[bright music] - Hello, I'm Nido Qubein.

Join me on the next "Side by Side" as we talk about healthcare.

We'll hear from an expert how we as a state and as a country can better manage the cost of healthcare and its delivery, and understand how artificial intelligence can help make us healthier.

Today we'll talk to Dr. Mary Jo Cagle, the president and CEO of Cone Health.

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75 years later, we employ more Americans than any other furniture brand.

But none of that would've been possible without you.

Ashley, this is home.

[bright music] [bright music] - [Narrator] For 60 years, the Budd Group has been a company of excellence, providing facilities services to customers, opportunities for employees, and support to our communities.

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[bright music] - Dr. Cagle, welcome to "Side by Side."

Your life has been extraordinary, amazing.

You're the first woman, first physician to be the CEO of Cone Health.

That's gotta 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.

- Yeah, yeah, I know there's so many challenges in healthcare.

I mean, how many employees are at Cone Health?

- About 14,000, not to mention all the volunteers.

- 14,000 employees plus lots of volunteers, and healthcare touches every one of us, our families, our life, our health.

And you deal with that day in and day out.

What would you say is the biggest challenge you have in running Cone Health?

- Well, 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 issue with nursing that became 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 in the workforce.

And so we had to approach how we were going to supply enough nurses, enough pharmacy technologists, enough laboratory technologists, and we're still beginning, you know, just beginning to think about how are we going to have the right workforce for today, but also moving into the future.

So that's a big challenge, because if we're gonna provide what our community needs, we have to have the right talent to do that.

- Mm-hmm.

I mean, I think we understand what you just said because practically every business, every organization had to deal with people either being sick or wanting to work remotely or work two or three days a week.

You are in the business, especially the hospital part of the business that demands people being there taking care of patients 24/7.

Sometimes we forget you're a 24/7 operation.

You have to have people around the clock.

So how did you deal with that challenge?

- So 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, for other areas as well.

But now we've began to work and say, perhaps we need to provide a different way for our team to work, where it was possible, we've allowed some of our staff to work remotely in our areas that are non-patient facing.

- [Nido] These backroom operations and... - Correct.

In finance and some of the HR functions, for instance, and IT.

But we've also allowed greater flexibility in scheduling for our nursing.

For instance, some of our nurses who decided to retire early, we've gone to them and said, "Perhaps you don't wanna work a 40-hour shift.

Would you be interested in working 20 hours a week?"

- You have to be innovative, in other words.

- Yes, be innovative and flexible.

- Yes.

- About what's possible.

- Mm-hmm.

- And so by doing that, we found more people who are willing to come and work with us, as long as we're more flexible with them.

So increased flexibility in how we're working, looking at different designs in how we're staffing our floors, asking our nurses to actually come and help us redesign the model.

- Mm-hmm.

Getting 'em involved in the process.

- Absolutely get them involved, because they're the ones actually doing it.

- Yes.

Yes.

- Imagine, they probably know more about it than I do.

- [Nido] [laughs] Yeah, they know.

Yeah.

- And so going to the people who are the experts and having them help us design new ways to do the work, - I can't completely understand, try as I may, the complexities in healthcare.

The delivery of healthcare is something all of us probably more familiar with.

Someone in the hospital, someone goes to a doctor, you know, et cetera.

But there's a whole other part to this.

Running the patient-to-payment cycle, for example, the IT, as you mentioned, the security, the maintenance, all of that strikes me as very complex.

And then multiply that complexity with our system of healthcare.

How you get paid, how you run the... You meaning the Cone Health.

How your organization works, and so on.

Is there hope down the road that we can make this simpler and easier and more accommodating and more inclusive?

- I do believe there's hope.

I don't believe it'll be easy.

I think it will require many of us working together, but I do think there's a better way.

At Cone, 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.

But what we believe is that 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 of that, and if- - You can pay the premium to you?

- You can pay it to us, or even to some other insurer.

We've developed some products that you can pay to us, but where we do better as a health system if we lower your costs, but so do you, with our goal being to see you in your doctor's office and keep you healthy.

And you do better, the insurance company does better, and we as a health system do better, all of us win and do better, have lower costs if we keep you out of the hospital, if we keep you out of the emergency room, and everybody stays healthier, because it costs you, you as the patient, you as the community member, less money.

You stay healthier.

You're able to do the things that are meaningful and important to you.

You don't have hospital bills, the payer's not paying big hospital bills, and because we are at risk and we have said we are gonna lower the cost of care.

If we don't lower the cost of care, we'll pay a penalty.

If we- - You a penalty to whom?

You mean a self-inflicted penalty?

- A self-inflicted penalty if we're the insurance carrier.

- Oh, yes.

I see.

- But its- - Because you're taking some of that risk.

- Yeah, but let's say if it's Blue Cross Blue Shield, we'll pay a penalty to them.

- I see.

- Because we went over the limit of care.

- I see.

I see.

- But if we lower the cost of care and we create savings, then we split the savings.

- Mm-hmm.

I see.

- So it's a win-win for everyone, because we've saved people money.

Ultimately, that ought to decrease what people are paying to have insurance.

The ultimate goal being to overall decrease what it costs people to have insurance and to decrease what you have for care.

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, decrease the number of times people go to the emergency room or are readmitted to the hospital.

And so we believe this can work and it's time to scale it to more people.

- Mm-hmm.

Mm-hmm.

So Mary Jo, I'm a layman, but I am a patient, and like everybody watching us today, we care deeply about what happens when we're sick.

- Sure.

- Or when one of our loved ones is sick.

So as a layman, I think what we care about the most is healthcare is available, it is affordable, it saves us from have having agony and pain, and all the rest.

- Absolutely.

- What I don't understand are the mechanics of all of that.

So when I talk to physicians for example, they lament the fact that they're making less money than they made before.

I don't know why, but you would know why.

When I talk to hospital administrators, they will say, "Well, emergency room, you know, we have to accept everybody, it's a huge loss, goes in our balance sheet, goes in our P&L as a loss, sometimes in the tens of millions of dollars."

Most of us don't know that, that you absorb the cost.

When you talk to a patient, the patient might cynically say, "Well, you know, they gave me an aspirin and it cost me $10 or $20," right?

Help me understand as a layman, in simple terms, why is healthcare so complex?

- Well, I think part of the reason it's so complex is we built a system that is unnecessarily complex.

- Mm-hmm.

- Sometimes you get the results of the system that you've built.

- Yes, yes.

- And rather than- - And the system is, what is it?

Insurance companies, the way they pay government, Medicare, et cetera?

- Yeah.

Rather than the patient actually directly paying all of their bill, they have paid an intermediary.

- Yes.

- The insurance company.

Or if you're a Medicare recipient, the government is paying your bill, and then the bill that you get from the hospital is for your deductible amount.

Right?

- Yes, yes, yes.

- That agreed-upon thing based on which policy you selected.

And there are all of these negotiations behind the scene that are required to be confidential by law, between the hospital and this insurance company.

And the contracts are hundreds of pages long, diagnoses by diagnoses, saying what will be paid.

- And therefore- - And then, there's a third piece.

There's the negotiations between the pharmacies and the hospital and the insurers that determines how much they're gonna charge for each drug.

- Yes.

- That's in addition to the insurance company.

- Mm-hmm.

- So you begin to see the layers of complexity that go into the billing.

It would be very different if the patient just said, "I'm gonna pay the bill" and we removed that intermediary payer act.

- Can they afford it?

- Well- - I mean, someone making $40,000 a year, they go have some kind of an operation or whatever, it's thousands and thousands of dollars- - So I would suggest that the cost would come down, because part of the cost of health system is, there's a whole department that does nothing but process bills from those payers, which lays another level of cost.

But part of what our system has developed is part of a benefit that we provide our employees to attract employees, is that we're gonna pay your hospital bills.

- Yeah.

- I'm not saying that's bad.

- Yeah.

- I'm just saying that's what has developed.

- But that cost was going up for employers, right?

- That cost is going up for employers.

- Yeah.

- So we've developed a complex system over time that, for good or ill, has helped to increase the complexity of the system and has accelerated price.

- It demand more people, more engagement, more IT, more everything to process.

- Yes.

So, but is there a way to improve it?

And I think there is.

I do believe that health systems, Cone Health has an obligation to lower our cost.

We have been about that, and year over year, we've been removing cost from our system, intentionally saying, how can... We've been using lean processes which manufacturers have been using for decades.

We've been using that to remove millions every year, a minimum of 30 million.

Last year we've removed $100 million worth of costs from our system.

Year over year, removing costs from the system so that we can lower that cost.

But it requires intentional focus and a new way of doing things.

And I do believe that we're going to have to, health systems, partner with the payers and say, "Can we partner together to be at risk to intentionally lower the cost?"

- Is it in their best interest to do that, the payers?

- I believe it is.

- I mean, most of 'em wanna make money, right?

They want, the more money, the better the reward, and so are they really motivated to do that, do you think?

- So, you know, just this week I've had the opportunity to have breakfast with one of the CEOs of one of the payers, and we had exactly this conversation.

And while we don't agree on everything, we do agree that our goal is to take good care of the people that we represent and the people that we're caring for.

And 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 wanna reach together rather than our differences, that we could get there.

- Yes, yes.

- Where there's a will, there's a way.

- When there's a will, there's a way, and when people of good will want to accomplish something, if we'll focus on the things, the common things that we want to accomplish.

- Mm-hmm.

- That we can get there.

- I mean, there are some countries in Europe, as you well know, Austria, Germany, perhaps England, they have a system where it's free, it's all free, right?

Medication's free, but when you talk to people, they have to stand in line, they don't get the best care, the doctors are paid so miserably that, you know, they're not gonna be as engaged, and so on so forth.

I hope we never go to that way, but clearly we have to streamline and make better things happen.

- Yes.

- So the most difficult part of your job is, what is it?

Is it people?

Motivation and workforce?

You know, availability and so on?

Is it staying up with artificial intelligence and all of this stuff I hear about, where you can do long distance surgery using robotics, for example?

Is it the true mechanics of the dailies of life, just operations as you suggested, cost containment, efficiencies, productivity, et cetera?

What is it that you feel, if you have to give a lecture to medical students, so, let me tell you what my hardest job is in order 1, 2, 3.

- So I believe everything I do, I do through relationships with people.

- Mm-hmm.

- The pace of change today is faster than it's ever been.

And so probably the most important thing I do, and perhaps the most difficult is work with people and my relationships with people to help them through the pace of change and the change management, to help them see- - To accept it, learn how to do it, mm-hmm.

- To accept it, and to have a vision of the future and where they fit in it.

- Mm-hmm.

- You know, if people are expert 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.

- Mm-hmm.

- And letting go of what I do today so well, to go to a future that is somewhat unknown, where I will no longer be the expert, is quite daunting.

- Mm-hmm.

It's quite difficult.

Yeah.

- It's quite difficult.

- Yeah, but that's true in every industry, every business, yeah.

- Every industry, but in medicine in particular, where the safety and even the life of an individual is in your hands.

- Mm-hmm.

- That's a big deal.

- Yes.

- Because our physicians and our nurses and pharmacists, they take that very, very seriously.

- Yes, yes.

- As well they should.

- Mm-hmm.

- And so a big part of my job is to help people see a vision of the future where it's okay to take an appropriate calculated risk to move into the future.

- Mm-hmm.

Yes, but you take risk out of life, you take opportunity out of life.

- That's correct.

- I like to say that some people will not change until the pain of remaining the same becomes greater than the pain of changing, right?

- Absolutely.

- And all of us are, you know, believe in the notion that when something becomes personal, it then becomes important.

As long as it's not personal to me, it's your problem, you're the CEO, I work with you and for you, and I'm not gonna change as fast as you'd like for me to, right?

So this is something we all, you know, have to tackle with and deal with is how do we get people motivated, incented, engaged, informed, and therefore deliver?

Let's talk about you personally for just a moment.

You went to the University of Alabama.

- I did.

- And what did you major in undergrad, biology?

- Biology.

Okay, and then you went to medical school became OB/GYN.

You practiced?

- I did.

- And when did you stop actually... You don't do any practice now.

- I don't practice currently.

- You're an administrator now, right?

[Nido laughs] - I'm full-time CEO.

- Yeah, welcome to the world of stress.

[Mary Jo laughs] So when did you stop practicing?

- I stopped practicing in 2007.

- And then you've became an administrator in other places and clearly you moved up the ladder and now you're leading a large system.

Cone Health is only in North Carolina, not beyond?

- Just in Central North Carolina.

- Just central North Carolina.

- About a five-county area.

- The opportunity is great, but the responsibility is even greater, because as these mega-sites come to be, these companies come here, they bring more people, they have more employees, there's more demand for healthcare that is timely and timeless in many ways.

So you are an Alabama fan, I take it, huh?

- Uh-huh.

I am a big Alabama fan.

- Football.

- Yeah, roll Tide.

- Were you born in Alabama?

- I was.

I was born in Jasper, Alabama, small rural town in Alabama.

- Mayor Jo, if I could ask the question this way, you're clearly a great ambassador for women who want to excel in business, in healthcare, in non-profits.

- Thank you, - What would you say to someone on a college campus?

Or what would you say to someone, some young person who wants to do well in life, what would be your advice to them?

- Never give up on your dreams.

Find people who can mentor you and encourage you.

I was very fortunate as a young girl, as a little girl, 3-year-old little girl, for my family doctor, Dr. Kerry Gwen in Jasper, Alabama, told me when I, audaciously, said at three, "I wanna be a doctor like you when I grow up."

Who all along the way encouraged me- - [Nido] To go on an do it.

You can do it.

- To go on and do it.

You know, I grew up in a little town where if you made the honor roll, your name was in the paper.

[laughs] - Mm-hmm.

- And he 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- - What a great impact.

- But it had huge impact in my life.

- Mm-hmm.

- And so what I would say, not only to young people, but to all the adults listening, is you can have a huge impact by doing simple things.

- Mm-hmm.

Mm-hmm.

- I try to remember that when I come in contact with children and teenagers, that very simple acts have huge lifelong impact.

And that gentleman had a huge impact just by telling me- - Encouraging you.

- Encouraging me, and telling me I could do something.

- Yeah.

Yeah.

- So I would tell people, find that person, and to not give up.

- How does one find that person?

I mean, I think what you're saying is we all need heroes, models and mentors in our life.

We need people who plan a seed of greatness in our heart.

We need people who say to us, "Look, there's no such thing as unrealistic dreams.

Just unrealistic timelines, but work hard, keep at it, don't say, I can't."

- So speak out loud your dream.

- Mm-hmm.

- Go ahead and speak it into existence.

- Mm-hmm.

- Understand that it does take hard work and perseverance.

- Of course.

- Surround yourself with other people who've succeeded.

- Mm-hmm.

That's big.

- That's big.

- Who you spend time with is who you become.

Yeah.

- Exactly, and so I think that's one of the keys I would add.

You know, other thing I really believe in is reading, reading books about successful people and how they became successful.

- Mm-hmm.

Yes, yes.

- Dr. Gwen told my mother, go get this girl a library card.

[laughs] - Mm-hmm.

Yeah.

- And that was one of the pieces of advice he gave me early on, but what that planted in me was that desire, and 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.

- Yes.

- Children, teenagers, go read about successful people.

- Mm-hmm.

Mm-hmm.

- Find some heroes and understand how they did it.

- Sometimes you don't have to meet someone in-person.

You could just read about 'em or hear 'em, speak.

- Yeah.

- Well, you know, I've seen you in many, many settings, and quite often you are the only female there, or one or two in a world that's, you know, dominated by male CEOs.

But I've also seen you stand tall and speak your piece, and do it with confidence and conviction.

And that's both remarkable and impressive, both substantive and substantial, and that's why I asked the question about mentorship.

So as you look forward, you're hopeful about healthcare.

- I am.

- You're hopeful about its delivery to more people, more affordable systems that could be streamlined and so on.

- I am.

I will tell you why.

Because I look at the young people who are still going into healthcare, people who are dedicated and passionate about making certain that we provide good healthcare to everyone.

- [Nido] Yeah.

- To everyone regardless of their color, their religion, their ability to pay.

- Yeah.

Fully inclusive of society.

Yeah.

- Fully inclusive of society, and that gives me hope.

As long as we have the next generation who are called to serve, then I have great hope.

- Yeah, we're in good shape.

Dr. Mary Jo Cagle, I could talk to you all day.

Maybe we'll get together again.

But thank you for being with me on "Side by Side."

[bright music] - Thank you for having me.

It was an honor - [Announcer] Funding for "Side by Side" with Nido Qubein is made possible by.

[bright music] - [Narrator] We started small, just 30 people in a small town in Wisconsin.

75 years later, we employ more Americans than any other furniture brand.

But none of that would've been possible without you.

[bright music] Ashley, this is home.

[bright music] - [Narrator] For 60 years, the Budd Group has been a company of excellence, providing facilities services to customers, opportunities for employees, and support to our communities.

[bright music] The Budd Group, great people, smart service.

[energetic music] - [Narrator] Coca-Cola Consolidated is honored to make and serve 300 brands and flavors, locally, thanks to our teammates.

We are Coca-Cola Consolidating, your local bottler.