How I Made It: Richard Afable, CEO of Hoag healthcare facilities

Categories: Featured News
June 17, 2012
Stuart Pfeifer 
The gig: Richard Afable is president and chief executive of Hoag, a network of healthcare facilities that includes hospitals inNewport Beach andIrvine; health centers inFountain Valley,Costa Mesa andAliso Viejo; and urgent-care centers inAnaheim Hills,Huntington Harbour,Orange andTustin. A physician who once operated his own medical practice, Afable is among a new breed of hospital executives whose background is in medicine, not business.
The beginning: Afable, 58, took a traditional path after graduating fromLoyola University Chicago's Stritch School of Medicine. He ran a private practice for 10 years, specializing ininternal medicine and geriatrics. He gave up his practice to pursue a career in academics, teaching medicine atWake Forest University, where he unexpectedly would be forced into a crash course about the business of medicine.
A transition: At Wake Forest, Afable was placed in charge of a new HMO for university employees, operated by the medical school. It wasn't his idea or the career path he had envisioned. "I said, 'No, I'm really not interested in that.' The dean said, 'Rick, I didn't ask if you wanted to run the HMO. You are running the HMO.' Lo and behold, I really enjoyed it." The move paid dividends. With his new business experience, Afable left Wake Forest in 1998 to help run a chain of Catholic hospitals on the East Coast, a job that led him to Hoag in 2005.
The doctor in charge: Traditionally, hospitals and healthcare facilities were managed by businessmen. That's changed in recent years, with more doctors serving as hospital executives. Afable said it makes sense. "I understand clinical care. If I was a lawyer or an MBA I may not trust what the doctors and nurses think is best. I'm a doctor and I speak the same language."
A new era: With employers passing more medical costs to consumers, the business of medicine is changing. It's become increasingly common for consumers to shop around for services, to ask how much an X-ray will cost the same way they would inquire about a plumber's fee. "That has never been a part of healthcare," Afable said. "The consumer has been outside the equation. You and I had insurance and insurance paid for everything.
"Consumerism has arrived in healthcare and that's really good. For me, a competitive marketplace in which people are competing for the business of a discerning public is always good. Whether you provided good care or not didn't really matter to be successful. Today, the care really matters."
Big change ahead: The Patient Protection and Affordable Care Act,President Obama's attempt to provide healthcare coverage for millions of uninsured people, will bring big changes to the healthcare business if a key part of it is upheld by the Supreme Court. In Orange County alone, Afable said, about 300,000 uninsured people will have insurance when the law takes effect in 2014. "Providing access to care for everybody, that's a good thing. But there aren't enough hospitals and providers to take care of all these people," he said. "We know a lot more people are going to be coming to Hoag."
The biggest challenge facing healthcare: "Being able to continue to provide the care that is needed in a very, very high-quality way at a time that payment for care and services is going down," he said. "We have to provide better care, knowing we're going to be paid less. The only way that can happen is through innovation. You can't just keep doing the same thing."
Sharing the wealth: One of the biggest changes Afable made at Hoag was giving physicians a 50% ownership interest in theorthopedic facility. "That's unheard-of," Afable said. "The result of that has been better care, better patient satisfaction and lower costs." He said doctors are providing better care, more quickly. "They were motivated because they have a business interest," he said. "Who gets the benefits? The patients do. It's better service. It's less expensive." It was a change that initially was met with skepticism. "People would say, 'Why would you give away half your business to someone else?'" he said. "Well, we now have 50% of three to four times the number of patients we take care of."
Spreading the brand: Hoag has been reaching out for new business by opening a network of clinics andurgent care centers throughout Orange County. "Our goal is to improve access to Hoag quality of services without having to drive to Newport Beach," he said. The costs will be a fraction of a visit to the emergency room, but "the care would be equivalent for most patients," he said.
Personal: Afable and his wife of 35 years, Sally, live in Corona del Mar. They have three grown children. When he's not busy managing Hoag, Afable enjoys running, golf and playing the guitar.
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