North Shore-LIJ Chief Moves with a Changing Market

Crain’s New York Business

November 3, 2014

North Shore-LIJ Chief Moves with a Changing Market

Michael Dowling keeps an eye on expansion.

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By Irina Ivanova

Michael Dowling, CEO of the North Shore-LIJ Health System, has helmed New York's largest health care group since 2002. Most recently, Mr. Dowling, 64, expanded the group from its Long Island base into Manhattan, and soon it will go well beyond.

Last year, the system launched a health insurance company, CareConnect, as it moves to new reimbursement models. Hospitals now are paid for each treatment. But they are moving to reimbursement based on their performance, not volume.

WHAT IS YOUR BIGGEST CHALLENGE?

The revenue in health care is changing, and you've got to diversify. I'm a big advocate that we should get paid for value and get away from traditional fee-for-service. But if you do it too quickly, you go broke. We've got about 350,000 members in some kind of value-based plan, and that's going to grow phenomenally.

WHAT DO YOU THINK OF THE STATE OF BROOKLYN HEALTH CARE?

WHERE THEY DINED

COMFORT DINER

214 E. 45th St.

(212) 867-4555

comfortdiner.com

AMBIENCE:

A classic diner, but all the customers wear suits

WHAT THEY ATE:

Chicken soup, turkey burger, iced tea

Veggie cheeseburger, milkshake

PRICE:

$41.31, including tip

We're having discussions in Brooklyn. I can't tell you [with] who yet, but we will have a substantial presence in Brooklyn. But some of the hospitals in Brooklyn are in very difficult financial straits [and] should have merged years ago.

WHAT SHOULD BE DONE WITH THOSE HOSPITALS?

Some of them need to exist because of their location [but] need to be part of a much larger system. The trouble is, if you're a big system like us, you've got to be careful not to take on something that's going to hurt you.

AT ONE POINT YOU WERE READY TO TAKE OVER LONG ISLAND COLLEGE HOSPITAL. DID YOU DODGE A BULLET?

If we had been allowed to move forward and not get caught up with all the crap, we would have had it up and running by now. But you got union politics, local politics, court politics, SUNY, and we were right in the middle of it. What we would have done there was something very similar to what we have in Greenwich Village. [At Lenox Hill HealthPlex] we were expecting about 40 patients a day. I think we're well over 100 now.

YOU RECENTLY LAUNCHED A PARTNERSHIP WITH GOHEALTH FOR 50 URGENT-CARE CENTERS ACROSS LONG ISLAND. WHY?

PLAY/LIST

People, places and things that make Michael Dowling tick:

ROOTS: Mr. Dowling grew up the oldest of five children in Knockaderry in County Limerick, Ireland. He's the only one who lives in the U.S.

HURLING: The Irish national sport, that is. Mr. Dowling was a gifted player, but gave it up to enter the workforce.

TUROPHOBIA? He'll eat anything except cheese. "I worked in a cheese factory briefly one time, back in Ireland, and I still smell it."

THREE-SECOND RULE: In Mr. Dowling's childhood home, "if something fell on the floor, you just picked it up and used it again. Now if something falls on the floor, my wife goes into a panic. But our house is clean!"

EARLY HOURS: Mr. Dowling has a daily 6:30 a.m. work meeting at a diner near his office in Great Neck, L.I.

NOT DOC: Mr. Dowling wrote and defended his Ph.D. dissertation in public welfare at Columbia but never handed it in. "It was in the car when I got the job with Mario Cuomo [as an adviser]. Has it made a difference? I don't think so. But it's a regret that I didn't complete it; I spent a lot of money and a lot of time."

NO HELMETS: Though he loves sports, "you learn how to be very good at something when you don't wear protection. Protection gives you a false sense of security."

We should have as many distribution locations as possible to deliver care. Health care should not only be given at a doctor's office and in a hospital. If you're living a block from a CVS and your kid gets a fever in the middle of the night, why not go to CVS rather than drive five to 10 miles to wait five hours in the emergency room? We've hired a lot of people from outside health care. We've been doing a lot of joint ventures.

PRIVATE EQUITY WOULD GET YOU ACCESS TO CAPITAL, BUT NEW YORK HAS TIGHT RESTRICTIONS ON PRIVATE EQUITY IN HEALTH CARE.

We're in discussions, trying to figure whether or not there are ways to do this legally. There will be for-profit medicine in New York, whether we like it or not. There is today: Insurers are buying physicians' practices. A lot of the policymakers say, "We'll never allow it in New York." Eventually, we'll have [it], too.

IS THAT WHY YOU STARTED YOUR OWN INSURANCE COMPANY?

Eventually, I want to be in the business of promoting health as well as curing illness. If I just get paid to take care of sick people, I'm just going to take care of sick people. But if I have your full premium dollar [as an insurer], I don't want you to get sick. If you were a member of ours, I'd say you couldn't eat that [pointing at reporter's milkshake]. We'd be monitoring your behavior. And if I want to sell insurance, I've got to have facilities and locations of care in a much bigger area, either through full ownership or partnerships.

CARECONNECT COVERS CARE AT HOSPITALS OUTSIDE YOUR SYSTEM. WHY?

People move for care, so we need a [bigger] footprint. We're looking very diligently at New Jersey, at Westchester, north of Westchester and western Connecticut, possibly. Around the country you have these very large, competitive health systems. And they are looking at New York. I want to be a big enough player in New York to be able to either take advantage of these relationships or prevent some of those relationships.

IS MEDICAL MARIJUANA A BUSINESS OPPORTUNITY FOR YOU?

For medical purposes, I think it's good. And then there are requirements about how to produce it, how you distribute it. Are we interested in playing a role there under the right conditions? Yes. You have to figure out how to get into enough things, so if a few of them go wrong, you're still OK.

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