Cone Health CEO Mary Jo Cagle joined High Point University President Nido Qubein in the Power List interview, a partnership for discussion with some of the state’s most influential leaders. Business North Carolina’s annual Power List publication spotlights the state’s powerbrokers.
Cagle is a Jasper, Alabama, native who knew from an early age that she wanted to be a doctor. She earned bachelor’s and medical degrees at the University of Alabama. She practiced as an obstetrician and spent much of her career in Greenville, South Carolina, before joining Greensboro-based Cone Health as chief medical officer in 2013. She became CEO in 2021 and now leads more than 13,000 employees. This interview occurred before Cone announced in June it was becoming part of Kaiser Permanente’s Risant Health startup. Comments were edited for brevity and clarity.
So, your life has been extraordinary. You are the first woman and first physician to be the CEO of Cone Health. That’s got to make you feel really proud.
Well, I’m delighted to have been asked. It was really a big honor and it’s a big job. So there are lots of challenges, but lots of rewards as well.
Healthcare touches every one of us. What would you say is the biggest challenge you have in running Cone Health?
One of the biggest challenges that we face right now are the changes in the workforce during the pandemic. We had many employees who decided to retire. We had the phenomenon of the travel nurse who decided to move to different parts of the country and work. And we had to face how the workforce was changing, which created shortages. We had to approach how we were going to supply enough nurses, enough pharmacy technologists and laboratory technologists. Practically every organization had to deal with people either being sick or wanting to work remotely or work two or three days a week.
The hospital part of your business demands people being there, taking care of patients
24-7. How did you deal with that challenge?
We had to be very creative. Certainly we had to go out and have contracts with some of these traveling nurses as well as contract folks for our laboratory, and other areas as well. But now we began to say, perhaps we need to provide a different way for our team to work where it is possible.
We’ve allowed some of our staff to work remotely in areas that are nonpatient-facing, including backroom operations, HR and finance. We’ve also allowed greater flexibility and scheduling for our nurses. We’ve gone to some nurses who retired early and said, would you be interested in working 20 hours? We have to be innovative and flexible. We found more people who were willing to come and work with us as long as we’re more flexible with them.
Running the patient to payment cycle, the security, the maintenance – all of that strikes me as very complex. Multiply that with how you get paid, how you run your organization and so on. Is there a hope down the road that we can make this simpler and easier?
I do believe there’s hope. I don’t believe it will be easy. It will require many of us working together. But I do think there’s a better way coming. For the past 12 years, we’ve been working on what we call value-based healthcare.
Now, that’s an easy term to say, but harder to understand. We believe there is a way that we can increase the quality and safety of your care and decrease the cost and have you pay your premium once a year. And for us to take some of the risk.
As a health system, if we lower your cost, you do better also. With our goal of seeing you in a doctor’s office and keeping you healthy, the insurance company does better, and we as a health system do better. All of us have lower costs.
If we keep you out of the hospital and the emergency room and everybody stays healthier, the payers are not paying big hospital bills. Because we’re at risk and we have said we’re
going to lower the cost of care, if we don’t lower the cost, we’ll pay a penalty.
Pay a penalty to whom?
Let’s say it’s Blue Cross Blue Shield, we’ll pay a penalty to them because we went over the limit of care. But if we lower the cost of care and we create savings, then we split the savings.
It’s a win-win for everyone because we saved people money. Ultimately, that ought to decrease what people are paying to have insurance. We’ve been able to prove over the last decade that our physicians and our health system working together can lower the cost of care and decrease the number of times people are admitted to the hospital.
We believe this can work and it’s time to scale it to more people.
Help me understand, as a layman in simple terms, why is healthcare so complex?
Part of the reason it is so complex is we built a system that is unnecessarily complex. Sometimes you get the results of the system that you’ve built.
There are all of these negotiations behind the scenes that are required to be confidential by law between the hospital and the insurance company. And the contracts are hundreds of pages long. Diagnoses by diagnoses, saying what will be paid. And then there’s the negotiations between the pharmacies and the hospital and the insurers that determines how much they’re going to charge for each drug. So you begin to see the layers of complexity that go into the billing. It would be very, very different if the patient just said, I’m going to pay the bill and we’ve removed that intermediary payer.
Can they afford it? If someone is making $40,000 a year, and they have to go have some kind of an operation, it can be thousands of dollars.
I would suggest that the cost would come down because part of the cost of the health system is there’s a whole department that does nothing but process bills from those payers, which adds another level of costs.
Is there a way to improve it? I think there is. Health systems like Cone Health have an obligation to lower our costs. Year over year, we’ve been removing cost from our system. We’ve been using lean processes, which manufacturers have been using for decades.
Last year, we removed $100 million worth of cost from our system year over year. But it requires intentional focus and a new way of doing things. And I do believe that we’re going to partner with the payers and to be at risk to intentionally lower the cost.
The payers want to make money, right? Are they really motivated to do that?
This week I had the opportunity to have breakfast with one of the CEOs of one of the payers. While we don’t agree on everything, we agree that ultimately our goal is the same: to provide great care at a better price. So I do think that if we could focus on the things we have in common, the goals that we want to reach together rather than our differences, that we could get there. When there’s a will, there’s a way.
What is the most difficult part of your job?
I believe everything I do is through relationships with people. The pace of change today is faster than it’s ever been. Probably the most important thing I do is work with people to help them through the pace of change, to help them see and accept it, and to have a vision of the future and where they fit in it.
If people are experts at the way things are today, the idea of changing to a future where they have to give up their current expertise is not very comfortable. Letting go of that to go to a future that is somewhat unknown, where I will no longer be the expert, is quite daunting and difficult.
A big part of my job is to help people see a vision of the future where it’s OK to take an appropriate, calculated risk to move into the future.
What would you say to someone on a college campus who wants to do well in life?
Never give up on your dreams. Find people who can mentor you and encourage you. I was very fortunate as a 3-year old little girl to audaciously tell my family doctor, Dr. Carey Gwin in Jasper, Alabama, I want to be a doctor like you when I grow up. I grew up in a little town where if you made the honor roll, your name was in the paper, and Dr. Gwin would cut that out of the paper and send it to me and say, ‘You’re doing all the right things.’
When I was valedictorian of the high school, he cut it out and sent it to me. What a simple thing. What a very great impact. I would say, not only to young people, but to all adults, that you can have a huge impact by doing simple things.
I think what you’re saying is we all need heroes, models and mentors in our life. We need people who plan and see greatness. Work hard. Keep at it. Don’t say I can’t.
So speak out loud your dream. Go ahead. Speak it into existence and understand that it does take hard work and perseverance. Surround yourself with other people who’ve succeeded.
I also think I really believe in reading books about successful people. Dr. Gwin told my mother, go get this girl a library card. I read the biographies of all kinds of successful people, and it’s still a habit that I have. And I would really encourage young people to find some heroes and understand how they did it.
I’ve seen you in many settings where often you’re the only female in a world that’s dominated by male CEOs. I’ve also seen you stand tall and speak your piece with confidence and conviction. So you’re hopeful about healthcare and its delivery to more people through more affordable systems?
I am. I look at the young people who are still going into healthcare and people who are dedicated and passionate about making certain that we provide good healthcare to everyone, regardless of their color or their religion in a socially inclusive society. That gives me hope as long as we have the next generation who are called to serve. ■