Craig Samitt
If there were ever a time for incumbents to take control back, adopt innovation, and lead the reinvention of healthcare from the inside out, it would be now. So, I’m inspired. I think there is probably no better time to be in healthcare as an incumbent because there is a whole world ahead of us that we can actually lead unencumbered if we’re willing to change from within and take on an interesting and fun, bolder path forward.
Narrator
That was Dr Craig Samitt, challenging healthcare leaders to disrupt the industry from within their own organizations rather than having it be done to them. Samitt is well-positioned to talk about what it’ll take to spread innovation across healthcare. During his 30-year career, Samitt has been an advocate for adopting value-based care, improving operations, empowering clinicians, and much more. He served as a CEO of Blue Cross and Blue Shield of Minnesota and the president and CEO of Dean Health System, as well as holding other leadership positions across the industry. This last February, he was named CEO of the National Physician Enterprise division of Surround Care, the parent company of Navvis and Esse Health, which merged in 2022.
In this podcast with Oliver Wyman’s Ann Kaplan, Samitt details how incumbent healthcare organizations can be leaders in transforming the industry. The Oliver Wyman Health Podcast is brought to you by the global management consulting firm Oliver Wyman Health. For more insights on the business of transforming healthcare, visit our online publication, health.oliverwyman.com. We pick things up with Samitt talking about the creation of Surround Care.
Craig
Surround Care was announced late last year and is the merger of Navvis, one of the most successful and transformative population health companies in the US, and Esse, an organization I know very well from my Dean days and one of our sister organizations as one of the nation’s independent value-based, leading primary care medical groups. We often use the expression, where there is a will, there is a way. In my experience, one of the challenges in driving healthcare transformation is there’s usually just one or the other. Some organizations have the will and not the way or the reverse.
And so what was so attractive to me when I read about the partnership between Navvis and Esse was that it really brought these two critical components together. Esse, in my view, represents the will: a medical group that believes that better care at a lower cost is possible and aspires to deliver on that promise. And Navvis is the way: tools, technology, and innovations that enable the transformation of care delivery. And I’ve seen a lot of hype in the industries and a lot of false prophets and a lot of organizations that are coming together with sort of big ideas without really the foundational parts that are coming together to drive true change, and Surround Care was established to deliver just that.
Ann Kaplan
Is that combination what sets Surround Care apart in terms of driving innovation or are there other pieces that make Surround Care different?
Craig
Well, the problem as I see it, is that many of the mergers that I’ve talked about, and frankly a lot of the innovation that we see in the industry, has been, in my view, highly misguided. We’ve become so obsessed with the latest shiny object that we’ve lost sight of the fact that we haven’t solved healthcare’s problems. And it’s remarkable to me that I predominantly hear two things as I listen to, quote, “innovators in healthcare.” Many disruptors or innovators either spend a majority of their time admiring our problems but really don’t have answers to fix it.
Or the other scenario that I hear, which is even worse, are organizations that are developing innovative ideas that make a lot of money for them but don’t solve the patient’s or the industry’s problems. And that’s where I think Surround Care is different. It’s not just the coming together of these organizations, Surround Care is focused on solutions to the problems. The obsession is not with the shiny object, the obsession is pure and simple to deliver results. But no more false promises about fixing the industry. Our focus at Surround Care is to actually do it and to be the transformation company.
Ann
And is there a secret sauce to that transformation that underlies that?
Craig
We have to remember that a large majority of healthcare today is delivered by those that have lived in the space for a long time, not new entrants into the industry. So I think the secret sauce of our focus is really aimed at the incumbents, the health plans, the health systems, the doctors, with a focus on tools and capabilities and culture and strategies to reinvent the industry from the inside, not to really be disrupted from the outside. Disruption is something that has happened to incumbents rather than something that is led by incumbents. And I think that’s the secret sauce of Surround Care. It’s really embedding ourselves in partnership with these organizations that have always been able to change all along and haven’t had the tools or the motivations or the expertise to get them there.
Ann
So when I think of incumbents, I think the word that comes to mind is a lot of inertia that you have to overcome in order to really start this movement towards change. And so how do you approach that when you think about embedding, inspiring, and starting to build that momentum?
Craig
I think that’s the key question, and frankly, I believe that it’s a big part of the problem and bringing about the change that we want to see. And I’m going to focus predominantly on physicians because that’s the world that I’m in within Surround Care. I’m leading the National Physician Enterprise, which is the creation of a high-performing, purpose-built, value-based, and inspiring practice environment for doctors, going back to why they got into healthcare in the first place. And the fundamental problem I think that we’ve had in overcoming inertia is we’ve gone about it in the exact wrong way. Over the balance of my career, we’ve tried to herd physicians or then we tried to manage physicians and then we’ve now wanted to hold physicians accountable or to harness physicians.
And what’s most horrifying to me is the latest expression that I’ve heard is that many organizations are trying to harvest physicians. And the reason why that horrifies me is it makes me think of the Matrix movie series where machines are harvesting humans for their energy, and that’s kind of what the physician environment has become. And we believe that if we herd or harness or manage or harvest physicians that we’re going to bring about change and overcome inertia. And I think that’s exactly wrong. I think that’s exactly opposite. We have to completely reverse the model. Empowering physicians and bringing about the change we seek is based on intrinsic, not extrinsic motivation. In my view and in my experience, change will come when we focus on physician partnership and support, and inspiration rather than manipulation, management, and control of doctors. Physicians and their teams have become victims of change in healthcare, and in my view, they should lead it.
Ann
What role do you think other players in the industry have in making that shift towards empowering physicians? I’m sure everyone has their own view of what they want to empower the physicians to do. What would be your ideal?
Craig
I’ve long believed that healthcare is a team sport, and part of the problem is, we’re not coming together to solve the industry problems, we’re breaking apart. The observation that I’ve had is we’re seeing a lot of big players buying up the pieces of the healthcare ecosystem, all with the desire to disintermediate or compete with the traditional model or the incumbents. Or the exact opposite, which is sort of hyper-fragmentation of the industry where everyone’s coming up with their slice solution and they’re going to pull this part of healthcare apart from the way that the ecosystem works. And frankly, I think both of those answers are wrong.
The right answer is to create an aligned and integrated solution ecosystem. And the reality is everyone has to change. Even though we’re going to build the highest-performing medical group in the nation through what we’re doing in Surround Care, I think it will require change. I think that the way we practice healthcare needs to change. I think the way we finance needs to change, the way we use technology needs to change. And there isn’t one single party that can pull all those parts together and create a singular solution, I think it’s going to require partnership and alignment, and integration.
Ann
As you think about the current economic environment, does that make you more positive and optimistic about the change to come or a little bit worried about a continued delay in enabling that partnership towards transformation?
Craig
I think the innovation that will get stifled by the current economic climate is based in these disruptive innovators that are trying to tear the industry apart. I think the economic crisis should and hopefully will instigate change among the incumbents, especially with doctors and hospitals. Never before have we seen such a burning platform. Hospitals at risk of tripping their bond covenants, doctors and other clinicians feeling disenfranchised and burned out, patients not knowing how to navigate a complicated and fragmented delivery system. If there were ever a time for incumbents to take control back, adopt innovation, and lead the reinvention of healthcare from the inside out, it would be now.
So I’m inspired. I think there is probably no better time to be in healthcare as an incumbent because there is a whole world ahead of us that we can lead unencumbered if we’re willing to change from within and take on an interesting and fun, bolder path forward.
Ann
If there’s an incumbent listening to this and recognizing that burning platform that you just talked about as they stare at their own balance sheet in the organization, do you have recommendations of the first three things that they should do to start down that path towards change?
Craig
The first I would say is not to go it alone. And I think that’s the approach that a lot of disruptors are taking. And as I’ve said, change is partnership oriented. Incumbents have probably long wanted to bring about change but don’t exactly know how. And I think there are organizations out there that enable that type of change that can really help support organizations that want to go in a different path. So that would be number one. As leaders of organizations, we say that we can either build or buy or partner. As we go through large-scale organizational change, building takes too long, buying is too expensive, especially when we want to pursue capital-light strategies. And so I think partnerships are the way to go. And that would be my first suggestion.
The second thing that I would say is that incentives matter. For incumbents on the care delivery side, we can’t get from where we are to where we need to be on a fee-for-service chassis. We need to be willing to be in the value space, be in the population health space. We need to be willing to bear risk as an organization. And I think until we do that, we’re not going to have the resources and, frankly, the flexibility that comes from a population health approach to bring about internal change within our organizations.
The third thing that I would say is, one of the most critical ingredients of change in my experience is leadership. Change does require energy and effort and vision. And I think there’s a whole new generation of leaders out there that want to carve a different path forward for the industry. So I’d very much focus on leadership expertise and talent, as I feel we’ve done at Surround Care, aggregating an army of people that aspire and have a vision for change and have the expertise to do so. Trying to bring about change with the old guard that isn’t inspired is really difficult.
Ann
To go back to your first point around partnership, you’ve seen a lot of innovators, you’ve seen the industry evolve. Are there any red flags that you would have people watch out for as they look at potential partners to start down this path?
Craig
From my point of view, you only get to count as an innovator if you solved a problem in healthcare and if you’ve demonstrated that you’ve moved the needle in quality, service, cost, access, or professional satisfaction for the people delivering the care. And the red flags for me in healthcare is there are a lot of false prophets. I think there are a lot of organizations that are making a claim or have identified this shiny object, but, when you look under the covers, they’re not bringing about anything different and anything significant. And when we talk about sort of the results that I’ve described in each of those dimensions, there are many organizations that haven’t delivered on any of them, let alone even one or two. So I think we’re all inundated with organizations that are making a lot of claims about the change that they brought about.
I would counsel incumbents in particular to really look under the covers and determine whether the organizations they’re looking to partner with are actually delivering the results. And I think the same is true of what we’re trying to design. At Surround Care, our focus is on to speak truth, to become obsessed with and solve the problems in healthcare, and then to deliver on them. I think if every organization in healthcare was less about the money and less about the optics and more about the outcomes that we can achieve, our industry would be in an entirely different place.
Ann
I want to go back to one of the pieces around inertia, because we had talked about incumbents in a really broad sense. I think for many of the listeners, they might break it apart into health systems versus physician groups, and they each have their own set of inertia. Is there a specific approach you take to really motivating physician groups in particular towards this change?
Craig
When I think about physicians in particular, I believe that the most effective strategy that brings about the accountability that we seek is all about intrinsic motivation, not external control. The most accountable organizations that I’ve seen and have had the honor of working with focus on physician culture and professional satisfaction, specifically delivering exceptional care or physician values and lifestyle or practice simplification and automation. Yes, incentives matter, but I think there are a lot of organizations that jump immediately to extrinsic motivation, and they say, “All right, well, let’s just gain share with the docs, or let’s put financial incentives.” Incentives do matter but when we jump immediately to incentives, it implies that physicians are predominantly driven by money, which many are not. Rather than rewarding physicians through piecemeal incentives, we should be providing them equity in organizations that are delivering true value, giving them a portion of the value that they create.
My observation is that value created on the backs of physician workload is increasingly being harvested by the, quote, “medical industrial complex.” And in my view, it won’t be until physicians are truly rewarded for the value that they create and that they’re inspired and supported and valued and are allowed to deliver the care that they grew up to want to deliver when they went to medical school, it’s then that I think we’ll see internal change that’s really led by and driven by physicians, and we overcome a lot of the inertia that we’ve seen in that space. We have to be thinking from within, not from outside.
Ann
So Craig, as we take a step back, if these innovations that you’re proposing were in place when you were completing residency, how do you think it would’ve changed how you entered delivering care?
Craig
It’s a fascinating question. If the healthcare that we seek at Surround Care was in place when I was finishing residency, I’m not so sure that I would’ve left residency to go to business school to get into the administrative side of healthcare. I suspect that I likely would’ve stayed in clinical practice. And what I didn’t quite understand as I was in clinical practice is everyone kept talking about how healthcare was broken or healthcare wasn’t innovative, or that we had flaws as an industry. And I wanted to go out there to understand why we had those flaws and what we would do to fix them.
I think that if those innovations were in place, healthcare would be much more fulfilling. These are incredibly talented, visionary, passionate, caring individuals that really should be maximized for the role that they can play as caregivers and innovators. If we could turn off the treadmill, we could arm ourselves with the tools and the capabilities that would put us in charge of driving change. I think we solve a workforce problem first and foremost. I think we become an industry that everyone wants to be part of. And I would envision, frankly, as we build this out within our own organization, that we’re going to have physicians and other clinicians from all other corners of the industry to want to be part of this because it goes back to the basics of why we got into healthcare.
The other thing that I would say is I’m not just a healthcare executive and a physician, I’m a patient, I’m a caregiver. I unfortunately lost both of my parents and my brother to illness, and I became their caregiver in the throes of their illnesses. And there was no better example of how incredibly broken healthcare was than when you’re trying to knit together a very fragmented imperfect system. Even when you have a lot of healthcare knowledge, it’s almost impossible. It makes this a professional problem to solve and a personal problem to solve. So I think that if these were all in place, care would be better for doctors, and care would be far better for patients and caregivers.
Ann
Craig, thank you so much for the time today. I really appreciate it and very much appreciated learning a little bit more about Surround Care and what you’re trying to do there.
Craig
Absolutely, Ann, it was an honor.
Narrator
The Oliver Wyman Health Podcast is brought to you by the global management consulting firm Oliver Wyman. For more insights on the business of transforming healthcare, visit our online publication, health.oliverwyman.com.
This transcript has been edited for clarity.