MHA Executive Interview Series Guest: Lowell C. Kruse

Leading Rural, Community Healthcare into the Future

Interview by Daniel K. Zismer, Ph.D, Associate Professor and Director, MHA and Executive Studies Programs, with Lowell C. Kruse (’67), retired CEO of Heartland Health, St. Joseph, MO.

While you spent the first couple decades of your career working in large urban communities, you did spend your last 25 years at Heartland Health in St. Joseph Missouri which serves as the referral center for a rather substantial rural area in northwest Missouri, northeast Kansas and southeast Nebraska. Do healthcare leaders need to think differently about healthcare for rural versus urban communities?

If we’re measuring quality, safety, cost, and health status of the population and comparing it to other communities and determining best practices, then at the high level there’s no difference. When it comes to a specific community, yes. Our moral obligation is to provide the highest quality, safest, most efficient care for the patients we serve, with a focus on improving the overall health status of the people living in our service area. In rural communities, you have to determine which services logically need to exist in that location, and which ones don’t. If you are in a larger urban community with outreach to rural areas, you have to be mindful of all the systems that exist—not just healthcare, but education, economic development, government and other sectors that are all part of the region’s economic vitality.

Regional collaboration is the only strategy that makes sense from the standpoint of partnerships between larger referral centers and rural community hospitals. When the large urban hospital only views a small rural hospital as a referral source, we have the beginning of a very serious problem. When serving as a referral hospital, it’s important that together with our rural hospital partners we focus on meeting the needs of that population in the most effective way possible rather than simply focusing on the needs of our organizations.

For many rural communities, healthcare is a significant, and perhaps leading contributor to the local and regional economies. I’ve been told by rural healthcare trustees and executives that “our main job is jobs for the community.” In an evolving healthcare economy is that “right thinking?”

Healthcare leaders have to think about what they can do best to assure the economic vitality of the area they’re serving. Just creating healthcare jobs to create new jobs is too simplistic. In small rural communities it’s problematic for businesses and retirees to locate and stay in those communities if access to a full range of high quality healthcare services is limited. People in small rural communities normally perceive the hospital as an important part of the economic fabric of that community, but many times they won’t utilize the local services and are unwilling to admit it’s because they lack confidence in their hospital and physicians.

In the ideal situation, with the right partnering relationship, the community understands that they have access to the same high-quality, safe care regardless of where it is provided. And, as much care as possible is provided in the smaller rural community as long as it makes clinical and financial sense. We have regional networks or information technology to maintain clinical records so that physicians can exchange information. Transparent communication between providers in small rural communities and their partners in larger urban communities is essential. The question is not, “Can we create six more jobs.” The question is, “What can we do to make sure you’ll work, live and retire here, and what are we doing to make sure you’re comfortable using our facilities?” Doing that right will help the local economy more than simply adding healthcare jobs.

You told our students that the mission of healthcare in rural communities must extend beyond providing care to the sick and injured; there is a larger and broader mission responsibility and accountability. With downward pressures on health costs from all who pay the bills, how will these seemingly costly outreach community missions be financed and managed in the future?

First, it’s important to understand that a large part of the downward pressure on healthcare costs and delivery systems is a result of poor population health…essentially, the demand side of the cost equation. The two key determinants of the health status of a population are the education levels of its citizens and the quality of their jobs. Those two things drive the health status of a population more than the quality of the hospital. The quality of the hospital and how well it’s managed drive the efficiency and effectiveness of how well a patient is cared for when they present to the hospital. But, if you look at why a majority (+/‑ 60% to 75%) of patients are presenting to hospitals for care, it’s in large part related to self-induced lifestyle reasons. To get at these issues, you have to go way upstream and acknowledge that it’s not just about delivering high quality, affordable healthcare; it’s about drilling down into the culture of that community and changing the way the entire community thinks about its own responsibility for maintaining its health.

Hospital and community leaders need to come together and work as one team to address these issues. This requires a partnership-oriented leadership style in order to bring key community players together. You have to address educational attainment, quality of jobs, employment rates and health status, and build a balanced approach that would influence and measure how our community is doing—just like you would within your own organization. If you’re not collaborating and partnering with the other sectors in your community on this broad range of issues that affects overall health and vitality, you’re not going to get the best results for your organization.

In order to set the right tone and direction, it is important to be clear with the leadership of your organization that part of their responsibilities include being engaged in the community and connecting with other organizations and sectors (I would include it in their annual performance review) to learn about what’s driving the health, or poor health, of the community or region served. Having a broad-based understanding of the dynamics of the community and developing partnerships with other organizations, sectors and their leaders to determine how best to work together, to pool resources and engage in collaborative activities designed to improve the health and vitality of the community is extremely important. I would provide ongoing education for all employees, medical staff, board members, etc. about the health and economic status of the community and offer encouragement to be actively engaged in some way or another in contributing their time and talent to helping their community.

You might want a very strong partnership between the school system and the hospital to make sure the children are all as healthy as they need to be. Sometimes, when you find out why children don’t learn, it’s often because they don’t get proper nutrition or their teeth hurt or they have other issues affecting their ability to learn where we can help as healthcare leaders. Ultimately, I believe it’s just doing what we ought to be doing anyway in a much different way. It may require us to change the way we lead our organizations and engage in our communities, but it doesn’t cost more. You just do it differently. That said, there will be times when you have to make a judgment about where to invest limited capital and operating dollars in the community as opposed to the organization itself. Those investment decisions should be made like any other…who will be served, what is the result we are looking for, what’s the short and long-term payback, etc.

Health policy and reimbursement models in the U.S. have, over the past few years, shifted in the U.S. in favor of rural community hospitals (especially hospitals qualifying for critical access status). Consequently, community hospital leaders have incentives to “keep care in the community.” On one level the goal is sensible. Some argue that, in the extreme, clinical quality and patient safety is at risk. How should leaders of the rural health strategy (especially rural-regional strategies) sort out right from wrong in this issue?

I applaud Congress for providing the funding to keep health services alive in these small communities because if you lose your hospital, you lose your doctors, then you start to lose the pharmacist and the grocery store and the tax base to support the school system. The key here is that rural healthcare leaders, and their urban partners, have to think about caring for populations in ways that they normally don’t consider. It’s just not about focusing on the internal needs of the organization; it’s about focusing on the needs of the community. There are many ways you can deliver safe, high quality care in small rural communities, particularly through relationships with like-minded urban partners who are there to truly help that small community maintain care in the community and give local residents and businesses confidence in its quality.

Frankly, there is a point where you have to be honest with people. For example, we can’t do a particular surgical or scoping procedure in our small rural hospital because we don’t have the personnel or the technology. The system of healthcare in this country simply requires us as leaders to understand what can be delivered in rural communities, small urban markets, and then large referral hospitals, and then do that. Heartland Health did 98% of everything that a hospital would do. We had 400 beds, a lot of specialties and subspecialties, but there were things we just simply didn’t or shouldn’t do. We didn’t do a good job with neonates but we had a great relationship with Children’s Mercy in Kansas City. We didn’t do transplants or burns. There were certain, specific procedures we didn’t have enough volume to do. When we referred patients on, the implication was that we weren’t as good. But you have to explain to patients that’s exactly what you want to have happen. You tell the patient that they want to go to a hospital that does enough volume to ensure high quality of care. Small hospitals and large systems have the responsibility to develop the system of care and the relationships and partnerships that provide the best care in the right setting. If you think about healthcare existing to serve the public interests, rather than a commodity fight over who’s getting the referral, then ultimately the right people are working on the right issues. If we think of the customer as the rural community (and the people who live there), then it thrives. Congress went to all this trouble to fund these small hospitals and to help keep our rural economy going and thriving. As healthcare leaders, we ought to be working and helping in the spirit of what that critical access legislation was intended to do.

Provider-side consolidation has been especially active in rural markets; rural hospitals consolidating with regional (and national hospital) systems and independent physicians becoming employees of community hospitals and hospital systems. Given your experience and vantage point, what are the pros and cons of rural, regional, provider-side consolidation?

The advantage of partnering or consolidating with a larger hospital is that you acquire added resources, people and expertise that you couldn’t possibly have in your small rural community. In small rural hospitals with two or three physicians, being part of a larger group that is committed to serving that rural population in the right way is essential. There are a lot of positives to those relationships.

One negative would be that if the small rural hospital insists on doing procedures they don’t have enough volume, competency or technology to do. Another negative is if urban hospitals view the small rural partner as a referral source rather than part of their obligation to properly work with their service area. Sometimes when a small rural hospital is owned and managed by an urban hospital you lose local governance…that passion of the community leadership for doing the right thing for their hospital and the community. You don’t want to take away a community’s responsibility for its own success. Many times when large urban referral centers go into these smaller communities and take over leadership and governance of the hospital, the local community tends to forgo its leadership obligation and responsibility for its own future.

Our obligation is to address the delivery of services from the patient’s perspective. It makes sense for us to focus on the economic vitality in the communities we serve and do that by providing safe, high quality health services in the best way we know how. It’s not about competing for patients; it’s about building a system that supports the community. Our service area at Heartland Health is the 15 counties of northwest Missouri, a few counties in northeast Kansas, and a few counties in southeast Nebraska. We felt our responsibility was to help those hospitals and communities thrive to the best of our ability by doing no more or no less than they needed to sustain their community. We needed to design our structures and our systems to ensure that that happened. If a patient cannot properly be cared for in a small rural hospital, for whatever the reason, then they shouldn’t be. But if they can, then it’s our job to figure that out. We have to serve the public interest.

Healthcare, government and education are examples of major sectors of our society that exist to serve the public interest. Government doesn’t and shouldn’t exist to create jobs. Government should be creating the environment so that the private sector can create jobs. Healthcare, while an extremely important part of our economy, is not about creating jobs. At the end of the day, creating healthy people and a thriving economy comes out of a responsive government, an outstanding education system and a healthcare system that work together to serve the individuals, businesses and communities. It’s extremely important that people leading our healthcare systems, education systems and government begin thinking differently about their joint obligation to serve.

What guidance and advice would you provide to the developing healthcare leader who wonders about a career in rural, community healthcare management?

While I have not led a small rural hospital, it appears to me to be a very complicated organization to operate and requires tremendous energy, hard work and knowledge. I would not go into rural healthcare until I had already developed expertise in leadership within a variety of settings.

Never be isolated. When you’re in a small rural community, you need to connect with a larger system of care and understand you’re an important leader in developing a vibrant rural economy. You have to figure out how to provide the safest, highest quality care as efficiently as possible while working at it from the perspective of the serving the community. This includes businesses, retired people and children. Are the children healthy? What else do they need? They might need a dental clinic because if their teeth hurt, they can’t learn. If they’re hungry, they can’t learn. You need to understand what causes an economy or a society to prosper and know a lot about an entire healthcare system.

People living in rural areas are just as passionate and dedicated to their communities as we are and want the same things you and I want. It’s a very complicated career choice and you have to make sure you’re doing it for the right reasons. The reason is not because less is demanded from you; more is demanded from you. It’s not less complicated, it’s more complicated. In a small community you become a much broader community leader. You have to take the long view on virtually everything and you can never do it in isolation.

If you could wave a magic wand to change the course of health policy, healthcare regulation, market forces and health economics, pertaining to rural healthcare, what would you do and why?

I would work to ensure that it’s clearly understood in our culture that the healthcare system exists to serve the public interest, and that our key partners are our patients, businesses, families, education and government. I would want people to know that we have to work together to design health systems and communities that assure every child and adult has access to the healthcare they need and we’re teaching healthy habits from the early grades all the way through to the workplace. Every decision we make is around meeting the needs of people living in our communities.

Imagine if we set as a national goal that the health status of the American people will rank in the top five in the world, and that the cost per capita for getting us there will be no more than the 50th percentile of all like countries. If we set goals about community health status, cost per capita, quality and safety outcomes or other like measures and felt accountable to the American public for those results, we might organize ourselves differently, work together differently and in general interact with our communities in a much different way.

Money is the fuel that encourages and allows us to invent new devices, create new clinical procedures for heroic recoveries like transplants, discover new pharmaceutical therapies, etc. By the way, this is all good. But, we missed the point! If we exist to serve the public interest and our objective is to help assure the good health and productivity of our citizens, then we have to think about different ways of organizing and delivering our services and financing the care we provide. Because individual behavior and personal accountability is so important to our collective success, we have to understand how important it is for us to partner with educators, business, government and others to redesign our approach to serving the American people. Because of the way we are currently reimbursed, there is nothing in our current approach that will incentivize us to develop a more effective healthcare system. That is not to say that what has been accomplished has not been remarkable, but when we’re at a point where the cost of healthcare and the poor health status of our American people is a major issue in the economic recovery of this country, healthcare costs and unhealthy people trump virtually every other issue facing society.

Closing Thoughts

I do believe, as an industry, that we have to create and educate a new generation of leaders who think about their obligation to society in a much different way than this generation thinks. At some point we have to step up and take action to change the course of human events. I think there is a very, very important role for experienced healthcare leaders that have seen what’s been going on. We have to acknowledge that the system we have developed isn’t working like it should. You can’t take the narrow view that you provide great care at your facility and you’re doing everything to support your doctors. We have to be honest with ourselves, our communities and society at large and bend and change this thing so when we look out five and ten years from now we can say this is the way we ought to be headed in the system. We must tell our new graduates, much like I was told in 1965, this is what the world looks like for you going forward in your careers. We need to be clear with our new students that the world they thought they were coming into can’t sustain itself anymore doing what we’ve been doing. We must come up with a new order of things. This is a “both/and” responsibility! Outstanding quality, new devices, new procedures—but not at the expense of having an unhealthy population, with healthcare costs two and three times any other comparable country and a healthcare system designed almost to bankrupt the very country we’re trying to help prosper.

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Questions regarding this interview and the content should be directed to Daniel K. Zismer, PhD, at zisme006@umn.edu.