Healthcare Innovation Leadership: Lessons from Jon Warner, Executive Chairman at Citizen Health Strategies

<p>hello everyone this is Cole from the American Journal of healthc care strategy joined by a special guest with many decades of impressive experience uh John Warner John H can you introduce yourself and your current role yeah so John Warner as you said uh I've been in healthcare an awfully long time now since the mid90s uh I started off uh in the UK Health Care System spent some time in the Australian healthc care system and 20 years now from a California base in the US Healthcare System system having tons of fun trying to apply Innovation and Technology as best I [Music] can thank you so much for for coming on and then kind of one of the first questions I have here is is you've spent time in other Industries as well across your career uh why Healthcare why did you kind of you know come and come and work for healthcare because it's not always the most desirable industry in terms of you know Building Wealth or having a good work life balance it's kind of tough in both of those areas so what caused you to to move over to it well as most things and I'm sure I won't be the first person to say careers are a happy accident when you look back you can find coherence in what you've done but uh believe me there were lots of happy accidents in the middle um you know I I did a philosophy undergrad uh but ended up doing a pair PhD I was kind of on a journey to being a psychologist or a Psychiatry I did finish my PhD in um you know in thinking that way but I realized pretty quickly I was never going to be a clinician I never had the patience for that um but I was interested on the business side of healthc care um but I ended up just going off into corporate the corporate world and early on you know you're right I had uh an early career in the oil industry for example climb that little greasy pole um but I was never wholly happy so I left to management consulting and that's really got me uh into the healthcare world the happy accident of getting clients in that space early on it was biotch and I did some work in Pharma and then in large Hospital systems and as you would know Cole um it's very worthy work I realized immediately that this mattered um and you know lives are at stake and that we had a lot to fix uh so it's been a happy hunting ground for you know far more time than the rest of my career you know 30 out of the 40 Years of been in healthcare and I love it I love every aspect of it just because I think we can uh we we can really lift people's lives up I I couldn't agree more it's it you know I've looked at leaving uh Healthcare and I think you know sometimes it's good to build build skills in other Industries but at the same time it's challenging to to leave because of of the mission behind it um you know one thing that's really interesting is is you have a lot of strategic advisory roles board member roles a lot of leadership or leadership influencing roles not everyone can do that a lot of people struggle um with that but yet you have almost a surplus of these experiences at reputable organizations is there anything about you in particular or things that you have done that you think have allowed you to achieve that level of success in those areas yeah I think in some ways I was lucky to have the career that I did at the beginning of the first 10 years climbing that ladder you know even with an ex on mobile um because you know the training was excellent they taught you how to do things I got to manage lots of different things you know budget and multiple functions so you know I kind of understood everything from strategy through to tactics through to operations in a very practical way and a very eclectic way and I think I carried that over into Healthcare so I think that's one thing that I really got is good training and a good base to then go and transfer into I think the other thing anchors back to being a philosopher funly enough I mean philosophy is all about teaching people contextual thinking and critical thinking and I think I tend to bring that into it because I I think that's where all Journey starts is we're trying to solve problems or go from A to B I think we first have to you know really get the helicopter higher in the sky see the terrain that we're trying to Traverse and then come up with you know tactical steps we might then Implement so I've done that all the time and I think that lends itself very nicely to both Consulting work and then advisory work because I think people are looking for that big picture view more than they are sort of diving into operational detail there's they've got lots of people who can do that so I like to stay at the big picture level I appreciate that and and kind of a a global question is you've been around the the Earth quite a bit uh different places so you've seen healthc care in different places as well um it's a common kind of complaint that the US healthare is the worst it's it's terrible compared to everyone else's what what we hear on the news what we hear on social media um I guess the first question is is that true based on your experience um well I'll let you answer that question first so as usual it's a mixed bag uh it's true in part and not true in part and I think we know this the US healthcare system has got both the worst and the best in the world many people beat a path to the us some of our teaching hospitals are truly world class I think we've got some amazing technology I think we've evolved many solutions that have started here first you think of drug development and areas like it so I think you can be very positive we can be very proud of that uh on the other hand we have a very complex system the most complex in the world no question about it and that system is not only complex it's costly um and I think those are the two criteria that need to change the most we've really got to work to DEC complexify the whole system um you know a lot of that is because of the way we play the reimbursement game a lot of it's because of politics a lot of it is because of a state based system which is very big with 50 states in the mix um so I think we've got to work hard to do that um and you know I I think that means there's opportunity for us but I think we've got to do it quickly I think our burgeoning costs are probably the greatest concern I read the other day that our cost by one of the estimates is what our cost by TW 2035 uh could well be 10 trillion dollars from a 4.9 trillion estimated Base today that's doubling in a very short space of time 11 years that is just unsustainable in this economy we've got to do something about it so in that sense the US systems plan catch up I guess I I I have some some confusion there um because and you're kind of the right person to ask with with such experience in the Innovative space but why are we Innovative in one area you know we do so well better than everybody else and then in the other area we're you know not Innovative we do we do kind of the worst I guess from my small perspective with small teams and small organizations it's either Innovative or it's not Innovative so can you maybe just explain to me how you can have a system with parts that are are mismatched like that yeah so I I think the simple answer to that question is massive fragmentation um we have silos everywhere now some of those are sort of created as the nation was created right I mean 50 states makes it more complicated than the whole of Europe so I think if Europe were trying to do things on a holistic basis in the same way they'd have they'd face the same issues we do and it's the way we devolve power you know in the country so I think that's a fragmentation that's nothing to do with Healthcare it's just the way things work so think of the way say Medicaid operates which is entirely in 50 states and in 50 different ways therefore um so that means innovation's fragmented so Innovation occurs but it occurs within silos and the problem with that is things don't connect to each other very well so whether you're talking about the payer space or the provider space or barmer uh as a result we don't have the connectivity we need uh so it's not that innovation's lacking I actually think we're very good at Innovation it's that we we don't often tackle the complex ity and the fragmentation um and that's really hard to solve because we have to go all the way back to the political will to do that the legal structures that allow us to do it the insurance systems that have to be in place in order to go and change say reimbursement models look how much we've had to use waivers to go and Implement teley health for example in fact to this day those expire next year we are still four years later working on waivers for that that's where that's what stops Innovation it's not our inability to do it it's just that there are other contextual factors that that get in the way so a lot of you know seet leaders of course might be frustrated by this because they're not really politicians uh and you know health systems are getting larger and larger who's responsible in the corporate world or in the health system world you know are we are they supposed to kind of wait for the political environment or or is there things that they can do uh yeah I think there are things they can do I mean to some extent you're right we need a political will and I and I think unfortunately Healthcare has become a little bit of a glass bowl that is deemed to be too fragile to touch by both sides of politics uh and and I mean just think about money running out in in Medicare and Medicaid for example now I mean that that Cliff is you know within sight it's within our you know half half lifetime from here um politicians can't touch that because there's there's really lot not a lot of benefit to them in the time frame they have available to them so I think we'll wait a long time to get much change I think people will Tinker at the edge so I I'm a great believer in Revolution from below I I think you can innovate uh In Pockets you know within the fragmentation prove that something worked and then scale it from there and I think that gives you the opportunity to then to render change uh I've seen that happen again and again and I think that's our best path forward uh while we wait for the small incremental changes to happen from the top down I like that concept can you just uh explain a little bit more about how that works and I'm assuming that that that you said Revolution From Below right I'm assuming that also works an organizational level sure does it sure does so I think large organizations can be more entrepreneurial which means they allow more latitude and flexibility for Innovation to occur um and they want to do that because they don't want to be caught cold you know we know famous stories in other Industries you know Kodak invented digital health for example um but were destroyed by it because they couldn't uh cannibalize the income streams they were getting from their SLR cameras and film um at the time well Healthcare faces the same problem so say large Hospital Systems um which were built you know more than a century ago made total sense back then for the population of that size today they need to be devolved um so the way to do that is to you know create intrapreneurship to allow people to go and test local clinics and uh put Amy services in places on a devolved basis for example but then on the other side of that I think you can make it happen by allowing startup companies with fresh thinking and fresh fresh views to reimagine how things Happ to change in microcosm some of those are going to fail but some of them going to succeed and they'll give us a clue into then how successful scaling can take place and I think we're seeing that I think the last 10 to 15 years we've started to see that model come into play more more how does does that work in terms of encouraging that because I'm sure a lot of people the SE Suite definitely you know are shaking their heads yes this is a great idea I mean you know me and my uh CEO here we've talked a lot about how we want our interns to come up with ideas and and how we'd love it if our intern put us out of business right and came up with an awesome idea but it's hard to actually encourage that is there anything that you see you know Common pitfalls or challenges that the seet experiences in the healthc care space at creating that uh entrepreneurship oh boy that could be a long conversation challenges are you know entrenched attitudes and and playing defense rather than offense and I you know I think if you're sitting there uh you know it's very hard to you know to to render change when you know you're s you know you're really succeeding to some degree in what you're already doing I think it's all about culture I think you've actually got to create a culture in which you create listening you create C you know customer or patient Focus uh you make sure that um you've got a very safe environment in which new ideas Can Survive and Thrive not be shut down you break down hierarchies you hire individuals who've got uh the right not only skill set attitude um and I think we can see that you know if you and I spent long enough on this call talking about it we could identify some best practice companies that have clearly succeeded by creating those cultures and they win it 3x 5x in some cases 10x over others so I think that's what we have to emulate within Healthcare we've got a few of those in healthcare but we need a lot more in my opinion and culture would be uh I think Peter draa said it best right culture each strategy for breakfast and and I think right let's start there um and I think the rest follows kind of uh in a way a personal question but you know it it seems like it's the right thing to do like you said we have the evidence um you know even in in the NBA you know program that I'm in we've we've gone over a lot of this right the evidence is there that uh diverse culture in terms of diversity of thought safety to express uh those those ideas usually uh ends up in higher share prices more profit but yet we we don't do that in a lot of a lot of cases and so I'm not I guess understanding why leaders you know struggle with that uh even myself right why do we struggle with giving those um PE you know the employees the the option to do that those who are under our leadership the option to say things that might be uh tough to hear or might be uh disruptive in a way you know innovatively disruptive if that makes sense this episode of the strategy of Health was sponsored by modality Global advisors modality Global advisors optimizes Hospital Revenue enhances patient experience and delivers proven results visit modality Global advisors.com to learn more well you know the simple answer again there and again this is a longer conversation is that change is scary uh I think all of us as human beings like to have a routine that's relative familiar to us you know we like things changing so quickly that they they start to discombobulate us so I think we settle into a pattern and I think that's true on the leadership ladder I think when you get promoted something you think wow great I've now got more power I've got more ability to choose what I do and it may not be you know devolving some of that power to others as quickly as you might I think in culture you have to go and set those ground rules so this is where startups tend to do so well if they go and spend a lot of time talking about culture and values and how things are going get done around here um they can go a lot faster as we know they're large organizations that's really what larger organizations have to inherit make it okay uh to uh to to to change yourself because that's where this all starts we have to kind of disrupt ourselves then we can disrupt the team then the team can disrupt other teams and before you know it that gets rewarded and I think the other side of that is incenting it I mean once you've got that at least being talked about we've got to incent it when people actually behave you want to behave and not reward the recalcitrant or the people not changing at all which unfortunate is what we do we very often anchor the very behaviors we don't want because we don't change the reward systems right we en we encourage short-term thinking still in the way that we compensate most CEOs right that's right I mean even the appraisal systems and everything else they might be misaligned incentives and boy we got a lot of those in health care where people would just game the system for the current status quo not for where they be getting uh if they thought about it a little bit more deeply looking at your resume you you kind of thrive on change it seems like H is that just a natural characteristic or is that something that you've actually worked to to build I think I've worked to build it again I had some luck in the mix I I I've lived in eight countries around the world now and I think when you you know take yourself out of a culture of a country and the familiarity of a country and Transplant yourself uh I think you have to sort of adapt adapt or die right so I I think I've had plenty of practice at that and I think that's allowed me to take that into every role that I take on and if fact I think change is something that I thrive on I enjoy uh so I I think I've probably hone those skills somewhat just by by you know forcing myself to do it I'm like everybody else there's times that it gets uncomfortable um but um but nonetheless I think leaning into it is more fun on balance than you know sitting back and saying I I avoid it um so so I think that's that's how I think about it so a good recommendation for the early careerist listening is to maybe seek out opportunities that make them uncomfortable in different you know Geographic locations or in different Industries or whatnot and in fact I think that's a really good point Cole as well I think people are too set in their ways you know if you're sitting in I know you you had sitting in Pennsylvania if there's a job you know next door go take it if there's a job in California go take it if there's a job overseas or even a short-term posting go take it so I think geography is one I also think fun functional breadth is interesting I think there's lots of people in health care end up at the top going through a very you know narrow channel vertically going you know through various sort of you know mid levels before they become a manager um I think it's better to to have some breadth at least in the mix I think it makes for a much better leader what do you mean what do you mean by that if you can explain that a little bit more so in some cases I think let's say you've grown up in a you know in a clinical pathway you know in some respects get outside clinical for a little bit go and take something on in customer service go and take something on in marketing go and take something on in product uh go and listen to customers in the customer success area get that experience I think you know in a startup you would do that you'd almost wear those hats on the same day or in the same week right you're probably doing that in your business um you can't be functionally narrow well we forget about that in large organizations because we've got these big functions and they get hierarchical um but I think if we do a bit of it I think you you create that bread that then serves you well later as a leader yep nope I I agree and I've seen that when uh bringing people on who are more senior is it's a challenge when they've focused on let's just say Finance yeah and that's all that they've done is is you know managing budgets and then we expect them in the startup realm to be able to do a bit more than that it's really challenging for them to to learn oh I actually have to create PowerPoints now I actually have to you know present to external clients now it's it's a challenge um yeah a huge challenge points uh so I have to ask everyone you know this question because this is uh what what's trending in the news but uh I think part of the question is is surrounding what we've already talked about it has to do with AI everyone's talking about AI um how do you think that that it's going to to disrupt kind of the the stagnation that some institutions have or the kind of refusal to accept change that some some leaders have do you think that it's going to kind of force us to to adapt or will it not be that simple well again boy what a big question so you know at one level technology comes along every I don't know 20 or 25 years which is incredibly disruptive we've seen it um I mean just sheer computerization alone if you just go after the second world war for example made massive changes I think the internet is arrived in the late 90s did the same um you know we've obviously got much faster computers now much much faster internet connections and now we've got AI turbocharging all of that in the last 20 or 30 years and it's going to go a lot further and quicker and I think it's partly because we've got super Quantum Computing now and this amazing connectivity so I think it is going to be more and more disruptive I think it already has been our world again we know outside Healthcare how much of us are doing walking into Bank branches anymore you know I mean I can do most of my banking on my on a phone that didn't exist before 2007 so so I think incredibly disruptive but by the same token there's lots of things that we get scared about that perhaps we shouldn't be quite so scared about I think they're just tools you know in some ways I see AI a bit like you know inventing electricity which is you know back in the late 1800s you know it's a tool that allows us to do many things um but we have to think about things we want to change which for me comes down to processes uh what process do we have let's say it's discharging a patient from a hospital what do we want to automate in that process and what do we want to keep as human interface that that doesn't change and that hasn't changed for a couple hundred years uh this is just a tool we can deploy um so you and I don't think today about oh wow look at that electricity that's available at my wall I wonder how many devices I can plug in it uh we don't do that so I I think you know that we have to get excited by technology but by the same token not lose sight of the fact we've got real issues to solve that um you know we have to spend quality time on thinking about before we then deploy the technology that takes it to a better place and so it still then does really require Innovation if we actually want to implement it we can't just sit around and it won't just do it itself yeah it's application Innovation I think um and I and I think you know I hear headlines you know the AI is going to you know really help us with anticipatory medicine or Precision medicine um I Heard the other day that revenue cycle management I had a very senior leader said revenue cycle management is going to go away altto together because it will all be done by Ai and the thousands of people in the industry won't exist in 10 years time well maybe but I think to get there we have to think about the process we have to think about how all of those processes in a very complex part of healthare work um so we've got we've got plenty of work to do in terms of how to deploy the technology um it's not the technology in and of itself um and it never has been and I don't think it will in our certainly in our lifetimes and probably a long time Beyond it so ask you kind of a just a final question um let's say somebody you know is hearing this and they're they're very motivated to start getting their organization to be more Innovative let's say to se sweet leader what would be just a very real reasonable kind of First Step that they should take to start them down this path yeah I love this question so I I mean I'm a psychologist as I said earlier I I think in the end it's about mindset um and there's lots of stuff written on mindset I particularly like Carol dxw out of Harvard on this U which basically says we want to open up our mind to every possibility so work on oursel before we work on anything else we're all prone to fixed mindset uh you and I will have fixed mindsets about podcasts and interviews and how they have to operate and what's a good answer and not a good answer um and whether this is even a good podcast or not um I think we want to be open to the possibility of improvement and that things can evolve and change for the better and I think getting evolving a growth mindset is part of that uh which is really saying there's nothing that isn't possible um it's just not possible yet which is D's favorite phrase and and I like that because it means striving is part of the game and Innovation comes about because of the striving it's about not giving up it's about saying there's got to be a way over under around it completely rethink it so I think if we get that attitud right amazing things happen um and Innovation which is a strange word because people often misdey it um is really that process it's the process of thinking differently about the future or reimagining that future uh so I think people can do that on day one um and I think it's first about thinking well where might I have a fixed mindset so if my father told me that you know you you know I was an engineer and you should be an engineer your first thought should be what other opportunities are there to be other than to follow that one piece of advice who else can I talk to uh job should I do what sector should I work in what will motivate me uh so I think that's where it starts for me great answer and great uh episode here John thank you so much for coming on the podcast I couldn't be more appreciative I hope we can have you on again in the future of course very good great talking to you</p>