2 min read February 2022 — Brian Gragnolati, President & CEO of Atlantic Health System, shares his insights on the institution’s strategic expansion of facilities and services while remaining a staunch community partner as the pandemic surges. “What makes us different here is the partnerships we create with our team members, who we keep front and center all the time,” Gragnolati tells Invest:.
What have been the key successes for Atlantic Health System in 2021 and how are those priorities shifting into 2022?
We have been committed to driving clinical excellence and access to care, while working to be an employer where people are attracted to and want to stay. Over the last several years, we have moved away from a volume-based revenue funding method to one that favors value-based care. In that regard, we are growing our ambulatory care base and moving services outside the hospital into more affordable settings. Data is also a major driver in our decision making, whether it is collected in clinical research or informing care delivery at the bedside. We continue to work with payers to develop financial arrangements where we can participate in cost savings. Blue Cross Horizon is our largest commercial payer, so we have worked with them to develop a risk contract. 25% of our revenue with them is from upside and downside financial risk, and it has seen great results.
Atlantic Health is also exploring how big our clinically integrated network needs to become. We have created a partnership with CentraState through which Atlantic Health has a 51% ownership stake. This has enabled us to move into the Central New Jersey market and enables us to deliver care in a region of over 6 million people. We have provided care to approximately one million people in just the past year.
The investments we have made in clinical care have been significant. Morristown Medical Center is recognized as the number one hospital in New Jersey by US News and is a top hospital in so many areas, particularly cardiovascular, oncology and neurosciences. We have extraordinary clinical programs because we have been able to attract amazing physicians who are migrating out of the city. We are bullish based on what we have been able to achieve. We are strong clinically and financially with a solid base of over 18,000 team members. We have been able to do all of this while coexisting with COVID-19, which has been remarkable.
But as we finished up 2021, the Omicron variant of the virus hit us. We are seeing thousands of COVID-19 patients in our physicians’ offices, emergency departments, and urgent care centers. We have set up more than 25 testing sites and have vaccinated more than 300,000 people over the past year. Looking forward, our modeling tells us this variant will peak sometime in mid-January and we are going to be working hard over that period of time. The virus is prevalent in our communities and workforce, so we struggle with staffing like everyone. But I think we are on the upside of hiring. This week we are bringing on over 100 new employees and next week another 100 will join, half of them being nurses. We are filling those gaps. I think we are going to continue being successful navigating this, but the headwinds are strong.
What have been the biggest differentiators for Atlantic Health System in being able to recruit and retain team members?
What makes us different here is the partnerships we create with our team members, who we keep front and center all the time. When the pandemic emerged, we were laser focused on keeping our doors open to the community and doing everything we could to protect and support our employees. When our hospitals were at capacity, we had everyone pitching in. Physical therapists became pronators in our ICU to flip patients from the backs to their bellies, helping them stay off ventilators. Our athletic trainers became escorts for the teams moving COVID-19 patients to the department they needed to be. Physicians whose elective care specialties were shut down started working in the ICU under the guidance of expert intensive care staff. We have a positive spirit here because of the continued focus on our team members. We had no layoffs or furloughs over this period and have gone forward with planned compensation increases for our team members while creating more flexible schedules and child care programs. We also ordered 62,000 COVID-19 test kits for employees and opened a testing site for asymptomatic team members that is also open to their family members, which is significant given how sparsely available tests are right now. All of that builds to a sense of caring that empowers our teams and helps us in our retention and recruitment.
What has been the impact of the shift from volume to value in Atlantic Health’s services?
The reality is that healthcare is becoming more and more unaffordable for people, and if we do not take that in our own hands it will be regulated in a variety of ways. There also must be a willingness to partner with a payer. The first willing payer we have had is Medicare with Obamacare, creating programs like Accountable Care Organizations, which we went all in for. It gave us the impetus to create a clinically integrated network to partner differently with other physicians and organizations. Then you have to do the hard work, investing the hundreds of millions of dollars in data and technology to wire everything together. This also brings a whole new sector of expertise, as we need more data experts to integrate that care.
You then have to change the mindset of the organization and the way you measure success. We always used to lead our messaging with how many hospitals we operate. Now, we lead with how many unique lives we touch every year. To that end, we need to make sure doctors and facilities are available where people need them, so we can retain them as patients. In our planning for growth, we use our data and analytics to figure out the white spaces in the market and how we can create access to care there. We will knit that all together, providing tools to the clinicians so they can provide high quality, affordable care. That is why we are doing well in our shared savings program and the risk business with Blue Cross Horizon.
To provide better health insurance coverage to our 18,000 employees and their dependents, we established the Health Transformation Consortium with five likeminded health systems. This consortium pooled together all of our employees and dependents to approach the insurance market for third party administrative services. We are in our fourth year of this now and it has been able to bend the cost curve for everyone.
What do leaders in healthcare see as the evolution of the industry in the future?
Healthcare is a team sport, so we have to figure out how to compete and cooperate with each other and this is a challenge in New Jersey markets. We have participated in a consortium called AllSpire for seven years now which brought together two healthcare systems in New Jersey – Hackensack Meridian, and ours – and three Pennsylvania systems – Lehigh Valley Health Network, Tower Health, and Wellspan Health. Our first initiative was a group purchasing organization which collectively saved us hundreds of millions in administrative fees and raw savings on supplies. We have also identified behavioral health and telehealth services as a big opportunity for growth going into 2022. Partnering is not always easy, but you have to try and find those collaborations and develop relationships with some wins. Our ability to align with other organizations on big issues demonstrates how trust can evolve and bring about positive outcomes for our teams and patients.
What is your outlook for Atlantic Health Systems and the New Jersey healthcare sector over the next two to three years?
The healthcare sector is still shell shocked by the implications of COVID-19. Every time we get some traction outside the pandemic, another wave comes in and that has been a challenge for the sector. I think the sector has lost a couple years of advancement and a lot of long term projects have stalled, especially mergers and acquisitions that are under stricter scrutiny by the FTC. We are seeing more pullback as a practical measure, which is how healthcare has always operated. But if we can get through this next wave and the virus becomes endemic, there will be more innovation around population health and affordability. Politics can always throw a wrench into things, but at Atlantic Health, we are going to double down on high quality, affordable care no matter what. We are going to increase our risk population with Blue Cross Horizon and encourage other payers to engage with us on that. On top of that, we will be laser focused on access, excellence, and being a great employer.
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