How Stephen Mooney transformed the back office operations of Tenet Healthcare into Conifer Health Solutions

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Cost center managers tend to lay low during times of change, but not Stephen Mooney. The latent entrepreneur in 2008 proposed the idea of splitting off the patient financial services division of Tenet Healthcare into a stand-alone company to take advantage of an opportunity he saw in the marketplace and to capitalize on the strong relationships already in place with Tenet’s network of hospitals.

To understand what Mooney faced getting this idea off the ground, consider Tenet’s situation:  The organization was in the midst of selling more than half of its 110 hospitals when he floated his idea by Tenet’s CEO. That meant significant change, and during a time when organizations typically are hesitant to champion new start-up initiatives.

“My idea didn’t have a lot of fans at first, but it did get our executives thinking about the future instead of our current dilemma,” says Mooney, who serves as president and CEO of Conifer Health Solutions LLC, a subsidiary of Fortune 100 company Tenet Healthcare.

Mooney was convinced that health care organizations would jump at the chance to boost revenue cycle performance and focus on patient care instead of billing and collections. So Mooney sold his vision to everyone he encountered, turning a $200 million cost center into an outsourcing success story, adding some 7,000 employees and 600 clients in just five years. Here’s how he did it.

 

Build a strong foundation

Providing revenue management to non-Tenet hospitals and health systems would require a hefty investment in technology, a cultural shift as well as the development of a sales and marketing arm. Still, Tenet execs were intrigued by the idea and pledged their support if Mooney could find some way to fund his revolutionary venture.

“My initial forecast had us losing money for the first two years,” he says. “Under the circumstances, the company couldn’t afford to lose a single dime. And since venture funding wasn’t an option, I had to find the cash in our operating budget.”

With the executive team behind him, Mooney set out to achieve buy-in from other constituents. He alleviated any concerns by sharing his vision and offering each group a customized slate of benefits. Servant leadership and creating vested partnerships was his goal.

For example, he grandfathered existing rates during the initial transition period. And, he lowered the cost of processing rudimentary transactions by offshoring selective technology and call center services, using the savings to build a robust technology platform.

“We’re not a tech company, we’re a tech-enabled company,” Mooney says. “I needed to enhance our IT platform so we could drive more volume through our machine and offer our clients greater efficiency and value.”

Next, he approached Tenet’s suppliers and asked them to partner with the company. Could they make near-term concessions by thinking long term?

“I shared my business plan with our suppliers,” he says. “I wanted them to see that they had the opportunity to grow with us if they were willing to reduce their fees. Plus, you need to establish strategic alliances from the outset because you’ll need them to manage growth.”

Tenet’s suppliers recognized the opportunity and jumped on board. But after several years of change, Mooney knew his larger task would be with his own team members.

“Getting this thing off the ground would take a lot of work, so I absolutely needed our employees’ support,” Mooney says. “You need to make sure that everyone’s behind you before you start approaching customers.”

Mooney emphasized the benefits of growth to garner support from workers. Having the opportunity to control their own destiny and career opportunities were his main selling points.

“I had to explain my vision to employees, get them engaged and help them understand that short-term sacrifices would yield long-term gains for them and also add tremendous value to our external clients,” he says.

Mooney credits his team’s enthusiasm and willingness to embrace change with Conifer Health’s early financial success.

“We were supposed to lose money in the first year and to everyone’s surprise, we actually broke even,” he says. “I credit employee engagement for allowing us to achieve a budget-neutral position in our very first year.”

 

Hit a home run

Convincing a prospect to relinquish operational control of vital functions like billing and patient communications isn’t easy.

Mooney and his sales team made ends meet by selling point solutions while devising a strategy to close their first major end-to-end outsourcing deal.

“We bought time in the first year by hitting a few singles and doubles, but we needed to land a big fish to prove our concept,” Mooney says.

“Our executives were wondering if this was going to work, but health care organizations were wary of turning over their entire business office to an outsider from Mars.”

The sales team set its sights on landing a major deal with a member of a faith-based, not-for-profit system. Mooney knew that signing a member of this prestigious fraternity would encourage others to follow. But he and his team would have to sway a host of skeptical attorneys, consultants and stakeholders to ink their illusive inaugural deal. They emphasized their industry experience, their servant leadership model, and cultural alignment.

The looming impact of the Affordable Care Act finally proved to be the tipping point, as Conifer Health signed a number of major deals including a long-term agreement with Catholic Health Initiatives (CHI) to provide revenue cycle services for 56 hospitals across the nation.

“Even CHI’s consultants agreed that their current model was unsustainable given the changes under health care reform,” Mooney says. “The market was aligning with partners and we finally convinced our prospects that they couldn’t wait to act.

“All I can say is don’t give up,” he says. “Our first deal died more than once, but I remained involved, and we continued to push the benefits that mattered to our prospects like improving the patient experience and the revenue cycle until the timing was right.”

 

Close service gaps and accelerate growth

Mooney worried that Conifer Health might lose its competitive edge given the massive changes imposed by health care reform. He hired experienced leaders, invested $200 million in the firm’s technical infrastructure and paid another visit to Tenet’s CEO where he presented a plan to leapfrog Conifer Health past its competitors.

“The market was in a state of flux due to health care reform,” he says. “Clients wanted turnkey solutions, and we needed to close a few service gaps to help them transition from a fee-for-service to a fee-for-value environment. The question became, ‘Should we build or buy these capabilities?’”

Mooney proposed a series of strategic acquisitions, and this time he not only garnered support, but funding from Tenet’s executive team and board.

In recent months, Conifer Health has added new services like clinical integration, population health management and financial risk management to its arsenal as well as data modeling and analytics. In the process, the firm has acquired a host of new clients and employees.

While acquisitions can boost revenues and a firm’s capabilities overnight, assimilating an outside organization can be tricky. Depending on whose research you believe, mergers have a failure rate of anywhere between 50 and 85 percent primarily due to a lack of cultural compatibility and the hasty departure of key employees who possess critical institutional knowledge.

Mooney has been successful in assimilating acquisitions by getting Conifer Health’s acquired companies to embrace his unique philosophy and vision for the company.

“We try to retain or find other opportunities within Conifer Health for everyone we acquire,” he says. “If we do lay someone off, we give them severance and outplacement assistance because everyone deserves the right to leave with dignity.”

He’s created new business units within Conifer Health to help him retain key leaders and staff from an acquired firm. He’s also bolstered retention by allowing employees to telecommute as Conifer Health expanded its footprint to more than 40 states.

“The key is empowering people to make decisions so they can serve the client,” Mooney says. “We’ve expanded what we offer our clients, and they’ve embraced them because they add value to their mission and their communities. I keep our staff engaged by relaying our success stories. That’s critical feedback as it validates the work they provide our client every day.”


Takeaways:

  • Build a strong foundation before you approach customers.
  • Prove your concept by hitting a home run.
  • Close service gaps and accelerate growth. 

 

The Mooney File:

NAME: Stephen Mooney
TITLE: President and CEO
COMPANY: Conifer Health Solutions LLC 

Birthplace: Margate, N.J. 

Education: Bachelor’s degree in accounting from Stockton State College in New Jersey and a master’s degree in business administration with an emphasis in accounting from Pepperdine University. 

What was your first job and what did you learn from it? I restocked the ice cream vendor on the boardwalk of the Jersey Shore. I learned that every person is important because the business couldn’t operate without a runner. Plus, it taught me responsibility because I couldn’t take a day off unless I found someone to take my place. 

What’s the best advice you ever received? Put people first because it increases their engagement. In turn, they’ll take care of your customers and the bottom line. For example, we let people go home when an ice storm is approaching and they make up for it the next day. They respond because we trust them to do the right thing. 

Who do you admire most in business and why? Jack Welch, former chairman and CEO of General Electric, because he was incredibly focused and a great developer of people and leaders. 

What is your definition of business success? Your business is successful when it’s turning on all cylinders, and it’s sustainable. In other words, you could walk away, and it would just keep going. We’re not there yet because we’re only a five-year-old company, but I believe that we’re on the path to sustainability.

 

Conifer Health Solutions Social Media Links:

Twitter: @coniferhealth
LinkedIn: http://www.linkedin.com/company/conifer-health-solutions

 

How to reach: Conifer Health Solutions LLC (877) 266-4337 or www.coniferhealth.com