In October, S&P lowered the long-term and underlying rating on the stronger Trinity Health bonds while raising the rating for Catholic Health East debt, so that both organizations share the same credit rating. Moody's Investors Service made a similar move. The ratings agencies will be watching to see how the two parties execute their megamerger and what the system's projected capital expenditures look like as it carries out ambitious expansion plans. Some observers were surprised that CHE Trinity didn't select someone from its inner circle to lead the system. “An organization the size of CHE Trinity often has massive bench strength, and it's kind of unusual that they would go outside the organization,” Holloran said. But the appointment of an outsider to the top post could be a sign that the board wanted to create a new system that's more than the sum of its parts. “Perhaps that sends a message to everyone that, 'We're not CHE, we're not Trinity Health.' ” Gilfillan earned his medical and undergraduate degrees at Georgetown University and started his career as a family physician at the Georgetown University Community Health Plan. He later moved to Massachusetts, where he helped found a community health center and a family medicine practice. His first position on the insurance side was as medical director for Medigroup Central HMO, a Blue Cross of New Jersey managed-care plan. Gilfillan was thinking about value-based models when he was in medical school in the 1970s, talking about HMOs and the “triple aim” goals of better patient experience, improved population health and reduced costs. “I went into healthcare because I was always interested in figuring out how to get great healthcare to people,” he said. While he's new to hospital operations, he brings expertise that the system didn't have before, said Rick O'Connell, executive vice president of CHE Trinity Health and president of the Trinity Health division. Prior to the CMS, Gilfillan was CEO of Geisinger Health Plan and executive vice president of insurance operations for Geisinger Health System. Earlier in his career, he served as senior vice president for national network management at Coventry Health Care, and also held positions at Independence Blue Cross. “We're getting someone with a whole new set of eyes,” O'Connell said. “He came from the payer side so his ability to understand how payers think has been a gift in and of itself.” Trinity Health had been setting up clinically integrated networks in its markets prior to the merger. It's now building relationships with insurers, O'Connell said. Gilfillan's arrival has “given us the acceleration we need to move forward in that direction.” Some skeptics question the overall prospects for success of ACO-type population health management, noting that the first years of the Medicare ACO program have shown mixed results. They also point out that many hospitals and physician groups did not do well financially in managing enrolled patient groups under HMO capitated payment in the 1990s, and that those efforts triggered a public backlash over restricted access to care. But Gilfillan said the Medicare ACO programs and CHE Trinity's population health management initiatives are very different from those earlier efforts because of the greater focus on measuring and optimizing the patient experience. “I think everyone realized that we needed to start from the perspective of the patient,” he said. Former CMS Administrator Dr. Don Berwick said he recruited Gilfillan to the Innovation Center because he respected the work he did at Geisinger Health Plan. At the Innovation Center, “Dr. Gilfillan had the job of establishing a brand new organization in a highly controversial political environment,” said Berwick, currently running for the Democratic nomination for Massachusetts governor. “I think his work there was heroic. ... He was elegant and very resilient in dealing with these potentially very demanding influences.” Gilfillan developed the ACO program and the bundled-payment initiatives. He also recruited the people to lead the different Innovation Center programs. The office space he designed for the Innovation Center was an open floor plan, with low partitions between work areas to encourage interaction. “Rick was always driven by a vision he called 'true north,' where incentives for providers are aligned with the outcomes we want to see—higher-quality and lower-cost care,” said Dr. William Shrank, who served as the Innovation Center's director of research and rapid-cycle evaluation and is now chief scientific officer and chief medical officer at CVS Caremark Corp. “His clarity of purpose stimulated the Innovation Center to launch a wide array of new payment models. I think they all have Rick's fingerprints as we move away from rewarding volume and toward rewarding value in the delivery of healthcare.” Nearly four years later, Gilfillan's key programs face growing pains. Many provider networks that participated in the Medicare Shared Savings and Pioneer ACO programs failed to achieve savings. In the Pioneer program, nine of the 32 original participants dropped out after the first year. Of the 23 remaining, only nine saved money. Gilfillan acknowledged that providers want more clarity on how the transformation to accountable care should work. The challenge includes having to work simultaneously under both value-based payment and fee-for-service, with conflicting incentives, which may slow the shift to the new model. “I think there continues to be uncertainty around timing and direction,” he said. Still, insurers and providers are moving rapidly to risk-bearing payment models, and organizations that don't adapt will be left behind, S&P's Holloran said. “Once the ACA was passed, it was a symbol that the stars and the moon and sun are actually aligned,” he said. “As an industry, everyone knows we can do better.” Berwick said that bundled and capitated payment models are challenging old habits for healthcare industry leaders, and that Gilfillan is well positioned to show others the way forward. “We're still in a very important era of expedition,” he said. “It's not an easy one. I think Dr. Gilfillan represents the new model of clinical leadership and organizational leadership for change.” JUNE 2014
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