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About This Episode

The unique culture of healthcare includes a strong sense of mission and obligation to the community.

In this episode, James Hereford, President and CEO of Fairview Health Services, shares his unique journey from teaching statistics to becoming a CEO in the healthcare industry. James discusses his early work with Boeing and Group Health Cooperative, emphasizing the unique culture and mission of healthcare. He highlights the importance of understanding revenue and costs, advocating for Electronic Medical Records, and recognizing the complexity of healthcare systems. James delves into the potential of generative AI in healthcare, warning against the pitfalls of past technology implementations like EMRs. He also stresses the need for thoughtful use of AI to improve patient care and reduce administrative waste. As a CEO, James describes the challenges of managing a large organization, the importance of coaching, and the necessity of building a strong, integrated team. Additionally, he shares insights on balancing revenues with costs, managing relationships with payers, and addressing financial challenges in the healthcare system. Finally, James offers practical advice for advancing a career in healthcare, including taking on difficult projects and pushing beyond comfort zones.

Tune in and learn about the intricacies of healthcare leadership and innovation!

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Martin Cody: Welcome to the Edge of Healthcare, where the pulse of innovation meets the heartbeat of leadership. I’m Martin Cody, your guide through riveting conversations with the trailblazers of healthcare. Tune in to gain exclusive access to strategies, experiences, and groundbreaking solutions from influential payer and health system leaders. This isn’t just a podcast, it’s your VIP ticket to the minds shaping the future of healthcare right now. Buckle up, subscribe, and get ready to ride to the Edge of Healthcare, where lessons from leaders are ready for you to use today.

Martin Cody: Hello again, everybody, and welcome to the Edge of Healthcare. My name is Martin Cody, senior vice president of sales for Madaket Health. And today’s podcast is dedicated to leadership at the highest level in a health system. With us to share some of the wisdom and insight of leadership and the path to achieving great accomplishments and helping the patients is James Hereford of Fairview Health Services. James, welcome to the podcast.

James Hereford: Thank you, Martin. It’s my pleasure.

Martin Cody: I always appreciate CEOs because the old phrase is the buck stops here. So it’s, I mean, sure, there’s a board that you have to report to, I would guess. But ultimately, some of the day-to-day operations all fall on your shoulders. So I’m curious your path and you can start as far back as you want. And how did you originally get into health care?

James Hereford: Well, I believe mine is a fairly unique path because my degrees are all in mathematics or statistics, and I was working on my PhD in statistics at the University of Washington. We started to have a family. I got very revenue motivated as I was not very well paid as a graduate research assistant at the University of Washington, and I was teaching a course Summer quarter. It was one of those stats for business majors or stats for engineers, one of those things where literally nobody wanted to be there at summertime in Washington state, which was gorgeous. And the department chair sent a note around that was from the Boeing Commercial Airplane Group, which was asking for somebody with platform skills who knew statistics because they were starting their 777 build, you can tell this is a long time ago, implementing TQM and they needed somebody who could teach SBC and DOE. Well, I didn’t know what any of that first paragraph meant, but the next paragraph was, And we’re paying $50 an hour contractor’s wage. So I signed up immediately, went and checked out some books on Duran and Feigenbaum and Deming, etc. to try to learn what all this was about. Started teaching, started doing project work. And out of that, because it’s Boeing, you have to have your own quality program, and I helped them develop that, I was a consultant around many of their suppliers in the Puget Sound. And just randomly one of my clients was Group Health Cooperative, which is a, was, it’s now been acquired by Kaiser but was staff model HMO. And I didn’t know anything about health care, but I got into it and there were three things that were so appealing that I’ve never been able to escape, which is more smart people per square unit space than any place. One of the many things that’s unique about health care is our smartest, best trained people are our front line employees. And Weiner, MD, PhD, is in large part. The mission orientation and a not-for-profit and the sense of obligation to the community and just that spirit that embodies most, if not all, not-for-profits. And then, frankly, their processes were so bad. I couldn’t help but contribute. It was literally a Rolodex organization. And this was still, you know, 11,000 people spread around the Puget Sound. But to get anything done, you had to know the person to call. And so I got involved, and I was just going to do it until I could finish my dissertation. They offered me a job, so convert from a consultant. Well, this would be great. I’ll do this until I get done. 20 years later, I was still working there, having had this amazing career and really being able to stick my nose in almost all facets of health care because it’s both payer and provider and all the administrative functions, etc.. So that’s how I started because I could never escape. I went to California, worked at Stanford, and then came here.

Martin Cody: Now, were you born and raised out in the northwest?

James Hereford: No. I grew up on a ranch in Montana. If you’ve ever seen the Yellowstone, the TV series, that is actually filmed in the Bitterroot Valley, which is where I grew up, a little town called Hamilton.

Martin Cody: Oh, wow. So you recognize the importance of revenue at a very early age from that standpoint, and with the advent of a family, you probably also recognize the cost side of the equation very quickly. Interesting. And it’s funny because you’re right. And we talk a lot about on the program with regards to health care, seemingly have an endless supply of intractable challenges or problems. And even though I think we’ve advanced from the Rolodex, there’s still a large percentage of items that are faxed in the industry. So we have to figure a way to get past that. And you hit upon something which I think is, I mean, certainly your path is correct, is very unique because you didn’t come by it by, My dad was a physician or anything like that, or my mom was a CEO of a health system. But you hit upon something I always refer to as the tion philosophy. And people do things more often than not by their inspiration, desperation, or frustration. And it sounds like you looked at this and said, Oh my God, this is a nightmare. We need to do something about this and jumped right in.

James Hereford: My interests have always kind of tended towards large systems, systems theory, and part of what attracted me out of academia and into an organization was just the complexity of an organization. And it was true, you know, as a contractor, what I could see at Boeing. But man, was it evident as you walk into health care and just the sheer complexity. And much of that is just a function of who we are and what we do. Much of it is a self-inflicted wound. We make it more complex and many times than it needs to be. Or our particular sector is famous for how long it takes us to implement things, anything, right? And certainly, the way we’ve used technology, I was a big proponent of the EMR and helped lead the EMR installation in group health, and I was excited about the potential because in the paper record world, that paper record was never where you needed it. So I saw this as a great opportunity. The challenge is we didn’t really leverage it to unload the burden from our clinicians, but it’s actually done is added to the burden. So again, I think you could see this in, back in the 1990s, there was a whole literature around the information paradox and other industries, other sectors where adding a lot of technology wasn’t getting better. And out of that came Hammer and Champey and business re-engineering. We’ve never really re-engineered health care to the level that we need to, and that’s part of what we’re focused on in our organizations. How do we really re-architect create new clinical models and then use technology to support and remove a lot of the unnecessary activities, the wasteful activities, etc., that burden our clinicians and I think, contribute in many ways to the burnout that people are describing of how they feel.

Martin Cody: No, it’s interesting and certainly poignant that you mentioned the complexity of health care, and a lot of it is self-inflicted. And I think as we’re recording this, we’re, you know, within 24 hours on the heels of Walmart exiting the care system and closing 51 clinics, because I think someone there said in Arkansas, Wow, this is hard type of thing and realize it. And that’s on the heels, obviously, of Walgreens closing, you know, most of their VillageMD facilities. So and I want to get to Fairview in a second. But when you talk about the man-made self-inflicted complexities, is there anything in particular that you can put your finger on and say, We’ve got to get rid of this, or this is what we’re trying to address here?

James Hereford: Well, I think one of the things that just frustrates everybody, whether you’re a patient or whether you’re in the ecosystem of care delivery, is just the, what’s the reimbursement economic model that we have, which one could never dream up. You would never sit down and say, I’m going to make up a system. This system is not the one you’d make up unless you were trying to replicate the sixth level of hell or something, because it makes no sense. It traps everybody in very difficult circumstances to understand. How do I even judge value in health care? So, you know, that’s certainly one. But I think it’s also a function of I mean, health care is by its nature has been a specialization field. And I would submit that most of the problems in health care are not at the point of care. We have dedicated people, experts, decent processes, but when we start to string those points of care together is often where it fails. Too often put the patient in as the navigator, their own navigator, to try to figure out, Oh, I just had a clinic visit. But I arrived at the clinic and they said, Well, I had to have a lab visit before, or I just had a clinic visit and they said, Well, you’re going to need some imaging studies. Good luck. And then the complexity of that revenue model because, well, where can I go? How can I go? Is it going to be paid for? A level is it going to get paid for. We just don’t do a good job of stringing the events together. And I think the additional complexity is a stat I saw that I think is so exemplifies our challenges. So if you are a brilliant medical student in 1950 and you memorize the entire body of clinical knowledge at the rate it was expanding, it would take 50 years for that knowledge base to double. Fast forward to today. You’re a brilliant medical student. You’ve mastered the entire body of clinical knowledge. How long would it take to double? 73 days.

Martin Cody: Oh, geez.

James Hereford: [00:09:50] So this idea, I mean, we’re generating knowledge so quickly, this idea of the physician as expert who is all knowing, all seeing as mastered a field is increasingly difficult to justify because the expansion of knowledge is so vast. And so I think we’re also seeing those disruptions. And one of the, I think, the most interesting parts about the potential impact of generative AI will be how does that impact the provision of health care, and how does it impact Subspecialization and the various ways that we think about delivering care and those care models.

Martin Cody: And that’s funny, because there may not be any hotter topic than generative AI in health care right now. Every conference I go to it’s, AI is the first five things that are on the agenda type. But I also think we should learn from history. And before we introduce this type of technology, and that it’s the panacea that some believe it will be, it could also have the unintended consequence, like the EMR did, of creating vast amounts of additional work that I hope doesn’t fall on the provider or the physician. So I think you’re right. It does have some promise. But AI has been around, I believe, for about 47 years; the first time it was invented at a Ivy League school think tank, whatever. But now it’s coming into its own. But are you using it for anything with regards to patient care or administrative waste reduction at Fairview?

James Hereford: Well, so it depends on. You’re right. AI is this broad, encompassing term. I mean it dates back. I remember looking at the myosin e myosin studies at Stanford, which was artificial intelligence. You know, not well received because it was a functional description that was trying to actually write out in specific code. You know, how does a doctor think? Kind of a tough challenge. I do think we’re certainly, you know, if you’re familiar with the Gartner hype cycle, we are on the very peak of the hype cycle when it comes to generative AI. I also believe this is a once in a generation technology that is going to fundamentally transform a lot of what we think about in our society and what we think about from a care delivery system perspective. But the trick and the mistake I think we made with the EMR was we didn’t fundamentally think about how do we re-architect process, how do we fundamentally take advantage of it. If we fail to take advantage and think about generative AI, I think we’re going to get the same kind of result is it’ll just automate our ability to produce loads of garbage, you know, that we often see in a clinical note. Because people feel like, Well, what the hell, I’ll just put all this stuff in its defensive, you know. If I ever get deposed, it’s there somewhere, right? But it doesn’t support the clinical activity because you can’t find what you need at the next stop in that clinical note. There’s a real danger we might replicate that kind of garbage in, garbage out, if we’re using those notes to train the new generation of generative AI models. I’m more optimistic than that, but I do think it’s something that we’ve got to be very thoughtful about. And we do use AI, but it’s more what I would call it, not generative, but functional AI. So predictive algorithms to be able to see. During Covid, we could look at an x ray of a lung and have a high predictive validity around is this going to lead to complications or can this person go home. So those sorts of things.

Martin Cody: Prompt AI where you insert a question. So CEO’s difficult of any organization, whether it’s a household or a 300-plus location health care system. What would you say or what do you wish someone would have told you two years ago about being CEO of a health system that you now know today?

James Hereford: I think there’s several things. One is, I wish I would have listened to better to the people who did tell me, as a CEO, you’re going to spend an inordinate amount of time with your board, a third of your time. So I didn’t that how could that be possible. I have a great board, but I have 19 bosses, right? So I’ve got a very large, typical, not-for-profit board, and I spend a lot of time interacting with those 19 folks to bring them all along and make sure that they’re understanding of our industry, understanding of the dynamics and able to contribute in a way that really leverages their knowledge. I think the other thing that, I think I’ve always appreciated, but I probably underappreciated it is health care by necessity has to be a team sport. And as a CEO, you are the coach of that team. And the big transition for me as a chief operating officer was, and I was in it, I was going towards problems every day, I was in our facilities every day, but not just to see what’s going on or talk to staff, but really get at, you know, we’ve got a throughput problem or whatever. As the chief executive, you start doing that, you have to be very careful because suddenly you’re doing other people’s work and you can’t get the kind of talented people you need if you’re stepping on their toes and starting to do their work. And so how do you do that effectively? I call it underappreciated. And then just the amount of investment you need to do, being external, facing, just engaging with the community, engaging politically, engaging in state and federal levels. It’s less about you’re somewhat the choreographer of a very large symphony or a very large dance, but that dance is being produced and you have to talk to every other element of the ecosystem, and it’s being produced out in the open with a whole bunch of other people. So that’s, it’s just the complexity. And the other thing, of course, is you better have a thick skin because, you know, you are the person who’s face and who’s, you know, name is out there and people have various opinions driven by politics or other affiliations they may have that may not love you all the time. And certainly every decision makes, going to make somebody unhappy. Otherwise, you wouldn’t, the decision would have never gotten to the CEO level.

Martin Cody: You know, one of the things that you mentioned I do hear a lot with regards to wanting to help, and certainly from your operational background and fixing things, you want to dive in and you want to help, but you also have to take a step back because otherwise, you’ll be doing all the problem-solving. And that’s not what your role is. How do you strike that balance?

James Hereford: Well, I think it’s in part get great people and be thoughtful about what do they need from you and what do you need from them and being very intentional about that. Because otherwise, if the danger is they’re expecting you to be there to be a lifeline, but otherwise give them room, I need to be aware of that, and I need to be okay with that. Likewise, if they say, Look, I need your help here, I need your support, I need a more continual presence, again, we have to be intentional about that. And every team member, everyone on my direct reports team, different individual, different backgrounds, different experiences. And so you have to be attuned to those differences. But at the same time, you want a holistic, integrated, well-functioning team. And so you have to bring all those differences together into a soup that actually makes sense, right, and that it works together. To me, that’s one of the fun parts, is being able to come to work every day and work with very talented people, but also kind of work that puzzle of, Okay, what is my chief operating officer need versus what is my chief people officer or etc. and how do I interact with them and then how do I bring them all together into a holistic group.

Martin Cody: And did you develop this philosophy just through School of Hard Knocks and going through the process, or was there a management course, seminar, book, mentor, and people that pulled you aside and said, Hey James, here’s part of the dance. Here’s what many people fail to recognize. Was there anything along the line that helped you hone this philosophy and desire?

James Hereford: Well, I think part of it, I mean, I didn’t go all the way back in my career, but I started out as a high school math teacher and basketball coach in Montana with my master’s degree in mathematics. And so I have a great appreciation for the concept of coaching and bringing a team along. So at some level, that was wired deep in my DNA, I suppose. But, you know, I also came of age in the wisdom of teams and servant leadership and all of those books and educational opportunities and mentors. There was a fairly large focus on that which resonated with me. It made sense. To me combine that with kind of a systems thinking approach and how do work systems actually function or don’t function. To me, that’s a really intellectually stimulating area. So I think part of it’s I’ve been lucky, I’ve been, had the opportunity to work with amazing people that I’ve learned a great deal from, and I’ve been intentional about trying to learn as much as I can as I go along. And also in terms of my choices about where I go work, has it give me the opportunity to learn something. I mean, the reason I went to Stanford was I had never worked in an academic before in Stanford. And so I learned a great deal about academic medicine in that time period.

Martin Cody: And being in basketball, you probably gleaned some lessons from The Wizard of Westwood because John Wooden seem to have a good coaching success, and I think still to this day is regarded as the number one college basketball coach in the history of the world type of stuff. And he’s got several leadership books that are very foundational to kind of exactly what you’re talking about.

James Hereford: Yeah. It’s interesting. So my favorite coaches, certainly John Wooden is one of them. And just again, a person who thought through, what’s the system that I’m creating and I’m going to put these talented people in? He still went and got talented people, right, whether it was Lew Alcindor or Kareem Abdul Jabbar or Keith Wilkes or Bill Walton, all these wonderful players. But they worked together in a system that he was very thoughtful and creative. Dean Smith at North Carolina, another legendary coach; same thing. Created a very thoughtful system about how he thought basketball should be played. But more importantly, how do you bring a team together and then go get great players, put them in a great system, great things happen. So yeah, certainly influenced me a great deal.

Martin Cody: And as it relates to Fairview, give the audience a kind of an overview of the health system. And what are the top three things you’re working on right now in 2024?

James Hereford: Well, so we’re about a $7.3 billion healthcare system. We have 11 hospitals. We have hundreds of ambulatory sites. We have a specialty pharmacy function that’s quite good. We have a senior care subsidiary. So we provide skilled nursing, independent living all the way through skilled nursing spectrum. We have a number of different elements. It’s one of the things that attracted me to Fairview. The number one challenge we have is a version of what I described to our board and to our people as the 2%-4% problem. Our revenues are going up, contractual revenue is about 2%. Blended, commercial, and governmental. Medicare, Medicaid does not pay the bills. We do this cost-shifting thing to be able to try to balance that equation. Fortunately, costs go up about 4% per year. So that delta of 2%, that’s about $150 million a year. You have to take out of your cost structure or grow your revenue base just to stay even.

Martin Cody: It’s funny because I was one of those students in statistics for business that didn’t like being there, but even I understand that’s not a sustainable math problem.

James Hereford: Yeah, I’d say you’re going to have a business plan, a business model. Here’s your model. If your revenues are going to go up slower than your costs, go. Well that’s probably not the greatest business model world. And it’s the one that we’ve created this policy of how we’ve created the ecosystem. And it’s going to get worse because commercial insurance is going down. It has been for the last decade in terms of number of people insured. Demographics are certainly going to double the size of Medicare in the next ten years. Medicaid has become a bigger part of the overall cost kind of expense from a payer class. So for us, a lot of it is just how do we get our cost structure in a place where we can manage our costs in a way that’s commensurate with the revenues that we can expect? And we’re just not going to see, the government’s not going to put a ton of new money into healthcare. Commercial payers are saying, Look, no more. Don’t pass your increases, you know, that make up for all the other deficits in health care to us. We can’t afford it as employers. So it’s on care delivery systems and to a certain extent payers because they control that spigot of the money. And so how do you think about that? What we can control is our cost structure and then try to engineer better relationships with payers. You know, my ideal world, back to the Seattle days, you know, you sit at the same table with Health plan guy, but you could talk about where do we take that premium dollar and apply it to best effect anywhere in the continuum of care? Well, the problem we have these days is the plans control all the money, either directly or indirectly from the employers. And what we’re left is our medical loss ratio. And then plans say, Well, we want to do value-based care, which is essentially putting your medical loss ratio at risk, some portion of it. That’s not really value. We’re not looking at the total premium dollar. We’re not looking at how do we keep people healthy in the kind of holistic way that we need to. So I’m also, you know, at some point that kind of relationship has got to evolve.

Martin Cody: And it’s interesting because you just hit upon a thread that I want to pull on a little bit, because when you say we’re not looking at, you know, it’s we collectively. You’re not singling out anybody by any individual. I’m proposing that there seems to be a genuine lack of leadership at very high levels across the healthcare spectrum, and I see the point-of-care advancements we’ve made in the last 30, 40, 50 years have been unbelievable with regards to interventions, therapeutics and stuff like that. But on the administrative side, on the reimbursement side, we don’t seem to actually be making the advancements. And I don’t understand if that’s a leadership issue, if that’s a stuck-in-the-status-quo issue, if that is just the way health care is. What are your thoughts on that?

James Hereford: Oh, I think it’s probably a little bit of all. I mean, there’s certainly a policy aspect of this of how we kind of envision this entire system. I do think there’s a leadership issue. I’ve always described, as I was coming up, health care was an especially permissive environment, health care delivery. You don’t get enough money? Put up a new tower and stent more people. It was a volume-based business. Now that day is come and gone. You know, and back in, even with earlier in my career, it was a cost plus business. Just add up your costs, hand them to the payer, and say here. And the payer would just turn around and give it to the commercial, the employer. All that has changed, but I do think it’s created an environment that is fairly permissive in terms of historically not being all that challenged in terms of you’ve got to get better to survive. Well, that’s certainly changed. You have to get better; you’re not going to survive. Every market is different and every market has, you know, it’s easier in some and harder than others. The Twin Cities market is a very efficient market. Our reimbursements are fairly low. So we feel the absolute necessity to be able to drive improvement, get better, probably more acutely than others. There’s also an element of, you know, I love when people talk about the hospitals are the problem because 50% of the spending is in hospitals, which is absolutely true. But you look at the, where the margins are, it’s not in hospitals; it’s in all the middle tier, middle players. Right? It’s the distribution companies. It’s in medtech, it’s in Itech, it’s in payers that where all the money is made. And that’s the other half of health care. And we’ve chosen this in our particular society to say not-for-profit health care gets certain tax advantages, but in return has to act like a utility. Essentially, you got to be there seven by 24, got to be available. On any given day, I’m going to have 2 or 3 regulatory agencies in my system telling us how care should be delivered. And you have to compete in a free market environment where you don’t have access to capital. You don’t have the same affordances and advantages that either for-profit health care has or all these middle-tier players have. So at the end of the day, I’m not sure it’s a sustainable model, but it does provide impetus for us to get much, much better, which we have to do. And then it’s also consumerism. I mean, people don’t know if I deliver great technical quality. They know how we make them feel when they show up. And so you have to be also then provide an experience that people say, Yeah, these guys actually care about me and I trust them. We’re such a trust-based business.

Martin Cody: No, you’re spot on in all of that. It’s a great review of some of the challenges or many of the challenges, but also some of the rewards that are possible because the trust factor is very real. It’s something that is built over time, it’s built over interactions and the outcomes of those interactions. And some of the outcomes are within your purview, and some of them are not type of thing. But at the end of the day, you’re providing care and there is a trust factor because, you know, all of us at some point in time are going to touch the health care system coming into this world or leaving this world inevitably. I do want to see if you have any thoughts or wisdom to share for someone who is just entering health care, and let’s say they’re on the health care delivery system side, what would you tell them? As you know, Here’s 2 or 3 things to keep your eye on as it relates to overcoming obstacles, overcoming, having thick skin. You know, those sorts of things.

James Hereford: Well, I’ve had the privilege of being a faculty at the University of Washington, at Stanford, at Ohio State. When you teach a class, you know, students inevitably approach you and say, Well, you know, give me some advice. How do I, you know, advance my career or how do I get my career going? And my standard piece of advice and probably it’s a little self-serving because it’s worked for me, and so, you know, whether it generalizes or not, Get involved with the hardest, gnarliest projects you can. The advantage of that is a couple of things. One is you’re going to learn a bunch of things that if you’re just trying to be a functional, you know, leader and move up the pyramid, that pyramid gets steep in a hurry, especially if you aspire to be a, you know, chief executive, part of the C-suite, etc.. But the advantage of getting involved with those hard projects is it gives you a breadth of knowledge that others aren’t going to have. It also gives you exposure in and with the organization, so more people know you. If you’re a good, capable pair of hands that’s contributing to important projects that are complex and, you know, that’s those are the ones that I see and are visible to our C-suite, etc., you’re then demonstrating, you know, Hey, this is a person to keep an eye on. This young fellow, this young lady. Grab them. There’s an opportunity there that getting involved in kind of volunteering into the hard, complex problems, I think is the best way to make progress in healthcare. The other thing is, you know, you got to take risks. I was on the CEO succession plan at Group Health in Seattle. The problem was Scott Armstrong was my age, and so it was clear. And Scott was very talented. Great guy, still is, but retired now. Scott wasn’t going anywhere. So that was not going to help me. And I had spent 20 years learning kind of the HMO business and knew it really well. I didn’t know anything about the great unwashed fee-for-service, I didn’t know about academic medicine, etc.. So I was very intentional in going to find an opportunity outside of that very comfortable environment I was in, one I knew really well, to be able to advance my learning. And I think one of the opportunities that I’ve had and that helped me, is my ability to be able to have experiences in all of these different healthcare environments and then bring those experiences to bear on the current challenge.

Martin Cody: Yeah, it’s funny how often and consistent I hear that theme, and it can be summarized with get comfortable being uncomfortable and push yourself well beyond your comfortable limits. And it’s funny when you say, Go ahead and volunteer for the most gnarly difficult problem, because for all the reasons you said, and I definitely think the conclusion of those reasons, in addition to you’re going to learn a wide breadth of knowledge of the work environment that you didn’t know you’re going to get new skills, people are going to see you, that’s where the aspect of what you do is far more visible than what you say. And when you start acting in that manner, in accordance with throwing yourself in, you’re absolutely right, people notice that. And you may not even, more often than not, you won’t notice they’re noticing type of stuff. But all of a sudden, three months later, six months later, you’ll get tapped on the shoulder and say, Hey, would you mind participating in this part of the business? And it happens all the time. And I think that’s an incredible piece of wisdom to share. So thank you for sharing that.

James Hereford: Of course. And again, selfish, it served me well, but I think it served the people who have asked me that advice over the years, because many of them now are in very senior positions in healthcare organizations.

Martin Cody: Agreed. We’re going to conclude with the fun aspect of the interview. This is a word association speed round. So I’m going to mention some things and you tell me the first word or the first thing, paragraph, sentence that pops into your head. Ready?

James Hereford: Let’s go.

Martin Cody: Medicare Advantage.

James Hereford: Great mechanism to transfer taxpayer dollars to health plans.

Martin Cody: There’s a lot of threads I could pull on that there, but we’ll save it for the next one. Quadruple aim.

James Hereford: A baseline-level of performance that every healthcare organization has to be able to provide.

Martin Cody: And it’s funny you mentioned this earlier with regards to medical loss ratio. That was one of the words or one of the phrases I was going to ask you, what do you think of when you think of MLR?

James Hereford: A scheme that maintains the profit margins for health plans.

Martin Cody: And it’s interesting because we’ve talked a couple of times during this segment about the complexities that have been introduced, and I keep coming back, and maybe it’s the cynicism in me that these are features, these are not bugs from a standpoint.

James Hereford: Yeah, I think that’s true.

Martin Cody: And lastly, James, if you could sit down and have an adult beverage with anybody in health care, living or dead, who would that be? And what are you drinking?

James Hereford: Oh my goodness. I honestly, you know, who it might be? This person’s actually not in health care. Rahm Emanuel. As Obama’s chief of staff and the engineering that went into trying to create really the only credible health care reform that’s been passed in this country over the last hundred years. How did he do it? What was the mechanism? How did he, the president, all of the players think about that process? Because whether you like the ACA or not Got passed and it did have a meaningful effect in healthcare delivery. Is it the answer? Probably not. But that might be the one. And what am I drinking? Well, probably whatever Rahm’s buying.

Martin Cody: As a former Chicago and you might be on your own there. This has been outstanding, James, and I really appreciate your involvement and certainly the wisdom you shared. A lot of great tips here, and we’re wishing you and the community nothing but success up there in Minnesota. Appreciate the time today.

James Hereford: Well, Martin, thank you for asking, and thank you for doing this. I mean, the kind of pay-it-forward element of this podcast is, I think it says a lot about you, says a lot about what we need is: we need talented people coming into health care because we got hard, serious problems that are critical to our society to solve. And so thank you for what you do.

Martin Cody: Our pleasure. We’ll chat soon. Appreciate it.

James Hereford: Take care.

Martin Cody: Yeah. Bye bye.

Martin Cody: [00:33:20] Thanks for diving into the Edge of Healthcare with us today. I hope these insights will fuel your journey in healthcare leadership. For more details, show notes, and ways to stay plugged into the conversation, head over to MadaketHealth.com. Until next time, stay ahead of the curve with the Edge of Healthcare, where lessons from leaders are always within reach. Take care of yourselves, and keep pushing the boundaries of healthcare innovation.


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