Deciphering The New Normal With OhioHealth’s Chief Strategy and Transformation Officer, Michael Krouse

There are many reasons why central Ohio is a fertile ground for
innovation and why the areas surrounding Columbus are ideal for
testing new approaches to consumer behavior. It’s a diverse city
with five Fortune 500 companies and 19 Fortune 1,000 companies in
a wide range of industries, from banking and insurance to
fashion. No single industry contributes more than 18% of GDP and
together, they bolster a region that’s experiencing active and
sustainable growth. In addition, Columbus has a relatively low
cost of living, temperate climate and demographics that are
reflective of the country at large. The bottom line is this
well-balanced community creates an environment of low volatility
that makes it an ideal place to try new things.

These attractive attributes extend to healthcare as well. Central
Ohio has a diverse payer market where no one payer holds more
than a third of market share. Several leading health systems
support the community, including OhioHealth, which is one of the
largest. OhioHealth is a faith-based, nonprofit system with
35,000 associates, physicians and volunteers, and a network of 14
hospitals, 200+ ambulatory sites, hospice, home health, medical
equipment and other health services spanning 47 Ohio
counties.

As OhioHealth’s Chief Strategy and Transformation Officer,
Michael Krouse is responsible for the future direction of the
organization and ensuring a strategic framework that delivers
operational excellence and growth by meeting consumers’ needs
with a diverse portfolio of services. Michael joined OhioHealth
as CIO in 2007 after spending the previous 20+ years in
healthcare executive roles at UW Medicine, First Consulting
Group, E&Y and Arthur Young in the Pacific Northwest.

In this episode of Healthcare is Hard, Keith Figlioli spoke with
Michael to explore “the new normal” in healthcare and what the
industry will look like at it settles into the post-COVID world.
Michael discussed his perspective and predictions on the new
normal including:



The sweet spot of scale. As a $6 billion health system,
OhioHealth is a growth company at its core. But Michael says
the path to becoming a $20 billion system is not as urgent as
it was a few years ago. He points to health system megamergers
and the difficulties those organizations have had driving ROI,
and discusses how the market is rewarding systems with greater
focus.


Lumpy operating margins. While volumes are recovering in
many places around the country, margins are still inconsistent
for most systems and the rebound is not enough to avoid making
tough decisions. With margins that are less than what’s
required to fund growth and capital for many health systems,
Michael foresees the need for major decisions around cost
savings and efficiency that will be required for survival.


Spinning up new business lines quickly. The healthcare
industry is not historically known for quickly or successfully
establishing new business lines where it lacks experience.
Michael believes this will have to change in the new normal and
says one path to success is through partnerships. He discusses
examples of OhioHealth’s partnerships with ChenMed, Privia and
Devoted Health and how they helped deploy new capabilities far
more quickly than doing it alone.


Inside innovation ecosystems. Michael shares his strong
beliefs on the strategic role venture capital and private
equity relationships can have helping health systems anticipate
market needs and transform in a way that differentiates them.
He talks about OhioHealth’s approach to strategic investing and
business incubation, and how it’s always driven by the
operational interest of the health system.



To hear Keith and Michael talk about these topics and more,
listen to this episode of Healthcare is Hard: A Podcast for
Insiders.