Mercy’s Dave Vellinga steps up, not down
Part of the hospital leader’s new duties: lowering health-care costs
Friday, February 22, 2013 7:00 AM
To really grasp all of Dave Vellinga’s roles, it’s wise to consult an organizational chart. But here’s a quick summary.
For the past 15 years, Vellinga has not only led Mercy Medical Center - Des Moines as its president and CEO; he has also guided the creation of Mercy Health Network and has served as its CEO for nearly 14 years.
As CEO of Mercy Health Network, he leads 11 Mercy medical centers in Iowa, along with a network of 28 affiliated rural hospitals in Iowa, Illinois and Nebraska, and 145 physician clinics. He is also part of the executive teams of the two national health-care groups that jointly sponsor Mercy Health Network: Catholic Health Initiatives based in Englewood, Colo., and Trinity Health, based in Livonia, Mich.
He will step down from his role as the Des Moines’ hospital’s president after his successor is named in the coming weeks; he remains CEO of Mercy - Des Moines and each of the 10 other hospitals in the network. Vellinga last year also became the chairman of the board of the newly formed University of Iowa Health Alliance, a collaboration of Mercy Health Network, Mercy Health Care in Cedar Rapids, Genesis Health System based in Davenport and University of Iowa Health Care.
The alliance’s key goal is to help Iowa’s hospital systems collaborate so they can improve and standardize health-care quality, lower costs, and increase patient satisfaction, Vellinga said.
The Business Record recently sat down with Vellinga to learn more about his new roles and the significance of these changes.
You’ve worn several hats for years; you must be pretty comfortable with multiple roles.
It’s been a natural progression over the last 15 years. As other Mercy hospitals in Mason City, Sioux City, Dubuque and Clinton and their affiliated hospitals began working together more with Mercy - Des Moines, I assumed that player-coach role. I was the CEO of Mercy - Des Moines, but also the CEO of Mercy Health Network. Then I assumed responsibilities as senior vice president for Catholic Health Initiatives and became the president and CEO of the Trinity Health - Iowa Hospitals. So I assumed, over time, about five different roles and responsibilities within the state of Iowa. With health-care reform, those regional responsibilities became more important, and it became obvious that we needed to have dedicated leadership in both (the president and CEO) roles.
How did Mercy Health Network evolve?
Initially, the two national organizations that owned and operated the hospitals in Iowa - Trinity Health and Catholic Health Initiatives – said that in Iowa, it makes sense for us to work together. So 15 years ago, we developed the joint operating agreement that created Mercy Health Network. Over time, a significant culture developed, a very collaborative culture where we worked together on almost everything. And over time, the CEOs of those community hospitals eventually reported to me. Then, the next evolution that has occurred over the past two or three years with health-care reform and accountable care was the need for all of these organizations to not just collaborate, but to create systems of care to improve quality, reduce costs and improve the patient experience.
What was the incentive for creating this larger alliance, the University of Iowa Health Alliance?
The goals of the alliance are to do three things: improve quality, improve the patient experience and reduce costs. By getting greater scale, we can get greater skills. The idea is that right now, Mercy Health Network does things their way; Genesis does things their way; Mercy - Cedar Rapids does things their way and University of Iowa Hospitals does things their way. Patients oftentimes navigate through all of that. What we know from our work is that if there is a best practice for doing procedure A, B or C, or even support service A, B or C, we should standardize those. This allows us to identify evidence-based best practices that we can implement on a consistent basis across all these organizations – on a clinical basis, an administrative basis and on a financial basis. That then allows us to achieve these three goals of quality enhancement, patient experience improvement and reduction of costs.
Will patients see noticeable effects right away from the alliance?
I think some patients will see it immediately. For example, in cardiology, this allows us to have doctors in Mason City, Des Moines and Iowa City understand how they’re going to treat a cardiac patient. If my dad, who lives in Orange City, needs a cardiologist, he’ll go to Sioux City. If that cardiologist needs (to refer him for) cardiac surgery, he would come to Des Moines. If he would need a cardiac transplant, he would come to University of Iowa. ... (The alliance) allows those doctors to get together for the first time to say, “What is the best way to treat a patient who has heart disease, and how are we going to treat him in a consistent way?”
What’s happening to standardize care nationally?
What’s happening at both Catholic Health Initiatives and Trinity Health, key service lines such as cardiology, cancer and orthopedics are being identified. For instance, our cardiologists in Des Moines and Mercy Health Network now participate in a cardiac service line at the Catholic Health Initiatives level, so if there is an identified best practice, that best practice can be done in all of our hospitals. ... So rather than having to start from scratch, they can draw from national resources. Another major step is that the alliance has agreed to adopt the Common Data Warehouse and Registry. With the registry, patients will not be identified, but we’ll know what the cost and quality indicator levels are at each hospital. So for the first time ever, we’ll be able to look at data to help us all migrate to the best metric.
With health-care reform, do you anticipate a need for a lot more providers?
We do. We think there will be a significant shortage of physicians, particularly primary care physicians, within the state of Iowa. There will be more Medicare patients because our Baby Boomers are rolling into that category. Second, health-care reform is going to allow currently uninsured patients to have insurance; we want to and should increase their access to primary care - which should increase the demand.
The counter to that on the hospital side is that there already are incentives in place to decrease high-cost utilization. What we want to have happen is that the patients in the hospitals are truly the very ill patients, and that there are alternatives for caring for ill patients outside the acute-care setting in a more efficient, high-quality fashion.
What are hospitals doing to try to help ease the pain of higher health-care premiums?
It’s not just legislative and government reform; businesses are also saying: “We can’t tolerate these premium and cost increases.” So that pressure by government and businesses - and a recognition by doctors and hospitals that the current (fee-for-service) system is just an incentive to do the wrong thing - we will now see more and more hospitals and doctors working together on how to assume risks with insurance companies. I personally believe that the more integrated that can be, the better off our organizations will be, the better off our patients will be, and costs will diminish.
What are you looking forward to most in your new roles?
For me, the opportunity to collaborate with other organizations to achieve these goals and to meet patients’ and payers’ needs - and those payers are businesses providing great benefits to their employees in the most cost-effective fashion possible. If they can’t do that, then products on the exchanges will allow individuals to have access to high-quality care at the lowest cost possible. I think for the first time in 35 years doing this work, it’s the opportunity to intersect mission and strategy with our day-to-day tactics. That’s what excites me: the true opportunity to get to the point where mission and tactics actually merge and we can do what we’ve said we’ve always wanted to do.
How well will hospital systems like Mercy financially weather health reform?
I think the transition makes it more difficult, because we’re living in two worlds; we’re in a fee-for-service world, knowing we’ve got to move to a fee-for-value world. We’ve got to invest in new infrastructure for this new world, while living in the old world. That three- to five-year period is going to be traumatic, in the sense of making these changes while still getting paid in this old system. So these next few years will be particularly challenging financially. The good news is that’s why it’s so good to have strong, large organizations that have strong balance sheets.
What’s on your agenda as far as personal goals?
What’s caused me some angst is that I’ve been a CEO of hospitals in the state of Iowa for 30-plus years ... My challenge and what I’ll focus on is how do I make sure I don’t lose touch with the doctors and nurses who actually do the work on a day-to-day basis. When you’re officed here in the biggest hospital in the state, you get that engagement every day. I’m concerned I won’t have that. My goal is to stay in touch with how people do their work on a day-to-day basis.