Latest / Becker’s Healthcare Podcast / Michael Stern, President and CEO of Tower Health

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Michael Stern, President and CEO of Tower Health · Becker’s Healthcare Podcast

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This is Alan Connon back with another episode
0:41
of the Becker's Healthcare Podcast.
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And today, I'm delighted to be joined by
0:45
Michael Stern, president and CEO of Tower Health
0:49
in Pennsylvania.
0:51
Michael, a real pleasure to have you on
0:53
the podcast with us today.
0:54
For those of our listeners who who might
0:56
be as well acquainted with Tower Health, what
0:58
yourself and the fantastic work that you and
1:00
your colleagues do, do you mind giving us
1:02
a little bit more insight into your background
1:03
and your experience at the health system?
1:05
Sure. I have, been at Tower Health, since,
1:09
the fall of of two thousand twenty two.
1:12
I came in as the
1:13
executive vice president and chief operating officer,
1:17
for the first, like, almost two years, and
1:19
then transitioned into the,
1:22
CEO role, February.
1:26
K. Fantastic. So fall twenty twenty two in
1:28
as the chief operating officer, I believe, succeeding
1:31
Sue Parati, who had the the pleasure of
1:33
interviewing a while back as well.
1:35
So, Michael, I think Tower, a fantastic story.
1:38
It turns there's no doubt pushing up against
1:40
some real challenges. No not unique to Tower
1:42
Health.
1:44
Expect a very tough and challenging year across
1:46
the board for this year and to next
1:47
when we think about what happened with the
1:48
ACA, federal Medicaid cuts. A real tough challenge
1:51
is for safety net providers there, which we
1:53
might dig into a little bit later. But
1:55
to kick things off, to to your point,
1:58
came in as fall twenty twenty two at
2:00
Tower held the COO. Now in that CEO
2:02
role for a little bit of time,
2:04
looking back,
2:05
can you take us back in terms of
2:06
tell us what are the lessons that you
2:08
carry over from your time as COO and
2:10
president
2:11
that now really shape your decisions as CEO
2:13
of the overall health system?
2:15
Well, you know, I would say, you know,
2:17
years ago, the chief operating officer role and
2:19
the chief executive officer role were were very
2:22
different. Right? You have the the CEO who
2:24
was,
2:25
taking the system at a much higher level,
2:27
really not dealing with the day to day,
2:29
and the COO's thought for the day, the
2:31
operations. And those two roles have have melded
2:33
to to not having that much gap between
2:35
them anymore because you really need to be
2:37
able to, you know, manage what's going on
2:40
in the moment while also ensuring that you
2:43
are prepared and ready ready for the future
2:46
going forward because things are moving so much
2:48
more quickly than they have historically.
2:50
And, obviously and, actually, when I took over
2:52
as chief executive officer, I did not replace
2:54
myself as chief operating officer,
2:57
simply because I wanted a much tighter connection
2:59
to the operations to our different presidents of
3:02
each of our enterprises,
3:04
so that there was a direct understanding of
3:06
what was happening on a day to day
3:07
basis, what the needs were, what they were
3:09
seeing, as well as me being able to
3:12
share more timely
3:14
what I was looking at going forward, what
3:16
was gonna be impacting us, what's more down
3:18
the road. So really bringing that
3:20
operations and executive,
3:23
positions,
3:24
you know, into a much tighter environment.
3:27
Yeah. I mean, I I I'm wondering, Michael,
3:29
if you could maybe just expand on or
3:31
elaborate on the the decision to to not
3:33
replace yourself as COO. I think we've seen
3:35
at other health systems across the board over
3:38
the last couple years,
3:40
some similar thinking in that regard in relation
3:42
to the COO role.
3:44
Yeah. I I think that, you know, it's
3:45
it's a it's a layer that I think
3:47
in a different time, it worked. And I
3:49
I was a a chief operating officer prior
3:52
to this role at my previous position. And,
3:54
you know, it was a little bit of
3:55
a different environment where where now when,
3:58
you know, at Tower Health, where we have,
4:01
you know, presidents of each hospital and presidents
4:03
of the provider enterprise,
4:05
we have these, you know, mini COO CEOs
4:08
that are underneath the the the system CEO
4:11
position. So
4:12
they're operating in both of those roles running
4:15
their enterprises.
4:16
So there was really no no need for
4:18
that additional layer. And you're right. The c
4:19
suites are definitely getting tighter, which requires
4:23
broader skill sets at eastern positions,
4:25
you know, that you're in so that our
4:28
president of the provider enterprise also plays a
4:30
strategic role for the for the provider enterprise.
4:32
And the president the president of Redding Hospital
4:34
is also looking at that role in a
4:36
much more strategic mindset
4:38
than historically just focusing on, you know, getting
4:41
through each day and making sure that, you
4:44
know, each day's patients are taken care of.
4:45
They're looking at it from a much broader
4:47
perspective,
4:48
you know, way beyond the the historic,
4:51
position descriptions.
4:53
Got it. No. I think it makes a
4:55
ton of sense when you talk about kinda
4:56
moving away from the focus on on that
4:58
day to day operations, but really kinda taking
5:00
that broader strategic look across the health system.
5:04
So so digging into Tower Health a little
5:06
bit in terms of the last couple years
5:07
and what's ahead. Yeah.
5:09
I know Sue's credited you last time I
5:11
spoke with her. I believe maybe last year,
5:12
the year before in terms of the fantastic
5:14
work, really driving that operational turnaround in your
5:17
role as chief operating officer. Still an ongoing
5:20
challenge, I imagine.
5:22
But taking me back to the success of
5:24
first and foremost you brought and helped lead
5:26
with your executive team, what were the most
5:28
kind of critical decisions or key changes
5:31
that really set Tower Health on this path
5:33
to financial sustainability
5:35
financial stability, excuse me?
5:38
You know, I think it's pretty well known
5:41
that Tara was facing significant financial pressures.
5:45
But for what the system had been through
5:47
is also dealing with significant, you know, culture
5:50
and employee engagement issues. And we had to
5:53
build both. We had to,
5:55
while focusing on the financial turnaround, we had
5:58
to make sure that we were
5:59
truly engaging with the employees, engaging with the
6:02
other leaders so that everybody knew what direction
6:04
we're going and why we were doing it.
6:06
And I think that that really helped make
6:09
the turnaround. You know, I got here in
6:11
the '22.
6:12
Within a year,
6:14
we we were we were seeing the ship
6:16
turn, and then the next year, that it
6:18
turned a little bit more because we were
6:20
all leaning in the same direction. We were
6:22
very clear on what our goals were, which
6:24
was really to start acting like a system.
6:26
Instead of acting as individual entities within the
6:28
system,
6:29
all working together, if everybody wins, everybody wins.
6:32
If every if one loses, then everybody loses.
6:35
Having a mentality that, you know, the sum
6:38
is better than the parts. Right? And that
6:41
has been really, really helpful because we have,
6:43
obviously, our hub at Reading Hospital, which is
6:44
the major trauma center, but we have, you
6:47
know, two community hospitals
6:48
that are very big feeders to Reading Hospital.
6:51
Without those two community hospitals,
6:54
Redding Hospital would not be the organization that
6:56
it is. And then on the flip side,
6:58
Redding has this incredible clinical expertise
7:00
that we've been able to push out to
7:03
to the smaller community hospitals to make sure
7:05
that patients are getting the exact same clinical
7:08
experience No matter what entity you have at
7:10
at tower at, you know, within our system,
7:12
they're getting the exact same patient experience, the
7:15
exact same clinical experience,
7:17
the same physician expertise
7:19
going flowing throughout our system, and it made
7:21
the relationships
7:22
much better within. And then you start gaining
7:25
on efficiencies, and you start doing the right
7:27
thing at the right time in the right
7:28
place, and then you start seeing those financial
7:31
turnarounds.
7:31
We had to make some tough decisions, obviously,
7:34
but we were very transparent on what we
7:37
needed to do and why we needed to
7:39
do it. They were, you know, tough
7:42
announcements that we had to made over the
7:43
last couple of years, even as recently as
7:45
as November. What we were doing would make
7:47
sure that we are ready to meet the
7:49
mission of our communities for for years to
7:52
come. So and it was really spending a
7:53
lot of time out with the employees,
7:55
engaging with the employees, talking it through, getting
7:58
their feedback, but really
8:00
explaining that we actually have a plan, and
8:03
we know what's gonna get it there. Now,
8:04
obviously,
8:06
we've seen the success in our turnaround, so
8:08
there's confidence
8:09
that we could take the next step because
8:11
we've already taken the first few steps. There's
8:14
a lot of confidence from from the employees
8:16
that we can continue taking those steps to
8:18
ensure that Tower Health is here for years
8:20
to come.
8:21
Yeah. So so it sounds like really crystal
8:24
clear communication,
8:25
making sure you're engaging with the with your
8:28
team, your staff across the board, explaining the
8:30
why it sounds like behind a lot of
8:32
these decisions.
8:34
The cultural aspect, just to kinda dive maybe
8:36
one bit deeper into that.
8:38
For other
8:39
health systems, no doubt of which there are
8:41
many at the moment, facing similar challenges, maybe
8:43
he trying to take a harder look at
8:45
their culture.
8:46
Take a playbook or a page out of
8:48
a playbook of the tower health strategy. Is
8:50
there something that really helps you kinda get
8:52
that buy in from your from your team
8:54
from from the bottom up and kind of
8:56
maybe a specific example you'd like to highlight
8:58
where this new culture helped to kind of
9:00
a significant benefit or operational change at your
9:03
system recently?
9:05
Yeah. Absolutely. You know, when we put out
9:07
our strategic plan, I don't know, eight or
9:09
nine months ago, one of our and our
9:11
first strategic pillar was the tower experience. And
9:13
the tower experience
9:15
is where every person feels
9:17
when they interact with tower health, whether it's
9:19
patients, families, or team members, you know, it
9:21
matters.
9:22
We've we have 10,000 what we call caregivers.
9:25
Every single person, no matter what their role,
9:27
is a caregiver and ultimately has some impact
9:31
on the patient experience. Part of being a
9:33
caregiver is how we treat how how we
9:36
treat each other. That is a very big
9:38
part of,
9:40
you know, who we are at Tower Health.
9:43
We want people to feel like they belong
9:45
at Tower Health, like, they should work at
9:47
at Tower Health because they are part of
9:49
a tower the Tower Health family,
9:52
and we and we know that everything starts
9:55
with our people. You know? We have 10,000
9:58
caregivers taking care
10:00
of hundreds of thousands of unique patients over
10:02
the course over the course of the year.
10:04
Reading Hospital is the busiest single emergency department
10:07
in the state of Pennsylvania.
10:09
Okay?
10:10
So we couldn't get any of this done
10:12
without the doctors, the nurses, the EVS workers,
10:15
the dietitians,
10:16
the nurses' aids. Every single person plays a
10:20
key role in our success, in our turnaround,
10:24
and making sure that
10:26
they and the patients
10:27
and their coworkers feel, you know, like a
10:30
like a family in all sense. Now that
10:33
word is used loosely, but we want people
10:35
to feel comfortable when they're here. They're gonna
10:37
work hard. Everybody's working much harder than they
10:40
worked years ago. Health care has changed dramatically,
10:42
but we can still be kind. We can
10:44
still care about each other, and we can
10:46
still look out for each other.
10:48
Yeah. No. Fantastic.
10:49
Greg, a credit to yourself. You're fantastic to
10:51
ground you.
10:53
So so looking a looking ahead to that
10:55
next phase, of Tower Health, Michael, no doubt
10:58
a lot of a lot of tough work
10:59
and challenging work still to be done, but
11:01
I think important to to no doubt take,
11:04
take a moment to kind of evaluate where
11:06
you've come from and kind of the success
11:07
you've had in the past. Looking ahead,
11:10
strategic growth of Tower Health, where do partnerships
11:13
come into play? Where do collaborations come into
11:15
play?
11:16
What do you think about the next couple
11:18
years in terms of growth and sustainability for
11:20
the health system?
11:21
Yeah.
11:22
Partnerships are
11:24
one component and and a key component of
11:26
the the board of strategic plan. You know,
11:28
we evaluate partnerships through a single lens through
11:31
a single lens. What helps us meet community
11:34
needs in a sustainable way? We don't provide
11:36
every
11:37
service, and we shouldn't try to be everything
11:39
to everyone. So there's an opportunity
11:42
to strategically align
11:44
with with,
11:46
a partner that brings a certain level of
11:48
expertise
11:49
to our community, whether it's in clinical, whether
11:52
it's research,
11:53
whether it's
11:54
technology.
11:55
A great example is our partnership,
11:58
with the Siemens Healthineers.
12:00
It gives us access to the latest equipment
12:03
and software that supports our efforts to modernize
12:06
care delivery without, you know, without a, a
12:09
capital expense that we're not able to endure.
12:11
The real value is partnering with experts, including
12:14
in the areas like AI,
12:17
to strengthen our service line and the care
12:18
experience. Siemens brings that to our organization,
12:22
and it allows us to work together. It's
12:24
not about just buying equipment. They bring expertise.
12:28
They bring data. They bring artificial intelligence. They
12:31
bring technology
12:32
to our organization that we wouldn't be able
12:35
to build ourselves.
12:36
So we bring in the expert.
12:39
I I guess a quick last question before
12:42
I let you go, Mike. We're very generous
12:43
of your time, your insights here. I guess,
12:45
Pennsylvania
12:46
is such a an interesting stage, but also
12:49
seems like a challenging state when you when
12:51
you talk about I think, unfortunately, we've seen
12:54
maybe the the state with the most hospital
12:56
closures in the most recent years. We've seen
12:58
a ton of hospital consolidation.
13:00
Maybe not mutually connected because of that when
13:02
I think about the Crozer Health situation. I
13:05
think of,
13:06
CHS gonna sell a few hospitals in the
13:08
in the area, the Jefferson Lehigh Valley merger.
13:11
It seems like there's a ton of m
13:12
and a activity going on in that state.
13:16
I guess kind of a crystal ball, if
13:18
you don't mind, where do you see hospital
13:20
consolidation going specifically in your state? And maybe
13:23
is this, an avenue that,
13:25
Tower Health may may look a little bit
13:27
higher harder at with some of these challenges
13:29
if the the opportunity to align with a
13:31
a large academic system or something like that
13:33
might come into
13:35
play. Yeah. I mean, speaking more globally, I
13:37
think it's very clear that, you know, you'd
13:40
you're not gonna have a lot of
13:43
stand alone, you know, two hospitals
13:45
systems. I think it's it's very clear that
13:48
each state, depending on their size and density,
13:50
are going to have, you know, two or
13:52
three major players in it, and you're gonna
13:54
have to probably align with one of them
13:55
or a bunch of the smaller if it's
13:57
a bigger state, a bunch of the smaller
13:59
systems theoretically can come together,
14:01
to create some sort of alliance. Now does
14:03
it have to be a true m and
14:05
a? Can it be affiliations?
14:07
Sure. But it's very clear in Pennsylvania
14:10
when you when you look at, you know,
14:11
the the University of Pennsylvania health system and
14:13
the and and the and the Jefferson system
14:16
that in the Philadelphia region, there there are
14:18
two big systems that are really,
14:21
you know,
14:22
responsible that territory. Now there are a couple
14:25
of smaller systems that are, you know, 2,000,000,000,
14:27
1 and a half billion. But when you
14:29
have, you know, a $12,000,000,000 system and a
14:31
17 volume system,
14:33
the the the efficiencies
14:35
just make more sense to align with one
14:37
of them. So but I think that's gonna
14:39
be a nationwide effect. I think we have
14:41
to look at our, you know, our cost
14:42
infrastructure, and the best way to do that
14:44
is to align because, obviously, you know, the
14:46
back office
14:47
and things like IT and other technologies,
14:50
you know, if and and human resources and
14:52
finance,
14:53
the more efficiencies you can get as a
14:55
bigger system, the, you know, the more leverage
14:58
you're gonna have and the more ability you're
14:59
gonna be able to withstand,
15:02
you know, what's the unknown that's in front
15:04
of us, right, with insurance carriers, with, you
15:07
know, government regulations and such reimbursement structures.
15:10
But I do see that the trend's gonna
15:12
continue
15:13
of of of more systems getting larger and
15:17
less of the standalones.
15:19
Yeah. Yeah. And all sorts of questions for
15:20
for the independent hospital, I guess, as well
15:22
as it comes down the line.
15:24
Michael, fan fantastic. Really, really a pleasure to
15:27
have you on the podcast with us today.
15:29
Always a pleasure to catch catch up with
15:30
a fantastic leader like yourself at Tower Health.
15:32
So, so greatly appreciate your time, and thank
15:35
you so much for joining the Becker's podcast
15:36
today. Thank you so much, Al. Appreciate it.