LEADERS IN HEALTHCARE: Banko Preparing for Healthcare Changes on Arkansas Medical News Inc.

LEADERS IN HEALTHCARE: Banko Preparing for Healthcare Changes

By: STEVE BRAWNER

Peter Banko, CEO of St. Vincent Health System, came to Little Rock in 2007 after serving as chief operating officer at CHRISTUS Spohn Health System in Corpus Christi, Texas. He grew up in New Jersey and attended Catholic schools from kindergarten through college at Notre Dame. At St. Vincent's, he has overseen the final stages of a $47 million renovation program and a $4 million increase in nurse salaries. Meanwhile, he has reduced the workforce and closed the geriatric psychiatric unit in order to save costs.

The 42-year-old married father of four sat down with Medical News of Arkansas in July.

What has surprised you most about the medical environment and culture here in Arkansas?

"I wouldn't say it's a surprise, but the medical community here is as strong as I've seen in the country. The level of training and sophistication of the physicians in and around Little Rock is amazing, and I don't think other people in the country, unless you've been here, realize that – that there's just a tremendous wealth of knowledge and resources that are here that aren't elsewhere. And I think on top of that, the physician community here is very supportive of hospitals and very supportive of quality care and improving the way things are done, and that's not always found elsewhere around the country – at least what my experience has been."

What benefits are involved with working for a Catholic-based hospital?

"It's an opportunity to express your faith at work. ... I think the sisters who founded us really came here to serve everybody, so not every healthcare organization is as accommodating or friendly to everyone in the community, and really our mission and our calling is that everybody is welcome at St. Vincent; you don't have to be Catholic to work here; you don't have to be Catholic to be a patient here; that everybody's welcome. But I think the part for me is, expressing my faith at work, and whether that's centering ourselves before our board meeting with prayer or it's that holistic approach to how we care for patients. Everybody provides medicine or surgery. I think we provide something different in that we try to look out for the whole person."

What challenges are there?

"Oh, it's an interesting time to be in healthcare right now. I think the economy has impacted hospitals and healthcare unlike any other time in history. Normally, hospitals are recession-proof. I think that's created some strains, and now on top of that, we're looking probably down the barrel of the greatest healthcare change since Medicare was passed in the mid-1960s. ..."

What are you hoping to see with national health reform?

"I was talking to someone who works in the healthcare system in England earlier this week, and he's worked in the United States as well, and he said the biggest thing (in England) is we view healthcare as a right, that's something that everybody has a right to access to, and that's how our system's structured. So I think we owe it to ourselves (in the United States) to make sure everybody's got coverage and insurance. … Everything else – the battle about how to tax or pay for this and whether there's a public plan or not, and whether there's a limit on physician self-referrals, I think is all on the peripheral. We need to really stay focused on making sure everybody's got care or coverage."

That's what you're hoping. What do you expect the healthcare landscape to look like five years from now?

"I think it's going to be dramatically different. I think we will see most people covered. I don't think we're going to see 100 percent. I think 95 percent is probably a safer bet, as President Obama has alluded to. I think we're going to see closer integration between hospitals and physicians working closer than we have in the past, and that's going to be a little bit forced upon us by the reimbursement system. I think the reimbursement system is going to change where it's going to more fully align incentives between doctors and hospitals. I think there's going to be more intense focus on quality and service and paying for it, and if providers are not providing a level of quality and service that is expected that the payment will not be there, which is how every other part of our economy works. I think increased transparency data on how physicians and hospitals perform is going to be available to everybody, so if you're having a knee replacement, you're going to know who's doing the best job and be able to make decisions based on that."

What are some of the hard choices that all hospitals are going to have to make during the next five to 10 years?

"I think all companies, including healthcare organizations, right now are dealing with what's the size of your workforce look like, and I think the recession, my perspective is, this one is different. In the past, people have lost their jobs, and the market's rebounded. I think we're going to see that people are going to lose their jobs, and those jobs aren't going to come back again, so I think the tough decisions I've had to make the last year are around what does the size of the organization look like and the scope of services look like to best prepare us for the future. So I think that's the toughest decision. I think as you listen to the debate in Washington, the payments in Arkansas are particularly low for healthcare ... and we're seeing in Washington, that's going to go down. So it's going to be, 'How do you deliver the highest quality, best service for a very little amount of money?' It's almost "the Wal-Mart effect." I think the government's looking at making healthcare look like Wal-Mart, and that's not a bad thing for me, but it's 'how do you deliver the highest quality, best service product at the lowest cost?' and that's something we haven't really been totally focused on in healthcare before."

Along those lines, what are some of the assumptions that hospitals will have to reexamine?

"I think being everything to everybody. We've got here in Little Rock two great competitors in UAMS and Baptist, and the reality for us is, whether we like to admit it or not, each of us has our strengths and each of us has our weaknesses. So as a community – and individual organizations – we're going to have to wrestle with, 'What do you focus resources in and can you make a weakness a strength, or do you let someone else pick that up?' We've made some decisions around ophthalmology or eye services there. We felt UAMS was the dominant player in the market and (providing) excellent service, and it made sense for us to lessen our resources in that area, and if patients are better served by going there and get better care, then that's the better thing for the community and better for St. Vincent's. ..."

Being a Catholic hospital, is there more pressure to provide charity care, especially during a recession, even though that brings you right to the brink of being in trouble?

"No, I don't think so. When the sisters came here in 1888, they didn't really worry about how things were going to get paid for. So we're here for everybody, and I think the conversation has never been about whether it brings us to the brink. The conversation always has been, 'Is there a better place for someone to seek care, or is there a more timely way to provide care?' So someone seeking care that doesn't have means in the ER, it's not the best place for them. So is there a clinic? We have volunteer physicians. We've got a clinic in the east neighborhood, and there are other free clinics in town. Is that a better place for care? And if you're delaying care to the point where you end up in an ICU, what could we have done to prevent that from happening? So more of the conversations at the board level and medical staff and the leadership level here are more around what's a better way to provide care than when it's in dire straits or in the ER than the level of charity care and putting us to the brink. ..."

St. Vincent has made some heavy investments – $4 million in nursing salaries, and $47 million in renovations. What led to those investments, and was it difficult to make them in the midst of this economy?

"The decision around the building really happened before I came, but we had an old emergency department and some older areas. I mean, this building was built in 1954, so we had some areas that hadn't caught up with the times. So really it was an investment in the future. But I also view it as an investment in midtown Little Rock. Midtown is changing its dynamic with some new malls and development, so it was important for St. Vincent to upgrade our building, but I think it was also a good catalyst for our community. Because in the end, we're one of the larger employers in the area, so when we do construction or invest in people, it has a direct payback for our community. The nursing piece was really for me, coming here in 2007. Our compensation to our nurses was not fair for the work that they were doing. We were not competitive with what other hospitals in the area were paying, and in the end, nursing is the backbone of every hospital. It's why patients come here. The nurse is at your side 24-7 and available to you, and there's probably no one else in the hospital that fills that role. So I felt it was a strategic investment in the people that drive quality and make our business successful. … We've seen lower turnover rates. Our vacancy rate in nursing went from 18 percent two years ago down to 2 percent today, so we're seeing people stay, commit, and want to be here. Despite the economy … that's a big return on investment for us, I feel."

You're 42. This is your first job as CEO. What lessons have you learned about leadership in the two years you've been here?

"Oh, that's a good question. This is a very lonely job, and that's a kind of cliche that the CEO's in a lonely seat, but at the three-month mark it whacked me in the head. I had a colleague that I worked with about 10 years ago who's a CEO now as well. He called me up at about the two-month mark and said, 'Lonely yet?' And I said, 'No, I don't believe that that's going to happen.' And about six weeks later, he said, 'Lonely yet?' and I said, 'Yeah.' (Laughs) You know, it's a tough job because everywhere else to this point in your career, you've got peers, and you've got peers in the organization down the hall or in the office next door that you can talk to about problems. The classic line I like from "Saving Private Ryan," when they're in the woods and they're talking about griping, and Tom Hanks says, 'You always gripe up and not down.' Well, when you're the CEO (laughs) ... there's no one to gripe to, so you're kind of alone in the sense that if you're having a bad day or problems, you either have to deal with it yourself or you have to have support mechanisms outside of the organization to deal with it. So I get the same frustrations that everybody else in the organization deals with daily, but I have to channel my concerns or frustrations … so I've built kind of a network outside of Arkansas of other CEOs that I can call up or they can call me up when they're having one of those frustrating times to reflect, help provide the resources. So I would say that was the biggest a-ha for me – was that being a CEO is a lonely position."

Tags:

Catholic-based hospital, hospital administration, hospital CEO, Little Rock hospitals, Peter Banko, St. Vincent Health System

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