The new CEO of MultiCare Health Systems has strung himself a tightrope.
Bill Robertson, who began work just six months ago, says his priority in the next five years is to make MultiCare “the place where the best people feel comfortable working.”
“I know that sounds soft, but if you do that well, a lot of other things are possible,” Robertson said in a recent interview. Robertson started work May 1, replacing Diane Cecchettini, who retired after 15 years as CEO.
Simultaneously, Robertson has started a three-year plan to cut $300 million from the nonprofit health system’s operating expenses – the largest cut the system has made in its history.
The thousands who work at MultiCare, Pierce County’s largest private employer, are nervous.
“It’s hard. No one wants to think about cost structure,” Robertson said. Changing to meet the demands of the future is “clearly in the best interest of our employees. If we’re not doing that, I can hear the story you’d write: Management didn’t do what it needed to do in the past, and now the organization is in trouble.
“It’s my responsibility to make this an organization that employees can have confidence in,” he said.
In his first six months on the job, Robertson has unveiled a new mission statement, started reorganizing the management structure, visited every MultiCare facility and taken 19,000 employees and their families to the Washington State Fair. He stood at the gate for hours and greeted employees.
The News Tribune interviewed Robertson in his office Oct. 29, as well as by phone Nov. 5 after learning more about the cost-cutting plan. Here is a Q and A, condensed and edited.
Q: Why are such large cuts necessary?
A: We see it as important to be part of the solution to reducing the cost of health care to the community we serve. If we don’t have a lower cost structure, it’s hard to be paid less for our services by Medicare, Medicaid and private insurers and still be viable.
Q: The health system has had healthy operating margins for years, and had a huge increase from 2011 to 2012. That doesn’t seem like MultiCare is in danger of becoming not viable any time soon. How do you explain cuts in this context?
A: I want us to be a vibrant organization with resources necessary to invest to what our community and patients need. It’s out of margin that we get to do the things that our community wants.
Q: Some examples?
A: We can rebuild Mary Bridge Children’s Hospital. You can’t do that out of a break-even organization. We built a new facility at Good Samaritan Hospital. We can reinvest in Auburn Medical Center and bring it up to the standard that the community desires. We can reinvest in new neonatal intensive care services so we have an amazing facility to take care of the most vulnerable. And it’s out of margin that we would enhance behavioral health services.
You are a good steward of resources when you create a margin. It’s very easy to lose it. It doesn’t take very much change in how we get paid, or mix of patients, or costs, for margins to evaporate. I’m into an ounce of prevention instead of a pound of cure.
Q: Will you take a pay cut?
A: No, I won’t. And we won’t be cutting anyone’s pay.
Q: Why make the cuts now?
A: The Affordable Care Act is influential. While the ACA is driving deep changes to the American health care system, I would suggest that the market is moving much faster than even the ACA demands.
Commercial insurance pays more than the cost of care, and Medicare and Medicaid pay less. Medicare is going to pay us what Medicare is going to pay us. So we’re looking to make sure that people who have health insurance don’t have to have as high a health insurance premium.
As we reduce our cost structure, we can charge insurance companies less, and they can pass that on to their members. That’s what we want to have happen. Then employers don’t have to pay so much, which helps the economy.
Q: How have employees reacted?
A: Any time there’s change it creates a sense of uncertainty. If we were doing nothing, people would feel uncertainty simply because the world is changing around us.
It’s been very public for two months. I’ve had several town halls. We are very up front.
Q: In late October you broke ground on a new hospital in Covington. How have you balanced plans for capital expenses like that in light of the cuts you’re planning to make?
A: We adjusted the plans for Covington. We made sure that the cost of the project will be something that doesn’t negatively impact that project. That community needs a hospital. But do we burden that community’s cost structure by spending too much, or just the right amount? So we made some adjustments. Not big things. Because once you spend capital costs, it’s there.
For example, instead of building all 58 beds at once, just 24 beds will be built and the rest will be shell space, to be added in the future.
Q: Do you plan to be personally involved with the area’s business leadership community?
A: I think that a health system, given the size and impact that we have, it’s important for me to be actively engaged. I did that when I was in Texas, Kansas City, and when I was in Maryland. And I will do that here.
Q: Why do you think it’s important?
A: Health care is part of the economy. It’s part of the social fabric of the community. We have a role to support what other people do. How do we work with the school systems? How do we work with colleges and universities? How to we work with other businesses? How do we work with economic development?
How do we have an educated workforce? In Maryland I was chair of the governor’s workforce investment board for six years. I served on the board for 12. That had health care in part of it, but also had construction and aeronautics and hotels and all of those types of things. I was chair of the Chamber in that region as well.
Q: The lack of mental health services is a pressing issue in both Pierce County and the state of Washington. What role do private health systems play in meeting that need?
A: We should have a continuum of health care services that allow people to access it at the level they need. That means outpatient, intensive outpatient, partial hospitalization and full hospitalization. That’s the continuum that should exist. Now what part MultiCare can play in that – we’re still deciding.
Twelve percent of our emergency room volumes have a behavioral health piece to it. We’re already doing it. We’re going to be enhancing what we do. We can do it in a way that’s viable, so it doesn’t have to be subsidized by other parts of the healthcare system.
Q: Tell me about a time you interacted with a health care system as just a patient, not someone used to running that system.
A: When I was 14, a wild throw of a ball made me partially blind in my right eye. So I have had that to deal with for 41 years. You learn to be a good patient. Be compliant. But be a knowledgeable patient.
I interact saying, ‘What are my options? What’s the best way to deal with those options?’ I think all of us owe it to ourselves to be in charge of our own health.
Q: You are a member of the Seventh-day Adventists, which among other things has a focus on health and wellness. How does your faith influence your work?
A: I see work in health care as a sacred trust. We are here, we have to be financially successful, but all of that should be focused on how to care best for the people we serve.