Lessons from the C-suite: Kevin Lofton, CEO of Catholic Health Initiatives

How the head of an 86-hospital system sees the industry

This interview with Kevin Lofton, the president and CEO of Catholic Health Initiatives, was conducted and condensed by Tom Cassels and Dan Diamond, and facilitated by Eric Larsen.

Q: You've been CEO of CHI for more than a decade—but let's not start there. Instead, I'm curious about a different line in your résumé: at one point, you were an ED administrator. How did that influence your path?

Lofton: Yeah, that was early in my career, about 34 years ago. I was weighing a few different offers, but ended up in Jacksonville, at University Medical Center [which became Shands Jacksonville].

At the time, it was the seventh-busiest ED in the country, with about 130,000 visits per year. And it was kind of like running a mini-hospital—you had to be prepared for anything, from patient challenges to natural disasters. For example, right after I started, we had to deal with Hurricane David, one of the really big storms that hit Florida.

Running the ED gave me a chance to hone my administrative skills as I was just getting started in my career. But if I look back at that experience now—in my 35 years in the industry, it's the closest that I ever came to direct patient care.

It was a chance to see what it's like for patients entering the system, and the closest I ever [got] to caregivers themselves.

Q: So do you have any specific takeaways from being on the frontlines?

"One piece of perspective I learned from [her]...Whatever happens out there in society, we're eventually going to see it in the hospital."

Lofton: Definitely. I can think of a lesson that I gained from Elizabeth Means, who helped me in the emergency department and was one of the top two or three mentors that I've had in my career. She taught me so much about the real work that we do and how it affects the lives of people in the community.

And one piece of perspective I learned from Liz—whatever happens out there in society, we're eventually going to see it in the hospital.

[Those things] within families and in the communities, between work and recreation…eventually, it comes to us.

Q: After your time in Jacksonville, you went on to run hospitals in Alabama, and here in D.C…

Lofton: Yes, at Howard [University Hospital]. I was just a baby CEO back then!

Q: So what do you know now that you didn't know when you were a 'baby CEO'?

Lofton: The key word really is leadership. Thinking about those early days in Jacksonville—I don't know if I would've considered myself a leader, just a manager. Especially when you're running around with your head down, just trying to get stuff done on a day-to-day basis.

But as you're moving up the ladder, that starts to change. And about the time I became the COO in Jacksonville in 1986, that's when I really began to become more of a leader. You start to understand the tremendous influence you can have, especially as you move into roles with more authority—you learn the power of the position.

That's especially true in my current job. Sometimes just my presence—what I say, and how I say it—can have tremendous impact on setting an agenda.

Steering the mission

Q: That seems like a natural segue into your role as the leader of one of the largest faith-based health systems in the nation—86 hospitals in 18 states, as well as long-term care facilities, home health services, and other operations. Can you talk about your vision for the future at CHI?

Lofton: Sure. About 95% of my job is to be forward-thinking, looking out to see where CHI can go.

[Broadly], we're focusing more on the continuum of care, especially because of health care reform and changes in care delivery. As part of that, improving management of population health—keeping people healthy in our communities—and looking for growth outside of the hospital.

Q: How are you tracking those goals?

Lofton: We've come up with some destination metrics to help us.

For example, a few years ago, we put a marker down—by 2020, we want 65% of our revenue to come from other areas beyond acute care services.

And to move in that direction, we've been steadily implementing new services and focus areas, understanding that more and more care will be provided outside the walls of the hospital. Acquiring a home care company based out of Cincinnati, for instance, [to help] grow our home health services.

Q: You've set some big, ambitious objectives. What's CHI's roadmap for this kind of transformation?

Lofton: Right. So there are three main areas that we focus on.

First, clinical integration. We've latched onto the federal definition [here]. And we've set a marker that by the end of fiscal year 2013, every CHI community will feature clinical integration—alignment between physicians, hospitals to deliver coordinated, high-quality care.

Second, payment for value. This [encompasses] a range of goals. We've begun employing experts who have come out of the insurance sector to help us with contract language. We're putting a toe in the water by acquiring a Medicare Advantage plan up in Tacoma. And parallel to that, we've developed strategies with our own workforce. We're doing this through a wholly owned, partnership organization.

And finally, clinical and operational excellence. We're looking at ways to become more efficient. Half of that COE work is in the clinical area, like standardizing supply costs. The other half is looking for ways to boost savings [on the backend], such as by setting new standards for effectiveness.

Q: You alluded to the health reform law, with its many ripple effects for the sector. And there's going to be a surge of newly insured Americans, many of whom haven't had regular health coverage in years, seeking out care—and that will surely test providers. So regarding patient access, what strategies are you setting up to achieve as much from the law's upcoming coverage expansion as possible?

Lofton: We're putting so much more emphasis on upfront point-of-service. At the end of the day, people who can pay want to pay. And our partnership with Conifer Health Solutions, which we entered into last year, will allow us to focus on improving the patient experience.

At the same time, our whole business is focused around helping the disadvantaged. So what we're excited about—as we're moving toward a world where millions are going to be gaining health coverage, we shouldn't have to develop special programs so these [previously uninsured people] can access health care.

Instead, we can figure out ways, such as using mid-level providers, to make sure they're getting the care they need.

"We know we have to take this risk on, but what are we going to do when we take on this risk?"

We also have to be sure that we're going beyond traditional models and using new technologies, like telehealth and telemedicine, to help reach communities that historically have had access problems. Especially because we serve so many rural areas at CHI; we operate about two-dozen critical-access hospitals.

Meanwhile, we're putting our heads around these Medicare Advantage plans. We know we have to take this risk on, but what are we going to do when we take on this risk? The goal is to gain enough experience to go onto a more wholesale approach.

Leaving a legacy

Q: You clearly have a number of priorities—if you had the opportunity to only accomplish one more thing in health care, and then you had to walk away, can you narrow it down to a specific achievement and say "Now I'm done. I've had the impact I want to have."

Lofton: Well, on a personal basis, my number one answer is to be around to see my grandchildren grow up. I joined the grandfather club two years ago—and it's the best club to be in.

Q: Congratulations.

Lofton: Thank you. But on a professional basis, it's to help our ministries make the transition into a new era of health care, where we must be more focused on value instead of volume. As the industry’s changing, we’re repositioning.

But even as health care goes through this remarkable transformation, the mission of our ministries has not changed.  Our mission has always been to create and sustain healthier communities, which perfectly aligns with the broad goals of health reform. .

One of the best reminders came when I was visiting one of our hospitals, and talking with Sr. Maryanna Coyle, the first chair of CHI’s Board of Stewardship Trustees and a driving force behind the creation of the ministry in 1996. And as we were discussing the future of the organization, she reminded me about our foundresses: They didn't come here to build a hospital—they came here to serve the community.

We are the guardians of what the sisters created…it’s our responsibility to protect and continue to build on their legacy.

I want to know that decades from now, even hundreds of years now, people will look back and say "the leaders who were running these Catholic ministries at the turn of the century made the right decisions" and put [these organizations] on the right path moving forward.

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