Northwell CEO Says Health Care Model Must Change

Health care is one of the biggest and most expensive sectors of The US economy. If patients are struggling with affordability, hospitals are under financial pressure, and access remains a challenge. It's the topic of this week's c suite segment. Yeah. Joining us now is doctor John D'Angelo. He's the CEO of Northwell Health, New York State's largest health care provider and private employer. Welcome. Welcome to the studio. Well, thanks for having me. Sure. Sure. Now David kind of set it up nicely talking about a lot of the issues that the health care industry is going through. Is the tradition... I wanna start broad stroke here. Is the traditional health care model, do you think it's sustainable? And and and if not, what does a restructuring look like in your eyes? Sure. I think that the short answer is no. It's not sustainable. You know, we have an affordability crisis that's affecting all stakeholders. And I think we need to address that challenge holistically without breaking the things that you also alluded to in the opening, without breaking access or quality or outcomes. So we need a patient centered, patient focused road to affordability, which I'm very determined to help help guide. I just had my annual physical. My doctor about to retire, so we talked a lot about the challenges of getting new primary care physicians. But something he says, there's a lot of talk in government and policy at the high level. People opining about what needs to change. I'm so looking forward to talking to you because you are a doctor by training, and I wonder sort of how that's influenced the way that you look at what we've been talking about here, issues of affordability and access, and indeed, the way that health care could change kind of at a fundamental level. Yeah. Being a physician CEO, I think, is powerful. I, started in the front lines of emergency medicine, worked decades, at the bedside and, progressed through leadership. And it it maybe sounds overly simplistic, but something that I've held as part of the core philosophy from day one is is two simple rules. Rule one, do what's best for the patient. Rule two, do what's best for the people taking care of the patients. And as simple as it sounds, I find if you come to those principles in your decision making as a health care leader, and I think in the global kind of conversation about affordability, you can land at the right solutions. And the political nature of it and the simple sound bite solutions that you hear about, I don't think are gonna solve this very complex problem. Yeah. And how do you do that without just compromising the quality of care as Dave was mentioning? Yeah. Right. And you... A, you have to keep in mind that, you know, in in this country, we have a chronic disease epidemic. We've had doubling and tripling of diabetes, hypertension, obesity, things that ultimately are what drives up the cost of care. And, you know, we're in a we're in a system where we are currently predominantly reimbursed. The economic engine of today is how many high margin kind of procedural, high acuity patients can you put through, you know, a hospital. That's what we get paid for for managing illness and injury, where the real path forward has to focus on the factors that really... The 80% that drives the health outcomes, which is which is, you know, life choices and circumstances that people, find themselves in. It's... And that's how you really, I think, attack affordability is we gotta focus on on chronic disease. And, you know, to put it into perspective, I think the real key to affordability is wellness. And how do we create a model where we're as focused and as committed to to wellness and prevention as we are on illness and injury? How difficult is it to be a nonprofit hospital system in this environment? I think we've heard a lot about the role of private equity in in in medicine. You're you're immune from that. But, I mean, how how is it to compete against that and and be a nonprofit player in this in this in this sphere? I I think people don't understand how difficult it is. And to give you, you know, an example, like, you know, like 60% of the nonprofit hospitals in New York State are running in... They're in the red. The average margin across the nonprofits across the whole state are close to 0%. So you're you're you're literally threading a needle to to not... You know, you don't wanna abandon your mission, and Northwell is very focused on our mission that doesn't drive any profits. I mean, when it's not about profits, we're out there with food is health, addressing, you know, the behavioral health crisis, homelessness, and other things that we are dedicated to doing because that's what drives overall health, substance use disorder, gun violence, things of that nature. And you wanna continue to do those things. And and, again, the the things that keep your your head above where the way you survive is the high margin, high acuity stuff that, you know, you need. And, unfortunately, the economics are are against us in every angle you can. You know, 70%... 60 to 70% most hospitals in the state are government paying Medicaid and Medicare. Medicaid, you pretty much make about 70¢ on the dollar. You know, it doesn't cover your cost of care. Medicare, it's about 85 to 90¢ on the dollar. So you're losing money with 70% of the people that walk through your door, in which case then the 30% that have commercial insurance are where you have to make that up just to maintain that 0% margin. So the dynamics are challenging. It's only getting tougher. We have an aging population on top of that chronic disease epidemic. We have workforce shortages. So you put all that together, and I joke around. That's why they hired an ED doctor to to be a CEO. One. Yeah. We're gonna go figure this out. So... Yeah. So Well, you mentioned the the shortage. I remember, you know, during COVID, after COVID, that's when we started hearing a lot. You know, we need nurses. We need all these different things. How how is it... How does the picture look now as far as staffing at the hospitals now, and what are you doing to to improve that? Yeah. It it varies in different parts of our geography. We're big. So we spread, you know, all the way out Long Island, the... In the... In New York City, up through Hudson Valley, in Connecticut. We're a big organization. And it... It's different in the different, geographies, but overall, the industry is suffering from shortages. And there's projections that, you know, we'll probably be about three to 400,000 fewer nurses in this country that we're gonna need over the next five years, about 80,000 plus fewer doctors that we're gonna need to meet the demands, the demands of the aging population, and that's the population that has this bigger burden of chronic disease and the bigger, you know, acute care needs and the more complex care needs. So you have to be real intentional. And in my my my... From my perspective, there's, like, it's almost like a three pronged approach when it comes to workforce. What are you doing to retain the workforce you have? How do you amplify the capabilities of the workforce you have? And how do you how do you develop pipeline? How do you how do you build, you know, build that pipeline? So retention is so strictly you keep people focused on our purpose. You know, none of us went into health care. You know, we all went into health care for purpose. You know, how do we contribute? How do we help people? How do we help communities? So our workforce works incredibly hard. It's challenging, and you gotta keep people focused on that. And then... And you gotta give back to them, you gotta focus on their wellness and their career development. And that's the pipeline piece too is in addition to to to their wellness, their their career development opportunities, whether it's ex... Like myself, I started in an e... In EZDoc. I didn't plan to anticipate this, but Northwell has invested in me over twenty six years and and so forth. The second part is building pipeline, and we have to be innovative in that regard. We have to not only think about the current roles and the current needs, but what are the needs of the future. And I'll give you some exam... Two quick examples. One is internally, we have a corporate university. There's a shortage of ultrasound techs in the market. So we got the licensure. We created an ultrasound school internally, and 20 of our employees every, you know, nine or twelve months can raise their hand. They could be from the dietary, from the front desk, wherever they are, And we're train... You know, we graduate them as ultrasound techs. They still work during the training, and then we put them into roles. So internally, we have a lot of pipeline programs like that. And then the traditional things are medical school, our nursing graduate programs. But the real fun one is actually partnering with Bloomberg Philanthropies and the New York City school systems. We opened last year the Northwell School of Health Sciences, which is a high school in Woodside, Queens. We have about 200 kids per class. They're in their second... Their tenth grade class... Ninth and tenth graders now. Highest attendance rates, highest grades in the New York City school system. And they're getting, exposure through curriculum that Northwell help create in health care administration, nursing, diagnostics, and behavioral health social work. And then it's not just the curriculum. We provide mentorship and then upon graduation career pathways. And that's how you think about building the workforce of the future. And David knows this, but my daughter is studying to be a nurse. Yes. Yeah. And so you're saying she's always gonna have a job. Always be employed. Thank you. Yeah. Just send her resume over our way. Yeah. I wanna ask you about AI. It was a couple of weeks back. Zeke Emmanuel at Penn, VC, wrote this piece which really caused some waves about AI and medicine. And my main takeaway from that is it's coming. We're gonna have AI more integrally involved in medicine, but also it's gonna be able to do things better than doctors can eventually when it comes to diagnosis, for instance. Your reaction to that so much as you have one, but also how are you thinking about the way it's gonna be integrated in medicine broadly? I think if you think about all the dynamics we talked about Yeah. I think there's a... I I I... Let me frame it this way, a dual moral imperative here. I think we have first a moral duty to deploy any tool that will help save lives. Yeah. And if there's... If we withhold technology that can see a cancer before the human eye or pick up on a medication error before it occurs, and and we don't deploy that, then that's not consistent with our mission and our our our our purpose. However, the second imperative is we have to be really clear of what belongs to AI and what really needs to be human. That human element's important. The human element's important. So I'm okay with AI reading the billions of pixels of a pathology slide or looking through a mountain of data to find the one out of thousand patients in our hospital that might be at risk of something that's not yet visible and get further upstream. But AI needs to be thought of as a thought partner, and it needs to be a tool. But any decision of consequence, the the human interaction, whether it's goals of care discussion, end of life discussions, being with a patient and be present as you go through a new a new diagnosis, again, decisions of consequence especially have to remain human. It has to sharpen our judgment, be available to us, but we need to retain that that piece. From a more broad perspective, I think AI is gonna be critically important in in addressing the affordability crisis as well. How do we use it to address the the administrative friction and burden in health care? That... There's a lot of costs associated with that. How do we use it to amplify the capabilities of our workforce? And using a doctor's example, I see as AI is not replacing the doctor. I see it as giving the doctor back to the patient. Our doctors spend twenty minutes on a computer. For every ten minutes, are face to face with their patients. That's not acceptable. So how do we... And you hear about clinical burnout. It's because of this administrative burden that we're all under. So I I see it as a tool that could help people work more efficiently, and we can scale their capabilities because we know there's gonna be shortages, but not making it seem like we're asking them to work harder or do more with less. And then third is what I alluded to in a minute ago. It it it could be a great tool for diagnostics and monitoring and intervention and earlier drug discovery and deployment and things of that nature. Wow. Love it. You have just, like, a a minute left here. You took over the reins from Michael Dowling, who led the company for twenty three years. So how is your leadership? I'm I'm sorry. I'm only giving you a minute to answer this, but how is your leadership role different? Well, Michael will tell you, and he was a phenomenal CEO, and I'm still fortunate to have him Yeah. Available to me. We are an organization that has never stood still. We have always challenged ourselves to think differently. We're not tied to legacy. We're not accepting the status quo. We're always trying to improve. So I think one thing Michael and I have in common is that drive for innovation and change. What's different is the dynamics are constantly changing. I'm a I'm a physician. He was from a social work background. We maybe have a different way we approach things, different life experiences, but we're we're both equally focused on the mission and the purpose. And I think he did an incredible job, and I think I'm the right person for the times that we're now gonna be embarking on. Check back in in a year. We'll do another visit. We got Absolutely. Physical. Happy to come back. Doctor. D'Dinzio, thank you very much.