As 2020 kicks off, so does the beginning of Matt Peterson’s first full calendar year with Universal Health Services (NYSE: UHS).
Peterson joined the hospital management behemoth last September, when he was named president of the company’s behavioral health division and executive vice president of UHS as a whole.
With a background in finance, managed care and military service, Peterson brings a unique new perspective to the company, which boasts 324 inpatient and 21 outpatient behavioral health facilities across the United States and Puerto Rico, in addition to another 135 facilities in the United Kingdom.
In fact, those experiences are informing the direction in which Peterson is leading UHS’ behavioral health arm, from seeking out new payer partnership opportunities to tapping the military for behavioral health workers.
Peterson told Behavioral Health Business he has his eyes set on collaboration in 2020 and beyond — and not just the kind you might think. You can find Peterson’s conversation with Behavioral Health Business below, edited for length and clarity.
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BHB: Congrats on the new role! How have things been going since you took the reins in September?
Peterson: It’s been quite a journey. I spent the first 90 days or so out in the facilities trying to get the lay of the land.
I’ve been really thoroughly impressed by how they operate, and [with] the staff and the compassion that they exhibit across the entire continuum.
I was telling a story recently about the longevity of the employees and the great work they do. The clinical outcomes they’ve exhibited throughout the entire system have been nothing short of phenomenal. When you look at things like 87% patient satisfaction scores, you have to just sit back and say, “Wow, it’s really impressive.”
You bring a really interesting background to the position. Can you give me a little bit of color about the professional path you took to get here? Thanks for your service, by the way.
I came up through sort of a bifurcated career path.
I spent some time in leadership roles at Bank of America (NYSE: BAC) and U.S. Bank (NYSE: USB), as well as at a couple of startups. At the same time, I was a healthcare hospital administrator in the Air Force and in the Air National Guard. Those two items converged after selling a couple of those startups I was involved with.
I was looking for what my next opportunity was going to be, and I really felt like I wanted to get into care delivery. I had spent a lot of time deployed with the military and had an opportunity to see patient care delivery firsthand in some pretty austere environments and really felt I could make a difference.
Prior to going all in, I thought maybe I would go to UnitedHealth Group (NYSE: UNH) because it was in Minneapolis. Certainly coming from finance, I was in a position of strength.
What I thought would be one year turned into 11 years, a bunch of different roles and some really neat opportunities across both Optum and UnitedHealthcare.
[That] ultimately led me to UHS, which was my goal — to be on the delivery side — and here I am.
You’re jumping into the position at an exciting and complicated time, as I’m sure you know. For UHS and the behavioral health industry at large, what do you see as the biggest challenges in the year ahead?
There are plenty of headwinds.
Some of those headwinds continue to evolve around what the payer dynamics are and the focus continuing to be on managed care. Certainly focusing on length of stay continues to be an issue that we deal with.
Then, political uncertainty also creates certain headwinds [because we don’t know] exactly what’s going to happen.
The market continues to be very competitive around staffing, so making sure that you have the right staff and amount of staff that you need in order to take care of patients and operate at max capacity is going to continue be a challenge.
During the J.P. Morgan Healthcare Conference last month, CFO Steve Filton explained that staffing shortages have caused UHS’ behavioral health revenues to lag. How will you mitigate the effects of the workforce shortage in the year ahead? Do you have a secret sauce you can share?
I wish there was a secret sauce, but it’s more a number of different things we have to do.
First and foremost is to really focus on employee engagement. How do you ensure that people really want to be engaged in what they’re doing? This is a very difficult space, although very worthy.
We’re also having to … expand the reach of who [we’re] attracting to the behavioral health space. One area of consideration there for me is the military.
We’ve got a number of military programs [already]. I want to continue to get even more aggressive in talking to the military and communicating to them about not only UHS, but what behavioral health in particular affords [military members and veterans] as an opportunity.
Lastly, is to look at other avenues, whether it be telemedicine or other means, to deliver care.
Those are three primary areas we’re going to have to get after, but given the headwinds I mentioned earlier, it’s going to be a challenge in 2020.
Got it. I don’t want to keep focusing on the negative, so can you tell me what opportunities you see for the year ahead?
I’m really excited about 2020 and beyond.
As we look over the next couple of years, the real opportunity is going to come down to continuing to focus on refining our operating model — to look forward at what can be, versus what is — not only from an efficiency standpoint, but [in terms of] what that actual model looks like.
We have an opportunity to focus much more on how we integrate, … to go further in medical-behavioral integration and to also look at how we partner with payers differently. If they continue to look to narrowing their networks and for clinical expertise to partner with, I think we should be that partner.
I’m really excited about the future, where we are and where we can be. It’s not going to be an easy journey by any means. But it’s one that, at the end of the day, is going to be really exciting for not only all of our stakeholders … but ultimately, it’s gonna be better for our patients.
Integration is something that UHS really leans into with its medical-behavioral joint venture model, which is kind of the company’s trademark. Why do you think that integration and other types are the future of behavioral health care?
Statistics [showing that] behavioral health integrated with medical [care] can really drive outcomes have been available for many years. But getting after ways to integrate has just been very, very difficult.
We get really excited about … our model of partnering with best-in-class integrated delivery systems, often nonprofits that are leaders in their community and want to get after behavioral health in an integrated fashion.
I think it will continue to be that way and even accelerate as data exchange becomes more and more prevalent and as we begin to see different modalities of behavioral health-medical delivery.
Before you mentioned taking integration a step further. Can you elaborate a little bit on that? You mentioned partnering with payers specifically.
Payers are looking for the same thing.
They realize that medical-behavioral integration is key, so many of them have looked at ways to incent models that get after medical and behavioral to … drive high outcomes.
As they continue to have and drive much more of the health care spend, … they’re going to look for premium partners. Given the background and expertise UHS has, I think we’re the ideal partner.
Now back to your behavioral-acute care JV strategy. Generally, what do you look for in a JV partner?
It’s large, integrated medical systems or leaders within their community that really have an eye toward behavioral health.
That could be where they’re really [cutting]-edge in what they’re thinking about in medical-behavioral integration. Or they may have a behavioral health need in their community, and they’re trying to figure out how to solve it.
We’re really just looking for large-scale partners who are really committed to the space.
You guys have a number of those projects in the work right now. Most recently UHS announced the groundbreaking on a new $39 million behavioral health hospital in Phoenix with HonorHealth. Can you take us inside the JV process and how it works?
As you look at these large integrated delivery systems, they’re so unique in the ways they do things. We want to be able to [combine] the best of what they deliver with our best in class service around behavioral health and integrate it in a way that’s going to meet the local population in a truly transformative way.
Every model is a little bit different. It really comes down to that relationship early on, laying out on the table what the end goal is and then building the partnership.
Looking back to your last earnings call in Q3, Foundations Recovery Network (FRN) was a pain point for you guys. At the time, Alan Miller said UHS is tweaking the Foundation’s business model to help with that. How is that going?
When I stepped on board here in September, [UHS President] Marc Miller continued to have oversight of FRN. I haven’t really integrated there [yet], as I’ve been dealing with much more of the legacy business early on as sort of onboarding.
We are really committed to continuing to tweak that model and to look at how we can maximize that asset going forward. I’d probably have more to talk about 90 days from now.
We’ll have to keep in touch then. More broadly, what are your thoughts of the some recent regulatory news we’ve seen on the behavioral health front? For example, last month, CMS announced it would change the way psychiatric hospitals are surveyed for compliance, and then President Donald Trump’s recently released 2021 budget proposal also prioritizes a few different behavioral health initiatives.
The government is ultimately trying to make some necessary changes. Some of them are definitely favorable, and some of them maybe continue to need to be modified a little bit.
I’m really favorable on this IMD waiver, [which the 2021 budget proposal calls for modifying to provide states flexibility to offer inpatient mental health care].
It really comes down to access. As long as people continue to get access to care from a behavioral standpoint at the same level that they could get access to medical care, I think we’re going to be in a good place.
Looking forward, maybe 20 years down the line, what do you want your legacy at UHS to be?
I don’t know that I’ve gotten to thinking of legacy.
I want to be known as a leader who really focused on collaboration across all of the stakeholders that are in the behavioral space, whether it be the medical-behavioral integration side or the payer-provider play.
I want to be known as one of those guys who was willing to stand up and say, “Hey, I’m willing to lead this organization differently.” [I want to] look at people that might have previously been either non-collaborators or even antagonists and say, “Hey, we each play a part in this, let’s align and do what’s right for the patient.”