Listen and subscribe to Counting Capital for free on the following platforms:
Apple Podcasts | Spotify | Google | Amazon
Robert Brunswick:
Hello, I’m Robert Brunswick, chairman of Buchanan Street Partners, a real estate investment management firm, and I’d like to welcome you to our Counting Capital Podcast, a program we’ve prepared for our clients, families, registered investment advisors, and the lifelong learners in the community to learn more about the real estate investment space, broad investment space, as well as key industries in our community. And I know you’re in for a treat today as we’re going to hear from the president and CEO of Hoag Hospital, a friend of mine and someone I’ve had the opportunity to see in action on the board of Hoag Hospital. So with that, welcome Robert. It’s great to have you aboard.
Robert Braithwaite:
Nice to be here.
Robert Brunswick:
So I thought as the listeners get to know you a bit, we’d start a little bit about your background. How’d you start out? We have a lot of young people listening, and I think career paths are important for them to learn about different opportunities, and yours is quite amazing. You like to frame it that you were born in the shadow of Hoag and starting your journey, which I didn’t realize as an intern in 1992, and now you’re the CEO of Hoag Hospital. So how does that work, intern to CEO? That sounds like a real passion or a real aptitude.
Robert Braithwaite:
Yeah, well, maybe a little bit of both, but super happy to be here. And I did start as an intern back in 1992. I grew up on Huntington Beach and not too far really the shadows of Hoag. And then went away to college, went away to graduate school, finished graduate school, and had the opportunity to come do an internship in what we call administrative residency here at Hoag. And so that was back then. Advancing from there, I had the opportunity to take my first managerial position in supply chain, and then from there I went into operations. From there I went into clinical services and some of the, what we call the institutes at Hoag, and then ultimately had the opportunity to do the project with Sandy Smith, our real estate executive down at Irvine. And that launched me into an opportunity to come back at Hoag as the chief operations officer for the entire enterprise, which ultimately then led to my appointment as CEO back in 2013.
Robert Brunswick:
Right, so since 2013. So really there’s not a post or an experience that you haven’t had in understanding the ins and outs of the hospital business?
Robert Braithwaite:
No, for the most part. With the exception of CFO, I’ve had a lot of opportunity to have a lot of different roles, which has given me really good insight and reach into the organization that we now call Hoag.
Robert Brunswick:
So as you maybe self-reflect on skills aptitudes that you might have that serve you well in this role that you have, what might you attribute to your success in your particular makeup to enjoy what you do?
Robert Braithwaite:
Yeah, so healthcare is a really complex dynamic industry, but at the same time you really have to have this human touch and this deep compassion for the patients and caregivers. And so I think that’s one of the things that’s really helped me over my career, is really understanding what they do, how they do it, how they interact with, what challenges they have, and really helping them work through some of those challenges as they do what they do best, which is deliver outstanding healthcare to this community.
Robert Brunswick:
Absolutely. Well, so if you think about when you started in healthcare to today, what really has changed? And I’m going to ask you as we go on a little bit and what’s the future have in store for us, but what’s different today than when you started in healthcare?
Robert Braithwaite:
Healthcare constantly is changing. I was thinking back to 1990, the body of knowledge, they used to say, I’m going to call it clinical knowledge, would change about or would double about every seven, eight years. When I started back in graduate school, that’s what the numbers were, at least that’s what they shared. Today, that body of knowledge in healthcare changes about every 18 months. And so I can remember the day when most of our patients, when they had surgery, they were in the inpatient and they stayed with us for a few nights, four or five nights. Today, the vast majority of our patients that have surgery are home within a day. Oftentimes they’re home for dinner that night, and that’s because technology, skillsets, they’ve all improved dramatically.
Robert Brunswick:
So I think a lot of folks, laypeople get confused about the healthcare providers and who they are and how they work. So first of all, how would you describe Hoag as an institution today?
Robert Braithwaite:
Today, Hoag would be described as a health system, if you will. In the United States there’s really two models of hospitals, if you will. The first model that everybody knows is the community hospital, which is what Hoag has historically been. They’re a general hospital with lots of services and emergency room, and they’re there for the general provision of acute care within a community. We also have the other model, which is called academic medicine or university medicine, which you would find at universities that have medical schools where their primary motive is to teach and maybe do research, and then they provide care as well. But Hoag over the last number of years has morphed into the middle space or gone between those two where we take the best of academic medicine and a lot of the things that are known at university hospitals and pull them into the community setting. And we call that privademics.
So it sits between the two models and there’s a lot of advantages for being there. You get the expertise of the university setting, all the clinical research. In fact, a lot of people don’t realize just how much clinical research is going on at Hoag. We have over 220 clinical trials that are going on. A lot in cancer, a lot in neuro, a lot in orthopedics and cardiac, but we’ve got about 70 to 80 clinical trials that are in the pipeline that are coming to this community. And so by the end of the year, we’ll be well over 300 clinical trials that we can offer to the community.
Robert Brunswick:
Robert, so privademic combination of the two, which is the best of both worlds. So when you think of a Mayo or a Cleveland Clinic, how would you describe them? Are they privademic or are they more academic? What category do they fall in?
Robert Braithwaite:
That’s a great example of a privademic institution.
Robert Brunswick:
Both of those?
Robert Braithwaite:
Both of those, yeah. So they’re not universities, but they’re clearly more sophisticated because of their capabilities, the amount of commitment that they have to research and clinical trials. But your community hospitals that have morphed over time into this space. We believe it’s the right space for this community, you clearly get a higher level of clinician, if you will, that is attracted to that. But you also have the nimbleness and the connection to the community that a community hospital might have.
Robert Brunswick:
So let’s talk about these clinical trials because I want to make sure everybody understands this because I think this is important. You said round math, 200 clinical trials today going to 300. So what exactly is a clinical trial? What are the different types of clinical trials? We’ll start there. And then why would someone pick Hoag as I assume a drug manufacturer, to use Hoag as their place to run their clinical trial?
Robert Braithwaite:
Great question. So for simplicity’s sake, there’s really clinical trials around new pharmaceuticals that are coming out, new drugs that are being tested by a lot of the pharmaceutical companies across the world. Then you also have the biotech industry, which is new technologies that are finding their way into the delivery of healthcare. And those are the two big categories where you see a lot of clinical trials housed. And so, one of the reasons why Hoag has been a place where a lot of these companies want to deploy their clinical trials is because we can move very fast, that’s one reason. The second reason is Hoag has a large patient population that it serves. Orange County is 3.2 million people. It’s a highly desirable healthcare institution. We do a lot of volume of various conditions.
And so if you’re a biotech company, that’s a place that you want to get to. They’re fast, lots of access to patients and high quality. And so those attributes help attract these clinical trials into this community. Now for the community’s benefit, they get access to leading edge technology and medications that are really at the leading edge of healthcare delivery. And so there’s a lot of wins for the biotech companies, the pharmaceuticals, and for Hoag and the community.
Robert Brunswick:
Are there different levels of clinical trials?
Robert Braithwaite:
The federal government ranks them in three different categories, and it’s level one, two, and three. Level one is what they call first in human or first in man type trial. So they’ve gone through all the laboratory testing, all of the testing to make sure that they’re as safe as they can be, and then they’re introduced into the human population. And so there is that category of trial. And this is really important, especially for new cancer drugs or agents, especially for somebody who’s got a really difficult diagnosis that has been non-responsive to a treatment. A lot of times those patients are willing to participate in clinical phase one.
Robert Brunswick:
The experimentation standard really.
Robert Braithwaite:
That’s right. Yeah. Phase two is, “Hey, we know it’s safe for humans. We know it’s somewhat effective. And now let’s see to the degree to which it is effective.” And phase three is really about the population in total.
Robert Brunswick:
So FDA approval happens where?
Robert Braithwaite:
So it happens at each stage.
Robert Brunswick:
It does for that stage.
Robert Braithwaite:
That’s correct.
Robert Brunswick:
But they go mass market after?
Robert Braithwaite:
After stage three.
Robert Brunswick:
After three. So most of Hoag is clinical trials, are they spread out between twos and threes, or how would you characterize where they are in that process?
Robert Braithwaite:
Great question. So we’re largely in one and two.
Robert Brunswick:
Wow.
Robert Braithwaite:
Yeah.
Robert Brunswick:
Okay. And this ranges everything from a couple of examples of a clinical trial?
Robert Braithwaite:
So new pharmaceutical agents to treat cancers, melanoma, lung cancer agents. We have some clinical trials in Parkinson’s as well that are in that phase one, new agent, very promising category. And phase two, you’re then participating with 30 or 40 institutions across the United States. So you’re in a large scale trial, mostly in university settings. So Hoag punches in that weight class with a lot of the academic medical centers.
Robert Brunswick:
So Hoag is moving from community to privademic to clinical trials. So paint the picture 10 years out, what does Hoag look like? Hoag is?
Robert Braithwaite:
So Hoag is going to be in that privademic space. We’ll look a lot like some of the best brands in the United States like Cleveland Clinic, like Mayo Clinic. Those are really great examples of organizations that Hoag is modeling itself after.
Robert Brunswick:
Helpful. You read every day, wherever you pick up your news about whether it’s City of Hope or UCI or Providence or Hoag with the new expansion, a new hospital. So lots of real estate going on. So you mentioned there’s 3.2 million people here in Orange County, I think it’s 26 cities. So how do all these institutes justify the expenditure to grow their infrastructure? They’re all making the same bet that they’re going to get more patient access, they’re going to get more patient customer base. So how do they justify that expenditure?
Robert Braithwaite:
Well, first and foremost, no one institution can serve all 3.2 million people. So we’ve got to have high quality colleagues that are in the community. What’s transpiring in the industry though is a separation, a clear separation. Those institutions that are able to keep up with technology, keep up with the knowledge base, recruit the right physicians and those that can’t. And so we’re seeing almost a tiering of clinical expertise amongst some of the institutions in Orange County. And Hoag is clearly in that category that can and will continue to be in there. I would say UCI is in that same space, although it’s focus is largely around education. That’s its priority. Ours is really around that patient care, high-end patient care and innovation and research. So they’re a little bit different focuses, but we’re glad UCI is in the county and doing their part.
Robert Brunswick:
And then City of Hope.
Robert Braithwaite:
So City of hope is very narrow focused in the cancer space. They have historically done really well in blood cancers. Where Hoag really does well is in what we call solid tumors. And so they’re a nice compliment to what we do here at Hoag, and they’re going to have a space in the community.
Robert Brunswick:
It’s fair to say that they all done their market share analysis, they’re bed counts, their assumptions, and they’ve all made the assumption that it’s financially viable to further their infrastructure and grow based upon Orange County’s growth. Or is there some underwriting that people used to leave Orange County to go get healthcare elsewhere and now they’re staying here for certain procedures?
Robert Braithwaite:
That’s a great point, Robert. It used to be a decade ago that one out of every five patients in Orange County would leave Orange County to get expert care. Usually that was to Los Angeles or abroad, sometimes to San Diego. And now with the investments that Hoag is making, we are clearly addressing that population to say, you really don’t need to go to Los Angeles to get that expert level of care, we have it right here in this community for you.
Robert Brunswick:
When I was a kid, my mom wanted me to be a doctor. The doctor was held out as you’ve arrived, okay, best in class, great compensation, respected in your community. It seems like that fewer people are aspiring for that career path. I don’t want to presuppose or project something I’m not a 100% accurate on, but you get that sense. And so you think about all this growth in Orange County, where’s the talent going to come from? Where do these doctors come from? Where do these nurses come from? And then I’ll touch upon real estate. Where do they live given the affordability issue? Is that a challenge for you as a CEO? So help me with that perspective.
Robert Braithwaite:
Medicine is getting very subspecialized, so it used to be just a cardiologist, right? I went to the cardiologist. Well, now there’s about seven different subspecialties within cardiology itself. That is true for almost every specialty. And what people need and deserve is that level of expertise that they find at the subspecialty level. That means we’ve got to go find and bring into this community the talent that can bring that subspecialty expertise here. And it doesn’t always exist locally. In fact, most of our physicians that we recruit to Hoag are coming from out of state from afar because we’re finding the best top five in the country. And that becomes our recruitment list to bring back to Newport Beach, to Orange County.
Robert Brunswick:
So that begs the question of why is Hoag succeeding in recruiting these people? And the price point of a home here to live here is much more expensive. So how does that math work and what’s bringing that talent to Orange County and Hoag in particular?
Robert Braithwaite:
Well, to Hoag, it’s this whole notion of being, I’m going to call it the privademics, right? They love than nimbleness and quickness of Hoag, plus they love the technology and the expertise that surrounds them. So building a winning team is really important because it helps attract the next generation of expert physicians. And so it becomes a very appealing place to practice medicine. I’ve got resources, I’ve got technology, I’ve got expertise, and I have a beautiful community in which I can raise my family and live, right? The challenge, as you just pointed out, is always the real estate, especially if we’re bringing somebody from the Midwest, the center of the country. From New York, not so much of a challenge, but you get to the center of the country and if we’re hunting in that area, recruiting from that area, then we have the real estate challenge that we have to deal with.
Robert Brunswick:
So can you give me a couple of examples of key points that differentiated Hoag landing at Key Recruit? I know you’re getting people from the Sloan Ketterings, the Dukes, some prestigious places, academic places. So what’s getting them to Hoag?
Robert Braithwaite:
Our ability to recruit really boils down to letting them experience the Hoag culture and the Hoag environment. You’re right, we’ve recently recruited a couple of individuals out of a Memorial Sloan Kettering, which arguably these are individuals that are in the top 1% of their specialty across the world. And when we introduce them to Hoag relative to maybe another academic setting, it’s like, well, tell me why. And then they come experience of. And what they find is technology that they can barely experience at some of these outstanding institutions across the country. A team that is so collaborative, so committed and passionate about their work of fellow experts that surround them, that help them get the results that they need. And then candidly, this philanthropic natured community that really gets behind a lot of the goals and passions that they have as physicians. And you bring all that together and they really realize, this is a special organization in a special community, and I’m probably not going to have this opportunity in my career except in places like Hoag, which are very few.
And so we recruit them out here, we expose them to all of these things, and oftentimes it’s like magic. It really works well. And Steven Wong is one of our physicians that we recently recruited from Memorial Sloan Kettering. He had two offers at two outstanding institutions, academic centers.
Robert Brunswick:
He’s the melanoma expert?
Robert Braithwaite:
Yes, he is melanoma expert and has a technological lead in the world with what he does. And he came and experienced Hoag as a potential dark horse alternative. And then once he got in and saw all of those things, the technology, the philanthropic support, the surrounding expertise by way of team members, it was an easy decision for him. And just in a matter of a couple of weeks, he made his decision to come to Hoag. Now we have that expertise in this community. We’re so fortunate to have it. And anyhow, he’s just a trailblazer for not only Hoag, but for the whole melanoma condition that so many people battle these days.
Robert Brunswick:
Well, especially in southern California, right?
Robert Braithwaite:
Yeah.
Robert Brunswick:
With the sun exposure and whatnot. Not surprisingly, I’ve had a chance to see you in action in my role on the board, and you never cease to amaze me with your poise, your calmness, your discipline. And so I think about even folks like that, like you, there must be things that keep you up at night. Healthcare is going through lots of changes, so a lot of growth going on, a lot of competition. So what are challenges that keep you up at night or things you think about? I think about the payer model and some of the things that are going on in that arena, tell me where that sits for you in terms of those worries?
Robert Braithwaite:
Yeah. Well, you touched on one, and that’s the whole health insurance, the payer model, it’s changing radically. As you heard over the course of the last 10 years, there was a lot of talk about a single payer system or Medicare for all. Anyhow, there’s a lot of conversation. I think the future of health insurance is a little unclear to be sure. But Hoag has always positioned itself as that high quality first class organization, which helps us negotiate really well with payers and creates access for our community to, well, get access to Hoag through the payers or the insurers that they have.
If I was on the patient side of this, I would really look hard as we go forward about what access you do have and what access your family has. Meaning that many insurers have different products, but you’ve got to really pay attention and say, within the product I am purchasing or that my employer is giving to me, I need to make sure I have access to high quality healthcare. It’s important, and it gets really important the moment you actually need it.
Robert Brunswick:
Sure. Yeah. So I think you’ve said it well, do your homework, understand what you’re getting. Of course, many people, they’re subject to what their company might offer them, but there’s different levels of things that they can look at.
Robert Braithwaite:
That’s correct.
Robert Brunswick:
But certainly, arguably you don’t want to use it, but when you do, it’s one of the best investments you have.
Robert Braithwaite:
That’s correct.
Robert Brunswick:
So Robert, follow up on the payer comment you made. I assume the outcomes that Hoag provides or the insurer projects they provide is an enhancement for those payers to stay involved with Hoag because they believe it’s a more efficient outcome in terms of the cost side of the overall equation. Is that a fair statement?
Robert Braithwaite:
That is a fair statement. Even the payers are evaluated on the clinical outcomes that the hospitals and the physicians provide. So the federal government ranks the payers. So to the extent that we rank high, which Hoag does, it also helps the payers want to have Hoag in their network or participate with them.
Robert Brunswick:
So favorite aspect of your job, I know you got several, but your day is from one end of the hospital to the other end of the hospital, talking about lots of different stakeholders to donors, to doctors, to administrators. What do you enjoy most about your day-to-day job?
Robert Braithwaite:
Yeah, so two things I really enjoy. One is the technology, right? The technology continues to just transform healthcare in a major way. And so watching the rapidity with which technology finds its way into the healthcare space, which enables better outcomes for patients, that’s really rewarding. It changes quickly. That’s one. The second one is at the end of the day when you walk out, you realize, I did a lot of good in the world today, right? Certainly here in our community, a lot of people were helped by virtue of the delivery of high quality healthcare, which the nurses and doctors and techs do every single day. And that’s a very rewarding feeling.
Robert Brunswick:
So there’s really a psychic income from your standpoint, aside from your day-to-day compensation, that just knowing you’re making a difference in the world and what’s going on. I’d be remiss if I didn’t touch briefly what happened during the pandemic and COVID because I know your staff and your team was on the front lines, and that was really something that we, hard to train and plan for. So three takeaways, if you don’t mind, from the COVID experience, the pandemic experience at Hoag? From drugs, we were able to offer from the clinical trial reputation to just the behavior of your staff?
Robert Braithwaite:
Yeah, it’s really hard to encapsulate-
Robert Brunswick:
Encapsulate, yeah.
Robert Braithwaite:
… carriers of COVID, but one of the challenging things was in the early days of COVID, there wasn’t a cure. There really wasn’t even a diagnostic tool at that point in time. And so the courage that was displayed by the nurses and the doctors in those early days, realizing that they don’t know what they’re dealing with in total, and it was something to behold. It was amazing to watch. And there was leadership that emerged from every part of the organization, not just the physicians and nurses. But people really leaned in because they’re committed to this community and delivering high quality healthcare. It was awesome to watch, something that I’d never seen in healthcare at that level before. It probably won’t either hopefully.
Robert Brunswick:
Yes, right.
Robert Braithwaite:
So that was one. The second one was the speed at which we were able to get clinical trials up and running on vaccines or diagnostic tests was also super impressive as well. In fact, Hoag really led the state of California and some of those early vaccine trials and feeding that information back, which literally went across the country, a lot of our results. And that was maybe a quiet win, but big win for Hoag to be in that leadership position within the COVID era. And then maybe the last thing, we learned a lot during that period of time, so that heaven forbid that we ever had a communicable disease like that, Hoag is in a far better place to respond holistically as an organization to make sure that this community is well taken care of.
Robert Brunswick:
So as we wrap up, we have a number of young people on our listening broadcast here, and I’m just curious as to what touch points or advice you might give them about a career in healthcare. Where to start, how to figure it out? Should they do it? Is it rewarding? Just give us that pitch or that framework, if you will, for somebody young thinking about this as a career.
Robert Braithwaite:
So it’s a great way to mix business skills with technology, innovation and adoption. And I think it’s going to be a place where people are going to see probably the best of medicine that’s going to happen in the next 10 years compared to the last 30 years. I’m super excited about the future.
Robert Brunswick:
Well, I want to thank you for your participation today. Our community is so lucky to have you in the leadership at Hoag and making a difference like you do, and I know how hard you work and your team responds under your leadership, so it’s just great to see. I want to thank everyone for tuning in to our Counting Capital Podcast. This has been a treat with my friend Robert Braithwaite, our CEO at Hoag Hospital. And I’ll look forward to seeing you all at our next podcast. Thank you for your time today.