terms of the fantastic work really driving that operational turnaround. In your role as chief operating officer, still an ongoing challenge, I imagine. But taking me back to the success that, first and foremost, you brought and helped lead with your executive team. What were the most kind of critical decisions or key changes that really set Tower Health on this path to financial sustainability? Financial. Financial stability. Excuse me.
- [05:39]
C
You know, I think it's pretty well known that Tara was facing significant financial pressures, but for what the system had been through is also dealing with significant, you know, culture and employee engagement issues. And we had to mill both. We had to, well, focusing on the financial turnaround. We had to make sure that we were truly engaging with the employees, engaging with the other leaders, so that everybody knew what direction we were going and why we were doing it. And I think that that really helped make the turnaround. You know, I got here in the fall of 22. Within a year, we were. We were seeing the ship turn. And then the next year, it turned a little bit more because we were all leaning in the same direction. We were very clear on what our goals were, which was really to start acting like a system instead of acting as individual entities within the system, all working together. If everybody wins, everybody wins. If every. If one loses, then everybody loses. Having a mentality that, you know, the sum is better than the parts, right? And that has been really, really helpful because we have, obviously our Hubbard Reading hospital, which is the major trauma center, but we have, you know, two community hospitals that are very big feeders to Reading Hospital. Without those two community hospitals, Reading Hospital would not be the organization that it is. And then on the flip side, Reading has this incredible clinical expertise that we've been able to push out to. To the smaller community hospitals to make sure that patients are getting the exact same clinical experience. No matter what entity you have at Tower at, you know, within our system, they're getting the exact same patient experience, the exact same clinical experience, the same physician expertise going, flowing throughout our system, and it made the relationships much better within. And then you start gaining on efficiencies, and you start doing the right thing at the right time in the right place, and then you start seeing those financial turnarounds. We had to make some tough decisions, obviously, but we were very transparent on what we needed to do and why we needed to do it. They were, you know, tough announcements that we had to be in over the last couple of years, even as recently as November, what we were doing to make sure that we are ready to meet the mission of our communities for years to come. So. And it was really spending a lot of Time out with the employees, engaging with the employees, talking it through, getting their feedback, but really explaining that we actually have a plan and we know what's going to get it there. Now, obviously, we've seen the success in our turnaround, so there's confidence that we can take the next step because we've already taken the first few steps. There's a lot of confidence from the employees that we can continue taking those steps to ensure that Tower Health is here for years to come.
- [08:22]
B
Yeah, so it sounds like really crystal clear communication, making sure you're engaging with your team, your staff, across the board, explaining the why. It sounds like behind a lot of these decisions, the cultural aspect, just to kind of dive maybe one bit deeper into that for other health systems, no doubt of which there are many at the moment facing similar challenges, maybe trying to take a harder look at their culture, take a playbook or a page out of a playbook of the Tower Health strategy. Is there something that really helps you kind of get that buy in from your. From your team, from, from the bottom up? And kind of maybe a specific example you'd like to highlight where this new culture helped to kind of a significant benefit or operational change at your system recently?
- [09:05]
C
Yeah, absolutely. You know, when we put out our strategic plan, I don't know, eight or nine months ago, one of our. And our first strategic pillar was the Tower experience. And the Tower experience is where every person feels when they interact with Tower Health, whether it's patients, families or team members. You know, it matters. We've. We have 10,000 what we call caregivers. Every single person, no matter what their role, is a caregiver and ultimately has some impact on the patient experience. Part of being a caregiver is how we treat, how we treat each other. That is a very big part of, you know, who we are at Tower Health. We want people to feel like they belong at Tower Health, like they should work at Tower Health because they are part of a Tower, the Tower Health family. And we, and we know that everything starts with our people. You know, we have 10,000 caregivers taking care of hundreds of thousands of unique patients over the course. Over the course of a year. Reading Hospital is the busiest single emergency department in the state of Pennsylvania. Okay. So we couldn't get any of this done without the doctors, the nurses, the EVS workers, the dietitians, the nurses, aides. Every single person plays a key role in our success, in our turnaround, and making sure that they and the patients and their co workers feel, you know, like, like A family in all sets. Now that word is used loosely. But we want people to feel comfortable when they're here. They're going to work hard. Everybody's working much harder than they worked years ago. Healthcare has changed dramatically, but we can still be kind, we can still care about each other and we can still look out for each other.
- [10:48]
B
Yeah, no fantastic credit to yourself. You're fantastic around you. So looking ahead to that next phase of Tower Health, Michael, no doubt a lot of tough work and challenging work still to be done, but I think important to no doubt take a moment to kind of evaluate where you come from and kind of the success you've had in the past. Looking ahead, strategic growth of tower Health. Where do partnerships come into play? Where do collaborations come into play? What do you think about the next couple of years in terms of growth and sustainability for the health system?
- [11:23]
C
Partnerships are one component and a key component of the board of strategic plan. You know, we evaluate partnerships through a single lens. Through a single lens, what helps us meet community needs in a sustainable way. We don't provide every quaternary service and we shouldn't try to be everything to everyone. So if there's an opportunity to strategically align with a partner that brings a certain level of expertise to our community, whether it's clinical, whether it's research, whether it's technology. A great example is our partnership with the Siemens healthineers. It gives us access to the latest equipment and software and supports our efforts to modernize care delivery without, you know, without a capital expense that we're not able to endure. The real value is partnering with experts, including in the areas like AI, to strengthen our service line and the care experience. Siemens brings that to our organization and it allows us to work together. It's not about just buying equipment. They bring expertise, they bring data, they bring artificial intelligence, they bring technology to our organization that we wouldn't be able to build ourselves. So we bring in the expert.
- [12:40]
B
I guess. A quick last question before I let you go. I could be very generous of your time. Your insights here. I guess Pennsylvania is such a. An interesting state, but also seems like a challenging state when you talk about. I think unfortunately we've seen maybe the state with the most hospital closures in the most recent years. We've seen a ton of hospital consolid and maybe not mutually connected because of that. When I think about the Crozer health situation, I think of CHS going to sell a few hospitals in the area. The Jefferson Lehigh Valley merger. It seems like there's a ton of M and A activity going on in that state. I guess kind of a crystal ball, if you don't mind. Where do you see hospital consolidation going specifically in your state? And maybe is this an avenue that Tower Health may look a little bit harder at? I think with some of these challenges, if the opportunity to align with a large academic system or something like that might come into play.
- [13:35]
C
Yeah, I mean, speaking more globally, I think it's very clear that, you know, you're not going to have a lot of standalone, you know, two hospital systems. I think it's, it's very clear that each state, depending on their size and density, are going to have, you know, two or three major players and you're going to have to probably align with one of them or a bunch of the smaller. If it's a bigger state, a bunch of the smaller systems theoretically can come together to create some sort of alliance. Now, does it have to be a true M and A? Can it be affiliations?
- [14:07]
B
Sure.
- [14:08]
C
But it's very clear in Pennsylvania when you, when you look at, you know, the University of Pennsylvania health system and the Jefferson system, that in the Philadelphia region, there are two big systems that are really, you know, responsible that territory. Now there are a couple of smaller systems that are, you know, two billion, one and a half billion. But when you have, you know, a $12 billion system and a 17 volume system, the efficiencies just make more sense to align with one of them. So, but I think that's going to be a nationwide effect. I think we have to look at our, you know, our cost infrastructure and the best way to do that is to align because obviously, you know, the back office and things like it and other technologies, you know, and human resources and finance. The more efficiencies you can get as a bigger system, you know, the more leverage you're going to have and the more liability you're going to be able to withstand. You know, what's the unknown that's in front of us. Right. With insurance carriers with, you know, government regulations and such and reimbursement structures. But I do see that the trend's going to continue of more systems getting larger and less of the standalones.
- [15:19]
B
Yeah, yeah. And all sorts of questions for, for the independent hospital, I guess, as well as it comes down the line. Michael, fantastic. Really, really pleasure to have you on the podcast with us today. Always a pleasure to catch up with a fantastic leader like yourself at Tower Health. So, so greatly appreciate your time and thank you so much for joining the Becker's podcast today.
- [15:37]
C
Thank you so much, Al. Appreciate it.