About Stewart Schaffer
Stewart Schaffer is a co-founder and managing partner of CSuite Solutions. He has been a senior strategy and business development executive in the healthcare, retail and hospitality industries for over 25 years. His areas of expertise include: strategic planning, organization structure, business intelligence, product and service development, consumer marketing, branding and all forms of digital marketing. Industry experience includes: healthcare, retail, hospitality, outdoor recreation, charge card and manufacturing.
About CSuite Solutions
CSuite Solutions was formed to attract the most senior and accomplished health care industry executives in their respective fields. They have spent most of their long careers transforming hospitals and major health care systems, physician groups and other providers into efficient and financially robust operating organizations. These C-Level executives are now dedicating their talents and connections to helping their peers successfully navigate through these transformative times.
U.S. Domestic Medical Travel (USDMT): Tell us how you got involved in direct contracting.
Stewart Schaffer (SS): I worked for Steve Mason, CEO at BayCare Health System in Tampa, Florida which included 12 hospitals at the time. My title was Chief Strategy and Marketing Officer.
Steve put his full faith and support behind me, which is required by change agents in every industry but even more so in healthcare. Steve and I started CSuite Solutions LLC together and we added four partners as of today.
One of the areas in healthcare that I identified as having immense opportunity came from my experience in the hospitality industry with a company called Club Corporation of America. During the years I was there it was the largest owner of private business and country clubs in the US. The success of that company was based on putting the members (i.e. customers) and their satisfaction (i.e. customer) at the center of all the services we were providing. By training every employee to do that, we were able to achieve incredibly high satisfaction scores.
Now, as healthcare has embraced this hospitality concept, leaders are putting the customer at the center of care because it’s all about the customer experience. It is what drives customer satisfaction in our 24-hr cable news, digital world. The result has been that overall satisfaction scores have improved for many healthcare providers who have committed themselves to this business philosophy. One of the major problems that still exists in healthcare is how it’s financed. It is the root cause of why it is so expensive and why it is so inefficient. Furthermore, the client or the customer or whoever is consuming the services is dealing with a payer, not directly with the provider of services.
Intermediaries in the healthcare industry are called insurance companies. They create an anomaly whereby consumers go to them to buy coverage and the payers in turn contract with healthcare systems to provide that coverage.
The anomaly is that, unlike every other industry, the consumer is unable to receive and pay for services directly to healthcare providers. This causes a lack of free enterprise market forces which would normally allow consumers to select the best healthcare at the most acceptable prices.
USDMT: What is your client base?
SS: Our clients are large healthcare systems.
A lot of work that has been done in the ACO space. Population health is one area where the industry has placed a lot of effort and invested significant money with lackluster returns. Another example is clinically integrated networks.
USDMT: Where is your connectivity with the employers? Are they more local or national?
SS: Our clients have the connectivity with the employers. The employers are local to their markets. Healthcare is local and a common mistake we see in our work is that many health systems fail to recognize that.
When we did research on cancer patients and their willingness to travel, the majority (even stage 4 cancer patients) actually wanted to be close to home.
They wanted to get their chemo draws and radiation and whatever surgery was required at a facility close to home so their family could be near them. We have Moffitt Cancer here in Tampa, which is a national cancer center with all levels of accreditation.
It’s certainly where I would go if I even had stage 1 or 2 cancer.
Most patients don’t have the financial assets and their coverage is limited. However, even if they have the coverage and live in Clearwater or St. Petersburg, they don’t want to cross over Tampa Bay to go to Moffitt in Tampa.
We did a lot of research on this because we were thinking of doing a Central Florida Cancer Network between our facility, Orlando Health and Univ. of Florida. The research substantiated that most people wouldn’t go outside a 10-mile radius unless they’re living in a very rural location to get their care, even if faced with stage 4 cancer.
I think medical tourism is a symptom of the dysfunction of how healthcare finance works. There’s no reason why somebody should have to travel to Cleveland Clinic for a knee replacement when you can have it done locally. It’s just a tell-tale sign of flaws in the pricing structure throughout the healthcare industry — which is not driven by the normal market forces of supply and demand.
But, if you are in a sizeable organization, then there should be a local doctor who could provide appropriate, quality care at the same or lower expense as a resource outside the area.
The patient/employer wouldn’t incur expenses for air travel, hospitality and the hotel. And remember, in many cases, there would typically be expenses for the family, too.
I think this normal lack of supply and demand vs. working out what the pricing should be has created an opportunity for medical tourism — obviously so much so that people go to Thailand and other destinations outside of the U.S. for all kinds of procedures.
USDMT: Do you think it’s just cost or are they’re looking for quality as well?
SS: I don’t think quality should be a subjective thing, but it is.
If we all could go to the Mayo Clinic, we obviously would all go there or to the Cleveland Clinic or Johns Hopkins — to name a few.
But the reality is, when you add up all the patient encounters of those organizations and divide them by the total of the industry, they are a small fraction of the demand that’s out there. There is a lot of activity going on with medical tourism but if you added it all up and divided it by the total healthcare spending for provider services, I don’t think it would add up to that much.
And what’s the reason? The reason is because there are serious obstacles to having a large percentage of people taking advantage of it.
I am a numbers guy, I am a data guy – and ultimately, data needs to be taken into account when health systems make decisions and consider what the needs of their communities truly are.