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Providence Health & Services
Swedish Health System | Seattle, WA
Kadlec Regional Medical Center | Richland, WA
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5 absolute truths Providence CEO Dr. Rod Hochman builds strategy upon

Rod Hochman, MD, is the president and CEO of Providence St. Joseph Health, a faith-based not-for-profit health and social services system.

Rod Hochman, MD, president and CEO of Providence Health & Services, asks the following question: "What are the things I know will be true?"

Dr. Hochman has led Providence as president and CEO since 2013. The system includes 34 hospitals across five states—Alaska, California, Oregon, Montana and Washington—along with roughly 475 physician clinics, 19 home health and hospice programs, 22 assisted living and long-term care facilities and 14 sites of supportive housing.

At the 6th Annual Becker's Hospital Review Meeting in Chicago May 7, Dr. Hochman said he thinks about health care as physics. Much like time, motion and space, there are many absolutes in health care.

He accepts there are only so many things he and Providence can influence in health care. As a result, he builds his strategies and understanding of the industry around the following truths.

  1. It's all about the consumer. There will be more change to medical care in the next three to five years than there has been in the last 100, said Dr. Hochman. The rheumatologist and internist began his remarks by noting the way total hip replacements were performed 20 years ago. The procedure then required a two-week stay in the hospital, he said. Today, patients can go home the same day with their new hip. Rather than strategizing under the assumption that patients will be in the hospital or facility, Dr. Hochman and his colleagues think about patients and consumers at home since so much of care is moving from inpatient to outpatient to the home. "As a physician, we've been very hospital- and physician-centric," he said. "Now it's all about the consumer, and if you don't think that, we're really going to miss the mark."
  2. So much of strategy is determined by what happens in different states, which are really micro health systems. "When you go from Alaska to Los Angeles, you are in the same country," said Dr. Hochman. "When people talk about U.S. health care, what they are missing is we actually have 50 different countries. The conversation in Alaska is so different from the conversation in Portland, Ore."
  3. Health care is going digital and it's not going back. The acceleration of technology in health care is unstoppable. Dr. Hochman said the last two holdouts to digitization were higher education and health care. To strengthen its digital presence, Providence hired 12 people from Amazon, including one professional who developed the Kindle. The new hires were met with two charges: Create a digital platform and make it happen fast. In the end, it took 41 days.

    Seeing the way Amazon thinks and innovates has left an impression on leaders at Providence. "What's the first thing we have to do with a new project? You have to write the press release for the end of it before you start," said Dr. Hochman. Overall, he said leaders can change the culture of innovation in their organizations by changing the people. "Bring new people in," he said. "Think you can be able to do it."

    Hospitals also have a number of new threats looking them square in the eye. Dr. Hochman insisted leaders be comfortable disrupting their own organizations. Providence attended the Health Evolution Summit with hundreds of technology companies "that want to take away our business," he said. "If you aren't looking at how to disrupt your own business, you're not going to make it in health care."
  4. There will never be more physicians and nurses than there are today, and health care professionals will never be paid more than they are today. "You better figure out how to design health care for people other than physicians and nurses," he said. Health care reimbursement is not going to increase, either. "If you think someone will write out a big check for us somewhere else, you're kidding."
  5. The term "population health" makes the concept sound more avant-garde than it is. "I hate the term," said Dr. Hochman. "When people talk to me about population health, we've been at it for 30 years. It's not really new to us; we're just changing the direction we're going."

Thirty years is exactly right. Providence Health Plans dates back to 1985, when the Sisters of Providence sponsored their first HMO, The Good Health Plan of Oregon. More recently, the system launched its Medicare accountable care organization, Health Connect Partners, in 2013 in collaboration with Swedish Health System. (Dr. Hochman led Swedish as president and CEO for five years before coming to Providence.)

A year later, Providence struck a preferred partnership agreement with Boeing, one of the largest employers in Washington state, to provide health care to its 81,000 employees at an affordable price. Dr. Hochman said contracts like this hold health care providers up to a new level of scrutiny and expectations, as employers will expect health systems to accommodate employees for next-day visits, customized portals, data sharing and other convenient means of service.

Dr. Hochman summarized the goal of "population health" quite succinctly: "I need to create the end of patients needing to see us."

Categories: CEO Insights