Episode 52:
Scale Matters
Kevin Tabb, M.D., President and CEO, Beth Israel Lahey Health
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In this episode of Fireside Chat, with Kevin Tabb, M.D., President and CEO, Beth Israel Lahey Health to discuss the merger between Beth Israel Deaconess and Lahey, the impact that COVID has had on telehealth services, and the characteristics of a leader during a crisis.

As President and Chief Executive Officer of Beth Israel Lahey Health (BILH), Kevin Tabb, MD, is responsible for leading a comprehensive integration plan among the BILH member organizations to effectively deliver on the promise to offer patients and their families better and broader access to extraordinary individualized care. Previously, Kevin was the Chief Executive Officer of the Beth Israel Deaconess system and Beth Israel Deaconess Medical Center (BIDMC). Read more

Transcription

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Kevin Tabb 0:00
The increased scale matters at almost every level. Obviously, as we increasingly think about managing populations and increasingly taking on risks, you can only do that when you have scale.

Gary Bisbee 0:18
That was Dr. Kevin Tabb, President and CEO Beth Israel Lahey Health, speaking about where scale matters. I’m Gary Bisbee and this is Fireside Chat. In this wide ranging interview, Kevin outlined his background from growing up in California, to college and medical school in Israel, to his current posting in Boston. The diversity in his professional experiences is ideal for today’s large health system CEO. Kevin reviewed the regulatory process governing the merger between Beth Israel Deaconess and Lahey and the constraints imposed by the regulators. Kevin dug into the impetus that COVID provided telehealth and how the forced uses introduced benefits to patients and physicians alike. He gave an example of beneficial outcomes of telehealth for behavioral health services. An interesting finding is that some primary care physicians liken the telehealth encounter to an old fashioned home visit. Let’s listen to Kevin’s discovery.

Kevin Tabb 1:14
Some of our primary care docs are talking about what they are particularly finding interesting is that they feel they’ve gone back to old fashioned med, to doing home visits again because they were introduced into a patient’s home by doing telehealth.

Gary Bisbee 1:29
Kevin discusses the characteristics of a successful leader in a crisis and how a leader cannot be paralyzed by lack of data.

Kevin Tabb 1:36
People can be paralyzed by the desire for perfect information, exact data, predictability on what’s going to happen. As much as I would like to have perfect information to craft a perfect strategy, we never have that. We certainly won’t have that now.

Gary Bisbee 1:54
I’m delighted to welcome Dr. Kevin Tabb to the microphone. Good morning, Kevin and welcome.

Kevin Tabb 2:03
Good morning. Great to be here. Thanks for having me here.

Gary Bisbee 2:05
Well, we’re pleased to have you at this microphone. Let’s start with an update on the merger between Beth Israel Deaconess and Lahey, learn about your background, and then cover the BILH response to COVID. Will you please update us on Beth Israel Lahey Health, which was formed now what about 18 months ago, Kevin?

Kevin Tabb 2:24
Yeah, we’re a little less than 18 months old. So we’re a newly formed healthcare system in eastern Massachusetts. We brought together four separate hospital systems, about 13 hospitals, over 4000 physicians, 35,000 employees, hundreds of ambulatory sites. We provide care for about 25% of our market, Eastern Massachusetts and got approximately $6 billion in revenue, or at least we did until the current COVID crisis, I’d say.

Gary Bisbee 2:55
So where does increased scale matter, Kevin?

Kevin Tabb 2:58
Well, it’s interesting. Increased scale matters at almost every level. Obviously, as we increasingly think about managing populations and increasingly taking on risk, you can only do that when you have scale. Scale matters and helps in the typical ways when you think about our ability to negotiate with suppliers when you think about capital markets, and all of those things. But I think that what is really interesting, is in the era of COVID and it’s we went through the crisis, a part of the crisis that we just went through, we really saw how scale and being a system and behaving as a system was so critical to us, and more importantly critical to our patients and the communities that we serve. If we had been acting in silos, we would have found that some of our legacy institutions would have been completely overwhelmed at any given point in time. We would have quickly found some sites without enough PPE. We would have found, particularly for those institutions that were closer to underserved communities that were disproportionately affected by COVID, they wouldn’t have been able to deal with this crisis on their own. But the scale that we had, our ability to do what I call load balance, move people, patient equipment around, really came to light during the current crisis as to how important it was.

Gary Bisbee 4:28
Assuming that we move through the crisis at some point, what are the top strategic opportunities for BILH over the next let’s just say five years, what does the merger allow you to develop in terms of opportunities?

Kevin Tabb 4:42
Well, I think that there are opportunities that are hosted at different levels. It allows us to think differently about the future. First of all, it allows us, in this market, to ensure that we are going to be here and be here for the long term, but it allows us to move beyond simply thinking about healthcare in the confines of the four walls of our hospitals, and move more rapidly and more effectively out into the community. One of the things that we were excited about as we brought this merger together, and that we’re accelerating now that we are going through the COVID crisis, is thinking about our care across the entire continuum. So when we brought these systems together, it wasn’t just about having more of the same. One of the nice things that occurred was there was what I call a complementarity of assets. So in some of the systems that we brought in, we had a good, strong presence with tertiary and quaternary academic centers. In others, we had a good presence with community hospitals. But in others, we had things like post-acute care capabilities that we simply didn’t have elsewhere. We brought in a very large behavioral health PNL that’s now benefiting the entire system. And so the way that we think about serving a population is changing for us. Made it a real opportunity for us that may be unique in this market. I don’t think that it’s unique in the country, but it’s unique in this market and will present us with a greater number of opportunities as we move forward.

Gary Bisbee 6:18
Well, just in playing on that, thinking about the merger itself, it seemed like it was fairly prolonged in terms of how the regulators were looking at it. You persevered, and congratulations for doing that. How did you think about the regulatory process? What were the main hurdles that you needed to jump over to get this deal done, Kevin?

Kevin Tabb 6:38
Well, I’ll admit that the regulatory process was painful and prolonged and that as much as anything had to do with the environment that we sit in here in this state. But we had four separate parallel regulatory bodies and agencies that independently needed to review and approve the transaction. So at the federal level, there was obviously the DOJ. But then at the state level, we have something unique in the state of Massachusetts called the Health Policy Commission, which really looks to make sure that we keep PME down in the state and has broad ability to make recommendations about mergers. And then we have separately the Attorney General that needed to approve the transaction and then separately, the state DPH and I should say, the merger took a long time, and it was sort of like we were dating forever. We finally decided to get hitched, but we needed approval of our parents and, this is Massachusetts, we’ve got a modern family, we’ve got a lot of parents. But ultimately we got their blessing and in March, a year and a half ago, the deal finally came through and we started to operate as a combined entity.

Gary Bisbee 7:59
So what were the main terms of the merger? I’m sure each of these parents were asking for certain things bundling all that together. What were the main terms of the merger as dictated by the regulators?

Kevin Tabb 8:11
They were relatively stringent. I was quoted in the press as stating that the terms that were imposed upon us that we ultimately agree to were unprecedented in nature. I guess the biggest one is that we have price caps for a fairly long period of time. We can’t see increases greater than approximately the state benchmarks set by the Health Policy Commission every year. In addition, we had to make significant commitments, financial in nature, to underserved communities, to behavioral health and other things. And so there were a large set of financial conditions, making sure that we would continue to serve our mission in ways that we have previously. We’re the only ones in this state to be governed by those conditions. What I can also tell you, though, is that we are hearing now around the country that attorneys generals around the country are speaking with our attorney general looking to the agreement that we came to with her as potentially a model for approving or not other transactions around the country. So I think for anybody listening to this podcast who is contemplating something similar in their own state, they might want to take a look at the construct that we ultimately agreed to, because I know that it very well may be that it will be a model for other states.

Gary Bisbee 9:41
I’m sure you’re receiving a lot of calls from your fellow CEOs to find out how that worked. How do you think about competing with Mass General Brigham?

Kevin Tabb 9:51
I think that we live, again we’re blessed in this region with a large number of high quality, well-known healthcare institutions, and certainly the institutions that came together to make up Beth Israel Lahey Health already enjoyed really good reputations, each of them individually. And those institutions that make up Mass General Brigham have traditionally enjoyed and continue to enjoy really a great reputation. So I think that we all provide great care. We think that there’s a unique opportunity for us in this market because we provide that same high-quality care that is well known but at a significantly lower cost. First of all, we’re required to now under the agreement that we came to, but it’s really part of our model in any case, and I think that that’s going to be increasingly important in the future. And we’re already seeing the way that we can benefit from that, major employers and others are very interested in talking to us about everything from the creation of new, innovative products to being able to provide that high-quality care at a lower cost. But ultimately, it’s incumbent on us to make our case and convince people that it makes sense. I like the position we have. And I guess time will tell.

Gary Bisbee 11:15
It does seem to me that cost and affordability is probably the issue of this decade when all is said and done so you’re off to a good start there.

Kevin Tabb 11:25
I think cost and affordability are really important, especially in this market. There is an additional component, which is that people are very aware of brand and reputation and people want to go to places that they know they will get really high-quality care. Places in this market typically that are associated or affiliated with Harvard, and there are a few of us. So I think a combination of those things will work to our advantage.

Gary Bisbee 11:51
Let’s turn to your background, Kevin, if we could, which you’ve certainly got a unique and interesting one. Grew up in California, went off to Israel following high school. Why did you immigrate to Israel?

Kevin Tabb 12:03
Who knows now, but I grew up, from a very early age, having become convinced by the age of 10 or 11, that I wanted to move to Israel to live in Israel. And my father still reminds me that at my bar mitzvah, I made a speech. I told people that I intended to move to Israel and that everybody here should consider doing the same thing. And everybody said, “Well, that is a phase, that’ll pass.” And from an early age, I caught the bug, so to speak, and really wanted to do it and then, when I finished high school, moved away and left my family behind. I moved to Israel, moved to a kibbutz and like all other 18-year-olds in Israel, began my military service.

Gary Bisbee 12:45
When did you become interested in medicine?

Kevin Tabb 12:48
Well, I sort of fell into it. I was trained as a medic in the military, and I fell into it and fell in love with taking care of people and when I finished my military service decided that that’s what I wanted to do on a full time basis. Israel is like much of Europe, after you finish your military service, you go directly into either medical school or law school or whatever it is that you choose rather than doing a separate undergraduate degree first. And so when I finished my military service, having served as a medic, I went to medical school in Israel at Hebrew University Hadassah which is the big academic medical center in Jerusalem, and it’s a six year program. So I did that after my military service.

Gary Bisbee 13:33
So you also have an expertise in information technology. Where did that interest come from?

Kevin Tabb 13:38
I fell into that too. Residency in Israel, I did my residency in internal medicine, is longer than it is in the United States. And that’s for a variety of reasons, but one of the components of residency is that you take six months off and you typically you go into a lab, you do what they call basic sciences there and you finish with a thesis. I had no interest in going into a lab and to cast around for different ideas. I was interested in computers, didn’t know a lot, but I proposed to the head of the hospital that I would for my six months of basic sciences go off and develop an electronic medical record for the hospital. You know, I cringe now thinking how naive and honestly stupid an idea that is. Honestly, I didn’t even have a computer at home. He laughed. And among other things, he didn’t have an electronic medical record. And so he said, “Sure, have at it.” I started and within a week realized that this was not going to work. I wasn’t going to build an electronic medical record. But they didn’t know the term at the time, I pivoted. In other words, I sort of took a look around. I hate to admit that I’m wrong. And I said well, I can either go back with my tail between my legs and tell them, you know, I’ve got to find a lab or I can try to figure out what I’m going to do. And I ended up building a program that took information from the disparate computerized systems that we had, and put it into a computerized discharge summary for the emergency department and really enjoyed doing that. And when I finished my residency, I decided, boy, that was a lot of fun and something I wanted to do and so I convinced my wife, we’d come back to the United States. I promised her it was for no more than two years. That was 20 years ago. And we came back and I came to a company called Medical Logic, which was subsequently bought by GE and spent a fair amount of time working on the vendor side in healthcare IT.

Gary Bisbee 15:40
What lessons did you learn from your entrepreneurial activities in your time at GE Health IT that have been useful to you as a provider executive, Kevin?

Kevin Tabb 15:50
There are a host of different lessons. As I sort of look back on my own varied career, I guess you could kindly call it eclectic at best, I think one of the advantages that I’ve had is how disparate a set of experiences I’ve had. So I’ve practiced medicine abroad and in this country. I’ve been on the commercial side, in small startups, and in large corporations. Based on the west coast and on the east coast. And it’s the sum of all of the different experiences. It’s the ability to see things from a host of different perspectives, that informs my own thinking about how to navigate a system now, and has been helpful to me over the years. I frequently get asked by younger colleagues who are sort of interested in when I was Chief Medical Officer at Stanford, how could they become chief medical officer or now CEO here? And I always tell them, “Well, I don’t actually have a clue!” None of my career was planned. It was in some ways, very serendipitous. But what I recommend to people is try different things and don’t necessarily pursue a linear path, but rather pursue things that may look off the beaten path, but things that may interest you. That’s certainly what I did and ultimately, I found it tremendously rewarding.

Gary Bisbee 17:16
Well, some would say that the diversity of your background really is a model for the modern CEO of a large health system. How would you react to that?

Kevin Tabb 17:26
I think there are a host of different ways to get to do what I and others do, leading healthcare systems. I do think it’s important to have had some experience outside of a traditional healthcare system in addition to working within. And I think we’re starting to see more people come from a diverse set of experiences. Ultimately, that’ll benefit us as an industry.

Gary Bisbee 17:56
Certainly agree with that. Leaving Stanford as the Chief Medical Officer and coming East must have been an interesting switch for you and the family. How did that work out?

Kevin Tabb 18:07
Yeah, well, it was, again, one of those unexpected moves. I wasn’t looking or thinking that we would be leaving the West Coast or Stanford, which I loved and the job that I was doing as Chief Medical Officer at Stanford. But the opportunity came up and, you know, I think here at what was at the time, Beth Israel Deaconess, they decided to take a chance on me. I really was pretty much of a non-traditional candidate. And I’ll never forget when the recruiter called me and she asked if I’d be interested and I told her, “Well sure. I mean, it’s a great place with a great reputation, but it’s a waste of time for me to go out. Because I can’t imagine that I’m the kind of person they’re looking for. You know, I know Boston and you typically, people would be looking for someone with a lengthy academic resume. I don’t have that. Somebody from Harvard, somebody who’s practiced at Boston institutions, and I don’t have any of that.” And she laughed, and she said, “Well, you’re right. You’re not what they’re looking for at all. And it’s not even the right job for you. But you know, it’s good for you to get some practice, because you’ve got to come out, you’ve got to try, and then when the right thing comes, you know.” So I did. And the board and the search committee, for whatever reason decided to take a chance. They decided to gamble, I think, on somebody who was really different and not what they were looking for. And I was lucky to get that chance and to have their backing. And I’ve been lucky since to get a tremendous amount of support from my set of boards and from the colleagues that I work with. It’s a phenomenal institution that I’m really lucky to be part of.

Gary Bisbee 19:52
Well, I think they’re lucky to have you, Kevin. So it’s worked out well for both of you. Why don’t we turn to lessons learned from COVID and I’m particularly interested in your view about telehealth given your IT background. Did BILH see an explosion in telehealth visits similar to other health systems?

Kevin Tabb 20:12
We absolutely did, right? So I think we’re not unique in that, but similar, I think to other healthcare systems. We dabbled in telehealth prior to the crisis, but honestly, it was pulling teeth. The vast majority of clinicians were not extraordinarily excited about doing it. Most patients were not interested in getting their business done that way and we just really had not moved the ball in the way that we had wanted to. Of course, along comes COVID and, you know, shut down in one fell swoop all of our ambulatory services and telehealth took off. Took off to the tune of thousands and thousands of visits within our system, and obviously, around the country and I suspect, similar to other places when you go back now and ask clinicians, would you want to go back? Would you want to just cancel all of our telephone services? You couldn’t pry it out of their hands at this point. And interestingly, we did ask patients, and we have asked patients and the level of patient satisfaction is off the charts with telehealth. We also think that there’s increasing evidence that it improves outcomes. And I’ll give you a single anecdotal example, but it’s just one and it’s in the area of behavioral health, which is incredibly important to us. What we have seen, particularly in the area of behavioral health, that telehealth lends itself well for that, but we’ve seen the no show rates for behavioral health visits plummet from what were along the lines of 30 plus percent of the visits which people were not showing up for to single digits as a result of moving to telehealth. And I think that’s a perfect example of, “Boy, we’re providing care in a way that is better for patients in some cases.” It’s different. It’s not about the technology. It’s not about, there are a host of different ways you can do it. We’re finding in some cases that the telephone is every bit as good as anything else. But we’re also finding some interesting things. Some of our primary care docs are talking about what they are particularly finding interesting is that they feel they’ve gone back to old fashioned med, to doing home visits again, because the were introduced into a patient’s home by doing telehealth, they can see what’s going on in that environment and just really different than what we used to do before.

Gary Bisbee 22:41
Terms of adoption by the physicians, are you seeing both primary care and specialty care?

Kevin Tabb 22:48
It’s lent itself far more broadly to primary care and a couple of niches like behavioral health more so than your typical specialty visit. But you know, I was out at dinner with the head of cardiovascular surgery Saturday night and we were talking about what’s happening with his division. And, surprisingly, cardiovascular surgery, he said, he’s using telehealth all the time for the visits prior to them coming in. He said, “Now typically I won’t see them in person until they actually come to get their surgery. I meet them, I meet their family, I meet them in their home through telehealth, but then they come in and face-to-face it’s really the first time.” And he said, “You know, for a cardiovascular surgeon, it’s working out very well.” We typically think about how for the context of primary care, but I think that there are advantages in areas well beyond primary care.

Gary Bisbee 23:45
Most of the health systems are seeing a moderation of this forced use due to COVID, but listening to you and others, it just feels like over the next five years, let’s say, there will be a continued growth in televisits. How would you react to that, Kevin?

Kevin Tabb 24:03
I think that that’s true. I think we’re going to see some retrenchment. In other words, there was a period of time and then, late March, April, and May timeframe, where obviously all of the ambulatory visits in as much as they occurred, occurred through telehealth. Not every visit lends itself to that, nor should it. And we won’t see it continue at the level of 90% of our ambulatory visits being telehealth. So we’ll see some retrenchment. I don’t think that that’s a failure, though, I think we’re just going to find the appropriate level over the coming months or a year or so. It’ll be certainly below the thousands of visits that we’re seeing now, but well beyond. We are not going back to the levels that we were at pre-COVID and that’s a good thing.

Gary Bisbee 24:51
How about remote working? Did you allow some or direct some employees to work remotely?

Kevin Tabb 24:58
Absolutely. We’ve a large number of employees working remotely. We’ve got 35,000 employees and a fair number of them are not patient-facing and like everybody else, we very quickly moved the mode of those that are not patient-facing, those that do not need to physically be in the office should not be in the office. So, you know, if you think about all the sorts of core services and support, whether it’s IT or finance or HR or whatever it may be, they all moved to providing services remotely and we’ve continued to do that. For the most part, we have not brought people back to the physical offices. Now obviously, frontline caregivers were before and continue to be on the front line. We’ve got a lot of people that are still working from home and that’s worked out relatively well. I think people are still adjusting to this day. Balancing working in a home environment and the advantages that brings to the fact that there are not as many boundaries between afterwork and work and other things like that. Society in general is still trying to figure this one out. But I think there too, we’re probably not going back to the pre COVID normal. I can tell you that we’re already rethinking office space and we’re already rethinking our real estate holdings based on the fact that we probably won’t be bringing everybody back in the way that we had it before.

Gary Bisbee 26:29
When you factor in social distancing requirements, let’s say, for ambulatory care, telehealth, remote working, it does seem to be a terrific opportunity to rethink the whole facility asset base of your health system.

Kevin Tabb 26:44
Well, I can tell you that it really hit home for me. I do come into the office and I come to hospitals and I think that’s important. But I also, there are days where I work from home and sometimes I feel a little guilty about it, but I was in a meeting with the governor of our state and he was working from home. And well, if the governor can work from home, I guess I can too.

Gary Bisbee 27:06
I think that’s right. Well, on to the health system finances just for a moment. Clearly not a pretty picture for most of the health systems in the country. How is BILH going to be affected in 2020 and 2021 in terms of your economics?

Kevin Tabb 27:24
I guess I’ll start at the end which is to say we will weather the storm. And this is another example of, I am pretty sure that at least some components, some of the smaller hospitals and healthcare systems that came together as part of BILH would not have weathered the storm if they had not been part of a larger system. So we will weather the storm but we have been hit badly. I mean, these are astounding financial losses that we never could have imagined. That being said, we’re thankful that it’s not as bad as we initially contemplated. Our first estimates when we headed into this in March and saw the precipitous drops in volume and didn’t know what if anything we would get from the federal government and didn’t know when things would come back to normal and whether they would and whether the volume would come back, we were initially estimating losses north of half a billion dollars for FY 20. We’re not seeing that. It’s been attenuated and we’re still seeing 10s of millions of dollars in net losses after we’ve received stimulus dollars from the federal government, but not half a billion dollars. Some of this will be dependent on how quickly the volume continues to come back. It’s come back and come back well, but we are not yet back at 100%. I am not convinced that we’re going to be back at 100% and I think it is quite likely that the new normal for us for a variety of reasons, will settle in 5 to 7% below what the old normal was. We may see a period where there’s a bolus where we work through backlog and other things, but I’m not convinced that it’s going to come back at the levels we saw before. It may come back close and we are seeing it come back strong, but if it doesn’t, then that means it’s time for us to be rethinking how we do things and to take that opportunity to make sure we’re investing in the right things and that we’re sized appropriately for whatever it is that we do, and we’re thinking through those things right now.

Gary Bisbee 29:33
That’d be a terrific topic for the next interview is to track your thinking through that process. Why don’t we wrap up here, Kevin, this has just been a terrific interview. Let me ask a question about leadership. What are the most important characteristics of a leader during a crisis?

Kevin Tabb 29:50
I reminded people just as we started and started pulling together the main central structure and whatnot, that I took a deep breath and I quoted, I think it was from House of God, where the first thing that you do in a code is to take your own pulse. That we need to take a deep breath and know that we’re in this for the long term. For a leader, though, it’s caused me to think differently even about strategy. And the way that we take that idea because, you know, strategy for me at least, is the art of moving beyond and above the day-to-day. That the crises that we all deal with pre-COVID that we’re dealing with even more now, move beyond just being reactive to really thinking and moving the organization in a direction that’s going to be impactful long term. Now more than ever, I think your strategy can’t be static. And one of the major dangers, especially as we’ve sort of reached this major inflection point in how healthcare is delivered, is that we continue to do a strategy that might have made sense three months ago, but makes less sense now. And I think that finding that balance of understanding how things are changing, changing our own outlook, and then getting out ahead of the curve is really at the heart of providing leadership and having a good strategy. So many people, I see this within our organization, I see this around us, people can be paralyzed by the desire for perfect information, exact data, predictability on what’s going to happen. As much as I would like to have perfect information to crack perfect strategy, we never have, we certainly won’t have that now. We can’t, though, be paralyzed into inaction, because of it. And, you know, we’re seeing all of that play out right now. We’ve not come out of the crisis yet, but we’re thinking already about what opportunities might be for us in the near, intermediate, and long term. And that’s what we should be doing.

Gary Bisbee 31:59
Kevin, let’s land here. Terrific interview. We really appreciate your time today and continued good luck with BILH.

Kevin Tabb 32:07
Thank you, Gary. It was great to talk to you and I’m happy to do it.

Gary Bisbee 32:11
This episode of Fireside Chat is produced by Strafire. Please subscribe to Fireside Chat on Apple podcasts or wherever you’re listening right now. Be sure to rate and review Fireside Chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends or those who might be interested. Fireside Chat is brought to you from our nation’s capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and leadership, read my weekly blog Bisbee’s Brief. For questions and suggestions about Fireside Chat, contact me through our website, firesidechatpodcast.com or gary@hmacadmy.com. Thanks for listening.