NEW BEDFORD, Mass. – Keith Hovan, the president and CEO of Southcoast Health, oversees a nonprofit health care delivery system that includes four hospitals and serves more than 719,000 residents in 33 communities, providing “an integrated continuum of health services,” covering a region that includes much of Southeastern Massachusetts and parts of Rhode Island, an area of some 900 square miles.

Southcoast Health’s network, which bills itself a community-based health delivery system, includes Charlton Memorial Hospital in Fall River, St. Luke’s Hospital in New Bedford, Tobey Hospital in Wareham, and Southcoast Behavioral Health in Dartmouth – as well as two centers for cancer care, two urgent care centers, a physician’s network, an employed physicians group, a visiting nurse association and numerous additional ambulatory facilities.

Today, Southcoast Health employs more than 7,400 workers and produces $1 billion a year in annual revenues, according to Hovan.

And, if all goes well with current plans to affiliate with Care New England, by the end of 2016, with approval by state regulators in Massachusetts and Rhode Island, Hovan will be serving as president and CEO of a new nonprofit health system parent company, yet to be named, with some $2 billion in annual revenues and more than 15,000 employees, spanning the region.

Hovan, who has spent the last 37 years working in health care, told ConvergenceRI that he did not follow a typical or traditional pathway in becoming the leader of a regional health system – and that has made all the difference.

“Knowing how my career has evolved is relevant to the work that we do today at Southcoast – and to the work as it evolves as a health care system,” Hovan said.

Hovan began his career working as a technician in an emergency department as part of his education in becoming a nurse, he explained.

“I went from tech, to RN, to back to school to get a master’s degree in administration, and from there, I [served in] various management positions in Connecticut, in New York City, then back to Connecticut,” Hovan said.

“What I bring to the table in my point of view is knowing how good clinical services should be delivered, from the perspective of what it’s like to deliver care at the bedside, in intensive care, and in the emergency room,” he said.

Both Hovan and Dennis Keefe, the current president and CEO of Care New England, appear to speak the same language and are simpatico with the future vision of health care.

Under the proposed affiliation, Keefe will assume the role of CEO of a Population Health initiative, the signature program for the new, unified system, working to advance innovative approaches through accountable care organizations to improve outcomes, enhance patient experience and reduce cost.

As Keefe explained the concept of population health in an earlier interview with ConvergenceRI, “The whole idea is moving away from volume to value.” The heart of population health, Keefe continued, is global payments that provide for all of the health care needs for a patient and a population. [See link to ConvergenceRI story below.]

The economics of the approach are straightforward, according to Keefe. “If we do better than the global payments, we retain the savings; if we don’t, we incur the losses. The fixed payments are for what we provide, no more, no less, and the financial incentives are tied to very, very significant quality metrics.”

Here is the ConvergenceRI interview with Keith Hovan, the current president and CEO of Southcoast Health, and the proposed president and CEO of a new nonprofit $2 billion entity created through an affiliation of Care New England with Southcoast Health.

ConvergenceRI: What is your vision for the future of health care delivery in the region?
HOVAN: As we think about health care, as we look at the way services have been historically provided by the health system in the U.S., it’s been a model that has focused on sick care.

This is a model that has provided [incentives] to providers to do more in order to make more [money], but not necessarily to focus on the activities and the interventions that promote a population to be less at risk, to deal with efforts to eliminate health disparities.

We’re seeing a real change in the way that care is being delivered [today].

In the future, we know that we’re moving toward a model to do the right thing for the patients at the right time, in a way that creates value.

In the vision of the future for our health organization, we will be deeply engaged in providing health care that promotes the optimum health and well being in all the communities that we serve.

ConvergenceRI: How does the affiliation with Care New England fit into that equation?
HOVAN: The affiliation with Care New England allows us to scale up the kinds of activities that we started to talk about.

We look at the legacy organizations of Southcoast Health and Care New England, the two provider organizations are deeply committed to delivering services to communities.

The visions are very closely aligned in [how we believe] health care needs to evolve.

The work underway at Southcoast is similar to what Care New England [is pursuing], with many of the activities [occurring] under a new paradigm of value-based payments, one that eliminates silos, the white spaces between providers.

One that pulls people together, where it is the patient who drives the health care that they need, closer to where the patient lives, in such a manner that is high quality, lower cost, and produces high levels of satisfaction.

There is tremendous synergy between our work and the work that Care New England has had underway for an equivalent amount of time.

ConvergenceRI: What are the key economic forces at play?
HOVAN: In the provision of health care to a population, a provider group bears some substantial risk that requires that you have the very best health informational technology systems, the very best analytical solutions, and the very best network management for care across a continuum.

Those services are incredibly expensive. As we have implemented Epic [a health IT system] over the past 20 months, we’ve spent $100 million in [installing] that system across three hospitals and eight different [physician group] practices, for the purpose of having the data analytics functions capable of taking all that powerful information [and applying it to population health].

When you build the infrastructure out, it becomes cheaper on a per patient basis, because you can lower the cost of care.

The reality is that providers are not going to get paid more for doing the work that we’re doing.

In Rhode Island, with the Office of the Health Insurance Commissioner, and with the Health Policy Commission in Massachusetts, and their efforts to bend the cost curve, there’s an imperative to continue to provide high-quality health care with increasingly lower costs.

That’s the economic point: We have similar needs, similar commitments to our communities in caring for them, and similar experiences in seeing reducing rates from commercial payers and government payers.

With the new affiliation, it’s possible for our two systems not just to survive, but to thrive in this new world of value-based payments.

ConvergenceRI: Why is it important for health systems to cross the chasm of artificial boundaries, such as area codes and state lines, and look instead at where the population lives?
HOVAN: I think that you’re correct: the state line is an artificial barrier. Many residents cross the state line each day from Rhode Island to work in Massachusetts, and similarly, many residents from Massachusetts go to work in Rhode Island.

We have had, for four years, employees of this health system working in Rhode Island. We care for patients in Rhode Island; we have primary care providers and specialists in Rhode Island. We have never viewed the state line as a barrier; we see the [expanding] geographies as a budding symmetry for cooperation and collaboration.

When you look at Southeastern Massachusetts and the Greater Providence and Greater Warwick areas, the health needs of the communities are remarkably similar. What matters is that we are acting together to improve the health of those communities.

ConvergenceRI: Do you see Southcoast Health and the new entity resulting from the affiliation with Care New England as competing with Boston-based health systems for a share of the future regional health market?
HOVAN: When we think about competition in Southeastern Masschusetts, we think competition is good, [because it forces] everybody to provide the very best services, in a manner that is transparent to find information about the care that’s provided.

Having said that, when we think about competition, we don’t compete with other community health providers. Patients that come to our facilities have grown to know that they can trust us; that they will receive excellent health care close to where they live, getting them the best value.

ConvergenceRI: How has Southcoast been able to move toward a more patient-centric approach in its care?
HOVAN: That’s a great question. That’s what this is all about, putting the patients first, when we think about providing really great care that is close to home. It is a foundational element for Southcoast.

There are certain things that we have come to do really well. We have outstanding programs in cardiac care, in heart surgery, in neurosurgery and in oncology. We bring these strengths [to the proposed affiliation].

Care New England has outstanding programs providing the very best in women’s health care services at Women & Infants Hospital, one of the very best in labor and delivery services, and outstanding gynecological and oncology programming.

The Providence Center has its unique models for managing patients out of the hospital into the community for behavioral health and substance abuse needs.

The program synergies that we can be able to establish working together will bring the very best of each of the two hospital systems together, to benefit the communities we each serve.

What’s in it for the patients? More care and services, closer to where they live in Massachusetts and Rhode Island, with more patients receiving care closer to their homes.

Over the past 20 years, Southcoast has grown, from 3,600 employees in 1996 to today, when we employ more than 7,400. We produce $1 billion a year in [revenue] in Southeastern Massachusetts every year.

The new enterprise with Care New England will operate on many sides of the state line.

ConvergenceRI: What are the future challenges that you see in health care delivery?
HOVAN: The challenge that we are all facing is that we really on a journey, we’re in this middle game, we’re moving from the historical fee-for-service model, moving toward a model where providers are taking really good care of patients and populations.

[In doing so], providers are assuming more risk.

One of the biggest challenges if that we need to think differently.

We’re not about hospitals [serving] as systems of care. If we’re successful, we will move more patients out of our hospitals, closer to our homes. The new system seeks to align our doctors with our patients, connect our doctors to our patients, and connect our doctors to our doctors.

Southcoast is an organization that is physican-led and professionally managed.

Physicians are the ones who determine care, in consultation with nurses, with evidence-based practices to provide innovative ways to care for patients, aligned with executive partners to help them figure o0ut how they can do that in a cost-effective manner.

[It’s about providing] excellent health care at costs that are bearable to the businesses and individuals in the communities that we are serving.

ConvergenceRI: What is the most effective strategy to contain the rise in medical costs?
HOVAN: The single most important thing that we as providers can do to bend the medical cost curve is to engage with and educate patients.

When people that we’re serving understand their plan of care, and connect to our health portals [through] Epic, these individuals will demonstrate, over time, [the capability] to help self-regulate and self-manage their health care.

We can help them more proactively manage their care, and not wait until an acute event arises, keeping them at home.

That is the single most important thing that we can do.

It isn’t about building more facilities, or doing more interventions; it’s actively engaging people in their own health care.

That’s why the underlying health IT infrastructure is so important – [to enable] patients to email and text and ultimately by video, with telemedicine that is evolving, to make a difference in [helping providers] in understanding the basic health needs of their patients.