HIStalk Interviews Joe Boyd, Chairman, Encore Health Resources

Joe Boyd is chairman of Encore Health Resources of Houston, TX.

Tell me about yourself and about Encore.

I have been in the industry for just about 30 years. I started my career with EDS on the payer side, working on mainly government-type healthcare — Medicaid, Medicare, and Defense Department-related payer side. I went from there to GTE, and then from GTE to Peat Marwick, all still focused on the payer side of healthcare.

In 1990, I joined Perot Systems and switched over in that point to the provider side. I ran the healthcare division of Perot Systems in the early 90s, from around 1994 until 1997, and then took a general management role for all of North America, which included healthcare. That period with Perot Systems is where I got to know Ivo and a number of the other folks who were the seed group that made Healthlink what it was. 

I left Perot Systems in 2001 and started to do consulting on my own, mainly focusing on working with small to mid-sized companies and largely in healthcare, working with the leadership teams to build the companies. One of the first clients I worked with was Ivo at Healthlink, so Ivo, Dana, and I started working together in 2002.

At some point relatively early, I took the chairmanship there. I was there through the sale to IBM, so I was involved in that process and then stayed on and helped them a little bit after they became a business unit inside of IBM.

When Dana and Ivo decided to create Encore, I was paying keen attention to what they were up to. Early this year, Dana approached me and asked me to join them in an advisory role. I spent most of the year getting up to speed on what they were doing and seeing how they’ve grown. In the last few weeks, they asked me to take the chairmanship role and essentially work with them through a growth period that feels very similar to the growth period I worked with them on the Healthlink side back in 2002 through 2005. That’s how I got here.

Why was the change made and what’s Ivo going to be doing?

It was an opportunity for Ivo to focus on the two things that he likes to do most. One of them is to continue to provide strong input into the vision of the company. I garnered a commitment out of him to continue in that kind of role. Also, to work with our clients and to leverage the relationships that he has in the industry. He’ll be doing a lot of the same things he was doing, but just a lot less involved in some of the day-to-day kind of activities associated with running the company.

What does a chairman actually do?

I’m not sure I can answer that question in the general sense, but what I do in Encore is that I’ve been very focused so far on helping them determine what things they need to put in place to support the kind of growth that they’ve had.

This company has grown from $4 million in revenue the first year to about $20 million last year and we’ll finish close to $43 million in 2011. When I got involved in early March of 2011, we had 125 employees. We have 250 employees now. We need to do some things to focus on supporting that kind of growth and making sure that we can continue to grow and take care of our clients as we have that type of growth. 

I’ll be helping strategically with what the company is doing, working with them on making decisions to put the infrastructure in place to run the company well, and guiding them through the phases of being a small company to being a relatively large company.

Ivo had told me that with Healthlink, he decided at the $100 million revenue mark to turn it over to someone else because it would have taken more money and different expertise to keep it growing. Do you anticipate a similar outcome at a similar point in Encore’s growth?

I don’t think there’s a dollar amount that is important there. I also think that the experience of the management team this time around is such that we can support growing a lot bigger than that. There’s not a magic plan that says that we can only grow to a certain size. I feel very comfortable in this team’s ability to be able to continue to grow and to grow aggressively.

People who start consulting companies often grow them, sell them, then start a new consulting company. What attracts someone to want to run a consulting firm instead of a product company?

I think that there’s a challenge this time around, particularly with Encore, to be more than just a pure play consulting company. One of the things that we focused on from the very beginning is looking at leverage solutions, where we can do two things by putting some methodology and some product in place.

One of them is to extend the knowledge that we have in the company to new consultants who don’t have as much experience maybe or don’t know the culture … a way to make that we have some best practices worked into what we’re doing. But secondly and more importantly is to be able to eventually have, particularly on the analytics side, products that have value independent of the consulting, particularly as clinical information becomes more and more important for decision-making with our clients.

I think we’ll see an evolution of the company to be a lot more than just a consulting company, and a company where revenues aren’t directly correlated to the number of people that you hire and the number of people you have in the company. I think the desire this time around is to have consulting elements to the company, but not be exclusively a consulting organization.

What kind of things do you anticipate that the company might get involved in?

There are two things that where we’ve already started and actually are well down the road on. One of them is a methodology that we call CoreQUEST, which is a discipline around the selection and management of everything from starting an EHR implementation through how you are going to use that kind of information to meet Meaningful Use requirements. If an organization is headed down a path toward becoming an ACO, how you handle that clinical information for decision-making, for what service lines are in which location, what disease management protocols we need to focus on in an area? Eventually if an organization decides they’re going to do their own insurance, how do they underwrite those kind of things? Really starting to use clinical information for decision-making.

There’s also a specific tool called CoreGPS that we’re using right now as a Meaningful Use product to help define how an organization is going to attest to having met Meaningful Use requirements. As the clinical information data becomes more robust, we plan to use that platform for other types of applications that would have use with our clients.

Do you see just growing organically, or do you anticipate that acquisitions will make sense at some point?

I think we’re open to either. From an intellectual property standpoint, we’re focused on building those kind of things organically with our folks and smart folks that we work with or clients, but we might be wise to look at an acquisition or two associated with those aspects of the tool.

When Encore started up, Ivo told me that he really didn’t care if it turned out to be a 30-consultant company as long as the client-base was 100% referenceable and people like to work there, but he would consider it a failure if it got huge and everybody made money but employees and customers weren’t happy. How do you think it turned out in the years since?

I think it’s a touchstone of the company. It’s the only company that I’ve ever been involved with where the beginning of every meeting – and this is true from a team meeting to a board meeting – begins with a discussion of one of the core values of the company, where we move around the room and everyone’s expected to talk about a place in the past week where there’s a good example of that core value being exercised. Then we circle the room again and talk about a particular area where we need to be working on those things.

One of the key components of that is exactly what you said — 100% referenceabilty. But that also extends to the type of people we bring into the company. It extends to what we’ve believe about the way teams should work together. It’s a key part of the way this company operates. The quality of the company will absolutely trump the size of the company at any point in this process. That’s a critically important part of the company.

Some people, probably me included, would say that Healthlink was a pretty special company until it got sold to IBM and they screwed it up. Not intentionally, but because their big company culture didn’t fit with an entrepreneurial consulting firm. Your competitors are being acquired by big companies. Has the dynamic changed?

From my perspective, there are not that many organizations on the field. When I was part of Healthlink, FCG was out there. There were a lot of other companies of a similar size. We were filling a niche that I think largely went away during that period.

What pitfalls did Encore have to avoid to get to this point and then which ones remain between where it is and where you want it to be?

I’m not sure there were pitfalls. There was certainly surprise at how fast the company grew. There was some surprise at how much the prior company brand really accrued benefit to Encore. Ivo told me at one point that he could have gone out and said, “We sell manhole covers,” and a client would have said, “Yeah, that’s great, but we need 15 people to help us with an Epic implementation.” There was a reputation that was built in from the start that I think created growth that they didn’t anticipate at first.

We stressed and we challenged our ability to recruit the kind of people that we want. We have never been willing to compromise the quality of the folks that we bring into the company. Aside from an acknowledgment that we need to spend some time and effort on making absolutely sure that we have the infrastructure in place that not only supports where we are today, but where we want to grow to.

I think that growth has been handled really well. To a large extent, this is probably the most mature startup you’ve ever seen. This is a group of people, including myself, who’ve worked together for 15-20 years. This team really knows how to run a bigger company and knew how to do it from the beginning. I feel like we’re well positioned. Even though we were surprised by the rate of growth, I think we’ve handled that growth very well.

Some clients might just want to deal with a bigger company, while others might just say, “I’m going to call Ivo. I don’t really care who else is out there – I want to work with him.” Do you think that’s unique to healthcare, and what’s the message for companies trying to figure out where they fit in the continuum from “tiny” to “huge conglomerate?”

I’ve been in healthcare for a long time and I also have been involved in other industries. I’ve also worked with some of the larger companies and some of the smaller companies. I think that healthcare — particularly the provider side — has been burned a number of times by large companies that came in and believed it to be similar to other transactional businesses. They don’t recognize that a lot of the makeup of healthcare is institutional and it’s built on longstanding relationships. It’s more collegial than a lot of industries are.

There’s been a tendency for some of those large companies to come in, decide it’s hard, and leave — and leave people in pretty difficult situations. There’s absolute value in knowing that a team is committed to this industry, not only that it’s an industry that they’re interested in, but it’s one where their relationships are more important than making a buck. That commitment to those relationships is critically important. It’s important to Ivo, but it’s important to Dana and to Tom and to myself and to the other leaders in this company.

You have a shockingly long list of current board and consulting activities. Why do you do all those things and how the heck do you find the time to get it all done?

When I left Perot Systems, I made a decision that I wanted to work with companies of a particular size. I also wanted to work in places where I could work with people I enjoyed and where I could make a large impact. I’ve let that guide who I get involved with and I’ve managed my time by limiting that at different points of time.

Right now I’m involved with three for-profit organizations and one not-for-profit. That’s about right for me right now. I’m not doing anything beyond that at this point. The CEOs of all three companies know each other. They’re working on things where I think there’s a lot of value between them. It’s not work when you’re having fun.

For people stuck in jobs they don’t like or that don’t have much of a future, they’re probably thinking, why not just take your suitcase of money and go sit on a beach somewhere? But almost never do people with that level of accomplishment do that. What’s it like to have that option but then to say, “No, I want to keep working?”

That was a soul-searching thing for me. I originally thought that I would do something that was more of a traditional retirement, but I kind of failed at that and decided that it was important to me to stay in touch with what’s going on, particularly in this industry. I did some work with non-healthcare clients. I’ve enjoyed what I’ve learned of a lot of those industries, but my passion has always been in this space. 

It may be that I’m just not a successful retiree. That may be the true answer.

When you look down the road a few years, what do you see as important issues in healthcare IT that people may or may not see coming?

There was an excellent article in The Wall Street Journal by Anna Wilde Mathews on the future of healthcare. She probably summed up my views better than I could possible have done myself.

In a nutshell, I think there are a couple of things. The changes going on in healthcare now have been politicized tremendously. I actually think they’re much more economically based than they are politically based. The requirement to fix a pretty badly broken financial system is going to drive the continued change. It will drive it in the same direction it’s going — quality of care and providing repeatable, successful solutions in healthcare is going to be critically important.

That’s going to drive a necessity to get a lot smarter about gathering consistent clinical data. It’s going to require good analysis of that data. And then really smart people — both client people and people who are external to the industry — working on ways to use that information to improve cost performance and to improve the quality of patient care. I think that’s going to happen. 

The distinction between the payer side of healthcare and the provider side of healthcare is going to continue to blur. Providers are more and more going to try to bring risk management concepts onto the provider side. I think that successful provider organizations are going to have to get sophisticated in managing risk.

The organizations that survive and thrive aren’t going to necessarily look like the organizations that exist today. They’re going to have to change and add some different types of capabilities than what they’ve historically had as part of the mix of what they have to worry about.

What’s happened in the industry right now is foundational. The analytics associated with consolidated clinical, financial, and claims data that position providers to make quality decisions on how to run their business is going to be super important over the next four to five years.