Network Spotlight: Southeast Texas Health System

July 2017
Southeast Texas Health System (SETHS)

Network Name

Southeast Texas Health System (SETHS)
Location Weimar, TX
Key Contact Tara Dilley, Executive Director

To integrate health care locally and regionally for purposes of responding to the growth of managed care in a way that preserves local control and maintains the independence of the member institutions. The members share common goals of operating a cost-effective, quality, integrated health care delivery system to provide a continuum of health care services and products that offer greater efficiency, economy, quality, and availability of such services than the individual providers can offer alone.

Tara Dilley, executive director of SETHS, was interviewed by the Network TA team to share information on the network’s characteristics, key learnings, accomplishments, and challenges.

Q: In a nutshell, how would you describe your network?

A: Southeast Texas Health System (SETHS) is a nonprofit health collaborative network serving eight to ten counties in Texas. Our membership is made up of eight member-owners that equally own and operate the network, functioning much like a co-op. We focus on the health care of our residents within the counties that we live in. Of our eight member-owners, two of them are larger, 120+ bed facilities, but the patients they service come to them from rural counties that surround their service area. The remaining six member-owners are a combination of rural hospitals and critical access hospitals, rural health clinics and FQHCs [Federally Qualified Health Centers].

When SETHS began in 1994, it was started to meet the demands of managed care contracting. As a single hospital, it was hard trying to negotiate better reimbursement rates, as compared to the number of patients that urban counterparts are seeing every single day. Although the network functions as a group, every facility remains autonomous. Basically, SETHS is a rural solution for our Texas area, bringing services to rural providers that they probably would not be able to either afford or accomplish on their own.

Q: What benefits do network members receive?

A: Our primary benefit, when SETHS was created, was to address managed care contracting, and this remains the largest income producer for the network. In addition to our eight member-owners, SETHS also has 20+ hospitals and private practices that utilize the managed care product line of SETHS.

Many of our members will say the networking itself is one of the most important benefits they receive. We have monthly board meetings, quarterly in person, due to being stretched along the Texas Gulf Coast. Our members really value that time, either on the phone or in person, to get a pulse on what is going on in neighboring communities and/or if there are any initiatives they need to look at implementing within their own. Bottom line, we all want to be successful and help each other.

Based off discussions with other network executive directors, I started implementing round tables as part of our monthly board meetings this year. Our members use this time to share current initiatives, brag on anything great going on at their hospitals, and voice any concerns they may have. It’s created some amazing discussions that would have never happened had we just stuck to the old meeting format.  

Because of the longevity of the network and its history of collaboration, we are very fortunate in that we are not competitive with each other. Yes, you will have those few patients that cross over because the towns are close to each other, but other than that, we do not have that defensive wall you might see elsewhere. Our board consists of primarily CEOs and CFOs, so when it is time to act on an initiative or a new project, we have the right people at the board level who can make that decision on behalf of their facilities.

Another benefit for our members is the opportunity to participate in grant opportunities. Because of the different requirements that funders put forward, and with our proven history of collaboration, we are very fortunate that we can bring that to the table. If awarded, our network then uses these grant funds for seed money to see if a project can be sustainable within our region or within certain areas of our region.

Q: What do you suppose accounts for the network's success in building diversified revenue streams and demonstrating the value of proposed projects?

A: I feel the network’s success in building diversified revenue streams and demonstrating the value of proposed projects is due to our board’s ability to be forward-thinking, being willing to take on risks and trusting their network partners. SETHS has been very fortunate to have received an estimated 10 to 12 million dollars in grant funding since its inception, and this support has allowed the board the opportunity to take on community projects or initiatives that would not have been possible alone. Many times, these projects allow our members to offer services only found in urban areas.

When I started with the network in 2006, I had been a state-based Medicaid worker, and I came into the job to run an Outreach grant [HRSA’s Rural Health Care Services Outreach Grant Program]. I had no idea what a grant was, and it was a real eye opener for me. I learned how our SETHS board functions, the processes they put in place, and the evaluation of the grant project in determining if there was a need in our communities for our project to continue.

Based off the success or the findings of previous projects or changes in the health care landscape, the network has always found another initiative to go after. Every grant that we write is written in a way that the project can be supported even if we are not funded. We determine how many members want to participate and then divide the costs associated with the project evenly between those members.

I think it is extremely important being able to demonstrate collaboration. Through its longevity and various projects, our network has been able to display that it is here to stay. SETHS is not going anywhere, and its members will continue to work hard and work together. Even with leadership transitions at our member facilities, our board has a way of molding back together. I think it is important to always keep in front of them the reasons SETHS is here. “This is what keeps SETHS going,” which would be our dedicated products and services. “These are the things that are going to give us the opportunity to offer more to our rural residents. We know you cannot do it on your own, so we will continue to do this together.”

Q: What challenges do you face working in rural health care?

A: Reimbursement is one thing our members all struggle with, basically to be made whole for the services that they offer. Technology, to a certain extent, can also be a burden. Not so much with implementing technology in a facility, but the cost associated with keeping that technology current, active, and updated. Unfortunately, technology typically comes with a hefty price tag. Rural provider recruitment, whether it is specialty or family practice, is also an ongoing challenge for many of my members. Finding that high-quality candidate who is going to want to stay and provide rural health care. I know that list of who they need constantly changes, but at the same time, the reason for the need is still there.

But right now, a struggle for a lot of our members is the ending of certain programs within the state that have really contributed toward their bottom line. The state of Texas is over budget, which means cuts. They have brought unique opportunities through district funding and other projects to bring revenue to rural communities, but now some of those projects are being ended, are being cut with funding, or are being reorganized and called a new program. This is weighing heaviest right now on a lot of my board members.

Q: On the other hand, what are the advantages of working in your rural area?

A: I think one of the biggest advantages is you know each other. The accessibility to our healthcare leadership is such a positive thing in a rural community. They’re physical; they're present. The community knows the CEO. They know the CFO. Most of our hospitals are the largest employers within the county, outside of schools or county employment. When you have the faces of our hospitals out in the public—they're approachable, they're available and they're genuinely concerned—I think that contributes to the success of what they're trying to do.

We have multiple hospitals that aren't in SETHS, but are in the service area of SETHS, that we might approach to do a project with them or reach out to them because it just makes sense for the other hospitals in the area to participate. I think there's a different level of trust in a rural community, and being able to trust your counterparts is easier when you know them.

Q: What has been a surprising insight over the course of your network’s development?

A: When I started in '06, the network was trying to do smart cards, much like a little credit card with a microchip, which was going to hold your PHR [personal health record]. They were going to have kiosks within each hospital for members to download information, check in, etc. At the time, I thought it was absolutely crazy that whatever information I want is going to be on this microchipped card. Then at the board retreat that same year, there was this road map that talked about health information exchange [HIE] and the process of going into the cloud. Providers can come over here, grab this information, and download it in order to provide better health care. At the time, I thought it basically went over everyone’s head, but boy was I wrong.

Fast forward a few years, and along came EMS, and the HIE, and everything going into the cloud. All of these ideas were coming to fruition, technology ideas. It felt like, “We really are doing this.” Three years ago, SETHS was a grantee for an HIE. The wall-sized chart that was created in 2006 road mapped future technology projects and where we saw SETHS going, and wow, we have done or attempted so many of them. These really crazy, far-fetched ideas that I saw in 2006, through the years, SETHS has either participated in them, is actively participating in them, or has tried to be a leader in developing something like that. This speaks volumes for our board that even 10 years ago, they were that forward thinking as rural community leaders.

Q: Based on your experience as a network leader, what advice would you give to a developing rural health network?

A: You are not going to have success if you do not have consensus around the table, for either the needs of the network or the needs of the project. Whatever you are trying to accomplish, you need to have all the backing. If your key people cannot support the mission or the vision of the network you are developing, you are setting yourself up for failure. You need to place your best partners together to be successful in what you want to accomplish.

Lastly, it’s okay if you don't have all the answers. Especially for us in the health care world, it's always changing. There is no black-and-white definition of what is happening, what is going to happen, and why it's all happening. You just have to be open to change. Accept that it's going to happen, and position your network in the best possible way.


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