Michael Covert, president and CEO of CHI St. Luke’s Health, speaks with William F. McKeon, executive vice president and chief strategy and operating officer of the Texas Medical Center, about the future of health care in Texas, achieving work-life balance and staying true to your roots.
Q | What led you to a career in health care?
A | As a young child in the early ’50s, I took care of my father when he had polio. This activity had a real impact on my life. Around the age of five or six, my brother and I would get on a bus with our dime each and go all the way down to the hospital. We weren’t allowed in the building as the communal settings were off limits to children. My father would wave to us from the hospital window, and then I would take my brother home. I was young and wanted to play afterwards, but my mother had to work. My job was to feed and bathe my brother, and eventually my father when he returned home. Due to these responsibilities, I learned to grow up very quickly. That early exposure to hospitals was an interesting point in time for me and has stayed with me for a good portion of my life.
When it came time to look at graduate schools, I’d already earned an undergraduate degree in business with another major in industrial psychology. I remember my father putting his arm around me and saying, ‘How do you intend to feed yourself?’ I said, ‘Dad, good point!’ At the time, my brother went on to pursue his medical degree, but I couldn’t afford it. I was working two jobs to support myself. I worked in the hospital as an orderly during the day and at the post office in the evenings while attending school the rest of the time.
In 1969, I was first introduced to health care administration by the medical director at Montefiore Hospital in New York. He said, ‘Have you ever thought about this field called hospital administration?’ At the time, I didn’t know what he was talking about. He continued by saying, ‘Well, you like health care. You’ve had an interest in the business side. You might want to look into it to see if you like it or not.’
So, I looked it up in the government’s occupational index and there were only seven or eight graduate programs in the United States and Canada. One of those was Washington University in St. Louis, where I’d actually gone to undergraduate school. I had been influenced by the dean at the time. His name was Carl Hill and he had come from Dartmouth. He said, ‘Michael, it’s an interesting field and we’ve not had any of our undergraduate students ever go to the graduate program in health care administration. You’d be the first and I’d love to serve as a reference for you.’
By that point, I had worked in a small hospital back in New York. I worked for a nun, and I still remember her name—Sister Mary Joseph Crowley. I used to refer to her as a triple threat because she had come out of the army, had been an OR nurse and was a nun. She was a very unique individual and really influenced my career. I got into the program and stayed at Wash U. As I was finishing up in 1971, a classmate and I came down to the Texas Medical Center to complete our fellowships. We were at Methodist Hospital and we both had opportunities to stay after it was over, but I chose to go to a different location. My classmate Larry Mathis [now retired CEO of Methodist] stayed. What makes this story even more interesting is that I went to Tulsa, Oklahoma, to work at Hillcrest Medical Center. I shared a suite with another strong, up-and-coming administrator. His name was Dan Wilford [now retired CEO of Memorial Hermann]. We were together for the next 10 years. Those are the pieces that got me started in my career.
I was then offered a job down the street from Hillcrest Medical Center at St. John Medical Center. The idea of Catholic health was interesting, but I didn’t think it was right to move to a competitor just down the street. The Mother Superior indicated that she was going to be stepping down and taking over as the leader for a hospital in Wichita called St. Francis. She asked if I would care to come work for her. Within 30 days, I joined her in Wichita and stayed for a number of years. Today, it’s called Via Christi Health System, but we had not combined all the Catholic hospitals at that point. From there, I was recruited to the Ohio State University hospital system and then ran an insurance company, which later became part of Cigna and New York Life. It gave me a different experience on the ‘other side of the street.’ I ultimately left, as I was interested in being back in the not-for- profit world. I didn’t like the fact that in our board meetings we only talked about stock values. We never really talked about the patients and families for whom we provided care. I was actually asked to help sell that company because the physicians, who were the investors, thought that was a little too volatile for them. We made them $37.5 million for their $15,000 investments, each.
After the sale, I took over the health department in Wichita—quite an extreme from what I’d been doing. I then went on to Florida and then to Washington Hospital Center in D.C. I was running the Hospital Center in D.C. on 9/11. After D.C., I was recruited out to California and now here to Houston.
Q | How much have these past experiences shaped your strategy for CHI St. Luke’s Health?
A | Well, if you think about it, my experiences have allowed me to deal with many different groups, between the religious, academic and community settings, working for physicians, and so on. Part of my goal is to find a common platform to give all our physicians an opportunity, a place to stand. We still have a number in private practice, and we have those that are in the large, multi-specialty group setting like the Kelsey-Seybold clinics or are faculty at Baylor College of Medicine. My experiences in California relate very much to the experiences with a group like Kelsey-Seybold or a group like St. Luke’s Medical Group—whether it was D.C., Florida or California, we started our own primary care and specialty groups to operate in a different managed care environment. Living in the public setting, as I did in Florida and California, prepared me for a situation in which everyone and their brother was watching what we did. Keep in mind, I worked for boards that had publicly elected members. In many ways, it’s prepared me for many of the challenges we could see in this particular setting, which is essentially a combination of all of the places I have been to date.
Q | You have a unique role at Catholic Health Initiatives (CHI) as CEO of CHI St. Luke’s Health here in Houston, but also as senior vice president of operations for CHI in Denver. How do you balance the responsibilities?
A|I spend a lot of time on the road visiting our hospitals across Southeast Texas and our national office in Denver. When I became CEO in 2014, our system consisted of six hospitals. Also during this time, the new joint venture between Baylor College of Medicine and CHI St. Luke’s Health was officially announced. In a year and a half, this organization has markedly changed. Today, we’re at 17 hospitals. It’s a $2.5 billion business with about 15,000 employees and eight community emergency centers. In regions outside Texas, CHI has typically grown from areas in which ministries were already established by various orders of nuns. Here in Texas, we didn’t have that, as we now do today with the addition of CHI St. Joseph Health in Bryan/ College Station.
We’re putting together a strategic plan that has some lofty goals. As we determine how to effectively fulfill our mission, we must address several factors. Number one, how quickly can we connect with CHI to take advantage of size and scale (finance, IT and HR capabilities). Two, how do we improve our operational performance so that we are competitive in the marketplace and get paid in the future? Third, how do we create a level of system-ness in a short period of time? I’m talking about everything from day-to-day operations to living our mission to relationships with physicians. Finally, how do we accomplish this in a way that allows us to continue to grow and to learn to be nimble? How do we do it in a way that creates, for lack of a better term, a better continuum of care for the people we serve?
Now, let’s say we did all those things and we’re doing them well. We still need to talk about the future to figure out what kind of strong regional system we want to create. There are certain key attributes that other health systems are embracing and implementing well throughout the Texas Medical Center. Institutions have learned to create a closed economy and develop relationships with their physicians. Physicians are seen as partners and are valued. Payment is based on growth and outcomes of performance. They bring people into the system and create a culture of inclusion that causes these individuals to want to trust their organization for care.
While there will always be a place for multi-complex care within the hospital setting, our other focus must be to emphasize an ambulatory relationship, as this is how we’ll be paid in the future. Today, in this community, palliative care is provided on an inpatient basis. However, if you were in California, where I come from, that’s gone away. This service is no longer provided within the hospital. How do we become consistent in how we care for people? It’s important to eliminate clinical variation, allowing us to have better outcomes. If we do that well and put the right infrastructure in place to become more efficient, it will allow us to compete in the marketplace and grow.
Q | What do you see as the biggest challenge in moving from a fee-for-service structure toward evidence-based care?
A| I think one of the things we have to do that hasn’t been done, is create better connectivity and use of information and data. Our doctors have always been excellent practitioners—we have world-class people—but if you’re not able to provide them with information so they can see how to improve outcomes of care for patients and make things more efficient, then the challenges will remain and the care we provide will be very episodic.
One of the exciting things about my role here in the Texas Medical Center is looking at how we can use technology in the future. I’ve created a technology and innovation officer position, something a little different than most organizations. The challenge for us is how do we get to that one source of truth—clean information—that’s available to our physicians and practitioners in a timely way, so they can use it in the care of our patients; not just in the hospital but in their total care. If we can do that, then we’re in a better position to work with providers and payers.
As I mentioned, we have a very detailed strategic plan to help us accomplish our vision in Texas. It says we want to cover a million lives beyond where we’re at today. And that means we’re going to need at least 1,000 primary care and extender providers available to us. We’re also going to need at least 100 ambulatory settings to enable increased ease of access for people into our system. Then we’re going to have to operate in a way where we could focus more on direct-to-employer contracting than currently exists. We want to have 100 of those types of contracts in the future. And, as Sister Mary Joseph used to say, ‘In order to do good, we better do well, or we won’t be around to do very much good!’ This is what makes it one of our top priorities, and we have to do it in 1,000 days.
Q | I know it’s often not asked enough, but how does one strike a work-life balance, or is there such a thing when you’ve taken on an audacious plan like this?
A | If I’m being really honest, then I’ll tell you that I’ve not done as good of a job as I need to. I’ll use a real-life example. I’ve been here now for almost two years, and I keep traveling back and forth to California because I have a son who is 18 years old. For the last two years of his life in high school, I’ve been here during a time that would have been beneficial for me to be there. Now, he’s doing very well because he has a mother who has done a tremendous job of sometimes having to serve as a mother and father when I’m not there. Obviously I’m very proud of him and where he’s coming to at this point as he heads off to college, but I would have liked to have been there more to shoulder the burden. My wife is a very special person!
Q | What do you enjoy most about your role at CHI St. Luke’s?
A | It’s great. First of all, it sounds like I’m selling something when I talk to candidates who come here. We have an opportunity to create a regional system that has not existed. There are many different pieces to this system that make us truly unique if we can learn to pull them together effectively. At a time when health care is dramatically changing, not just in Texas but nationally, we’re taking a place that has had no history and culture as a system and developing a structure from the ground up. That doesn’t mean that each piece has not had a history or culture. However, if we can pull together the resources of CHI, the legacy of our current hospitals and our partnerships with Baylor College of Medicine and Texas Heart Institute, then we will have created a system that didn’t even exist here in the past. By doing this, it allows us to extend our healing ministry to many more people. Being a part of CHI is important—size and scale matter. There’s a definitive reason why CHI moved into the Texas market. It had much to do with the extension of the ministry of the organization and the capability for growth in health care within the state. Texas is where it’s happening. And for me, returning 46 years later to the heart of the Texas Medical Center at a time when it is truly leading edge is a tremendous opportunity.
I’ve always wondered why we haven’t done more in terms of innovation and development in a location where you have all the academics, as well as great physicians and universities. In addition to providing world-class care for patients, we should also be the mecca in terms of innovation and technology system development. You don’t see this any place else in the United States. We’re neighbors with such fine institutions as Methodist, Memorial Hermann, MD Anderson and Texas Children’s Hospital, which present great opportunities for partnerships to fulfill our mission of building healthier communities. For us at CHI St. Luke’s, we are trying to see the big picture and capture the most efficient and effective way to deliver health care. If we do it right, there’s something magical about it. If we don’t do it right, then we have wasted an opportunity. That’s my take, and I share that when people come to Houston and come to work at CHI St. Luke’s.
Q | Any last thoughts?
A | We have a lot of capacity to grow in this market. CHI St. Luke’s will be here for many years to come. It will have a larger position and influence in the state of Texas. And being able to share our healing ministry is something that is important to me, personally, but it’s important to everyone who works here, too. I’ll leave you with one quote that was given to me by my father, who really influenced me. I had come home from Tulsa, been in the newspaper for something, and sent him a clipping with my picture. It was Thanksgiving and I came back home and said, ‘So Dad, did you see it? What do you think?’ He said, ‘I’ll see you on the porch. Wait for me there.’ So, he got his cane, came over, and sat down. I said, ‘So what do you think?’ He looked at me without batting an eye and said, ‘Don’t you ever believe in your press clippings, young man. And you better always remember where you came from in life, because if you do, life will be good. But if not, you’re going to have a very hard time. Now, go take out the garbage.’
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