The Value-Based Healthcare Podcast - Episode 23: How to Address the Core Challenges to Fix Healthcare: A Conversation with Dr. Ron Paulus

Introduction:
Welcome to Reveleer Value-Based Healthcare Podcast. In every episode, we discuss healthcare technology, innovation, and current events, presenting interviews with the thought leaders from a variety of disciplines of healthcare. Don't miss any episode by subscribing to the series via reveleer.com. And now here's our host, Jay Ackerman, introducing today's guest.

Jay Ackerman:
Today. I'm excited to be joined by Dr. Ronald Paulus. Dr. Ronald Paulus is president and CEO of RAPMD Strategic Advisors providing advisory services to health systems, boards, CEOs, technology companies, and others. He's the immediate past president and CEO of Mission Health, a $2 billion integrated health system serving all of Western North Carolina. Before joining Mission Health, Dr. Paulus was executive vice president, clinical operations and chief innovation officer for Geisinger Health System where he managed Geisinger's hospitals and it's more than 800 physician member group practice. Was also responsible for ensuring system-wide innovation. Dr. Paulus received his MD degree from the School of Medicine, University of Pennsylvania and his MBA, concentration in healthcare management and BSM economics from the Wharton School University of Pennsylvania. I guess you'd probably never thought you were going to leave UPenn.

Dr. Ronald Paulus:
I call it the lifetime tuition plan.

Jay Ackerman:
Yeah. Well welcome Dr. Paulus. I'm glad to have you with us today.

Dr. Ronald Paulus:
Yeah. Call me Ron.

Jay Ackerman:
All right, Ron. So let's dive in. Why don't we talk a little bit about yourself in your healthcare journey?

Dr. Ronald Paulus:
Yeah, so it's kind of a crazy story. Born into a village of 35 people in central Pennsylvania. I lived with my brother and sister and mom and dad and grandparents in a house that didn't have complete indoor plumbing. And then my mom and dad moved to the quote big city of 10,000 and it's been an interesting journey. My brother who's five years older was the first in our family to go to college. And then you can see we've all been overcompensating ever since. And so I became interested in medicine as a kid when... I broke my leg in fourth grade, my tibia, the big shinbone. I went to the doctor and the whole thing was just like so cool in terms of fixing the problem and finding it and all the equipment and all that. So that's what initially led me to medicine.

And then when I got to Penn as an undergraduate, I became exposed to and enamored by a lot of economic and health policy issues. So that's what led to that whole University of Pennsylvania saga.

Jay Ackerman:
And then what brought you to Geisinger and then Geisinger to Mission Health?

Dr. Ronald Paulus:
Prior to Geisinger I had co-founded a predictive analytics company that spun out of Penn. Yeah, another Penn tie. That was a 12 year journey of startup venture, IPO, sold the company. And after that experience, I wanted to get back closer to where care was being delivered and Geisinger at that time was doing some really interesting things. And I had the privilege of serving there with Glenn Steele, who was the CEO at the time, Howard Grant, who was the CMO, Rick DeFellin who was the head of the health plan. Glenn really fave me, we can cut to this chief innovation officer title to allow me to create trouble anywhere I wanted to. And so a lot of that early work was around creating bundled payment models and the proven health navigator, medical home model and so forth and so on. And it was just spectacular.

But about four and a half years into that journey, I had made a blood pact with my wife never to move the kids during high school. And so Glenn had extended his CEO role for another five years, more power to him, he certainly deserved it and was the right guy. But that created a dilemma for me. And so I opened myself to recruitment options and ended up being recruited down to Mission Health where I saw an opportunity to apply a lot of the work that I had engaged in at Geisinger, but in a fundamentally different locale.

Jay Ackerman:
That's fabulous. Thanks for sharing the background. Let's talk a little bit about the last 10 months. What have you learned about operating in this pandemic and in this kind of stay at home, maybe for you and the people you work closely with?

Dr. Ronald Paulus:
Yeah. Well, the first thing I learned, which is something I try to remind myself every day is just how incredibly blessed I am to be in a role in a system where I can do my work virtually. And we know that so many people can't and I still feel guilty in part of not being on the frontline in a caregiver role and so honored to know how those folks are out there delivering on what our nation's needs are. But I also learned how resilient the team that I work with is. It's just amazing to me how everyone rallied and stayed on point, despite all the chaos. As you know, I'm an executive in residence with General Catalyst, the private equity firm, and that team of people has just been so incredible throughout this pandemic. I closed one of my first major deals with a company called Olive right in the middle of the chaos in late March, April. And I have another colleague from GC who was on the board of Moderna with one of the two approved vaccines.

So it's just amazing how adaptable, resilient, and creative all the portfolio companies have been. And then two other quick things. One, how much travel that I did was probably not really necessary. And the fact that my wife and I could spend a lot more time together without killing one another.

Jay Ackerman:
Yeah, I think there are many people that are going through both of those learnings.

Dr. Ronald Paulus:
And she gets all the credit because I've never wanted to kill her.

Jay Ackerman:
Wonderful. Ron, let's talk about the change that's unfolding in this industry that we love called healthcare. What are the greatest challenges that you see that you continuously encounter in healthcare?

Dr. Ronald Paulus:
Yeah, I think the first two for me are the inequities in accessing care based upon geography and socioeconomic status. It's been around since the beginning of time, but those challenges remain and a tremendous amount of work to do. Second as it relates not just to the pandemic, but before the pandemic, it's the challenges our frontline clinicians and caregivers are facing. Even before the pandemic, problems with burnout and compassion, fatigue and then you layer on top of that, this risk of being infected, taking it home to your loved ones in an area that's sort of caught a lot of my attention and passion, which is around this tragedy of workplace violence in healthcare. The overwhelming majority of workplace violence events in all of the United States industries occurred in healthcare.

Almost 80%. 80% of nurses have been assaulted at some point during their career and sadly and tragically often view it as just part of the job. So those things are baseline Maslow's hierarchy. Am I safe? Am I in a place that I can do what I need to do? Also the resistance to change, particularly as it relates to cost and quality. This has been a long journey and I found that humans have an incredible capacity to focus on what's wrong with the new idea while completely ignoring what's wrong with the current state. It's just sort of a cognitive dissonance that is remarkable. And then lastly, I think it's the challenge for payers and providers to work together when the only way there's ever going to be a real transformational solutions is if financing and delivery come together and that's not only going to happen with vertical integration.

Jay Ackerman:
If you don't mind, let's double click on a couple of those. Maybe we'll start with the last one first, the payer providers working together. Do you see a silver lining in how COVID has shaken up healthcare? Do you think that'll drive payers and providers closer together?

Dr. Ronald Paulus:
Yeah, I hope so. When I was at Geisinger where we had a health plan and a delivery system and we were not hermetically sealed like Kaiser, where it's full a hundred percent vertical integration. So about a third of the patients were both provided an insurance and the care and what was remarkable was what we could do in what we called that sweet spot. We could change the incentives and care models. We were doing virtual care back then in an innovative way. The pandemic opened that up so that everybody is now exposed to virtual care, which I think is one of the lasting good things about the pandemic. But without the ability to manipulate those payment incentives, it's just incredibly hard to get people to do the right thing without undermining and destroying their core business. Right.

So that's one of the biggest friction points and Kevin Volpe, another Penn guy, had a call for a new reimbursement paradigm recently in an article that laid out some of the challenges around this. So I am hopeful that the pandemic will open up both providers and payers to new things. I don't know how much I should bet on it.

Jay Ackerman:
Yeah. And maybe the point right before that about the resistance to change and what's wrong with a new idea versus what's wrong with the status quo, how do you see that changing and evolving? Do you see anything going on in the industry that will accelerate the willingness for payers to drive change, for providers to drive change, and even for the individual members seeking care to drive change?

Dr. Ronald Paulus:
I think there's three things there. Number one, and although I must admit, I've been talking about this and others have been talking about this since I was an undergraduate many, many, many years ago, taking my first healthcare systems course literally called Healthcare 001 and the professor at the time, Bernie Boone, was talking about how healthcare is almost 8% of GDP and if it rises, it's going to hit 10% and all hell's going to break loose. Well, we're almost at 20. But I do think that pressure, particularly on federal and state governments with Medicaid now being the largest expenditure for most states beyond education and so forth and employers, having it be such a big... That pressure is still building and that's going to be one force.

The second force is consumerization. I think consumers as baby boomers and millennials and so forth, keep continuing to flow through, they have different expectations than people have had in the past. And I think there's going to be a lot of pressure to put the consumer at the center.

And then thirdly, in my private equity work, startup companies are not waiting for change to happen from within. They are innovating from without and they're forcing change. And I think those three things is going to either wreak havoc on existing incumbents or force them out of the comfort zone into a much more radical change model.

Jay Ackerman:
That's a perfect segue to my next question, which is, what innovation do you see emerging in healthcare right now that you're most excited about? And I imagine you get to see a lot in the seat you sit in at General Catalyst.

Dr. Ronald Paulus:
Yeah. I mean, it's a blessing, I'll tell you that. And there are three areas that I think have the biggest opportunity for health care right now. The first is AI and automation. I think, although there's been a lot of overblown hype, I do believe that AI is going to have a transformational impact. The machine learning capabilities that are evolving as designed largely to assist humans, I believe is going to be the biggest impact and automation that goes along with that. Right now, every day, companies like Olive and others are automating tasks that humans used to do. And they were frankly dull and drudgery and error prone, and so forth, freeing up time and space to do other things and to frankly, have a better economic outcome for themselves.

The second is around the merging of biology and informatics. I'm also on the board of a company called Carious that does for infectious disease, what liquid biopsies do for oncology. So, it takes a sample of blood. It extracts all of the human DNA and amplifies the remaining DNA, which is the pathogenic DNA. But that's not enough. It then runs those DNA snips against an AI database of known pathogens and then produces, this is what the infection is. And that's just the tip of the iceberg on this intersection between biology and informatics.

And the third is around the ability to manipulate the genome. CRISPR technology and related technologies with editing DNA, not unlike what processor did to type writing. It's going to have changes that are just unfathomable. Ethically challenging in part, but are going to be just, I think, remarkably positive.

Jay Ackerman:
Thanks for sharing those three innovations that are unfolding. You've served in some interesting chairs and thus have a perspective that not many have. What advice might you have for health plan or health system executives in navigating the industry right now?

Dr. Ronald Paulus:
Yeah. So having just come up just over a year ago, coming out of navigating one of those roles, it's hard to give advice, but the things that I'll just say, how I thought about it was don't run from the most foundational problems. The ones that are super hard to solve. That's where you have to spend your time and recognize that it's a marathon, not a sprint and you've got to keep focusing on that every single day to talk about what those core problems are openly and thoughtfully, even when it makes people very uncomfortable. And that's a hard thing to do as a leader to make people uncomfortable all the time. But I think it's also one of our most important roles.

And then to think about how to remain laser focused on moving from treating sick people, to assuring people's health, wellbeing, and optimizing health over time. That puts the consumer right at the center and I think if you focus on how do you keep your team members safe and engaged and well, and how do you keep your constituents, whether you call them patients, consumers, whatever, safe, healthy, and well and address those core problems, I think you'll do well.

Jay Ackerman:
So continuing on that thread around keeping people well and working to keep them well versus treating the sickness, what recommendation would you have for the public or what do you think needs to happen for the public to take more ownership around the wellness?

Dr. Ronald Paulus:
Yeah, so that's a huge thing because let's think about what comprises our health status, right? 30% is what we're born with, our DNA, at least for now, until CRISPR edits it all out. And 20% at best is from the healthcare delivery system. And that remaining 50% is some combination of behavioral lifestyle choices and whatever we refer to as social determinants, your lived environment, your socioeconomic status, et cetera, et cetera. And then one of the most common diseases in the United States, obesity, diabetes, COPD, the so-called diseases of despair, suicide, et cetera, those are all behavior change issues. So focusing on behavior change at the consumer level, using a behavioral economics framework and so forth, is the key to what we can do to really fundamentally improve and maintain health and wellbeing.

At the societal level it's all about social determinants, right? But as a consumer and individual, it's essential that you, we each take control over who we are, what we do and get support externally because we're all frail and we're all subject to wanting to do the wrong things and so forth. It's not about judging. It's about understanding that we have control and must take control and then building the support, coaching behavioral, other expert infrastructure that we need.

Jay Ackerman:
Anything that you might add on how you see payers and providers playing a stronger hand around social determinants of health?

Dr. Ronald Paulus:
Yeah. I'm glad that health plans are allowed to spend money on social determinants now and that Medicare is moving in that direction as well. I think social determinants, yeah, that's not a marathon. That's an ultra marathon. Right. So, I think the issue is it's really got to be a collaboration between providers and payers and local, regional, state and federal governments, right? Because these are societal infrastructure components that we've gotten out of sort of the willingness to invest it. But I think if payers and providers can do tests of change to show impact, there's an opportunity that will be created for others to step in.

And one of the things for my Mission Health role, my role ended with a transaction that created the largest per capita foundation ever formed in America, The Dogwood Health Trust, that is dedicated exclusively to social determinants that occurred when ACA acquired Mission Health. And that was exactly because the board knew that if it wanted to fundamentally change the health status, not just the care delivery of the citizens of Western North Carolina, it had to have the funding to invest in social determinants and they decided that they wanted to go out and get it. So they now have plus or minus $2 billion for not a hundred thousand people. It's going to be one of the largest social experiments ever made in healthcare in America.

Jay Ackerman:
Is there any place that you can highlight on this podcast where people could go to understand more about that and follow the progress unfold?

Dr. Ronald Paulus:
Yeah. So I would go to Dogwoodhealthtrust.org. Go to the website and see what they're doing and follow them over time. Remember, you're not going to see change in weeks or months. It's decades.

Jay Ackerman:
Yeah. No, as you put it, the ultra marathon, for sure. Yeah. Fantastic. Well, on that note, Ron, we'll bring it to a close. I've really enjoyed the dialogue today.

Dr. Ronald Paulus:
Likewise.

Jay Ackerman:
[crosstalk 00:19:09] I let you off the hook and let you get on with, I'm sure, what is a very busy agenda. Let's wrap with four quick questions. So, what keeps you up at night?

Dr. Ronald Paulus:
This election. I still have teenagers and time. We have to change this system collectively and it's just... There's never enough time.

Jay Ackerman:
So when you are a bit restless and yeah, like you, I think that election is a... I woke up this morning, probably more anxious than I've been in a long time around it. What book might you grab from your nightstand and why are you reading it?

Dr. Ronald Paulus:
What I read at night, I usually read online even though I'm not supposed to be. And this will probably sound crazy, but I love reading about physics, particularly anything that involves the Schrödinger's cat experiment and believe it or not, there's actually quite a number of things going on there that relate to that experiment.

Jay Ackerman:
I'll have to check that one out myself. All right. So next step. How do you invest in yourself?

Dr. Ronald Paulus:
For me? Exercise, exercise, exercise. It's when I get to free associate, solve problems, distress. That's what I do.

Jay Ackerman:
How'd you change your exercise rhythm through the pandemic?

Dr. Ronald Paulus:
I moved to Santa Monica so I could be outside on the beach.

Jay Ackerman:
Well played, well played. All right, last one. And then we'll wrap it up. What's the most creative thing you've done during your stay at home period?

Dr. Ronald Paulus:
I completely remodeled a home 2,500 miles away so I could run on the beach.

Jay Ackerman:
All right. Well with that, we'll wrap today's Value Based Healthcare Podcast. Ron, you've a great guest. Thank you for your time.

Dr. Ronald Paulus:
Thank you. I appreciate it.

Jay Ackerman:
Over and out.

Dr. Ronald Paulus:
Bye-bye.

Outro:
Thank you for listening to The Value-Based Healthcare Podcast. If you enjoyed this episode, don't forget to share it via LinkedIn, Facebook or Twitter. For more healthcare technology news and information, follow Reveleer on LinkedIn. We hope you join us next time.