Kevin Barnett is a Senior Investigator at the Public Health Institute. He has led research and fieldwork in hospital community benefit and health workforce diversity at PHI for over two decades, working with hospitals, government agencies, and community stakeholders across the country. Recent work includes a study of community health assessments and implementation strategies for the Centers for Disease Control and Prevention and a national initiative funded by the Kresge Foundation to align and focus investments by hospitals, other health sector stakeholders, and financial institutions in low income communities.
Current work includes a partnership with The Governance Institute and Stakeholder Health with funding from the Robert Wood Johnson Foundation to build place-based population health knowledge among hospital board members and senior leadership, a national study of hospital interventions to address food insecurity, and a partnership with the Carsey School of Public Policy to convene regional meetings of hospital and community teams with community development financial institutions to design intersectoral health improvement strategies.
He serves as the Co-Director of the California Health Workforce Alliance, as a member of the Board of Directors of Communities Joined in Action, and as a member of the Board of Directors for the Trinity Health System.
Conversation with Gary Gunderson.
Gunderson: I’m talking to Kevin Barnett. We’re in downtown San Francisco, across the Bay from the place where I normally see Kevin, in your office at Public Health Institute. But it actually sort of fits that you turn out to be a thought partner of many organizations, in many settings. And so we’re here in Pablo Bravo’s office. And the two of you have been co-conspirators with all manner of disruptive schemes across the years. What I want to talk with you about is you play a key influence on Stakeholder Health. And the nature of the movement today is a movement of movements in which many things have been disconnected or that we think of as being separate bodies of work are actually finding commonality.
Your particular work has probably the clearest vision about why they are in fact a common body of work. That is, the alignment between what has been the missional side of many healthcare organizations, what we think of as community benefit. But many of these organizations trace their mission, such as Trinity, where you’re a board member, way back before the government asked for community benefit. The Sisters, religious, they insisted on one. And so the alignment between mission, community benefit, and the actual business realities of caring for a population, especially a population that, in the United States today, has a large fraction of very predictably poor people. And those poor people are very predictably located in neighborhoods of acute and complex vulnerability. Healthcare knows way too much about what’s wrong and what the pathologies are. Talk to me a little bit about where you see opportunities emerging right in this time.
Barnett: In doing so, it might be helpful to touch on a little bit of how I came to this point in my own career and in this work. I’m going to start with it where I came to this work in the community benefit arena, which was sort of an unexpected discovery around the time in the early- and mid-90s, when there were a number of states establishing statutes that in essences challenged hospitals, nonprofit hospitals, to conduct community health needs assessments and to submit reports to the state on what they were doing to address unmet health needs.
I was struck by that because, like I think many people, I did not envision that hospitals had a role outside of their four walls. And in fact community benefit as a term and as a practice is, for the most part, still primarily a function of the delivery of care to economically indigent populations at a discounted or at no cost to those individuals.
Gunderson: When you think about care in the same way we think about any other care, it’s an episode with components of treatments that can be taken apart and built.
Barnett: Exactly. We’re not aware of those needs until those individuals present themselves, typically in our emergency rooms. And of course they present themselves at a point when, typically, these conditions are acute, far more so and far more developed than they would have been had we, as institutions, been engaged in communities.
And so the new state statutes began to suggest to hospitals that there were things that they could do to promote health in communities. And in the observation of that, I began to look at ways in which from the standpoint of somebody who was trained at public health and city planning, how can we work with hospitals to help them more effectively engage in these communities.
Gunderson: So the way you’re telling that story, I want to push on it just a little bit, is in the nineties, that was back when margins were larger. And if I were a governmental regulator or legislator, I’d say, “Boy, those hospitals have a lot of money. Surely, some of that money ought to come over here.” You’re describing this a little bit further along in the story, when population health began to emerge as a conceptual body of …first, a conceptual mind, and then a body of practices. Most hospitals today generally still don’t know what to do on the other side of the sidewalk.
Barnett: That’s right.
Gunderson: So the linkage between having way too much money… but not really having a body of technique and practices that go with where you see the opportunity. It’s almost 30 years now. When in this process did you begin to see that there was actually a body of practice and technique and evaluation that would connect this mission possibility with an actual community?
Barnett: I think the truth of the matter is, I began to see it early on, although in a relative small scale. And I spent a good part of at least the first decade of my work in this arena engaging those who had the responsibility within their hospitals and health systems to deliver on their organizations’ charitable obligations as it related to whether it’s compliance with state statute or, ultimately, not until 2010 and the revision of the 990, then it was a clear federal requirement.
Gunderson: So literally some poor guy in a hospital is sitting there saying, “Oh, we got to do something. Oh, we can do something.”
Barnett: Right. And in fact many of them had done some very good things in their communities. However, they are, for the most part, relatively small scale. And the early conversations that I began to have in a context of a number of demonstration projects were beginning to engage the chief financial officers of these organizations to begin to actually look at the patient populations that they were serving in their ED and inpatient settings who were either uninsured and/or underinsured and/or were Medicaid populations, and to actually look at when they interfaced with the system.
This was informed by the early work of John Billings that looked at ambulatory-care-sensitive conditions in the mid-nineties. That ultimately became the work of the Camden Coalition and hotspotting. But even at those early days, we had the technology to look at these data. And the case that was made with these chief financial officers, particularly for those that were in faith-based organizations, to say, “Look at these numbers. And if in fact we are committed to the concept of good stewardship, we are not spending these dollars well, treating acute asthma conditions, untreated diabetes, unmanaged cardiovascular disease, in our emergency rooms. Couldn’t we spend those dollars much more effectively, if we began to look at ways in which to leverage our resources, ways in which to engage diverse stakeholders in our communities, as a way of addressing these issues?”
And so these folks leading this community benefit work, this resonated with them. But for the most part, their response to the encouragement and the tools that we had to share at the time was, “Gosh, this is great stuff but can you talk to my boss, because he or she doesn’t really understand how this relates to our core business at the time?”
Gunderson: As we were talking with Pablo, before you came in, Pablo, who does this work for Dignity, keeps thinking someone’s going to come in his office and say, “Hey, knock it off. That’s enough.” So talk to me a little bit about the other place where you’ve taken this body of work and with your work with the Governance Institute, is bring this into the real highest levels of governance of these massive organizations. So you’re a board member of Trinity. You interact with board members and CEOs all over the country. Is the word “courage” the right word in this? Or is there something less dramatic?
Barnett: I think “courage” is clearly part of it. My own observations, having worked with folks at the Governance Institute for the last decade or so, and before that, having the opportunities to begin to engage the leadership in part out of my own frustration that of a lack of progress in simply trying to work with people at the operational level. Frustration on their behalf, because they understood what needed to be done but didn’t have the sufficient support within their organizations to take anything that they were doing to scale nor to connect it more fundamentally to the organizational business model.
Now, the challenge within that is how do we get to doing this work in a way that actually is consistent with long-term economic viability of the organization. We could approach reducing preventable and ED… patient utilization for the uninsured populations prior to the Affordable Care Act. That was good stewardship, because we weren’t getting any money for these people when they came into our emergency rooms.nAs we have begun to expand coverage, and in a fee-for-service environment, it is harder to make the case that it serves our economic interest as a hospital if we reduce the number or people coming into our emergency rooms. Despite our best urges, many of our hospital leaders still look forward to flu season, when people are streaming into our emergency rooms and we’re getting fee-for-service payments for those individuals.
Gunderson: And we had a really, what our CFO considered a bad flu season was when not many people had flu.
Barnett: Exactly. So this is not because they’re bad people. It’s because we’ve had a pernicious system of financing that incentivizes filling beds and conducting procedures rather than improving the health and wellbeing of the people of our communities. So the promise yet to be realized in the movement towards value-based reimbursement is in fact by assuming more financial risk for keeping people healthy and out of our hospitals. We have the opportunity to closely intertwine, in effect, more fully integrate, our thinking of how we fulfill our charitable obligations, whether driven by a faith-based ideology or just more fundamentally a part of doing good work in our communities.
Gunderson: So do you see not-for-profit hospitals significantly going at risk for Medicaid, for instance? Is the management move towards assuming risk usually creating some sort of a health plan that then competes for Medicaid, ends up with Medicaid risk? At that point, you really need the intelligence that came out of the work with uninsured, and community benefit turned out to be relevant to what was now a business exposure. Do actually see those kind of dots connecting?
Barnett: I do see them being connected increasingly, and increasingly certainly by the provider community as different hospitals and health systems are discovering the work of community health workers and how they, through high-touch and high-trust engagement, not just with individuals in their communities but beginning to see the broader drivers of poor health in ways in which they can help inform the care delivery process and build networks of relationships with other kinds of providers and support systems in local communities.
The physicians and other providers that have engaged these community health workers, those that have had that on-the-ground experience almost uniformly celebrate and advocate for that as a continually expanded way in which these systems engage.
Just the other piece of that, coming back to the issue of board engagement, is that we have historically formed boards which have a relatively narrow spectrum of competencies and expertise. We want people who are good fundraisers, people with legal expertise, people with financial expertise appropriately because they are looking out for the fiduciary responsibilities as a large organization. But those kinds of competencies are almost inherently conservative in terms of ways in which we might spend our dollars that involve stepping into new areas. And that has presented a challenge for many provider organizations, hospitals, and health systems across the country because even if you have a senior leader, if you have a CEO that gets it, he or she is often confounded in bringing forward ideas by board members that ask questions, some of which cannot be immediately answered.
This does involve stepping into new territory for these organizations. And what increasingly health systems are recognizing that they need board members that have competencies in other areas, from government agencies to epidemiology to intersectoral collaboration to looking at how we work with a broad spectrum of stakeholders in local communities. And I’m heartened in seeing that a growing number of hospitals and health systems have recognized that and begun to diversify their boards, both in terms of race and ethnicity but also in terms of the competencies needed to begin to, in a more robust way, take on these issues and to grapple with them with the senior leadership. It’s a new model.
Gunderson: You and I have spent a lot of time hiking in wilderness areas and sort of opening our spirit to the unexpected. I’m curious about your experience as a board member at Trinity, where you have a powerful Catholic spirituality that’s still part of the formation of board members. I remember when you were early on in your board experience, sort of encountering the requirements to familiarize yourself, to immerse yourself in what Catholic spirituality had to do with the governance role in a multi-billion-dollar organization. Talk to me about that learning journey. You’ve now been a board member for some period of time. What does spirituality have to do with governance?
Barnett: My experience as a person, as I indicated and as I interviewed for coming on the board, was that A, I’m not Catholic, and B, I don’t consider myself particularly religious. But my belief is that there are a set of universal truths that drive all religious denominations and those common truths are pretty clear cut. And for the Sisters and the other board members that interviewed me, that was more than sufficient to believe that I was bringing to the board, which they were forming. They had an explicit focus on what are the competencies that we needed. And the decision was that we needed somebody to help push us to make that connection between the underlying drive of spiritual connection and commitment to charity with the practical tools to how do we apply that in communities. I have continued to be pleased and appreciative of how the continued attention to what are the underlying teachings in a Catholic religious community in theory that underline the work that we do and how to apply that.
We struggle, as I think many other faith-based institutions struggle, with the disconnect between what we know needs to happen in our communities and a system of financing that frankly works against that. The understanding of the fundamental inequities in our society, the challenges that so many of our fellow Americans struggle with on a day-to-day basis, and the way that that plays out in terms of their health behaviors and their ability to operate in an effective way in our society is something that we have an acute need to begin to address in a more effective way in our society.
Those kinds of conversations are a part of our board deliberations. How can we, as a system, reflecting on the history you opened our conversation with, that our Sisters came to this country 150 years ago and went to the poorest neighborhoods in these communities and set up clinics in many cases that have become shining steel and glass, large buildings for providing acute care.
But the underlying mission and commitment is still the same, to serve the poor. And those same communities that the Sisters came to are still those poor communities, just as the recent study looking at going back to when we first began to redline communities in the thirties. And we go back to those same Census tracks, and they are the same, in the same economic situation that were now, 70 years ago.
Gunderson: So that’s exactly the right turn in the conversation. The redlining was seeing communities that were not worthy of investment. And some of your work right now is to help these health systems who tend to think of the community mission as what they do with a little bit of margin. And what you’re now focusing on is not the margin, it’s your investible corpus, your days of cash on hand that for most hospitals run hundreds of millions and billions of dollars.
If you’re accountable for that, then you actually can be relevant to these investible communities.
Barnett: That’s exactly right. And this is not say that hospitals should be spending down this corpus. But for most cases, we’re talking, even those that are most robustly engaged it this, we’re talking about 1 to 2 percent of that corpus that they can, without any impact whatsoever upon their bond rating, be dynamically deploying it in a way that helps stimulate the kinds of investment in affordable housing and healthy food financing, childcare centers, the very backbone of what creates a healthy community.
And the problems and the needs are so obvious in this day and age. We have the data to reinforce and measure not only how we spend these dollars but what are the potential returns on this. We are able to make the connections and to understand issues in a way that makes it impossible for us to suggest that we don’t understand the connection anymore.
Gunderson: In the big picture, 10 years from now, do you think we’ll have as many robust faith-based missional healthcare organizations? Or are we just dreaming that we can compete financially in this hard-hearted time, if you expect to see the basic framework of the industry remain with a significant component of the folks we were part of?
Barnett: That’s a great question. I guess the short answer is I hope so. And I think there is good reason to believe that will be the case, that they’ll not only still be here but be stronger. I say that, in part, as I look at the kind of painful deliberation and discernment that we engage in to, as we look at what to do about hospitals that are part of our system that are doing not as good as others, and as one of the advantages of a system, of a larger system, as you can cross-subsidize, you can lift up those when they’re having financial challenges due to those in other parts of the systems that may be doing well. At the end of the day, of course, as an organization, you have to make a responsible decision of where to continue to invest dollars and where not to.
I think what we are coming to grips with, and to some extent others are as well, is that the role of hospitals acute of the role of inpatient acute care facilities is and will continue to be a declining role. It is certainly central in the present environment. But we and a variety of others are looking at, down the road, at a smaller footprint on the acute care side and…
Gunderson: It’s a larger system, but the hospitals are a smaller component of that larger system.
Gunderson: That requires very different, integrated capacities and…
Barnett: Yes, it does.
Gunderson: …back to that “courage” word.
Barnett: Exactly. And it is difficult to pull back from that, and is why I think many of us were excited about and continue to be impatient with the progress towards moving towards what we are calling value-based reimbursement, because as we look at it, as we look at it in the state of California, we are engaged in a current process to develop a state health workforce master plan. And many of the kinds of things that we talk about happening could happen almost overnight if, in fact, we went very quickly to value-based reimbursement.
So a lot of the questions that we have about how do we get more reimbursement for this and more reimbursement for that becomes moot when you have a global budget. When you’re going to get this amount for each patient, whether or not they come in for care, it totally shifts your orientation and motivation as a healthcare delivery and finance system towards what do we do to optimize the health of this person in their community.
Well, if we’re going to do that, we better find out and engage with what’s going on in that community. And that is a fundamentally different role for a health system. It moves us towards, in fact, perhaps a truer meaning of what the term “health system” is all about.
Gunderson: I happen to know for a fact that you’re not a man who’s afraid of a difficult journey, that’s cold and foggy and filled with exposure and wild animals surrounding us. Kevin and I just got back from the Arctic, in which all those things were true. But also the price you pay for that opens up the possibility of transcendence and exposure to the glories of our created world. And I’ve been able to see some of that glory because of my friendship with you. The way you talk about health system is similarly complex. So are you hopeful that we’ll see some moments of increased meaning and significance, and not just survival?
Barnett: I am hopeful, or I wouldn’t be getting up every day and thinking about what we can do next. I think we’re at a unique moment in our history where, despite frankly chaos at the federal level in the policy arena, despite the near-term setbacks I think we’ve encountered at the federal level, I am on a daily basis reinforced by the kind of leadership that I hear from those who are at the helm of these organizations around the country who are evermore committed to saying, “We can and should make a difference.”
I think a lot of folks in the health policy arena and a lot of folks in the leadership of these healthcare organizations have often looked to the public sector and looked at the public policy arena for their solutions because those solutions have also so often been focused on reimbursement rates and coverage. And what I see happening now is a door has been opened that I’m not sure you can close again where people are beginning to look into their own communities, beginning to understand those connections and are beginning to speak up in city council meetings, in county supervisor meetings, with elected officials on things other than their own reimbursement rates.
When you have senior leaders of hospitals and health systems talking about the lack of affordable housing, the need for affordable healthy foods in their neighborhoods, the need for good schools, the need for safe places for children to go, I think we’re at a very exciting moment.
Gunderson: So you’re helping us design our itinerary from San Diego to Raleigh and Wilmington, the See2See road trip. You actually know folks all along that route. I didn’t know you knew people in Lubbock and Albuquerque. What do you think we’ll be surprised at, as we take that incredible journey?
Barnett: My guess is that we will continue to be surprised by people’s passion and commitment to their communities, to the people that they live around, to doing things for the right reasons in our communities. And that’s part of what I think motivates both of us in this work, is we continue to run into these people that, despite all odds, they continue to be committed to their communities. That is a continuing surprise to me, that that is the case. And it’s also a driver for continuing to look at how we can spread this work.
Gunderson: Kevin, I appreciate your time. Look forward to maybe getting you to help drive on the Phoenix-Dallas lap of this trip. But thank you for the other laps of the learning that we’re going to be doing.
Barnett: I can’t wait. Thanks.