Episode 74:
No One Wants to Work for a Pessimist
Warner Thomas, President and CEO, Ochsner Health System
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In this episode of Fireside Chat, we sit down with Warner Thomas, President and CEO, Ochsner Health System to discuss how a greater organizational scale allowed a more efficient response to COVID and the continued growth and development of regional health systems. We also talked about key issues in healthcare like affordability, the next generation leaders of health systems, and the importance of digitization and scientific innovation for the future.

As President and CEO of Louisiana’s largest non-profit, academic healthcare system, Warner Thomas is responsible for Ochsner Health’s overall strategic growth and development. In the wake of Hurricane Katrina, Ochsner invested in the community by acquiring six hospitals and developing strategic partnerships and affiliations to grow its presence across Louisiana and the Gulf South. Thomas joined Ochsner in 1998 and served for 14 years as Ochsner’s President and Chief Operating Officer. Read more


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Warner Thomas 0:03
I do think CEOs have got to be much more attuned to consumerism, digital connectivity, digital competitors, and looking to transform a business versus just making the existing business better.

Gary Bisbee 0:18
That was Warner Thomas, president and CEO Ochsner Health System, discussing his thoughts about change required in the next generation of health system CEOs. I’m Gary Bisbee and this is Fireside Chat. Ochsner has grown steadily during Warner’s 22 years at the helm. He spoke about how greater organizational scale allowed more efficient response to COVID and he believes that we will see continued growth and development of regional health systems. Warner believes that affordability for the consumer will best be addressed by transferring risk to providers and structuring a global capitation model. He spoke about Medicare Advantage as a step in the right direction. Warner discussed how tighter relations between the public health infrastructure and health systems are the best option for eliminating public health gaps identified during the pandemic.

Warner Thomas 1:08
What we need to see is a tighter relationship between health systems and the delivery systems and the public health infrastructure. I think that the public health infrastructure is challenged to be able to manage some of the complex issues that we see in today’s world. And we see the system being very fragmented with the public health system working in one angle, federally qualified health centers working in another area, health systems in another, and I think there needs to be a more unified agenda to move in that direction.

Gary Bisbee 1:40
Warner discussed the importance of digitization and scientific innovation and how they will accelerate a major evolution of health delivery to incorporate predictive modeling rather than the current reactive approach. Let’s listen.

Warner Thomas 1:54
That’s the next big frontier for traditional health systems. How do we move from being reactive, fee for service, that we take care of people when they want to come to us or need to come to us to being predictive?

Gary Bisbee 2:07
I’m delighted to welcome Warner Thomas to the microphone. Well, good morning, Warner and welcome.

Warner Thomas 2:16
Hey, Gary. Thanks for having me today.

Gary Bisbee 2:17
Absolutely. We’re pleased to have you at the microphone for the second time. I looked it up and you were with us in early May, last year. Boy, a lot’s changed since early May till January this year. But in any event, why don’t we move into the conversation talking about COVID and I believe this is the third surge for New Orleans, Louisiana. But could you give us an update on this surge, Warner?

Warner Thomas 2:43
We are going through our third surge here in Louisiana. We are seeing our highest rates of inpatients since our first spike, which was late March, early April of last year. March and April last year, we had nearly 1,000 COVID inpatients. Now we’re running a little over 500, about 540. Since then we’ve gotten as low as 50 and now we’re back up to 540. It’s really tied to social gatherings and whatnot over the holidays. And we’re managing bed capacity and managing that process and staffing which has been a challenge. I know it’s a challenge for everybody across the country. But we’re managing and we’ve had to move some elective surgeries, but it’s been a minimal impact so far.

Gary Bisbee 3:26
You mentioned staffing, and I’ll bet your frontline caregivers feel like they’ve been under pressure now for almost a year. How are they handling it?

Warner Thomas 3:35
I think the team’s doing great. I mean, they’re tired and certainly, it’s been a challenging time. I think with the vaccination process, so we started about five weeks ago now, that has been a really big boost to people. I think they see hope, they see a lot of optimism in that. Obviously coming into this third surge, it’s a challenge and people see that as a real challenge. But at the same time, it is optimism that we can continue the rollout of the vaccine and work through this third surge that we’ll be able to get on the other side of COVID in hopefully the not too distant future.

Gary Bisbee 4:10
Before we get to the vaccine update, could you share with us what lessons have been learned through surges one and two that you’re employing now?

Warner Thomas 4:19
Obviously, the clinical protocols have changed around vent and ICU utilization, so we see a much lower ventilation and ICU utilization. We also have done a good job moving patients around our system. So our medical center flagship in New Orleans has over the past several months really been a place where we’ve moved a lot of COVID patients from the Greater New Orleans area. But as we’ve escalated cases in the past few weeks, we’ve had to use all of our hospitals and we’ve moved patients around to really try to level load our patient demand and our patient census around our systems. That’s been really helpful. Constant communication – we have two huddle calls a day looking at testing, looking now at vaccines, looking at inpatient census, understanding where there are staffing issues, how we need to move folks around. So the constant communication, the transparency about what’s happening, where we are, I think is really critical to keep people informed, and to keep people optimistic about the future and optimistic about what we’re doing day to day to impact their lives. So that constant communication is really important when you’re going through challenging, stressful times.

Gary Bisbee 5:37
You mentioned vaccines and there’s been a supply issue around a lot of the country. How is it in New Orleans?

Warner Thomas 5:45
We have been okay up until probably a couple days ago. We had a huge push the weekend of January 9th and 10th. We did 22,000 vaccinations in 2 days and it really has been a team effort across our whole system. And we are really focusing on how we get to 10,000 vaccinations a day across our system and building a model and a capability around that. That’s really been our focus. We piloted a lot of that this weekend. So we did hit the 10,000 a day level this weekend. That’ll be a little more challenging to do during weekdays because of our clinic operations, but we’re looking for sites off of our clinic locations that we can run large scale vaccination processes and we’re working with the state and cities on doing that. So I think that supply, starting now, it’ll be a little more challenging, but we have a call with the state today and they’ve assured us that they will keep us supplied with vaccines. I think for providers, we just have to build the systems and scale up to be prepared and then challenge our colleagues at the governmental level, at the state level to get us the vaccines that we need. I do think that with the new administration coming in, President Biden, it looks like he’s gonna release a lot of vaccine into the system. So we are really gearing up to be ready to take an influx of vaccine and get as many vaccinations done as quickly as possible in the coming weeks.

Gary Bisbee 7:17
Why don’t we turn to Ochsner. Ochsner has grown steadily under your leadership, which is now 20 plus years there. Can you give us an update on Ochsner Health System?

Warner Thomas 7:28
Sure. One of the things I’m proud of from 2020 is, obviously we had to deal with COVID and the pandemic and all of the challenges that came with that, but at the same time we advanced our strategic agenda in a very successful way. We closed a merger -Lafayette General Health with Ochsner. They joined us on October 1 and the integration of that is going exceedingly well. We completed a strategic partnership with Singing River Health System in the Mississippi Gulf Coast that has been going very well on the integration and collaboration with that team. At the same time, we’ve been dealing with COVID these strategic initiatives around growing, being more regional, and advancing our initiatives have been successful. And then all of our existing partnerships in North Louisiana with LSU Health in North Louisiana, we’ve seen significant patient growth. We opened a new hospital in Shreveport and we’ve grown our physician base there tremendously. With our partnership with St. Tammany Parish Hospital here in the Greater New Orleans area, we’ve added several new service lines, we’re building a new joint venture cancer center together. So we the organic growth being very successful. And I know that the same will happen with our merger in having a Lafayette General merger, with David Callecod, Patrick Gandy, the whole team over there have done a great job and we’re making a big capital infusion to expand inpatient capacity, which has been a real issue for them and to help them build a much bigger ambulatory network. So the nice thing that I’ve seen is that our team has been able to continue to execute strategically while dealing with the operational challenges of COVID in 2020.

Gary Bisbee 9:12
What do you think the importance of scale is to particularly during times of crisis like this?

Warner Thomas 9:18
I think scale brings you the capability to do things. For example, we brought all of our COVID testing in house and ran a 14 team statewide COVID testing team for the state. We couldn’t have done that on our own. It allows you to secure PPE when smaller facilities may have challenges doing that. I mean, we worked with a couple of organizations in actually manufacturing PPE when we were going through the challenges of the first COVID spike. It allows you to invest in technology so that you can scale up, like our vaccine process. We were able to build analytics, build capabilities around registration, so everyone’s been able to get a link, get registered, get their appointment times. Our cycle time of getting our shots done is 30 minutes or less and we’ve done 1,000s of them. So I think it’s more difficult for a smaller organization to be able to deploy resources to do those types of things versus larger-scale organizations. And then the other benefit of the scale beyond COVID, I think, really get back to investments in digital capabilities and all the work we’ve put into investments we’ve made in Innovation Ochsner, the investments in data analytics, and then the investments to really move to more of a global payment model. I mean, I truly feel like health systems of the future have to be able to accept and manage risk effectively. And that takes a significant investment in people, data, and processes in order to do that effectively. So those are the things that are hard to do if you don’t have the right scale.

Gary Bisbee 10:59
Many people feel that this decade will see the growth of the regional health systems or regional provider systems. Seems like Ochsner is a model for that right now. Is that the way you think about it, Warner?

Warner Thomas 11:12
I think you’ll see larger regionals continue to build and grow and an even broader regional basis. My guess is you will see combinations on more of a national scale in a not-for-profit area in the future. Ochsner with our partners is a little over 7 billion in revenue and then you look at an United Optum, that’s a couple 100 billion, you look at Humana that’s 60 or 70 billion. I mean, the scale of these other organizations is so large. I do think you’re going to see provider organizations want to come together to create a bigger platform over time. Not that it’s going to happen tomorrow, because I know there’s a lot going on with COVID, but I do think the future will yield multiple or at least one not for profit that’s non-Catholic that is trying to build scale in a much larger way. I mean, I think we’ve seen this with regionals that have come together and I think it’s inevitable that will happen on more of a national scale over time.

Gary Bisbee 12:10
So when you think about roles of your executives, take let’s say the chief medical officer. Has COVID meant anything in terms of changing the roles of the CMO at a large health system?

Warner Thomas 12:24
I wouldn’t say that it’s really changed roles. What I would say is that everybody works as a team and everybody picks up and runs with the projects that they need to run with in order to make things work and come together. I do think our Chief Medical Officer Robert Hart has been more involved in throughput, in operations, and bed scaling, and how we redeploy especially physician staff to manage some of the surge that we’ve dealt with. So maybe there’s a little bit of a different angle there. But I wouldn’t say that his job has necessarily changed. I would say that all of us have had to change and adapt in a COVID environment and I think that all of our roles will change and adapt in the future. I think that’s inevitable as our health systems change to be much more ambulatory versus inpatient, much more digital versus just fixed asset locations. That’s going to require different roles, different focus, and, frankly, different skill sets. So I don’t really think that roles are changing, I think the jobs are morphing and there’s overlap with other roles in the organization. Which gets back to why it’s so important to have a team. You’ve got to have a team that can work together, that can matrix manage issues, that can not worry about, it’s got to be black and white and do I have responsibility or do you have responsibility. I think people have to really come together and work on projects in a collaborative fashion. I think that’s one of the reasons that Ochsner has been so successful as we’ve built that type of teamwork in our organization.

Gary Bisbee 13:56
As these roles evolve, what does that say for the next generation CEO? Are we going to be looking for different skill sets or different backgrounds in the next generation CEO?

Warner Thomas 14:09
The key things around driving culture, driving strategy I think will be the same in the future versus say what they’ve been in the past. I think what that strategy is and what that culture is will be different. So that could require someone that has different viewpoints or broader viewpoints. I do think CEOs have got to be much more attuned to consumerism, digital connectivity, digital competitors, and looking to transform a business versus just making the existing business better. And I think that’s going to be the challenge for healthcare executives for traditional delivery systems is, how will you transform your organization? Do you have the skillset and the people to transform your organization? And frankly, I don’t think we know exactly what that looks like or what the timing is on that. And so you have to be very comfortable with ambiguity, you have to be comfortable being uncomfortable and deal with that and morph your organization over time. So it is going to yield a different mindset and some different skills. However, I will say that driving culture strategy, building your executive team, setting direction, I think those are key things that are not going to change even though what you do may be different in the future.

Gary Bisbee 15:29
What about the board of directors? Do you think there’ll be an evolution of the type of background and skills you will want in your board members?

Warner Thomas 15:38
I do think continuing to look at that and ensuring that you’ve got the right diversity on your board of viewpoints, ethnic diversity, gender diversity, but also knowledge, diversity, making sure that you have folks that understand technology and consumerism and regional growth and the size and scale of what these organizations have morphed to, because they’re very different today than they were a decade ago or two decades ago. So health systems are just more complicated, they’re larger, they’re much, much bigger operations. And I think that requires a board that provide the right focus, provide the right guidance and stewardship of an organization. But I do think diversity of viewpoints and diversity of skill sets is important and will continue to be important in the future.

Gary Bisbee 16:29
Why don’t we take a tour through several of the issues that you all are dealing with. Many people feel that affordability will be the issue of this decade. How do you think about affordability, Warner?

Warner Thomas 16:41
I think affordability is an issue. I think that the real change that needs to take place in order to make healthcare more affordable is a change in the payment mechanisms, moving towards global payments, putting providers at risk, moving away from a straight fee-for-service type of arrangement. We have done this for decades at Ochsner in Medicare, Medicare Advantage. And this is where I think the government’s actually ahead of the commercial payers in trying to move more payments to risk. I think that is really what’s going to drive affordability versus just trying to fix prices or just price transparency, because frankly, price transparency, it’s not just unit price, it’s the number of units and the number of procedures that are done. I think that’s what some people miss when they think about healthcare affordability.

Gary Bisbee 17:31
When you talk about shifting risks to the providers, that sounds like something that needs to be hand in hand with the health insurers. Do you see there will be closer partnerships or relationships between the provider systems in the health plans?

Warner Thomas 17:46
I think there needs to be. I think that’s a challenge. I think some plans are willing to be closer to providers than others. I think some plans are willing to be more creative with providers than others. But I do think more strategic alignment, more alignment of payment, and tighter relationships would absolutely help create more affordable health care and, frankly, healthcare that’s easier to use and less administratively burdensome if the plans and the providers worked closer together.

Gary Bisbee 18:18
You mentioned that the federal government is leading in this space with Medicare Advantage, which is growing. Do you think that’s going to end up being the model for some of the commercial insurers?

Warner Thomas 18:33
I’m not sure if commercial insurers are willing to go that route, one. And two, with the fact that we have so much self-insured or ASO business these days, I think it’s hard to get some companies to go that route. So I think that’s another challenge on the commercial side. I think certainly Medicare Advantage, the expansion of Medicare Advantage, the expansion of ACOs, and alternative payment mechanisms from the federal government, I think those are going to keep accelerating and growing. It’s unclear to me what will happen in the commercial area.

Gary Bisbee 19:04
That seems like a key issue to be resolved this decade. Well, turning to public health, if we’ve learned anything during the last year of COVID it’s that public health is related to the economic security of the country. How do you think about that, Warner?

Warner Thomas 19:20
Well, I think public health is very important. I think we’ve seen and I’ve known that there’s a lot of health disparities in our country and certainly we see a lot of health disparities in Louisiana. And some of that’s really been exacerbated by COVID and the escalation of COVID. I think what we need to see is a tighter relationship between health systems and the delivery systems and the public health infrastructure. I think that the public health infrastructure is challenged to be able to manage some of the complex issues that we see in today’s world. And we see the systems being very fragmented with the public health system working in one angle, federally qualified health centers working in another area, health systems in another and I think there needs to be a more unified agenda to move in that direction. Ochsner made a commitment back in the November timeframe to work to move Louisiana, which has historically been 49th and 50th in health status, to 40th over the next decade. And we’re investing initially over the first five years $100 million to do that in new clinics and a Center for Health Equity with Xavier University of New Orleans, and really trying to put money into the healthcare worker pipeline to create more healthcare workers in the region. But it’s going to take a unified effort of public health, of insurers, the government, of the providers, and the large health systems, I think, to step up to make large progress in that area.

Gary Bisbee 20:53
Turning to digitalization and scientific innovation for a moment. Last decade, we saw the HITECH Act, of course, which in effect, digitized medical care. We’ve seen an explosion of scientific innovation, whether it’s the high-end drugs that eradicate certain types of diseases or a variety of other genetic uses and so on. How do you think that will affect the delivery system this decade?

Warner Thomas 21:23
I think that’s the next big frontier for traditional health systems. How do we move from being reactive, fee for service, that we take care of people when they want to come to us or need to come to us to being predictive. Over the last decade-plus, we’ve digitized a lot of data and I think electronic medical records have been a very positive thing in some ways. But the reality is, digitizing the data is probably only about 10% of the value. Now the question is, what do you do with that data to take better care of patients? How are you more predictive of what’s happening, predicting readmissions, predicting hypertension prior to it happening, managing hypertension in a digital way versus the traditional way of folks coming to our clinic. So I think putting data to use and putting it to use to drive a more improved clinical experience and agenda has to be a major priority in the future. And also to move to make electronic medical records easier to use. I mean, it is a challenge for many physicians. It takes a lot of time. Hopefully, over time voice recognition will modify that and we’ll see easier use from medical records. But that is a challenge with physician burnout and whatnot today is the electronic medical record and the time associated with that. But I do think that’s continuing to improve and will improve in the future.

Gary Bisbee 22:48
Warner, this has been a terrific interview covering the waterfront of those things that CEOs are concerned with. I’d like to ask one last question if I could, and that involves leadership. You’ve been in a crisis situation one way or another for the last year. Of course, you went through Katrina and have gone through other hurricanes so to some degree you’re, can I dare say, used to this. But how do you think about leadership in a crisis? What are the most important characteristics?

Warner Thomas 23:19
The key thing, first of all, is to take care of yourself. You’ve got to be able to have a sound mind and body and be focused and driven. And you can’t be in that mode if you’re not taking care of yourself. So I think that’s job one. I think job two is all about a team. You have to work as a team. You have to rely on your people. And high levels of trust are really important to work through these challenging times. I have a high level of trust on my team and that allows us, I believe, to deal with a lot of adversity and to deal with a lot of challenges very effectively because we trust each other, we can each run in our own direction, and come back and work together on major issues as well. So I do think that piece is really important. And you don’t build trust once you get into a disaster or into a pandemic. I mean, that has to be built every day, every year, and I think that’s an important bedrock of executive relationships and of executive team relationships. And then finally, I think just communication and leading with optimism. I think it was a line and Bob Iger’s book that said, “Nobody wants to work for a pessimist.” And you’ve got to be realistic, but you’ve got to be optimistic at the same time. That line in that book stuck with me and I think it’s a great way to have an outlook that, we are in a pandemic, it’s a very difficult time for health systems. We’re going to get on the other side of this. And people need to know that as the CEOs and as leaders that we can see that there is a brighter light at the end of the tunnel and we can help people get through those dark days and you do that through leading with optimism, not pessimism. And it’s really, I think, been helpful for our organization.

Gary Bisbee 25:03
Warner, thanks so much. Terrific interview. And it’s safe to say that the people at Ochsner aren’t working for pessimists so good stuff.

Warner Thomas 25:12
Thanks, Gary. I appreciate the opportunity and I look forward to speaking to you again soon.

Gary Bisbee 25:17
Fireside Chat with Gary Bisbee is a Health Management Academy podcast produced by Think Medium. 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’ve found that podcasts are known through word of mouth and 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 strategies of leading health systems through conversations with CEOs and other interesting leaders. For questions and suggestions about Fireside Chat contact me through our website firesidechatpodcast.com or gary@thinkmedium.com Thanks for listening.