Turbo-Charging Clinical Transformation: A Conversation with Fairview’s Terry Carroll, Ph.D. | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Turbo-Charging Clinical Transformation: A Conversation with Fairview’s Terry Carroll, Ph.D.

April 10, 2013
by Mark Hagland
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Terry Carroll, Ph.D. of Fairview Health Services in Minneapolis, talks about what it really will take to transform the healthcare system

Five years ago, Terry Carroll, Ph.D. joined Fairview Health Services in Minneapolis as its senior vice president for transformation and CIO. With the educational background of a Ph.D. in biomedical engineering, and a number of years’ experience as the CIO of several different types of patient care organizations, Carroll came to Fairview—an integrated health system that encompasses seven hospitals (including the flagship University of Minnesota Medical Center, Fairview, and six community hospitals), the 500-plus-provider Fairview Medical Group, and Fairview Physician Associates (representing 1,500 affiliated physicians), as well as a range of other services, including home healthcare, hospice, assisted living, and retail pharmacy. Carroll’s IT team numbers 360, and operates on an annual spend of $114 million.

Carroll, who came to Fairview to help lead healthcare transformation, will be speaking at the Healthcare Informatics Executive Summit being held May 15-17 in San Francisco http://www.healthcare-informatics.com/summit/healthcare-informatics-executive-summit-2013, where he will participate on a panel discussion titled, “How Will Population health and Analytics Support ACOs, Bundled Payments, and the Medical Home?”


Dr. Carroll is particularly well-positioned to participate in that panel discussion, as Fairview Health Services is one of 32 patient care organizations participating in the Pioneer ACOs Medicare Shared Savings Program.


Carroll spoke recently with HCI Editor-in-Chief Mark Hagland to share his vision of the future of healthcare, and his work helping to lead delivery transformation at Fairview. Below are excerpts from that interview.

You have an unusual professional title, “senior vice president for transformation and CIO.” Can you unpack the elements involved in that title, and their significance?

The elements in my role include innovation, transformation, and information, as well as involvement in the healthcare policy space. My interest in pursuing all this is to try to take an innovative and design approach to how we might start to change the healthcare system. That’s where my passion is. I’ve fulfilled the CIO role in a number of organizations. But I have a passion for transformation. What happened was that when I came here to Fairview five years ago, I had been doing some consulting work for Mark Eustis, who was the CEO at the time [Eustis retired in July 2012], on how to transform the IT organization that we had here. And at the time, they didn’t have the CIO. In fact, he actually asked me about four times to be the CIO before I accepted; but I had been the CIO for several different smaller or specialized patient care organizations, including McGee Women’s Hospital in Pittsburgh and Bay State Health System in western Massachusetts, and I told him that if I were to take the position here, a considerable portion of it would have to be transformational work, and not core day-to-day operations management.

So transformation was included in your title when you came to Fairview five years ago?

Yes, that’s the only reason he was able to get me to come here. My proposition to the CEO was, I’ll oversee the IT stuff, but what I really want to focus in on is the transformation part. And he welcomed that. But it turns out that after we got started on that, the healthcare reform process was getting underway. And back in late 2008, when the state of Minnesota was going through some difficult times, and the CEO went to the biannual meeting with the governor to complain about state budget healthcare cuts, the CEO then, Mark Eustis, said, I can’t defend a broken system any longer. And we have to do something about it. And the governor at that time was Tim Pawlenty. And Tim basically said, I get it, I hear it, can you have a plan on my desk in two weeks?

And so in the consulting work we had done, I had created capabilities—we had worked with some Silicon Valley people—to work through challenges like that pretty quickly. So we mobilized people pretty quickly; and we worked to develop a plan for changing the economics associated with healthcare costs in Minnesota. And that started us down a whole path, in which we looked at how to begin a transformation process.

And that led to important discussions with some health plans, in particular, Medica, at that time, which led to opportunities to look at new care models. And so the approach we took organizationally was to develop an ambidextrous organization that could focus both on operations and on design work. The idea is that you can use some of the same capabilities you’d have in a technology environment, to rapidly develop new care models and other concepts. And in doing that kind of work, we employed new technologies. So we use decision accelerators, which are strategy events, where we gather people together to set directions and develop strategies, in sessions that last a day or two, but to develop strategies in that timeframe that normally would play out over an entire year’s time.

So I was involved in the design aspects around developing new payment models and the new delivery models that would be needed to support those. That’s where my passion is, to develop such innovations. So we use that kind of capability now. We had a session last week that worked on, as an example, what we would do to fulfill the requirements in year three of the pioneer ACO program—that’s when the program’s requirements change.

When did you decide to participate in the Pioneer ACO program?

When it was first announced. We had been sharing with the federal government a lot of the work we were doing. We had been developing a lot of those capabilities to work with a commercial plan. Right now, the only population segment of our population we don’t have in a performance-based program is the fee-for-service Medicaid population. So we started doing work way back in 2008 around how we would do this kind of work in the commercial space; and that kind of work teed off the conversations we were having with the governor. And we had developed some sort of value-based program with all of our payers except for fee-for-service Medicaid. And we did some work with a collaborative at Premier [the Charlotte-based Premier healthcare alliance] on this, and came together to talk about what some of the alternative models might be. So some of those elements in the year three of the Pioneer ACO program came out of that collaborative.

What are the biggest things that the Pioneers are being asked to do?

They’re in essence being asked to test different aspects of the model, everything from how you risk-adjust, to how you exchange data back and forth with the government—all things related to beginning to advance the model. And I don’t play as much in that space now, because part of the ambidextrous philosophy is, once something’s designed, you turn it over to someone else to run. But the biggest challenge that we’re going to have as we start to think about population health management is, how do you really start to look at the nature of the populations being served? And we tend to lump them all together based on the payer. And that’s not my view of how we have to do this. We have to do it in much more refined population segments. So the question is, how do you take a population, and how do you naturally segment that, so that you can develop a solid program around it?

And inside our organization here at Fairview, when people talked about population health management, we literally had to go through a process to define what population health management was. And when our CEO left and our board chairman came in as interim CEO, he said to us, what does that mean? And everyone literally gave him a different definition. So we actually spent executive time defining it. And it means that you have to go through a population and segment it and determine how it naturally clusters, and how to do that in the context not only of the payer, but what their conditions might be, what their environmental situations might be, etc., etc.

Once you have an understanding of all that, then you ask four fundamental questions. What’s the right care model to serve that population segment? What’s the right operating model, meaning, what’s the right configuration of the assets available to us? At Fairview, we’ve got an academic medical center, community hospitals, 500 primary care docs in a primary care base; pharmacy and medical management capabilities; sub-acute care, assisted living to home care and hospice, so how would you best use that constellation of resources to care for those patients? And the third question is, how do you create a sustainable business model for it? Because you need sustainable economics to make it work.

And the fourth one is one we added to the end of our conversation, which is, how do you service that population? How do you actually reach them, through a portal strategy, for example?

Have you actually created detailed, articulated profiles of those segments yet?

We’re still working on those, and we’ve been leveraging the resources of the Premier collaboratives on that. We’re in discussions about some social service agencies about how we could bring those capabilities together with our medical capabilities, for disabled populations. And even there, there would be several segments, such as people with developmental disabilities, people who have experienced trauma, and even sub-clusters under those, with every sub-cluster requiring different service models. I believe that it’s going to force healthcare to really focus in, in a granular way on those elements.

It requires really detailed thinking and acting, right?

Yes, and focus. Carolinas Health System did some of this work, and determined that, for example, the best way to work with a particular community or subpopulation was to build certain clinics for particular groups, for example. The other place where we’re really vulnerable is in looking at how we really measure the outcomes of this, the science of all that. We want to be able to actually measure value; and the context of what that means to the individual is something we still have to do a lot of work on; there’s a lot of science that still needs to be developed there.

Where are the biggest IT foundational gaps right now, per all that?

One is that I think we need to very carefully look at where we’re making our investments. EHRs [electronic health records] are necessary, but totally insufficient; what we really need to have is the analytic capability that’s totally underdeveloped in the industry. And primarily what we’re strapped with is that we spend so much energy doing the data management piece of this, that we run out of gas when it comes to doing the analytics that can provide value here. So there needs to be some redistribution of capabilities and resources. So you’ll hear from Keith [Figlioli, senior vice president for healthcare informatics at Premier] and some other panel members on that. Carolinas, for example, has done some work in that area.

They’ve thought about how precisely you deploy your human resources?

Yes, exactly. There are 22,000 people here, and at least 2,000 of them are doing data management here, but in a brute force way, because we haven’t yet leveraged all the capabilities. The outcome of their work is not to manage the data, but to provide the insights we need. But you need capabilities and tool sets to do that. That’s one of the reasons we’re looking at the approach and the data model, in our work with Premier. And our strategy here is to actually have Premier do the data management function for us. I want to offload that and have it as a capability that would allow us to focus our time on creating the real analytics engine at Fairview to actually gain that insight and foresight.

The second thing that I think is going on is that we’re not flush with capital; and there are lots of people out there who believe that healthcare is a growth industry; and the VC guys are looking at where to put their money, and how to make it effective. And part of what I think is really interesting about the model that Premier is moving forward with is that they’re going to create the data model that will give us care delivery and plan information. And what I think is the next step, sort of the next quantum leap, is where we can take intellectual property so that when I have a team doing analytic work, that we can go to that marketplace and say, I want to get a subscription to that particular piece of intellectual property, and begin to apply it immediately, very much as you guy apps for your smartphone.

So you need to modularize and commercialize those capabilities so that you’re not spending years developing those capabilities?

Exactly. And also, you have to begin working off a standard data model. Right now, I have to spend time researching companies. And once I get something, I have to figure out how I would plug it into a data warehousing framework, and test it, and so on, before we would get any value out of it. And that’s a cycle that runs 18-24 months. And what we’re really trying to do is to work through the model with Premier; and the data alliance that’s there is designed to create a data environment, and as members of that data alliance, we’ll be putting intellectual property into that alliance. And Premier will be putting intellectual property into that. And they’ll be working with vendors who might be willing to connect their intellectual property into our standard data model. So then, all that connectivity is done upfront, so all I have to do if I want to create risk stratification in a certain way, I go out and buy a subscription to it, and point it at our space, per the data model. And that allows the resources I have inside Fairview, to focus on gaining the real insights. To me, it’s sort of a fundamental shift in how that might work.

One could analogize the challenge to how the auto companies first created assembly line-based mass production. We can’t be building every single auto vehicle in a custom way from the bolts up, right?

You’re exactly right. And the question is, where do we invest our innovation dollars in healthcare? We have been investing in buildings, in technologies, in EHRs and things like that; but we don’t invest in the way that the business model and operating model should actually work. It’s fine if you have decades-long business cycles, but you don’t. Within 18 months, we had done three different iterations of shared-savings models. That’s how fast things are spinning. And the other challenge is that our regulatory models are not going to be very inductive to that pace of change in business models. And we’ll have to work fast enough to be able to demonstrate the value of these new delivery and payment models. That’s why we created the ambidextrous model, because people who are out there working on the next new models for payment and care—we’ve actually begun putting those in place. And that’s not the typical competency set you would see if you’re just building the competency to operationalize a known model. And in order to take advantage of a new model—that’s yet another new competency set. And in healthcare, we tend to blend all those processes together—core operations, new model creation, optimization; and we tend to put all those people together in a room and then wonder why we struggle to produce change.

And the thing is, that’s why I’m so passionate about the transformation side. The IT side is very important, and a foundation, but not the entire story. It’s just a first step.

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