The U.S. health care industry was on the cusp of momentous change in 1966, the year Northridge Hospital Medical Center Chief Executive Saliba Salo started his job as a business office manager at Dignity Health (formerly Catholic Healthcare West) California Medical Center in downtown Los Angeles. A year earlier, then-President Lyndon Johnson had signed into law the creation of Medicare and Medicaid. The single-payer federal health insurance programs now cover a combined 133 million U.S. citizens. Salo took leadership of Northridge Hospital in 2012, just two years after Barack Obama signed the Affordable Care Act. More than five years later – and just a few months from his retirement – Salo remains convinced that the Affordable Care Act has advanced the state of the U.S. medical industry. In this interview with the Business Journal, Salo discusses health insurance, the future of hospitals and his retirement plans.
Question: When the Business Journal spoke with you in 2012, you were optimistic the Affordable Care Act would prove to be good for hospitals. Was your predictions correct?
Answer: Back in 2012, I was totally optimistic. The landscape did change with Obamacare, and despite the fact that between President Trump and the Republican Congress has been there for a year, wanting to repeal and replace Affordable Care Act, they have failed. Despite the shortcomings embedded within the act itself, people like it overall. ACA enrollment is at its highest point; despite all the bad-mouthing and backstabbing it is still quite popular – not only with hospital executives like me, who like that it gives people some kind of insurance coverage, but because it gives people access to healthcare.
Do you think the ACA will be repealed?
To repeal it and replace it would mean throwing millions and millions of individuals without coverage. I just don’t see that happening. The fact that the Republicans have failed to repeal it and replace it so far tells a story.
What would be at stake from a business standpoint if the ACA were to be repealed?
I believe it would be a disaster because while it has its own blemishes, (the ACA) still covers individuals with preexisting conditions. Without it, that coverage does not exist. That puts people into financial difficulties because they can’t afford to pay for the services.
How has health care changed since you started in 1966?
I started in the year when Congress passed the law that permitted seniors age 65 and over to be covered under Medicare. The state of California passed the Medi-Cal welfare act that same year. Fast-forward to today, whether in the emergency room or on an inpatient basis, 50 percent of our patients are covered under Medicare. Another 30 percent are under Medi-Cal. So these two government policies cover up to 80 percent of the patients we see here now. We’re highly dependent on the government.
What has stayed the same?
I don’t think anything has stayed the same. Even the way physicians practice has changed. Under current regulations, providers are incentivized to be more efficient, so surveys by patients are becoming more and more important. (This business) really has to treat the patient as the customer.
How has that shift affected hospitals on an operational level?
It’s not only about what happens within our walls – it’s also about what happens after patients leave. Now I have teams of professionals, including pharmacists and nurse practitioners and a leading physician, to follow certain populations to make sure that once they leave my facility they are cared for. For certain diagnoses, there are people who go out and check on them at home, make sure they are caring for themselves. The way the rules work, if a patient leaves and comes back to the hospital in 30 day period, I am stuck with that bill and I can’t bill Medicare for that treatment.
Do you think the industry has progressed since the start of your career?
Yes, we have come a long, long way. For example, a patient who needs hip replacement could have expected to stay in a hospital seven to 10 days. Today the same patient can come in and be out in two days. Medical advances have made it so that Medicare and other insurance companies are pushing for a 23-hour stay rather than the eight or nine day stays that were routine before.
How do you expect the industry to evolve moving forward?
With the length of hospital stays down from a week or more to a few days, I expect us to no longer need medical-surgical units in the future. Patients now come in and have surgery, then are sent to the ICU, then they go to med-surg a day or two. I foresee five years from now that after the ICU they will go home or back to their nursing home or skilled nursing facility.
What are you most excited about?
On February 16, 2018, at 4 p.m. I’ll leave the office for the last time and go off to enjoy my life with my grandchildren. I recently had my routine visit with my physician and my blood pressure was the lowest it has been in decades. I don’t know if that’s a sign that I’m relaxing and looking forward, but it feels like things are getting easier.
If it were up to you to reform the U.S. health care system, what would you change?
When the ACA was passed, Congress failed to pass really needed major legislation for malpractice suits. What makes health care expensive these days is that physicians and hospitals tend to practice a bit of defensive medicine because of malpractice suits. It seems to me it’s rampant. Without tort reform, physicians will continue to practice defensive medicine, which will cause the cost to continue to skyrocket.
What was the biggest challenge of your career?
When I came to Northridge Hospital as bi-campus chief financial officer, it was split between one hospital on Roscoe Boulevard and another on Sherman Way in Van Nuys. It was overwhelming – being CFO of one hospital is tough, so dividing the time and giving attention to both facilities was twice the challenge. But it was an easier transition than I thought.
Describe your best day at work.
When I became CEO that first year there were issues I had to face and do some layoffs. That gnawed at me for quite some time. Dignity Health embarked on an important mission to do employee surveys. That first year that I was president, the employee engagement score was 3.47 out of 5. We were facing difficult times, so there was unhappiness. I set a goal in my head to move it over 4. It took a long time, but this past May it was 4.02. We had 95 percent participation, the highest ever. To me these are two satisfying points, because it was important to make sure that we listen to employees. At the end of the day, happy employees make happy patients.
What is your proudest achievement?
I never thought I would be a CEO. To be CEO and be successful at it and be accepted by my peers and medical staff has been my proudest professional accomplishment. Looking back, I feel I’m leaving at the peak of my career, and it really does feel good. I think that’s why my blood pressure is the lowest it’s been in a long time.
What advice do you have for the next generation of health care executives?
Two things: The satisfaction of the employees at the front should be top priority, starting with the parking lot attendants. They are just as important as the VPs, because the first impression starts with these front-line individuals. The other side is the physicians and medical staff. They are the ones who bring the patients in here. I had the most fun here the last five or six years because I really had a great relationship with the medical staff. Not that things were smooth all the time, but there was mutual respect.
What do you plan to do in your retirement?
I have two grandchildren and another on the way. I’ve spent a lot of time here in the hospital; my wife used to work but has been retired for more than 10 years, so it has been kind of tough for her. We’ll be doing a lot of traveling.
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