Barclay Berdan is known for his calm, cautious and methodical leadership style, and that’s the kind of transition he planned when he took over as chief executive officer of the largest health care system in North Texas last Sept. 1. He says he was going to sit back at first and just listen intently to physicians, nurses, staff, insurance companies and other payers and patients.
But barely a month into the job, while he was busy determining how best to proceed up “Transformation Mountain,” as he often calls Texas Health Resources’ 10-year strategic plan, an avalanche hit. The first case of Ebola ever diagnosed in the United States was reported in the emergency room at Texas Health Presbyterian Hospital Dallas, one of 25 acute-care, transitional, rehabilitation and short-stay hospitals under Berdan’s leadership.
“I was in Washington, D.C., for a meeting when I looked up at a television monitor at my hotel and saw helicopters circling Presby,” Berdan recalled recently. “I got on the first plane home.”
For the next month, “home” for Berdan and a couple of his key administrative staff members would be the incident command center, set up in the administration department of THR Presbyterian, and the communications command center, set up in the professional building next door. Berdan was at one or the other every day, dawn to dark, conferring with county, state and federal public health officials, political leaders, physicians, nurses, staff and public relations consultants, as his team of health care providers diagnosed the deadly virus, first in Thomas Eric Duncan, who had contracted Ebola in Liberia, and then in two of its own — nurses who contracted Ebola while caring for Duncan. Duncan died at Presbyterian despite the team’s desperate efforts; the nurses were quickly flown to specialized Ebola treatment centers elsewhere in the country and survived.
“We had a hotline staffed by physicians to answer clinical questions from other physicians, the media and the public, as well as hospital administrators around the country, seven days a week for five weeks,” recalled Wendell Watson, director of public relations for THR. “We often had 40 [television and radio] satellite trucks set up in the parking lot. We were sending out for breakfast, lunch and dinner. No one wanted to leave, even if they could,” Watson said.
“We are still the only hospital in the country that has ever had to diagnose a patient with Ebola in our emergency room,” Berdan pointed out recently, looking back on that hectic and heroic time when he had to shut down the hospital’s busy emergency department, divert ambulances and help evaluate, isolate and quarantine anyone who had any contact with Ebola patients.
Berdan drew criticism for staying totally behind the scenes during the crisis and for not accepting the responsibility and apologizing (for what?) sooner than he did. But he says he doesn’t regret hiring a national public relations firm to deal with the media or asking his physicians to field all the medical questions while he avoided the media spotlight. “We were uncertain about how big it would get,” Berdan said. “The world moved from science to political science, to social science, to superstitions and fear. … You have to think about how to protect your people and your patients and your community. … No one could be ready for something like that in advance.”
Ebola cost THR dearly.
The average inpatient daily census at Presby dropped 22.2 percent (from 428 to 333) for the month that ended Oct. 31, 2014, net revenue was down 24.7 percent, surgeries were down 23.5 percent and ER visits were cut in half. Yet the hospital remained fully staffed because, Berdan said, “We had to stay strong and get through this period of time.”
In addition to the negative net revenue impact (awkward wording – is that the same thing as a revenue loss?) of $12.2 million in October and $8.1 million in November, the Ebola crisis cost Texas Health about $6 million in extra supplies, decontamination, transportation, security and support staffing, legal and professional services, communications and other items, according to official reports Berdan made available to Fort Worth Business CEO.
Ever since the crisis, Berdan has been evaluating everything that happened, formulating recommendations, making changes in protocols, presenting programs to other hospital administrators, and sharing the lessons his hospital learned the hard way.
“Operational & Leadership Lessons Learned,” his report to the American Hospital Association on May 5, emphasizes the need for emergency department processes designed to provide rapid, effective screening and isolation for the safety of patients and care teams. Among other things, it calls for thorough triaging with more emphasis on a patient’s travel history, more face-to-face dialogue to bolster communications among nurse, doctor and patient and better use of electronic health records.
Weathering the Storm
By the middle of January, the operational numbers at Dallas Presbyterian were all back up as high or higher than they were before the Ebola crisis.
On April 15, Moody’s Investors Service upgraded THR’s tax-exempt bond rating to Aa2 and reported, “The upgrade to Aa2 reflects THR’s multi-year trend of strong operating performance and very good liquidity. Performance is consistent with the favorable trajectory prior to the October Ebola Virus Disease event, demonstrating the system’s financial resiliency and effective management.”
On April 20, Standard & Poor’s reaffirmed Texas Health Resources’ AA and AA/A-1+ and AA/A-1 dual ratings on various series of bonds issued. S&P noted, “Texas Health’s general operating trend continued in fiscal 2014 (audited full-year results through Dec. 31, 2014), successfully absorbing the operational challenges associated with the October 2014 treatment of Ebola patients at its Presbyterian Dallas facility.”
In June, THR received two prestigious national awards for its efforts to support the health and well-being of its employees. The National Business Group on Health named THR a Gold winner in its “Best Employers for Healthy Lifestyles,” and the American Heart Association presented Platinum-level recognition for being a “Fit Friendly Worksite.”
In addition, THR was named one of Fortune 100’s “Best Companies to Work for 2015,” and Great Places to Work and Fortune.com ranked THR No. 37 on their list of 100 Best Workplaces for millennial-age employees (those younger than 35). It was the only large health care system in Texas included on the 2015 list.
Berdan and THR had weathered the storm.
Back to the Mountain
Now, he says, he’s ready to turn his attention back to “climbing Transformation Mountain,” his strategic plan for THR to reinvent itself and become more than the sum of its medical centers. (Climbing the mountain never fully stopped to wait for the Ebola crisis to pass, Berdan says, but for several months he was forced to leave it in the hands of other top administrators.)
“We want to be more than a great acute-care hospital system designed to take care of the sick and injured and deliver babies. We will always continue that, but a great health care system is more than a great hospital system. The best medical care doesn’t necessarily improve the overall health of your community. It takes a continuum of health care to do that,” Berdan said earlier this summer.
THR’s $500,000 grant to establish the Community Well-Being Index that was needed to jump-start Fort Worth’s Blue Zones Project is a good example of commitment to a continuum of care, Berdan said. Blue Zones is the community-led well-being improvement initiative aimed at cutting health care costs and improving well-being by making it easier to make healthy choices. Blue Cross and Blue Shield of Texas and THR are major sponsors.
“Preventing disease and catching it early may over time destroy some demand for hospitals, but it’s a big part of our mission. Our mission is to improve the health of the community we serve,” Berdan says.
If that sounds like he wants to keep people out of hospitals and emergency rooms, it should come as no surprise. It’s what he has been saying for most of the last 29 years, since joining Harris Methodist Health System as vice president of Harris Southwest in 1986, but especially since he was named executive vice president of Texas Health Resources in 2005.
Under his leadership, THR brought together three separate brands committed to that same mission: Texas Health Harris Methodist, Texas Health Presbyterian and Texas Health Arlington Memorial.
THR owns, operates or has a joint venture or other affiliation with 16 acute-care hospitals, 16 behavioral health centers and hospitals, six short-stay hospitals, two transitional care and rehabilitation hospitals and 21 surgery centers and outpatient facilities, including its new Neighborhood Care and Wellness Centers (fitness centers) in Burleson and Willow Park.
Shifting Emphasis
The far-flung system has more than 250 “community access points” — Texas Health Physicians Group clinics and physician practice locations — but Berdan is committed to opening more and to creating medical homes for people who still get most of their health care in hospital emergency rooms, the most expensive places to get such care.
“Investments in brick and mortar have shifted in the last several years to focus on a variety of models designed to provide access to services close to where people live and work,” Berdan said. “The type of facility depends on community need and market strategy. Our investments can be divided into three categories ranging from updates, replacements and expansions at existing facilities to new access points for services such as ambulatory care, fitness and behavioral health to neighborhood clinics.”
At the top of his list of things to do is “build more bridges” among outpatient centers, home health centers, neighborhood care and wellness centers, dietitians, psychologists and other therapists, behavioral health care centers, rehabilitation centers, nursing homes, hospices, pharmacies and doctors and help people navigate the system.
“We own or have joint ventures with a few of those [pieces of the puzzle], but we are looking for like-minded people with a spirit of cooperation who are already doing things well. For example, we are collecting information on skilled nursing facilities to create a database with information we can provide to patients,” Berdan said.
Berdan is a native of Chicago and a graduate of Texas Christian University who thought he wanted to be a marine biologist at one point. He earned his master’s degree in business administration with a specialization in hospital administration from the University of Chicago Graduate School of Business. Before joining THR, he worked for American Medical International for nine years, holding hospital leadership positions in Florida, Arkansas, Houston and Dallas. Today, he is ultimately in charge of the largest health care system in North Texas with 22,900 employees $6.7 billion in total assets and a $4.06 billion operating budget.
Dream Job
Since first starting through the ranks at THR, he has never much wanted to do anything else. “This is too much fun. I’ve enjoyed everything I’ve ever done here. I get the opportunity to work with smart, diverse, caring people for the benefit of our community well-being,” Berdan said. “The job is very different day to day. There are a lot of challenges, but I think it makes good use of all my skills and strengths.”
He lists being a good listener and considering many points of view foremost among those strengths. “I’m an accomplished change leader, and I enjoy being able to bring diverse interests into focus to bring about transformational change, improvement in outcomes and sustainable performance,” Berdan said.
As CEO of THR, he has a dual role when it comes to community health: THR is responsible not only for the health and well-being of its own large workforce — second only to American Airlines among companies based in North Texas — but also, in large part, for millions of other health care consumers in the Dallas-Fort Worth area.
“How do I control the cost of providing health services to my employee population as well as to the community at large?” he asks. “How do I make sure my employees are as happy, healthy and productive as they can be? How can I help make sure that your employees are as happy, healthy and productive as they can be?”
In answering those questions, Berdan says, THR is changing its clinical and financial structure from volume-based transactions — how many surgeries and X-rays and ER visits it tallies — to value-based outcomes — how healthy people are when they wave good-bye.
Value-Based Health Care
Medicare is leading the charge to a value-based system, but employers are more than 70 percent self-insured today, (more than 70 percent of employers are self-insured?) Berdan pointed out. “They are very interested in a value-based system with better care at less cost.” A recent survey found that nationally, 80 percent of companies with 1,000 or more employees use self-insured health plans, as do 48 percent of companies with 200 to 999 employees. They primarily use the major payers, the large insurance companies, to keep up with all the bookkeeping.
Hospitals should welcome “accountable care agreements” with private insurance companies and other third-party payers who want to pay health care providers for improving performance, Berdan said. He also likes the idea of “bundled care,” where acute care is bundled with not only after-care, but also with ongoing care aimed at keeping people healthy so they don’t need expensive hospital care.
“No one wants hospital-centered care. No one can afford it. Hospital-centered care looks at where patients come from [what brings them to the hospital], rather than where they are going and what it takes to keep them going strong,” Berdan said. “If you are a health care system, you think of yourself differently than if you are principally a hospital system. You pay more attention as people are leaving the hospital. It’s about having an ongoing relationship, not just waving goodbye.”
And the way to that new reality is climbing Transformation Mountain.
Carolyn Poirot is Fort Worth Business’ medical correspondent and previously covered health topics for the Fort Worth Star-Telegram.