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Hello, everyone. This is Jacob Emerson with the
Becker's Healthcare podcast. I'm thrilled today to be
joined by doctor Tom Shanley, who's the president
and CEO of Lurie Children's.
Doctor Shanley, thank you so much for taking
the time to be with me on the
podcast this morning. My pleasure. Thanks for having
me, Jacob.
Absolutely. And and, Tom, before we dive into
everything we wanna talk with you about, can
you first tell us a little bit more
about yourself, your background in health care? And
and for our listeners who might not be
familiar, a little bit about, what you do
at Lurie's.
Sure.
So, well, first, in addition to now serving
as president and CEO,
my professional background is as a physician.
I'm trained as a pediatric intensive care unit
doctor,
and also did a number of
research work as well, in the area of
immunology.
So that always tried to combine
the discovery enterprise in advancing what we do
in clinical care. And so certainly
relevant in terms of opportunities to do that
with critically ill and injured kids that I
had the opportunity to care for.
Fantastic. No. I appreciate the personal background, Tom.
And can you tell us, just for anybody
who's not familiar, a little bit about Lurie
Children's,
who you serve, where you're based, and just
a little bit about your facilities.
Sure.
Well, we we're a very unique organization
in both the city and the and across
the state.
We are the only
freestanding,
comprehensive,
acute care pediatric hospital,
in the state, and
really proud of our ranking in US News
and World Report as the number one children's
hospital in the state of Illinois and, among
the leading the nation's leading children's hospitals.
We are in the process of really
evolving from a hospital, Lurie Children's Hospital, to
more of a health system. I'm sure we'll
talk a little bit more, about that.
But in doing so, really privileged care for
kids that come actually from just about every
county across the state,
as well as the Midwest Region and nationally
and internationally.
An aspect many people don't typically know about
us, perhaps, is that we're also
the top Medicaid
the pediatric Medicaid provider in the state.
Nearly 60% of our inpatient activity is covered
by Medicaid. So, you know, thinking about it
from that standpoint, we really are a bit
of a critical safety net hospital for
organizations.
In addition to that,
we have our academic partnership with Northwestern University's
Feinberg School of Medicine
that really embraces
much of our training activities
for our pediatric residents and fellowship program.
And then, of course, our research enterprise.
What we really,
ground ourselves in is our multi pillar mission,
and we describe that as care, which includes
c for clinical care, a for advocacy, r
for research, and e for education.
And so each of the areas we strive
for excellence in advancing
the health and well-being of kids we're privileged
to serve.
And, Tom, let's dive into some of the
things you just mentioned, evolving into more of
a health system,
the the Medicaid piece of what you mentioned.
We'll talk about that in just a little
bit.
But but, obviously, as you know, Lurie just
opened a new outpatient facility out in Schaumburg.
You're planning a new inpatient facility in Downers
Grove.
So so talk to our audience about what's
driving the strategy here for these suburban facilities
and how you're really thinking about which services
can move
into these communities versus what needs to remain
concentrated at the flagship hospital here in the
city.
Sure.
Well, I think,
first and foremost,
the principal driver of the strategy is a
focus on the kids and the access that
they need
for,
excellent and high quality
specialty
and primary care. And
what we,
recognize as we look across both our market
in Chicagoland as well as the national market,
there's an increasing recognition that what
we do here at Lurie Children's and many
of our national leading peers
do is not easy,
to put together comprehensive
multidisciplinary
programs with a plethora of faculty that are
expert at that and to have that the
degree of patient volume to drive the experience
that re that results in the high quality
of care.
And when you think about the systems that
aren't necessarily
laser focused just on kids,
it's very challenging for them to provide that
kind of service line. And so we're seeing
across our market and others, people getting out
of the pediatric service business.
And that leaves a dearth of where these
kids, particularly in the Far Northwest Region, that's
that explains why we wanted to get more
proximal in the Schaumburg outpatient facility,
and then the Western Suburban Region as well.
It it also, you know, makes strategic sense
for us as an organization because we do
believe that
we have the opportunity,
to develop sustainable clinical service programs with this
expansion.
And I'll talk a little bit about what
that looks like both from the ambulatory standpoint
in terms of casting a broader net for
our subspecialty,
But also as well, you asked the question
about the differential of care, if you will,
for example, in our in our, plan Downers
Grove initiative.
So as we think about,
that particular market, first of all, we've had
services there, for a number of years in
our Westchester site where we provide ambulatory surgical
care as well as some ambulatory subspecialty care.
We were, we knew over time we were
outpacing our capacity there, and we're looking at
how to
phase our next replacement strategy there. As we
did so, we looked very closely across
all the types of pediatric services that are
requested by patients and families in that region
and how they may or may not be
adequately met and delivered. And so we recognized
it provides us an opportunity not just to
expand
those services, ambulatory surgical care and ambulatory subspecialty
access, but also provide both inpatient and emergency
care.
We recognize that about half of the kids
in that region leave that region to get
inpatient care. And so we felt that being
able to keep kids closer to home where
they where they play, where they learn,
and where they study is a much makes
much more sense for them.
And it it enables us to not have
to make,
parents,
make a differential chain
a a choice between convenience versus
competence and excellence. And so rather than saying
we're gonna go
somewhere different,
because it's closer and don't have to come
downtown, we wanna make sure that we're bringing
that service capability much closer so families aren't
sort of forced to make that decision.
So excited. The other asset that will be
out there is the pediatric emergency department. And
right now we we, staff with our partnership
with Northwestern Medicine,
most of the day at Central DuPage Hospital
with pediatric emergency medicine trained physicians. That's really
the only
service that's out in that entire region that
is focused on pediatric emergency care, which is
very different and requires very different expertise than
adult emergency care. So we believe that too
is going to be an enormous,
enormous asset for this region to be able
to provide stability for kids.
I'll just touch briefly, Jacob, that you asked
about sort of that level of care and,
this institution,
in Streeterville, the flagship hospital will always be
the place where we provide that high quality,
and high tertiary
so called coronary care. So kids with heart
failure that may need a cardiac transplant, kids
with,
cancer that may need,
a bone marrow transplant.
Though that type of care will always be
anchored here at this facility because it requires
a a unique environment and a unique workforce.
What we will be placing out in the
Downers Grove is a a slightly lower level
of care capability.
So for example, today, we we have a
number of kids in our hospital
impacted by
lung viral infections where their oxygen level in
in normal room air is not sufficient. And
they need a little bit of oxygen to
recover, but they don't need extensive services beyond
that. We have kids that often come in
with, significant vomiting and and diarrhea that might
be dehydrated
and can't do that on their own, but
need intravenous fluid therapy for a period of
time. Those are the kinds of kids that
we anticipate,
often leave
that their region, to get that kind of
inpatient care that we'll now be able to
provide for them and keep them local for
that aspect of it. And we've had a
number of, you know, we we've had experience
in managing
how to triage that level of care. So
I think it's something very familiar to our
providers that we'll do safely and effectively with
our new site.
Understood. So these new sites, they're gonna be
working in tandem with the flagship hospital downtown,
but this is all really to meet the
access demands that you are seeing and hearing,
from patients out in in, out in the
suburbs.
Staying on this topic, Tom, Lurie is opening
the Austin Hope Center on the West Side
Of Chicago later this year.
Can you tell us a little bit more
about this project and
more contextually how you think other children's hospitals
should be thinking about meeting the needs of
more underserved
populations across the country?
For sure. I think it's such an such
an important area today, Jacob.
The the high level summary I I would
put on this is that, you know, two
things kinda come to mind. One,
too often,
a child's ZIP code has a much higher
impact on their health outcomes than their
genetic code. And that's because of all what
we describe as social influencers of health. It's
often described as the determinants of health,
that that conveys a deterministic
factor from those, situations, and we believe they
can just be influential and that we can
help address them. And so the other component
is that health is, not just about health
care, but it's the broader environment. And,
we believe that we need to be a
component
of the
comprehensive
health and well-being of kids.
So,
we have a number of initiatives that progress
in that area through what we call our
Magoon Institute for Healthy Communities.
My privilege to to succeed, Patrick Magoon, who
was the CEO for twenty two years here
at Lurie Children's and, with his retirement took
the opportunity to name,
this area, which was such a high priority
and focus for him that we're extremely proud
to carry on.
And in Austin,
as we work through,
an opportunity
to enter into the neighborhood in partnership with
the Stone,
church,
to develop this, it's an effort for us
to be
a component of a holistic approach to what
our our real vision is, and that's to
be a transformational
force for health and well-being to achieve the
healthier future for every child. And that's every
child regardless of where they they live. We
know that this particular area of the West
Side Of Chicago has been under resourced for
a number of years,
and we have an opportunity
to come in at what I would describe
as the generational ground level.
Because one of the most important challenges we
have in Chicago in many urban sites is
the differential in terms of,
longevity
of health.
And we have too too much of an
adult disparity in terms of health outcomes here
in Chicago and in other urban sites.
You can try to address that at the
adult level,
but we believe that this requires a generational
investment in kids.
And that if we can elevate the health
and the well-being and the education
of kids, they can be that next generation
of adults that continues to remain healthy and
to remain productive and to really drive the
future
of our city.
So you can't do that just with health
care. And so this is an effort where
we're bringing both our clinical services
that the community has identified as needing most,
and that's the key component of this. You
can't go in as a system and say,
we believe we know what you need. You
need to go in and understand from them
and from the community based organizations, from the
patients and the families, and from other providers
that are already existing in that community
to not duplicate what they do well already,
but to complement that. So we're very excited
to have an integration of the primary care
services, bring some behavioral health and social support
structures
along with access to subspecialty care that too
often is not provided and results in unnecessary
hospitalizations,
and too often is not being taken care
of in the community and necessitates them coming
in to the emergency department really unnecessarily.
So I will just say
parenthetically to keep in mind, this is certainly
first and foremost an investment in the kids.
That it is going to make a tangible
difference in them.
But in the long run, this is also
an investment
in reducing the cost of care. And so
when we think about the challenges, I'm sure
we'll talk about the Medicaid
funding challenges that we have coming.
This is a way to overall reduce the
the cost of care by significantly elevating the
health outcomes.
So we believe not only is this the
right thing to do for kids, but, honestly,
in the long term, we think it's the
right thing to do for the state of
Illinois in terms of the cost of care.
Absolutely. No. It's it's incredible to hear the
investments that you're making into this part of
the city, and and I do wanna follow-up
with you on on the Medicaid changes that,
we are seeing coming down the pipeline
under HR one,
largely going into effect next year. But I
know I know your organization has been,
really preparing for this ahead of time.
You you
said publicly, I believe, last year that you
were conducting a clinical program review in response
to some of these these changes,
under HR one, and it's nearly 60% of
your inpatient stays are covered by the program,
I believe.
So, you know, we've been hearing from leaders
all over the country, both from health systems
to insurers, about how they're how everyone is
prepping now,
to get ahead of this this massive change
for the entire system.
Can you give us the Lurie's,
version of that and how you're navigating this?
Yeah. The Lurie perspective of all that.
Well, you know, I mean, in in in
doing so,
you know, I I think it's important.
Look,
Medicaid is is a critically important program for
the country.
People often don't realize that half the country's
kids are covered by Medicaid, and that's certainly
the case here in Illinois.
Despite that, they only they're only responsible for
about 18, maybe 20% of the overall Medicaid
cost. So to me, it would again, it
makes sense to make the long term investment
in kids is to really sustain the Medicaid
program at least as it relates to kids.
And so let's let's
let's make no mistake about it. HR one
is a is a disaster.
That at the same time,
I'll I'll give the federal government
credit for recognizing
there are opportunities to make it better, to
make the program better. And that's part what
we just talked about in the Austin community.
That's part of what we believe are opportunities
to improve
the the quality of the care and the
outcomes at a lower cost for many kids
that are covered in Medicaid. So we're all
in on that, but to do it in
the way that the HR one bill proposes
to do it is, not not the way
that we would believe to be approaching that.
Nonetheless, that's what the future,
at least at this point looks like we
have coming. And so certainly, we have to
look at what impact that that will have
on the future.
I will, before we jump to that, just
parenthetically also just state the, you know, I
wanna give our Illinois Hospital Association leadership and
our,
our, health and family services in the state
of Illinois
leadership credit for,
the success in getting a state directed payment,
altered,
for the next couple years for us. That
brings in a higher Medicaid rate for the
time being before HR one hits. And so
that frankly is a lifeline,
for many of, of us, our critical access
and safety net institutions. And so we have
some breathing room. And that breathing room is
to your point, giving us the time to
understand
what clinical programs
we wanna continue to maintain that we know
are high quality. We know that they're mission
aligned. And importantly, as we look at what
the rates are anticipated to bring, they are
also financially,
sustainable from that aspect of it. So
we also are looking at opportunities in terms
of technologies that,
you know, the the AI,
opportunities that allow us to be more operationally
efficient and be able to reduce,
the overall cost and burden of the work,
but still being able to maintain these delivery
services overall from that aspect of it. But,
there's there's no doubt all of us, I
mean, all of us that have a significant
amount of Medicaid,
business are going to be having to make
these hard decisions as we look at it.
And so
my my bigger concern,
as we look at what the future brings
is to not forget where the biggest bang
for health care investment, including Medicaid investment,
is in the country. And that's still
in the future generations of this country. And
so I think as long as we we
keep that in mind and consider how we
might be able to adjust,
the future of Medicaid to ensure that the
children are covered and that they're,
continuing to drive,
health and well-being,
that is the future of driving our healthy
communities that will benefit all of us. So
a lot of advocacy. I'm very proud that
we're, an important voice of pediatric expertise and
advocacy,
both with a very favorable administration in Springfield,
but, even with the work that we do
at the federal level in DC.
But these are going to be challenging times
coming around the corner, and and, we'll continue
to work hard on making sure that we
continue to to meet the demands of the
kids that we're privileged to care for.
Certainly. Certainly. Tough decisions, challenging times ahead, but
it is good to hear, that the state
is supportive
of expanded assistance,
to to help navigate this.
Going back to what you had said earlier,
Tom, and just in terms of why you're
expanding,
in certain areas and the dearth me trying
to meet that, dearth of, lack of care
access you see in certain parts of Chicagoland.
I wanna read you a stat from from
some of our recent reporting,
that that twenty percent of hospital pediatric units
nationally
have closed over the last decade.
I'm I'm sure that's not a surprising statistic
to you, but I wonder
what role an organization like Lurie
should play in the broader
pediatric care system,
and how you're thinking about virtual care,
partnerships like the one with Northwestern,
labor training pipelines to
further address some of these access gaps that
sound like they they could worsen,
in the region.
Yeah.
Well, there's a there it's important for folks
to realize the some of some of the
factors that have that drive that. And it
is not surprising because it was our research
team that published that work. So,
we're we're
too intimately familiar with those challenges across the
country.
I I think what we just talked about
was Medicaid. Much of this really started or
and was even
much of it started before the pandemic, but
was accelerated from the pandemic and a a
very practical thing that happened during that time.
Fortunately, kids were not impacted by COVID as
much as adults. And because of the number
of adults that needed inpatient beds, many of
these systems that had small inpatient pediatric beds,
provided them to adults and
suddenly realized that when there's an adult in
the bed paid for by Medicare,
you do much better than when you have
a kid in that bed provided by Medicaid.
So it does get back to that differential
of of adult versus pediatric reimbursement for care,
even though I believe pediatric care is much
harder than adult care.
So that's one driver is just financially, it's
more challenging in terms of providing that kind
of care. The second you mentioned and alluded
to the workforce,
there are additional statistics that look at
the increasing
challenge that we're seeing of,
medical students coming out of school and deciding
to pursue pediatrics, and then even,
folks that pursue pediatric training going into subspecialty
fellowship training. Those are all on decline.
And so we know that there's a
a a growing dearth of subspecialists
that are available,
which which really creates a couple of things.
Number one, it creates really a a a
national competition for expertise. And then when you
go down to a local market like Chicagoland,
you realize it's really hard to have sufficient,
workforce to be able to provide the kind
of services that I've, alluded to that that
we're privileged to be able to to provide
because of the the special workforce that we
have. So that certainly is a key strategy
for us is to continuing to have one
of the most competitive pediatric residency programs.
We're estimated to be the third most competitive,
meaning,
folks really want to come, to Lurie Children's
for their pediatric training. And I think Chicago
as a great city is also a great
draw for that.
And then we're continuing to try to,
encourage them to come out of that residency
training program and stay in our subspecialty fellowship
pro programming.
So being able to sort of train your
own and,
populate that critically important workforce is is really
critical there.
Whether you can continue and and I will
say that those strategies are ones that are
being shared across
really the national leading peers that we have.
You know, it's been it's been it's been
estimated or projected that
these large independent children's hospitals and large urban
areas like ourselves and and other peers are
are going to be the few remaining
pediatric institutions across the country that are able
to continue to sustain
the kinds of high level, high quality expertise
in the subspecialty area that we're known for,
but we're also now seeing that
come out of the community based opportunities in
providing care. And so we're all
taking the opportunity and responsibility
to lean into that access challenge.
So we're not the first to to develop
a community based hospital like we're doing in
Downers Grove. You've seen Children's Hospital of Philadelphia
do this along,
their area. You you've seen Seattle expand with
partnerships in the Tacoma region. We're seeing our
other peers
have to take a similar strategy
and, really doing it, because of the access
challenge that kids in their market are having.
And so we take that as an important
responsibility to do so.
I I think
the other unique piece
about ourselves
in the Chicagoland market, and and this does
extend to other peers,
is you you can't have a static system,
a static health system. You have to advance
it. And I think what we're so proud
of is the extraordinary growth of our research
enterprise. When I got here ten years ago,
you know, we probably had around $20,000,000
of research expenditures.
We're now well over $140,000,000
of research expenditures. And what what does that
mean? It only means that we have a
research enterprise
that is advancing what we understand about diseases.
It's, it's identifying new therapeutic ways to take
care of kids. It's It's developing new treatment
strategies,
and it's and it's informing us what the
next questions are. So to your point, our
research enterprise
being able to tell us, hey, places are
closing around the country. We better step in
and do it. So I think that important
essentiality
of our discovery enterprise that complements and advances
what we do on the clinical side is
it's just our mission focus. And, again, I
think it's our responsibility
as the only laser focused children's hospital in
Chicago and across Illinois
to continue to drive that mission.
Well, Tom, we've covered a lot of ground
today.
Anything else we're missing that you wanna make
sure we mention to our audience or any
final bits of advice you wanna offer all
your colleagues listening in from around the country?
No. You know, I mean, I I I
think the one thing I would reflect on
is is,
how how challenging it is today.
We've talked about the the reimbursement pressures with
Medicaid and what's coming down the pipe
in the pediatric world.
And and and each, you know, the adult
world has its own aspects of it, but
we have challenges in terms of where how
people are recognizing the important critical importance of
vaccination strategies, for example. Right?
We're
we're looking at the ability to provide
appropriate drugs and access to those both for
kids and adults. So the pressures on the
three forty b program,
There's just enormous challenges that we have and
I I think what I've always encouraged our
folks to do is to make sure
that despite the challenges, we stayed anchored on
our mission. And that as things continue to
be challenged and things continue to evolve, you
you can put your head down and and
be defeated by them.
But, frankly, I think that's not the that's
not the position we take, and we have
to just take the opportunities and looking at
how we devise strategies, how we devise operations,
and frankly, how we educate and advocate for
changes,
to those policies that are impacting negatively
the well-being of our kids and therefore the
future of our city and the future of
our country.
So I think as long as folks remain
so anchored and committed to what we come
to work every day to do and improving
the health and well-being of the of the
patients that we're privileged to care for, whether
it's adult or kids,
I think we will continue to thrive,
and continue to drive the best health outcomes
and therefore the best communities,
that we have for our great city and
our great state.
It's a great message,
to close us out with. Doctor Shanley, I
wanna thank you for taking the time to
sit down with us and and for sharing
all about the leader the stuff that's going
on under your leadership at Lurie Children's with
our audience. We really appreciate it. I appreciate
the opportunity, Jacob. Thanks again for having me.
Absolutely. Anytime. And to our audience, if you'd
like to listen to more podcasts from Becker's
HealthCare, you can visit beckershospitalreview.com.