Aurora Health Care has had a great year. So why does its CEO want to 'self-disrupt'?

Lessons from the C-suite: Nick Turkal, CEO of Aurora Health Care

This interview with Nick Turkal, CEO of Aurora Health Care, was conducted by Eric Larsen, managing partner, and Kate Scott, principal, and condensed by Amanda Wolfe, senior director.

Question: You worked as a rural physician, you were a clinical instructor, you were an associate dean, and you were a CMO. You've been at Aurora since 1987 and its CEO since 2007. To begin, can you give some meditations on your path here?

Nick Turkal: One year after I finished my family medicine residency, I was practicing in a small community, Robinson, Illinois. It was a wonderful, busy practice. I learned a lot from being there but also began to understand how little health care really responded to what people want and need. Modern health care was not designed for patients, and my training in medical school and residency did not prepare me for what patients and communities actually needed.

At that point, I also got very interested in systems of care and how to connect this small community to larger systems of care to enhance quality and access. We started working with folks in Indianapolis, Indiana, and Springfield and Champaign, Illinois. Rather than always sending patients to specialists, we were able to attract specialists to come to the patients in this small community.

I was trained during a time when health care was very reductionist. It was believed that you could 'take people apart' and treat individual components and supposedly get good outcomes. In reality, health care is about 50 percent relationships and 50 percent data. And if you melded those correctly, you could get a really great result.

Later, I went to Milwaukee for an academic role, and I was asked to serve as medical director of a clinic. I found that I enjoyed management, and that was a surprise! But I was not yet prepared for management or leadership, so I did a lot of coursework with the American College of Physician Executives, went to Kellogg/Northwestern for finance training, and then came back and was able to apply that knowledge immediately to management situations.

As my work became more removed from patients—I still see patients a little bit now—I learned that there would be a real impact if I could care for a population within a system. That led to a real interest in quality improvements across the system. Aurora is a great testing ground for how you make health care better for people across very diverse communities.

Q: It's been really fascinating to hear your peers' observations on mentorship, and it's always striking how specific the memories are of particular mentors. Which of your mentors come to mind?

Turkal: Mike Elliot was a family doctor in a small community where my grandparents lived at the time. That's the community where I ultimately ended up practicing. He was great at diagnosing and taking care of patients, but his real gift was how he interacted with them, how he read them and the relationship.

Bruce Van Cleave, who was our chief medical officer here at Aurora until his retirement, was my residency director during my third year of residency. He's the first one who talked to me at any great length about leadership.

And then a very critical person in my life was a patient I cared for shortly after I got to Milwaukee. This young woman had cancer, and I treated her at a stage where she had been undiagnosed for a long time and it was too late to really alter the course of her disease. From her, I learned a lot about dignity and end-of-life care. She was really incredible.

Q: Two of the examples you just provided are unique and specific to your role as a physician. Do you feel that being a physician gave you a unique set of skills that were essential to being a system CEO?

Turkal: When I talk to emerging physician leaders about leadership roles, I always give them the same advice. If they want to enter the administrative or leadership world, they should be at least as good as anybody else in that field. Then, they can layer their clinical skills background on top of that. If they cannot prove their administrative or leadership skills, they won't be able to use their clinical skills to the full advantage of the system or hospital.

To directly answer your question, the skills I used as a family doctor are exactly the same skills I use in this job.

Q: If you could teleport back to 1987, when you were newly arrived at Aurora, what are one or two things that you wish you could tell the Nick Turkal ‘incarnationat that time?

Turkal: Wow. Nobody's ever asked that question. It's almost an overwhelming question. I think I had to learn, as I got into more and more leadership roles, that the immediacy you get with patient care gets stretched out, so the time frame is different. It takes longer to accomplish things at a system level, but it has a greater impact. I think I have learned a degree of patience that I wish I had learned a little bit earlier. Some might argue that I still have a ways to go in that regard!

The other thing is that for years I consistently underestimated my impact on other people. I think that's true in every setting for everybody. We need to value every interaction and know that we have the opportunity to make a difference to someone else.

Achieving financial success and true systemness

Q: Switching gears a bit to strategy, Aurora had a pretty spectacular financial performance last year. What are some of the elements behind that?

Turkal: I've been asked so much about whether last year's success was because of [Wisconsin's federally administered] health insurance exchange. That was a relatively minor, but still important, part of it.

When I started as CEO, we had all the right elements of a good system, but it was not well-integrated at the time. In the last five years, we've done some things that all came together in a way that produced great results.

The standardization of quality makes all the difference, and while we started with traditional inpatient measures like everybody else, we've had a very robust outpatient approach for physicians as well. Higher quality means better care at a lower cost.

We have a single electronic health record system, which is extraordinarily helpful, both in ways that we can measure and ways we can't. That's where you begin to see huge standardization deep into patient care. There's a great deal of cost avoidance with an EHR, and that translates into better outcomes for patients, fewer readmissions, all the things we know about. IT is an enabler, not as an end to itself, to better care.

The supply chain and what we do in logistics in standardizing the way we work as a system have been a huge advantage. There's also a lot of work in revenue cycle. Over time, we've made sure that our productivity standards are where they should be. We've also moderated our price increases and expectations.

Finally, getting everyone moving in the same direction is critical. We have a single medical group of 1,700 physicians. All of our hospitals use the same quality metrics; we've connected our ICU beds electronically. We have patient service areas where a single leader is responsible for the community –hospital/s, physicians, home care and behavioral health.

All that has come together to result in some great financial returns last year, and now into this year.

Q: You've been a very outspoken proponent of system integration and true 'systemness.' How do you think about next generation systemness?

Turkal: We looked really carefully about a year-and-a-half ago at health care organizations around the country. In general, the medium-to-large size regional systems tend to do well. They were more often market leaders and more often more progressive on integration.

We don't have some of the challenges that the very large systems have. We're trying to take advantage of that and be very thoughtful about what that implies for us around growth. What does it imply around positioning for five years down the line? How are we going take what is an important community asset, Aurora Health Care, and make sure that it is healthy a decade from now?

We want to continue to push down the path of getting paid differently. Part of the value of integration is that we can manage populations. We've demonstrated it now with two different ACO models, with some of our other commercial contracts and with our own employees. We know that we can, on a reasonable scale, manage risk of populations and get those populations healthier. That's part one.

Part two is consumerism. Our approach should always be about our patients, how we take care of them and how we interact with them. The beauty of the national discussion on the Affordable Care Act wasn't what resulted from the act itself or the exchanges or any of that. It was the fact that patients became more educated about health care and they're more engaged now.

Health care has assumed we know what patients want, but we haven't asked them in the same way other industries have. And every time we ask them, they tell us what they want and need.

Q: How do you think about achieving efficiencies through systemness? For instance, how do you balance service-line rationalization and consolidation, while still providing the access that patients want?

Turkal: Well, one of the things we haven't talked about yet is our responsibility in the industry to redefine what a hospital is and what a health care system is. The expectation has been that a hospital is a building with four walls and lots of bricks.

I think it's up to us to redefine for the people we take care of why we do things the way we do and what access means.

Let me give a specific example. When you have cancer, you want the very best care you can get. Some of the tools we use for cancer care, like a cyberknife, we can't put at every hospital, nor should we. It would be irresponsible to do that. But we can have it at Aurora St. Luke's Medical Center and patients that need that type of care can go there. Then they can go right back to their home community for infusions, radiation therapy and all the core elements of their care.

For us, it's important to describe to patients the advantages of being part of a system. We can provide anything that you need, from primary care all the way to tertiary and quaternary services like transplant programs, cardiac, and neurosciences, but we don't have to do every element of it everywhere. In fact for you, as a patient, it won't be as good if we try to do it that way. Part of our responsibility is to redefine health care for our patients, demonstrate the value of systemness, and stop talking about hospitals as if they all look the same.

From our archives: More about Aurora Health Care

How Aurora Health Care is dual coding for ICD-10

How Aurora Health streamlined its hiring process

Nine hospitals win award for community health programs

Disrupting the system and partnering with like-minded groups

Q: What are your thoughts on some of the so-called "disruptors" in health care? Specifically retailers like CVS, Walgreens, etc.

Turkal: I think they will be very disruptive to us unless we disrupt ourselves.

I've told our board and our senior executive team that my job has changed now and I have to figure out how to disrupt Aurora at a time when we're doing really well. Disrupt the model or we will be disrupted from outside. That's why listening to our patients is so important. If we can provide what they want when they want it, at a reasonable cost, we don't have to be disrupted. 

Q: What you just said is really interesting. Can you expand more on your approach to self-disruption, particularly at a time when Aurora is doing so well?

Turkal: Here's my theory. Disruption can come from people in the organization who are motivated to self-disrupt. So part of it is how you incentivize your senior team to think about new ideas and  projects and doing things differently. That is part one.

Part two is that we must partner with other organizations that will force us to think about things differently. Our investment in StartUp Health is a good example. They bring new companies, new ideas, new technology to us. We become a testing ground, rather than having them compete with us. And, outside innovation stimulates part three: harnessing the power of innovative people within Aurora. I think the real opportunity is to capture the spirit of those innovators and allow them to innovate from within.

Q: Aurora is part of abouthealth, a statewide network. How did that come about?

Turkal: The idea behind abouthealth was really pretty simple. Aurora has a great service area in the eastern part of Wisconsin, and we thought it would be very hard to expand to the east because there's a big lake there.

One of the effects of the Affordable Care Act, and the development of exchanges, was to solidify our belief that we needed a larger Wisconsin presence, but not necessarily ownership.

As we talked about the development of what is now abouthealth, we looked for providers that were well above average in quality and below average in cost. When we identified those partners and got everybody together a year ago, it was pretty easy to see why we should all work together. From the very beginning, there was an acknowledgement that everybody around that table had some really specific and great strengths.

Q: Nick, fast forward 12 or 18 months. What's your definition of success for abouthealth?

Turkal: There are tangible and intangible ways to measure that, like how many contracts do we have together where we all have agreed on the same terms? We're on our way with that effort, as we have achieved clinical integration, and I expect that we will do well on that front.

We all want to do population health and have all moved down that path, so how many lives are we touching or affecting as a group? That's another measure.

The third measure is how much standardization there is across those systems. How much we're sharing resources on what we do with IT and quality management and the like, will be another way to measure success.

The more intangible measures are: How well are we working together? What happens when the CEOs change? What happens when we add organizations that have a different model than the rest of us in abouthealth?

If you have people who are committed and willing to lead together, and willing to check their egos at the door and make it work because it's good for everybody’s patients and communities, then I think we'll be very successful.

Q: What are your thoughts about a business venture some hospitals have been taking—health insurance plans?

Turkal: If you talk to the people who own their own health plan, they often say, "It's made us better at analytics. It's made us better at having some position of strength in our market. It's made us more thoughtful about cost."

I believe we can achieve most or all of those same things in other ways. The expertise we've gathered from our executives who've come from the insurance industry may be as valuable as having a health plan because it helps us know how to position ourselves well.

I believe startup de novo health plans are a bit of a dangerous place to go in most markets right now. Not only does it have financial implications of cash reserves that are larger than most people expect, but it also suggests that you're going to be able build up the salesforce and all the things necessary to being a really good health plan. I don't think most people are aware of what it's going to take to do that. In practicality, a lot of health plans will fail because they won't be robust enough.

I also don't believe the big insurers are going to go away. They have really smart people with a lot of resources, and I don't mean just financial resources, but intellectual and IT resources.  I believe we need to know how to work very effectively with them.

Looking to the future

Q: Last question for you. If you had to write the press release for Aurora on Jan. 1, 2018, what would that look like?

Turkal: What I want to see in that press release is this: "Aurora is the trusted health advisor to patients, communities and businesses in Wisconsin and beyond. They have developed a model that works around integration, quality, cost and service. They are innovative, always looking for better ways. They have a superb culture that attracts the best talent. Their purpose statement says it all: We Help People Live Well."

Get more lessons from the C-suite

See the Daily Briefing's archive of must-read interviews with other top hospital and health system leaders, including:

Why Kevin Lofton banished 'bullet points' from his hospitals

Catholic Health Initiatives' CEO explains what his hospitals are doing to improve health care outside their walls and why he thinks his system needs to get back to tradition. Read our interview with Kevin.

Why this CEO wants to know your favorite baseball team—and how it's shaping strategy

Ralph Muller discusses his path to becoming CEO of Penn Medicine, what factors he considers when weighing consolidation, and investing in the future. Read our interview with Ralph.

Next in the Daily Briefing

Meet Dr. Robert Califf—Obama's pick to head FDA

Read now