In 1856, the Sisters of Providence began establishing hospitals, schools and orphanages across the Northwest, and that humble beginning planted the seed of what is now one of the largest and most innovative health systems in the country. Providence brings together more than 119,000 caregivers across seven states, 51 hospitals, 829 physician clinics, and many other health and educational services.
Being headquartered outside Seattle – with the access to tech talent that location affords – is just one element that has allowed Providence to flourish amid the rapidly shifting healthcare landscape and the pervasiveness of digital transformation. The organization’s foresight to get ahead of this shift was honed under the leadership of Dr. Rod Hochman as CEO and extended through a number of strategic hires, including the addition of former Amazon executive Aaron Martin as Chief Digital Officer.
In this episode of Healthcare is Hard, Keith Figlioli talks to Rod and Aaron about the longstanding values and evolving strategies that have kept Providence at the forefront of U.S. healthcare for so long, and how they plan to build on that history. Their conversation touched upon a wide range of topics including:
- Partnering inside and outside the industry. As more organizations enter the healthcare market to force disruption, Rod goes beyond recognizing the potential of partnerships and points back to a document from the health system’s founding sisters that calls for seeking partnerships. He describes the document as a constitution that remains relevant today as a means to inspire the organization with the values that inspired its founding sisters nearly 175 years ago. In that spirit, Aaron describes later in the conversation how Providence works extremely closely with other health systems and has had more than 120 visit over the past two years to work collaboratively on the challenges they face.
- The roadmap for new entrants. Thinking back to his days at Amazon, Aaron talks about how he couldn’t imagine a conversation with Jeff Bezos suggesting an opportunity in a low-margin business that’s very complicated, fraught with legal, brand and other risk, where life and death is actually at stake. For these reasons, Aaron is doubtful that tech companies entering the market will get into care provisioning in a big and meaningful way and believes that partnerships between health systems and companies like Amazon and Microsoft will be critical.
- A focus on SDOH before it existed. One unique piece of trivia Rod shares about Providence involves its continued investment in areas such as housing and education. The system runs an 85-year old liberal arts college in Great Falls, Montana, a high school in Burbank, California and manages public housing for seniors and low income populations in multiple states. In other words, Providence was invested in social determinants of health long before others were thinking about them, providing a high degree of knowledge and experience to address these increasing challenges.
- Diversifying revenue. In the future, Providence will not be able to exist on patient care revenue alone, according to Rod. That’s why he’s set a goal to create $1 billion in revenue with a 20% EBITA from things other than patient care within the next three years. He talks about the need to become a services company in order to achieve this goal, and gives examples of what that involves.
To hear Rod and Aaron talk about these topics and more, listen to this episode of Healthcare is Hard: A Podcast for Insiders.