Interview with Scott E. Armstrong, FACHE, president and Chief Executive Officer, Group Health Cooperative.
Article Type: Interview
Subject: Health care industry (Officials and employees)
Chief executive officers
Author: O'Connor
Pub Date: 01/01/2012
Publication: Name: Journal of Healthcare Management Publisher: American College of Healthcare Executives Audience: Trade Format: Magazine/Journal Subject: Business; Health care industry Copyright: COPYRIGHT 2012 American College of Healthcare Executives ISSN: 1096-9012
Issue: Date: Jan-Feb, 2012 Source Volume: 57 Source Issue: 1
Topic: Event Code: 540 Executive changes & profiles Computer Subject: Health care industry
Product: SIC Code: 8000 HEALTH SERVICES
Organization: Organization: Group Health Cooperative
Persons: Named Person: Armstrong, Scott E.
Geographic: Geographic Scope: United States Geographic Code: 1USA United States
Accession Number: 279261875
Full Text: Scott E. Armstrong, FACHE, is president and CEO of Group Health Cooperative, one of the largest consumer-governed healthcare systems in the United States, with nearly 700,000 enrollees. He has been with Croup Health since 1986. Prior to this, he served as assistant vice president for hospital operations at Miami Valley Hospital in Dayton, Ohio.

Mr. Armstrong is a commissioner on the Medicare Payment Advisory Commission, board chair of the Alliance of Community Health Plans, and a board member of America's Health Insurance Plans and the Pacific Science Center. He is a Fellow of the American College of Healthcare Executives and was named by Modern Healthcare magazine as one of the 100 Most Influential People in Healthcare in 2010 and 2011.

Mr. Armstrong earned his bachelor's degree from Hamilton College in New York and his master's degree in business with a concentration in hospital administration from the University of Wisconsin-Madison.

Dr. O'Connor: Tell us about Group Health Cooperative (GHC). How did it begin ? What characteristics and guiding principles distinguish it from other types of healthcare organizations ?

Mr. Armstrong: Group Health was founded 65 years ago when a cooperative movement was taking place in this country. It was inspired by a gathering of community leaders here in Seattle. Many people considered the healthcare cooperative movement radical. The community leaders here in Seattle who started Group Health were called socialists and "commies" but carried on with their work. They felt that there had to be a better way of providing healthcare--investing in salaried doctors who cared for patients on a prepaid basis, which would allow doctors to focus on the overall health of the population of patients over time, rather than seeing patients who paid on a per-visit, per-illness, or per-treatment basis. Frankly, it was a brilliant idea.

The consumer governance component of the cooperative endures as a strong principle, despite how we have modernized over time. Our 11-member board of trustees is elected by our membership. That board is my boss. In addition to performing traditional duties such as setting highest-level strategic direction and hiring the CEO, the board reviews our premium levels and ensures that we build benefits and innovate our care delivery to reduce service overuse, lower expenses, and improve quality. As you can imagine, my leadership team and I are extraordinarily accountable to our patients and members. Our structure creates a remarkable degree of accountability for the overall health of populations and ultimately focuses us on being more affordable over time by investing in better quality and care.

Our original principles concerning salaried doctors and prepayment have evolved to become contemporary issues. I've joked about the fact that back in 1947, our founders built an accountable care organization. Many people ask, "What is an accountable care organization? What does one look like? How do you define it?" I say, look at Group Health and you have a pretty good answer. We have an opportunity to innovate with our care delivery system, invest in great primary care, and ensure clinical decision making that fits us perfectly because of our payment structure and the fact that we are freed from a fee-for-service payment mechanism.

Dr. O'Connor: Can any Group Health enrollee become a governing board member?

Mr. Armstrong: To be a board member, you have to be an enrollee and a registered voting member. Enrollees can register online. We have nearly 700,000 enrolled lives, but only about 45,000 have actually registered to be voting members. We intend to dramatically expand the number of voting members over the next few years. There is so much talk these days about engaging patients more deeply and getting them to understand the health implications of their choices and to own more responsibility for their health. We think that as our enrollees register as voting members, they are more attentive to their healthcare system and just a little bit more engaged.

Dr. O'Connor: Why is it that the Seattle area seems to be so innovative in healthcare delivery?

Mr. Armstrong: I think there is a combination of factors. One is the culture of the Pacific Northwest. We have Scandinavian roots that value collaboration for the common good. Another factor, to be frank, is that Group Health has had a real influence. People admire and envy what we've been able to do. In the last few years more organizations, particularly those who are close to Group Health, recognize that our model has many features of healthcare's future. This is also the place that gave birth to Nordstrom, Amazon, Microsoft, and Starbucks, organizations that twisted traditional models in innovative ways because they understand what customers are really looking for. Selling books online, for example, was initially considered a weird idea. But today Amazon can tell you what you want before you know what you want. Something embedded in the culture of the Pacific Northwest stimulates this kind of innovation.

Dr. O'Connor: Describe the accountability that patients and members bring to GHC. What special opportunities and challenges do they present to the organization ?

Mr. Armstrong: Over the past five years we have been refining our system to encourage our patients to play a more active, engaged role in their care. Our consumer governance structure as a cooperative certainly sets the tone for an engaged patient. Beyond this, we are pushing the use of shared decision-making protocols for many of our specialty procedures, inviting patients to have easy access to their medical records through their computers or smartphones, and organizing groups of patients with common chronic illnesses into a network to support one another. Of course this is all done knowing that a more engaged patient will likely be a healthier patient.

Our unique structure makes this kind of focus on patients natural for Group Health. First, we are a health plan: an insurance company. We are the third-largest in our market, with nearly 700,000 insured lives. Second, we are a large integrated care delivery system, with more than 1,200 doctors and 30 medical centers across the state of Washington. Third, we are a large employer. We have nearly 10,000 employees and spend more than $80 million annually on their medical benefits and services. Bringing this combination of perspectives--particularly the patient point of view--to this formula allows us to be an incredible laboratory for exploring how healthcare systems need to evolve. The nation can observe, learn, and imagine how our discoveries may apply to different markets. That is the brilliance of what our founders put together--and why my job is so complicated! But it is also why it is so gratifying to work here. We have created a space within this unique structure to boldly experiment. It has taught us a lot and given us real competitive advantages.

Dr. O'Connor: In your words, what is a medical home? Do you think medical homes will become a key strategic component for the future delivery of healthcare services ?

Mr. Armstrong: We have invested a lot in redefining primary care. We use the term medical home, but we are careful because it can be defined in so many different ways. For us, the primary care model is one that creates a close and trusted relationship with our patients. It is the conduit through which our patients get access to the resources they need from our healthcare system. The model is based on the idea that making it easy to access advice, consultation, and the clinical expertise of their primary care team will help members stay healthier over time. Better health is the best path to lower costs and better affordability.

We have invested in rich staffing schedules for our primary care doctors, pharmacists, nurses, and others and have dramatically increased the amount of time for standard appointments so that patients can really talk with their providers. Our clinical teams huddle daily and prepare for the day ahead. If a patient is scheduled for a sports physical, that time is also used to take care of a variety of additional preventive needs or other things the patient wants. We try to maximize what we give to patients in every contact that we have with them, whether that contact is face to face or virtual.

Coming into an exam room when they only have a very brief or simple question is a hassle for patients, so at many of our practices, most doctors' visits are actually e-mail and telephone consultations. For example, most of my personal healthcare now is done by secure e-mail with my doctor. Patients love this kind of communication, and our providers love it too. E-mail and phone consultations allow for high-quality, speedy service. Unfortunately, few care delivery systems are set up for this kind of care, but it is what our primary care medical home is designed to do.

Dr. O'Connor: How do you define patient-centered care? What behaviors indicate that providers are engaging in patient-centered care?

Mr. Armstrong: As leaders in the industry, many of us design care delivery systems and medical benefit structures. We have endless opportunities for those designs to focus on individual patient needs and on engaging and connecting with patients. For example, when we implemented our electronic medical record ten years ago we designed it first to be easy for patients to access, so that they could know their information and more easily take responsibility for improving their health. From any computer in the world, our patients have been able to access their clinical information, e-mail their doctors, review lab results and radiology films, and schedule appointments. We did what very few organizations had done because we saw electronic medical records as part of our version of patient-centered care.

This focus also influences our health plan designs. It is common for health plans to create web-based health risk assessment tools that provide patients with a risk score to help them build a plan of action for improving their health. We, too, make these risk assessment tools available to our patients. However, our tool is unique in that it is connected to patients' clinical records. The assessment tool automatically pulls patients' cholesterol levels, height, weight, BMI, blood pressure, and other results from the clinical record. Patients cannot lie, and it forces them to put a plan together. When completed, the patient's plan for improving his health is pulled back into the clinical record. As a result, every time the patient speaks with the consulting nurse or sees the doctor, he is being asked not only about his sore throat or shoulder pain, for example, but also about his interest in losing 20 pounds through diet change and exercise. The clinician can talk to patients about their plans, encourage them, and ultimately help them achieve their health goals.

Dr. O'Connor: As many healthcare organizations seek to implement patient-centered care, what challenges emerge as patient involvement, responsibility, and decision making becomes more commonplace?

Mr. Armstrong: In our specialty practices, a dozen or so procedures are preference sensitive. For example, for most patients there is more than one way to appropriately treat a sore knee--surgery, physical therapy, cortisone shots. We have implemented a structured process in which our specialist--the orthopedic surgeon, in this case--and the patient sit down and have an informed conversation about treatment choices after the patient has reviewed videos that describe those choices. The outcomes may be comparable, but the impact on one's life and personal preferences could sway a person one way or the other. Surgeons naturally tend to steer patients toward surgery, but we are finding that when patients get involved, many of them who would have had surgery actually prefer not to have it. That is a great example of how we bring the patient into this process. Such care requires a system that is structured so that it doesn't hurt the orthopedic surgeons financially to not do surgery.

Is there a downside when patients are more informed or assertive? Patients show up in our clinics with printouts from websites and with access to a huge amount of information. We like that. We need to structure our time so that we can really talk to them about what they have learned and work with them to reach the smartest conclusions for their situation.

Dr. O'Connor: What topics and issues would you like to see addressed by authors in the Journal of Healthcare Management?

Mr. Armstrong: We are seeing a wave of consolidation across the country, for provider groups in particular. It feels a lot like the mid-1990s. But "scale" is not going to solve the industry's problems. Community and industry leaders need to hold our care delivery systems accountable for innovations and mergers that focus delivery systems on the overall health of populations of patients. Health outcomes and medical expense trends need to become the measures of success, and these must become what we pay for, rather than allowing us to continue to feed the fee-for-service dragon. I don't yet hear care delivery leaders saying the right things. JHM's authors should write more about what it will take to change our focus.

My point of view on this comes from experience at Group Health, but also through my role as a commissioner on the Medicare Payment Advisory Commission. Grassroots solutions are developing in different markets around the country, and they will also have to align with federal and state policy changes. The situation is complicated, but I am optimistic. More common sense solutions seem to be arising now than I have seen in a long time.
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