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March 21, 2016

Some CEOs talk about 'my team.' Here's why UNC Health Care's CEO won't.

Daily Briefing

    This interview with William Roper, CEO of UNC Health Care, was conducted by Eric Larsen, managing partner, and Sarah Larsen, senior principal, and was condensed by Amanda Wolfe, senior director.

    Question: You have one of the most diverse backgrounds of anyone we've sat down with for this series. You worked in the White House under both President Ronald Reagan and President George H. W. Bush. You were director of CDC, and you also headed the agency now known as CMS. You had a stint with Prudential, and now you're CEO of UNC Health Care, dean of the medical school, and vice chancellor of the university. Given your heterogeneous background, I'll just start by asking you to reflect on your career.


    William Roper: I went to med school and trained as a pediatrician, and in the years since have gone back and forth across this road, or chasm, that divides public health and prevention from medicine and health care. Happily, the world is now interested in integrating those two fields, and most people now describe it as 'population health.'

    There are some people who say, 'I'm going to do this job for three years, that one for five, and then that one for four.' That was not the way it happened for me. This wasn't a carefully planned career.

    When I talk with students, they ask, 'I would like to be doing what you're doing in a couple of years. How do I get from here to there?' And what I always say to them is, 'Be prepared for opportunities and take them.' Sometimes students are so focused on what they want to do five years from now that they lose sight of the need to make an 'A' on that test tomorrow, so to speak.

    Q: In past interviews you've credited your wife, Maryann, with being your greatest influence in providing you with balance. Who were some of the other instrumental mentors in your career?

    Roper: There are many names I could mention. One is George Bush. I was the deputy assistant to the president for domestic policy, and I had responsibility for the domestic policy staff at the White House.

    What I learned from George Bush is the importance of caring for the people who actually do the work. He is an incredibly generous person who always takes the time to say thank you. I received many thank you notes from him over the years, and I've followed that model to say thank you and encourage people.

    HBR: When a leader should say 'I'—and when to say 'we'

    Another thing that I've seen him do over the years, and I myself try to do, is avoid using the pronouns 'I' and 'me.' I just think it is really grating, like fingernails on a blackboard, for people to say, 'My team,' 'My staff,' 'My people,' or 'What I am doing.' I try to say, 'What we're doing together; what I'm privileged to be able to do because of the people who really make this place go; and what a remarkable institution this is that I'm privileged to play a part in leading.' And that's not just being humble. It's important to convey to people that I'm just passing through, that this is an institution that was here a long time before I got here and will be here a long time after I leave. My job is to work with a group of very talented people and give them the tools, resources, and encouragement to do their jobs.

    Steering strategy

    Q: There's a lot of curiosity around how UNC Health Care quadrupled its operating margin last year—especially in this tough financial environment. How did you achieve that?

    Roper: First, this is a team effort. What we've accomplished, and this is still a work in progress, is getting real alignment from our faculty, our health system leaders, so that we're all pulling in the same direction.

    But we're not satisfied. That's why we embarked on a project called Carolina Value last year. We're integrating all of the parts of UNC Health Care—soon to be nine community hospitals, two academic hospitals, and thousands of physicians—into a well-functioning organization. We will have one revenue cycle, one HR system, one employee benefit plan, one way of making decisions about staffing of our clinical operations.

    In this world where people value brands, if we put the UNC Health Care name on a hospital, a clinic, or a doctor's office, we want to make sure we have clinical integration, so that we can vouch for and stand behind that practitioner or institution. To use a somewhat trivial example, if you go to a McDonald's, you know what you're going to get when you walk in the door. We want people to have the same assurance that they know what they're going to get with UNC Health Care.

    Q: You have a growing clinically integrated network, too, correct?

    Roper: Yes, UNC Health Alliance. Increasingly, we're looking for how we can expand without having to own things. We don't have all the money in the world, and we sure don't have the intention of buying everything in the world. We're looking for ways to partner with other hospitals and physicians, so that we can work together in common purpose, whether responding to private payers or corporations that are seeking a special arrangement for their workforce and families, or responding to government initiatives.

    The future of AMCs

    Q: Not too many leaders in your position are simultaneously CEO of the health system, dean of the medical school, and vice chancellor of the university. What's your perspective on the uniqueness of the role you have?

    Roper: I couldn't imagine doing my job successfully if I didn't have responsibility for both sides of the organization. We have an incredibly complicated set of funds that flow across the organization. The fact that I am concurrently dean of the medical school and CEO of the health system doesn't mean that arguments over funding go away. It just means that I'm the decider, as George W. Bush famously said.

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    At institutions that don't have an integrated role like I have, the more powerful person is often the head of the health system, and the dean of the medical school is put in a subservient role. I wouldn't want that.

    Q: I'd like to turn your gaze to your AMC counterparts across the country. While UNC has had a tremendous financial turnaround, and you've hit some remarkable milestones on the operational side, it is hard to ignore the fact that so many AMCs are struggling. Can you give some observations on AMC performance generally, and any trends or developments that you are seeing? I'd also be curious to hear your thoughts on how struggling AMCs can successfully turn their performance around.

    Roper: It's quite challenging, isn't it? It seems to me that institutions like ours are at a turning point. We basically have been able to demand people pay us a lot of money, because they valued the high-end, tertiary, quaternary level of care, and all that it involves, from clinical trials to the latest and greatest of techniques, highly trained individuals, and research and innovation.

    We still do all of those things, but increasingly, we find ourselves in competition with the very people we have trained, who have gone into community practice and who are doing pretty much the same thing we do, except they're doing it faster, more efficiently, with greater customer service and attention to all of the things that delight people.

    Is this AMC model sustainable? I think it is, or I wouldn't be doing what I'm doing. But it's not sustainable if we continue to thumb our nose and believe that people will pay us whatever we demand.

    Q: You also have perspective on insurance, having worked on the payer side. My observation is that commercial payers have been reticent about delegating risk, particularly downside risk. How can an AMC help accelerate this process and take on more and more of the premium dollar?

    Roper: Well, one bright light is Carolina Advanced Health, a successful four-year pilot project funded 50-50 with Blue Cross Blue Shield of North Carolina. We created a new outpatient clinic and purposefully enrolled mostly people who have a long list of behavioral and chronic illnesses. The idea was to use the best care managers, nutritionists, IT solutions, and other resources to see if we could improve patient satisfaction and health outcomes while also lowering the cost of their care. The pilot ended recently, and we are expanding the lessons learned broadly.

    I believe America will always need doctors and hospitals, though probably fewer beds than we have now. I do not say this cavalierly, but I'm not sure America will always need health insurance.

    Some organizations—namely UPMC, Johns Hopkins, and others—are saying, 'If we can't find health insurers to partner with us, we're going to do it ourselves.' We're trying to figure that one out right now. It's not my preferred direction, because there are set of required skills that we don't have. It's not as simple as we hire people to fill those roles, and we're a health insurance company in two weeks.

    I don't think there is a single solution that fits everywhere. We need to be thoughtfully innovating and preparing for a future, but at the same time we need to be successful in the roles as they currently are.

    Reflections on industry trends

    Q: Can you comment on the accelerating pace of change in the industry? I'm particularly interested in your view, having served in both the federal and private sectors.

    Roper: The conviction I have, which we are acting on, is that the driving force for change in health care in America is not what's happening in Washington, but what's happening out across the country. I think Washington is really behind in the power curve instead of leading at these things.

    President Reagan loved quips. His definition of an economist is someone who sees something work in reality and wonders whether it will work in theory. And I mean no disrespect to my colleagues and friends at CMS, but all too often, I think that epitomizes not just economists but also this messy reality we're facing.

    Q: I agree. Although my personal favorite Reaganism is 'The nine most terrifying words in the English language are: I’m from the government, and I’m here to help.' I think we can agree Reagan was eminently quotable. 

    Roper: Absolutely.  One of the reasons I think so well of him.

    Q: Bill, you mentioned population health earlier, and clearly this is a dominant part of the national health care conversation now. I’d like to hear your views on how you think about population health and longitudinal care management here at UNC.

    Roper: I gave a lecture last week to a group of students at our business school, and we were talking about this. I asked, 'Do you know how many people we cared for last year who have diabetes?' And they said, 'No.' I said I didn't know either. Population health will be hit or miss until we construct a data system that allows us to understand which patients have which conditions, so we can figure out which programs and people can best care for them.

    Organizations like ours are building the capability to understand the population that we serve and then design and operate programs to reach people.

    For that notion to work, the people who set the rules and pay the bills—whether private payers, self-insured corporations, or government programs—have to insist that people like us operate in a transparent fashion and are held accountable.

    Q: Given your background in government and work at CDC, I'm curious for your insight into rising pharmaceutical costs. What's the prescription for curbing costs? Is it government intervention?

    Roper: Specialty pharma, broadly speaking, has brought to market remarkable innovations that are hugely beneficial to millions of people. Unquestionably, the U.S. pharmaceutical industry is a wonder of the world that we ought to be immensely proud of.

    I'll tell a story related to this issue. Before I left the Health Care Financing Administration [Ed note: this agency is now known as CMS], one of the last things I did was to sign a notice of proposed rule-making for a new rule specifying how Medicare would decide to cover services. For the first time, the rule said that Medicare would evaluate the cost of the service.

    After the rule was published, my friends in the industry said, 'We can't have that. We are producing things that are valuable to the American public, and somebody else will have to worry about the cost. But we have to be allowed to bring our new products to market.' And my response at the time was, 'I'm all for people coming up with new things, but we ought to judge them, based on cost-effectiveness and a cost-benefit analysis.'

    Concluding thoughts

    Q: As we've discussed, you have a truly diverse background, with roles in academia, policy, and government administration. Which platform has given you the greatest lever to be impactful?

    Roper: Unquestionably, I'd say it's the job that I have right now. I have thoroughly enjoyed the things that I've been privileged to do, but there are several hallmarks that cause me to say, 'This is the role that I have enjoyed the most.'

    One is that it's so broad. It's an opportunity to be a health policy leader at the state and, occasionally, national level. It's academic, in the sense of new insights and knowledge, and always preparing the next generations for medicine and other health professions. And, of course, we care for people and their families. It's a wonderful thing to exercise national leadership in Washington, but it's pretty far removed from the day-to-day lives of real people.

    Q: As you think back on everything that you've been privileged to do, what are you most grateful for?

    Roper: I'm most grateful for my wife, who has believed in me and encouraged me, and keeps me grounded. We're now in our 39th year of marriage, and I am most grateful for her.

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