The Interview Issue: Barry Ostrowsky is making sure RWJBarnabas Health changes for the best

By
Rich Pizzutillo
-
File photo Barry Ostrowsky, CEO and president of RWJBarnabas Health.

RWJBarnabas Health has gone through a significant growth spurt in the last two years.

Opening new facilities and renovating others are just some of the changes. There also was the merger of two prominent health systems, opening the door to a new partnership with Rutgers Health.

But, behind the various moves, rather than a focus on size and prominence, the health system has touted its local efforts.

“Typically, the mission speaks to health care services and education and perhaps research,” RWJBH CEO Barry Ostrowsky said. 

“We decided that we shouldn’t be in that health care business. We should be in the health business. So, what does that mean? If we’re going to be judged … it’s going to have to be on the basis of what we’ve done to improve the health of the community.”

RWJBH is one of the two largest health care systems in the state by far. Navigating the behemoth organization requires skill and patience. 

Ostrowsky recently sat down with ROI-NJ to discuss the future of RWJBarnabas Health and how he envisions the future of health care, even as his competitors and peers pursue different avenues.

ROI-NJ: Many of the hospitals in the state are pursuing innovation, research or specialty services. What are some of the key focuses for RWJBarnabas Health?

Barry Ostrowsky: Once upon a time in our world, health care systems had assumed that the way you made people healthier is you hospitalized them or you did surgery on them. But everything was linked to some health care service that you provided. That’s wrong. What has been determined (is this): Those who have studied the health of the community have concluded that health is typically generated 10 percent by genetics, 30 percent by what we do (in a hospital) and 60 percent-plus by social determinants.

ROI: ‘Social determinants’ is certainly one of the newest buzzwords in the industry, increasingly related to population health. Why focus on this?

BO: To try to pick an example, if you’re going to live in infested housing with no ventilation and no heat and no air conditioning, the chance of you being healthy is almost zero. Now, I don’t care how many times we operate on you or how many visits you make to the emergency room, you keep going back to that shelter, you’re going to be sick. So, what is the relative value of having the world’s best MRI versus having good shelter?

I certainly was, and I think the overwhelming majority of my colleagues here have been convinced, that, if we’re going to be true to what we want to see happen, which is a healthier community, we better start paying attention to these social determinants. Even though that was never what health care systems did, and even though there’s no code in Medicare for that or Blue Cross doesn’t reimburse for that.

I don’t know why Medicare doesn’t pay us to do certain things that everybody is convinced will keep people healthy because, eventually, they ended up paying for people when they get sick. 

ROI: But taking on these types of projects without the reimbursement for it means you are eating away at your margin, right? Why do that?

BO: I think a Medicare program will ultimately be there. I think the Medicaid program will ultimately too, but that could be 15 years from now. But we’ve decided we’re going to build the intellectual capacity to understand (the value of understanding social determinants), and we’re going to build the business infrastructure to do that, even before there are discrete reimbursement programs to pay us for doing well.

I read an article recently that suicide is killing more people than diabetes. So, obviously there’s something in society here that is not stopping people from making that awful choice. It’s not like it’s something new; it’s gone on for a long time. So, behavioral health, which clearly is critical, generally has been treated as an afterthought. But if you’re going to take custody of the community, then, among the things that you have to consider is how behavioral health is going to impact the health of the community. I think eventually we are going to take this commitment of ours, and we’ll show results, and then the entire macro health care system is ultimately going to insist we do that. 

ROI: What does population health mean to you?

BO: I have my own definition of population health. Ultimately, if we’re going to be successful in population health, we’re going to have to have the notion that we have custody of you. Custody sometimes implies some condescending relationship. You know, you have a child and you have custody of the child. I don’t mean it in that sense. What I mean is we have to have an interest in you as a person and be responsible for your health and your daily set of activities to ensure that you have good health.

That, to me, is population health. You’re going to manage populations. You’re going to say, ‘It’s my job to know as much as I could possibly know about you,’ and to make sure that, as you conduct your life, I’m able to advise you on how to stay healthy and recover quickly, so that you’ll have a happier and healthier life.

ROI: Let’s switch over to the business side of the industry in the more traditional sense. What are your thoughts on diversification of revenue sources for health systems?

BO: GE decided to sell its health care business. I can’t tell you how many hundreds of millions of dollars we spent with GE over the years. If we were the company and size that I’d like to be, I would have to said to our investment banker, ‘See what they want for it.’ But we don’t have the capacity to do that. 

(Here’s a hypothetical): If J&J next year sells a division, and it (involves) health care, we are a health care company. If they think it’s too insignificant to concentrate on, maybe it’s a good idea for us. And if that company, after we get done paying for it, creates a 10 percent bottom line, what a great subsidy it would be for all the stuff we are doing. So, the diversification of a company our size into related fields may be a far better thing for us to do with money that we have, because that ongoing flow of profitability will propel us as we continue to fulfill our mission.

ROI: You don’t seem to be concerned about aligning yourself with major brands. Joining with Rutgers appears to be an avenue to join the Big Ten cancer consortium. What’s the strategy there?

BO: We know the recipe. It’s high-quality education, good research, accessibility to services, investment and social determinants. I mean, that’s the recipe to effectively make your community well. Now, I don’t cook much, so I don’t know, but if (a recipe) calls for some ingredient, there’s a brand you can buy or (a generic). So, the question is: Does it make a different cake?

In order for us to be successful, when we look at those ingredients, does it require that we pay Mayo Clinic $10 million a year to put a decal on that ingredient. I don’t know. I wouldn’t hesitate to do it if I was convinced that it qualitatively made the recipe better, but if it doesn’t make the recipe better, then I don’t know that it’s necessary.

ROI: So, you think the Big Ten decal for cancer care is that strong?

BO: I happen to love sports and I played football for my alma mater, Rutgers. I don’t understand why no one talks about the Big Ten cancer consortium. You have Northwestern and Michigan, which is in a class of its own in medical research, Ohio State, Illinois. You’re talking about Wisconsin, big-time medical facilities that are known to be great, and Rutgers. That was a good enough reason to join the Big Ten, to tell you the truth.

The intellectual property that we’re swapping and that we’re collaborating on, such as precision medicine, that is very much the future.

ROI: Last question: How will this connection help the Rutgers Cancer Institute of New Jersey grow as a brand?

BO: There is no, I emphasize no, cancer institute in the United States that has a precision medicine program that’s better than the Cancer Institute of New Jersey, and I invite you to do due diligence on that. That’s how good that place is.

So, part of what we’re going to do is we’re going to make that brand as well known.

Conversation starter

  • Name: Barry Ostrowsky
  • Position: CEO
  • Organization: RWJBarnabas Health
  • Type of business: Health care system
  • Location: West Orange
  • Date founded: 2016
  • Financial goals: Not disclosed
  • Website: rwjbh.org
  • Phone number: 973-322-5000

The Interview Issue