Novartis' David Epstein: A Diverse Team Can 'Accomplish Feats Nobody Thought Possible'
Having had great success through cultural transformation, this executive is now taking on a bigger challenge as Division Head of Novartis Pharmaceuticals.
David Epstein, Division Head of Novartis Pharmaceuticals, spoke with DiversityInc CEO Luke Visconti at Novartis corporate headquarters in Basel, Switzerland, about how diversity impacts innovation, R&D and marketing. Novartis Pharmaceuticals Corporation is No. 13 on the DiversityInc Top 50.
LUKE VISCONTI: What led you to be a supporter of diversity and inclusion? How has it impacted the success of your business units?
DAVID EPSTEIN: There are two drivers for me. One is that I grew up in an atmosphere my parents created where people are people, regardless of whether they're male, female, from any given country, religious background or sexual orientation. I'm interested in what a person can contribute, what their unique experiences are.
The second driver is that, back in 2000, Dr. Daniel Vasella [Chairman and former CEO of Novartis AG] gave me the opportunity to run Novartis Oncology, a global business unit. For the first time in my career I ran discovery, development and commercialization. We operated in more than 70 countries. I had the opportunity to build that team from scratch. I picked people based on their experiences and how I felt they treated other people. My philosophy is that you treat others in the way you expect to be treated.
I ended up with a team that came from all over the world. We had phenomenally productive discussions. At the beginning, it was very difficult because we had different cultural backgrounds and the norms within which we communicated were different, but after a while I saw the power of people with different backgrounds and what they could contribute to business ideas. Once we got that group working as a high-performing team, we were able to accomplish feats that nobody thought were possible.
The business more or less didn't exist when I was asked to create Novartis Oncology in 2000. We pulled together what oncology products and pipeline we had within Novartis, which represented about $1.5 billion in sales. We had three products, two of which were not robust: one was going generic, and the other was a licensed product but the license was coming to an end. The business was about to disappear.
We built, over 10 years, a $10-billion business, the No. 2 oncology business in the industry. More importantly, people who work in that business say there is a unique focus on creating the environment and the atmosphere, which drives people to do what's right for customers and patients. An environment that brings people together in a way that's unique: People can be open, be themselves, and passion fuels what they do together.
Now, I'm trying to create that here in the bigger Pharma business. We're making progress: You see a much more open, a much more inclusive atmosphere. You see that we're increasingly hiring people of varied backgrounds. You're seeing more women in management, more people from emerging markets sitting on the leadership team. It's starting, but it's a long road. It takes years and commitment.
VISCONTI: When I interviewed Dr. Vasella, he said, "I love other cultures." Do you think it was his influence, his leadership that was an inspiration?
EPSTEIN: Daniel influenced me in a lot of ways; I found him to be a very authentic leader. I take great pride in my authenticity. When I speak, there is no hidden agenda. People around me know what I think. They know that I will listen, that I will debate. I might be the guy who makes the decision, but they'll know where I'm coming from. It engenders a lot of trust.
If you have weaknesses as a leader, you should be willing to discuss those with your team. If you make a mistake, you should admit it, whether it was a business decision you made, the wrong person you hired, or how you treated someone.
The second thing I owe to Daniel is that he believed in me. He gave me some unique opportunities, such as running the Oncology business or being chosen as head of Pharma. If he hadn't made that choice, I never would have had the opportunity to grow and become more worldly, more diverse, more inclusive.
VISCONTI: How do you translate the Novartis values across different cultures while respecting local traditions?
EPSTEIN: It's not about everybody being in the same place at the same time or having to do everything exactly the same everywhere. For me, it's a journey. Everybody is moving along that journey to become more inclusive, to put together the best possible team, to get their teams to operate in a high-performing way. Yes, you may have to do it uniquely in China versus Japan versus somewhere else. I think that's OK.
Sitting still is not acceptable. Having a team that all looks and sounds and thinks the same is not acceptable. How you do it will vary and, being a global company, we're fairly adept at making those changes. Sometimes there's friction and you have to have a discussion.
VISCONTI: I've heard it put that this work is fatiguing at times—a good fatigue—but that it's also very invigorating.
EPSTEIN: For me, it's not fatiguing. I get great satisfaction from developing people and seeing teams do great things that no one thought was possible.
You can have lots of people that look and sound like you and your organization will work fine, but you will never be great and you will never capture the upside. Or you can decide to go for a more diverse and inclusive atmosphere. If you don't do the work, don't have the right leadership skills and those people don't work together, it may actually be worse than having a homogenous team. You just don't get anything done.
On the other hand, when you lead a very diverse group of talented people and have created the right atmosphere, you're unbeatable. So it's worth it. As a leader, you have to have your sights on that far-off horizon.
For the person who comes into a job and thinks they're only going to be there two or three years, it might not seem worth it. In every job I've taken, I have adopted the mind-set that I will be here forever. I want to leave a legacy of an extremely well-functioning organization that is delivering unique value to patients. That's ultimately what drives me. I take personal pride in seeing people be successful.
VISCONTI: How has Novartis made efforts to address diversity in drug trials? Has this approach changed over time?
EPSTEIN: If you look back 10 years, we were a very U.S.– and Euro-centric company. That's where the business was. That's what we knew how to do.
Over time, we began to realize a couple of things. One is that one size does not fit all. A drug for every patient with a given disease doesn't exist anymore. Medicine is more personalized, which forces you down the road of understanding differences in people—these differences can be genetic, dietary, about lifestyles, or many others.
Second, the world has shifted. Much of the growth opportunity in healthcare comes from emerging markets. Patients in these markets need to be included in trials to make sure we are developing the right medicine for them. About six years ago, for example, we started a project in Japan. We typically launched in the United States and Europe, and five to seven years later, we'd launch in Japan. We wanted to get to the point where that gap was down to one or two years. This year, we have a drug that was approved first in Japan, the U.S. and Europe a bit later.
In the U.S., we are trying to better adapt to the needs of various ethnic groups, and we're increasingly doing clinical work that includes them. We need to see the data for an African-American patient or a Latino or a Japanese person living in America. We look at women versus men, we look at different age groups, so all these things are being incorporated into our business. Companies that do this work have an advantage in the marketplace. They can talk with the customer and make a different kind of connection.
VISCONTI: Do you see ultimately being able to give people pharmaceuticals customized to their genetic type?
EPSTEIN: If you look at what's in our portfolio right now, I would say close to 90 percent of the medicines moving from discovery into the clinical-trial phase are targeted based upon a person's genetic makeup.
Our new medicines will come along with an assay, which will become a diagnostic in the marketplace. If we have three patients in the room that have a given disease—whether it be breast cancer or rheumatoid arthritis—we will be able to tell in advance, thanks to a genetic test, which patient is likely to respond. Then all the clinical trials are done with those responding patients. You can imagine how it changes the health-economics benefit. There's no more waste. There are no longer expensive, long trials with groups of patients who simply will not benefit from a certain drug.
In our company, we're investing in R&D and we're driving innovation and it becomes a competitive advantage. Some companies have chosen to be more focused on short-term commercial opportunity and have not continued to evolve their innovation capability. This creates a bigger gap between us and them.
VISCONTI: Can you connect the company's focus on diversity and inclusion, cultural awareness and cultural competency with your philosophy on research and development?
EPSTEIN: There are a couple of connections. One is we can recruit people, the best people, from anywhere in the world, which is a major advantage. And when you start to recruit these people, they bring in even more people from those regions or those backgrounds.
Working with diverse cultures and backgrounds, you're also more likely to design your clinical trials in a way that looks for subgroups or different patient characteristics
It's largely about talent. It's about getting the very best people in the door and then making the investment to get them to work together in a high-performing team. That means training your leaders to be inclusive—and we do have inclusive leadership training. We just rolled out a program called Leaders as Coaches. It teaches people specific coaching skills as leaders—for example, how to have a conversation with your team members so challenges and options can be addressed openly and in a reflective manner. We also do high-performing team training where the leader and their direct team work together on a multitude of things.
When you first explain to people that we are going to do this, you get the classic reaction: "I have to take two or three days out of my schedule to do this? I have to think differently?" After they've been through it, something interesting happens: They say, "This has made me a better leader and it's had an immediate impact on how we all work together and what we can achieve.
Our strategy is to win in primary care, specialty care and oncology. We want to become the best pharmaceutical company by 2016. There are four major pillars: growth, innovation, productivity and people. The people pillar is very clearly spelled out as becoming more diverse and inclusive, to invest heavily in high-performing team workshops and education so that we can bring out the best in people. We're very explicit about it.
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Health insurer Humana and Oak Street Health forged a value-based arrangement in June 2015.
(Originally published on FierceHealth.com)
By Leslie Small
These days, value-based arrangements are common between traditionally adversarial entities like providers and payers. But making these partnerships successful requires a lot more than just signing a risk-sharing contract.
Health insurer Humana and Oak Street Health, which operates primary care centers, think they have the puzzle figured out. The organizations forged a value-based arrangement in June 2015, combining Humana's pay-for-value expertise with Oak Street's holistic, population-health-focused approach to serving Medicare patients in the greater Chicago area.
Now more than a year later, leaders from Humana and Oak Street are encouraged by the partnership's early results, saying the use of robust data, open communication between payer and provider, and a focus on quality before cost are all helping drive success.
FierceHealthPayer spoke to Humana Chief Medical Officer Roy Beveridge, M.D., and Oak Street CMO Griffin Myers, M.D., to learn more about this unique value-based arrangement.
FierceHealthPayer: Can you start by telling me what led Humana and Oak Street Health to choose one another as partners?
Griffin Myers: We built our practice as an exclusively value-based practice from day one, that was the intent. And we wanted to care for a specific population where we thought we could have the biggest impact. We wanted to innovate in value-based care, and that required a partner who's not only sophisticated enough to do that value-based partnership with you, because you can't do it on your own, but also could help us get better at it. Humana is a health plan very focused on being a leader in the value-based care space, so it was a nice fit from that perspective.
Roy Beveridge: What we're looking for are high-quality providers who are really dedicated to the care of our members. Our members traditionally stay with us for more than 7 years, so it's very important to us to work with entities that are going to invest the appropriate, good amount of time to engage our members and help them improve their health. Because from our standpoint, the healthier that Griffin's physician can make these patients, the better it is for our members, the longer they're going to stay with us, and the better it is for us long term.
"I have my phone on portrait mode, so that without even getting vertical I can flip through that list, and I know which patients were unfortunately admitted to the hospital." -- Griffin Myers
FHP: You mentioned the loyalty of Medicare Advantage members. How does your work together take that into account in terms of relationship-building with patients?
RB: From our standpoint, when our members are with really good clinicians, who have really good experience and are engaged, they're obviously going to sign up and stay with Humana for the next year and the next year and the next year.
GM: We had a hypothesis very early on that happy patients would be healthy patients, and we have seen that. Folks who enjoy their experience, engage in their care plans, are healthier. We've seen that at Oak Street, and thankfully there's now peer-reviewed literature that tells the same story. We have a voluntary attrition rate that's under 2% at Oak Street. The reason for that is we have a net promoter score of 92% so far this year, which compares to what the Advisory Board reported last September—for primary care nationwide, it's 3.
FHP: Can you take me through the nuts and bolts of how your organizations work together, and how you're working toward your value-based care goals?
GM: There are three main pieces to that. The first is, we have a contract. It's a full-risk arrangement—there's a little variation based upon the county and based upon the state—but you can think about it as full upside, full downside. The second is that there are some transactions that go on, meaning we take care of patients and share information with our partners at Humana, and Humana does a really nice job sharing information and data, both in raw form and data analytics.
The best example: The first thing I do when I wake up in the morning is look at the census, which gets emailed to me and a small group of our medical directors. I have my phone on portrait mode, so that without even getting vertical I can flip through that list, and I know which patients were unfortunately admitted to the hospital, and which PCP unfortunately is going to wake up to that and recognize that they've got some work to do to help get those patients back into a stable home setting with their care back under control.
So that's the second piece, and the third is some really important relationships; we've become partners in the way that we manage care. Our regional medical director in Indianapolis has a counterpart at Humana, and they're able to have conversations about patients and their care every day, about whether they are getting the right care, whether it's being delivered by the right practitioner, and whether it's in the right setting. We can't do that on our own; we have to do that with our partner.
RB: From Humana's standpoint, it's important to us that Oak Street does well, not just because it's the right thing for our patients, but also we have invested a lot of time and effort, so we want them to do financially well. It's very reasonable for us to devote resources that help them grow and take care of their patients better. In the old world, with fee-for-service, there was always a challenging dynamic. People would want to do something and the plan was looking at utilization, and that was the knocking of heads. Once you've got value relations where you're looking at the outcome, as opposed to the individual steps and how one gets there, then you can do very inventive things.
FHP: What are some of the inventive ways that Oak Street cares for patients?
One of the vans that transport clinic patients (Courtesy of Oak Street Health)
GM: When you think about what value-based care does, it changes the perspective in the way you look at patients' problems. The example I always give is the moment I realized I wanted to start this practice. I'm an emergency physician, and a nurse looked at me at 3:45 in the morning and pointed and said, “it's her again" (in reference to an ER frequent flier). It's not that person's fault that she is there; we don't have a great history of providing equal access to care in this country for everybody, and there are a bunch of social factors that can impact that.
GM: At Oak Street, we talk about this with our team as, we want patients to be happy, healthy and out of the hospital. The measure of happiness is the 92% net promoter score. Health we measure by using the Healthcare Effectiveness Data and Information Set (HEDIS) metrics—we call it the stars system. For engaged patients who have been with us for 12 months, we are a five-star practice.
The third piece—out of the hospital—the reason that's important to us is because the unit cost of going to the hospital is extraordinarily high. The average hospitalization for an Oak Street patient is around $15,000, so if we can prevent that hospitalization, that's capital we can keep and reinvest back in what we do. The nationwide number for hospital admissions per 1,000 older adults per year in this country is 315, according to the Dartmouth Atlas of Health Care. The city of Chicago has one of the highest rates in the country; it's about 360. A dual-eligible male living in Chicago has a hospitalization rate of 770, and Oak Street runs just around 200, so that means we've cut the hospital admission rate by over 40% in our population.
RB: From a Humana standpoint, when we look at all of our value-based reimbursement model agreements, we've found a 6% reduction in emergency room visits among Medicare Advantage members (compared to MA members in standard arrangements). Even more importantly, we've found that screening for colon cancer has increased by 8% and breast cancer screening is up 6%. For older women, osteoporosis management is up 13%.
If we look at the HEDIS scores, we've found that there's a 19% improvement in that, and at the same time, there's a 20% reduction in costs associated with care of these folks. The common message that you keep hearing is, whereas cost is important, the quality measures are things that we hold to be most important. Unless you've got a really high-quality program across the entire network—as seen at Oak Street—you're not going to retain members and therefore a lower cost doesn't really help you. So quality has to go first, and cost then comes second.