April 15, 2025 • 37 mins
Tom O’Neil, Managing Director, BRG, and Jim Hearty, Chief Compliance Officer, DaVita Inc., discuss the various dimensions of the Chief Compliance Officer’s role. They cover issues related to strategic enablement, organizational values and culture, and working with the legal department and the board of directors. Tom and Jim spoke about this topic at AHLA’s 2024 Fraud and Compliance Forum in Baltimore, MD. Sponsored by BRG.
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Speaker 1 (00:00):
Speaker 2 (00:04):
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Speaker 3 (00:45):
Hi, Jim, good to see you, and thanks for joining us
today.
Speaker 4 (00:48):
Hey, Tom. Thank you.
Good to see you and, and , uh,good to be here.
Speaker 3 (00:52):
So, last fall, you and I got together in Baltimore
at the A HLA Fraud andCompliance Forum, and we did a
deep dive in a lot of thedimensions of the role of the
Chief compliance officer todayin the field of healthcare ,
both as the source of truth andas the strategic partner , uh,
to the leadership team, andalso to the board of directors.
(01:15):
I wanted to build on thatconversation if we could, and
this time, perhaps focus alittle bit more on the
strategic dimension of yourjob, and then later, if we have
time, perhaps we can go backand talk about , uh, uh, other
aspects of your role and, andhow to fulfill stakeholder
expectations. Does that work?
Yeah,
Speaker 4 (01:33):
That sounds good, though . Look forward to it.
Terrific.
Speaker 3 (01:35):
So, one of the things that fascinates me about
your journey at DaVita , uh, isthat when I got to know DaVita
as a Baltimore resident, Ialways associated the company
with being an iconic dialysisprovider. And as you and I have
gotten to know each otherprofessionally over the years,
it's at least my perceptionthat the company has embraced a
(01:59):
much more holistic view from astrategic perspective of the
care that it provides topatients, really as a global
kidney care organization. And Iwas wondering if you could just
set the table by talking aboutthat a little bit.
Speaker 4 (02:14):
Yeah. Um, so I think you're right about that. We ,
we have been on a journey to be, um, first global. I think
back when we first met , uh,DeVito was just embarking on
our global journey. We're nowin 15 countries, and so we've
continued to growinternationally, which has been
a , a really interesting andfulfilling part of the, part of
(02:36):
the business and thetrajectory. And the other place
is really a , a focus on , um,value-based care, and also ,
uh, being able to providereally a full continuum of
kidney care for our patientsand really being a kidney care
organization, not a dialysisorganization. So that's been
where much of the focus hasbeen on. And then in that space
(02:58):
, um, it's really been on beingable to provide
patient-centered care and , uh,value-based care has really ,
um, in the last several yearsand, and a lot having to do
with some government programsand government sponsored
programs has really scaled in avalue-based care space in
kidney care. Uh, and so thathas been another kind of
(03:22):
interesting and dynamic areathat we've spent a ton of time
, uh, focused on and, andreally trying to , um, increase
and improve our capabilities inthat space to serve our
patients.
Speaker 3 (03:33):
So, Jim, what accelerated , um, Davida's
strategic , uh, trajectory?
Speaker 4 (03:41):
You know, I think it's been a recognition that
that's, that's been there for along time, but a rec
recognition of the gaps thatexist in the healthcare
delivery system and trying toreduce those gaps that we have
from the fragmented healthcaresystem and have more holistic
care for patients. And , and inDaVita space , uh, you know,
(04:02):
kidney care patients arecomplex patients that are
vulnerable and have a lot ofcomorbid conditions. And so
trying to bring more holisticcare delivery for those
patients , um, is a reallyworthy goal for both DaVita and
for other folks , um, in thehealthcare system, including
the government and payers. Andto give you a sense from a,
(04:24):
from a , a metrics perspective, um, and first, let me just
explain what, what, what I meanby a value-based care program.
So, a value-based care programfor us provides holistic care
services , um, to the patienttrying to have, trying to help
manage the patient's entirecare journey , um, that's
(04:45):
focused on their personalizedneeds. And then in those
situations, we take, we,meaning DaVita as a provider,
take full risk for the patientsand the cost of their care. And
so, to give you a sense , um,the , uh, DaVita currently
provides, has 80,000 patientsthat partic participate in a
value-based care program. Andthat accounts for about $5
(05:09):
billion of risk healthcare riskunder management today. Um,
that is, that represents about40% of DaVita's patients that
participate in some kind ofvalue-based care arrangement.
And so it has grown a lot, asyou said , um, from back when
we first met, you know , 10years ago or so. Hmm .
Speaker 3 (05:27):
So clearly providing , um, greater access to
holistic care. But it soundslike one of your , um,
strategic pillars is also todrive better outcomes within
the system.
Speaker 4 (05:42):
Yeah, I think, I think the two things that, that
at least I think about in thatspace is one, is the goal of
having greater collaborationbetween the different players
in the system. And so that isfor us , um, with
nephrologists, with other , um,providers and, and physicians,
specialty physicians, and with, um, healthcare systems that
(06:05):
will reduce the total cost ofcare for the system and then
improve the quality of care forour patients. And those are
really the twin goals I thinkthat exists there.
Speaker 3 (06:15):
And I have to believe that the ramifications
of that strategy have beenpretty profound for you and
your team.
Speaker 4 (06:23):
Yeah, it has. And, and I think for the entire
organization. So it startsthere, and I think that , that
, one of the things that I'venoticed is really the
organization and, and , um,the, our, our clinical teams
and our business teams reallybeing more nimble and focused
on innovation and then findingways to continuously improve.
And so there's a lot of thingswhere it's using technology to
(06:46):
enable healthcare deliveryusing technology and data to
get quicker feedback on what'sworking, what's not working ,
uh, piloting different modelsof care and delivery systems as
a way to, to , um, innovate andfind better ways to deliver
care. And then for me and myteam, it is then making sure
that we are plugged in upstreamand early, working with the
(07:08):
business to be number one,understanding what the business
is trying to do. And thennumber two, providing guidance
and collaboration early in theprocess.
Speaker 3 (07:19):
And , and one of the things that I've long believed
is that the role of the chiefcompliance officer is very much
at the same stature or , um, onpar with the chief financial
officer and the chief legalofficer. And certainly
listening to , um, you describethe strategic trajectory that
(07:39):
DaVita has been on, I wouldassume that kind of tripartite
collaboration has been prettyimportant for your colleagues
on the executive leadershipteam.
Speaker 4 (07:48):
Yeah, for sure. And , uh, the one that I would add
there, it is really beingplugged in closely with the
business. And so for us in ourintegrated kidney care side of
the business , um, where theyare doing a lot of the
innovation and the ideation,it's being plugged in closely
with them early on, and thenalso close with our legal
partners , um, and evaluating,you know, trying to understand
(08:11):
what they're doing first,evaluating what kinds of, what
, what are the regulatoryrequirements in those areas,
and then working with thebusiness to design controls ,
um, to mitigate risks in thatspace.
Speaker 3 (08:23):
And again, without delving into anything , um,
confidential or proprietary orprivileged, what have been some
of the greatest , um, internaland external challenges as
you've embarked on thatjourney?
Speaker 4 (08:39):
Yeah, I think, I think one of the things that's
been a a real challenge is justyou're going into areas of
uncertainty. So, and , and ,and new areas , um, of new
business areas that aresomething that were new to us
and our team, and frankly, tothe entire company. An example
of that is , um, in integratedkidney care, we have risk
adjusted coding mm-hmm . And of course
(08:59):
that has been an area that'sexisted in other, other
businesses for quite some time,but was new to our business.
And so both, you know, kind ofunderstanding that business,
working, working with ourbusiness leaders , um, to
implement systems, to be ableto do that effectively and to
do it appropriately has been animportant thing that we've
done. And then also learning ,um, uh, new risk areas. And so
(09:22):
for instance, there's new safeharbors that exist in
value-based care, where thegovernment has created safe
harbors to encourage , um,providers to embark on and
invest in value-based care. Andso those are new, new safe
harbors, new regulations thatwe're trying to interpret and
understand that there isn'tprecedent for. And then , uh,
(09:45):
consulting with outside expertsto make sure that we understand
them and have, have a , a goodunderstanding of them. So those
are a couple of the areas Ithink that have been , um,
challenging and alsointeresting.
Speaker 3 (09:56):
It sounds like it's, on the one hand , um, a bit
uncomfortable as the spectrumof risk broadens and they're
less well known . But has italso provided sort of a
strategic impetus or north starfor your team in being mission
driven ?
Speaker 4 (10:14):
Yeah, for sure. Uh , I think the entire
organizations are even comingout, you know, moving outside
the compliance department hasbeen very exciting, excited
about delivering holistic careto patients and then trying to
reduce barriers , um, forpatients and actually improve
the care that they'rereceiving. And so that, that's
been, I think, exciting for theentire organization. And then ,
(10:36):
uh, for my team, I think that'salso been exciting is, is to be
part of that effort and thosegoals to deliver that kind of
care and really change thehealthcare system for the
better and change it for thebetter for our patients, has
been something that, that Ithink , um, the entire company
and my team in particular havereally rallied, rallied around
and been excited about.
Speaker 3 (10:57):
And recognizing that this is occurring in some
different way across thespectrum of healthcare
delivery. Do you have anythoughts or pearls of wisdom
that you'd share with otherchief compliance officers or
even chief legal officers whoare finding themselves in the
same position?
Speaker 4 (11:15):
Yeah, I think there's maybe three things that
I'd say on that. One is , is ,um, number one, you really, it
is really critical to have acapable team and a capable
staff because in order for usto be able to effectively
advise the business in kind ofdynamic areas like this, my
staff needs to be viewed ascredible by their business
partners to be effectivecollaborators. Um, and so
(11:37):
that's really an importantpiece of them being brought in
early. My team being brought inearly , um, to help problem
solve with the business hasbeen, has been critical to them
being seen as, as reallyeffective partners to the
business. Um , the second is,is having a culture that even
if you don't know exactly whatthe answer is, culturally, our
(12:00):
business leaders are committedto doing the right thing. So
even if you don't know what theright answer is, the fact that
they're bringing in legal andbringing in compliance early in
a collaborative way of tryingto get to the right answer,
even if it's slowing them downat times and creating
frustration, that that cultureof doing the right thing
becomes really imperative andkind of dynamic times in new
(12:22):
areas. And then the , um, Iguess the third one I would say
is be involved early. Um, it'simportant for me and my team to
be adaptable and open-minded,and then also to acknowledge
when we don't know the answerand to seek guidance and, and
do research and get externalhelp to make sure we're
advising the business the rightway. Tom, what , what is , um,
(12:48):
it actually makes me think ofyou've been involved in, in
companies that have also gonethrough dynamic times and
challenges as a general counseland chief compliance officer.
Anything that you would add tothat list?
Speaker 3 (13:00):
Yeah, and I, I think culture at the end of the day
ends up being a bedrock of muchof what we're talking about.
The interesting thing for me iscompliance officers are often
recruited or appointed undervery different circumstances.
So when I was the chief , um,the general counsel , I should
say, of WellCare and then laterthe vice chairman, that was
(13:23):
obviously a well storiedcrisis, if you will, in the
sense that the company wastrying to address a lot of
external scrutiny effectivelywhile ensuring that it was in a
position to emerge from thatstorm in a , in a healthy state
ready to serve , uh, programbeneficiaries. The journey at
Cigna was different. It was thestory of creating , um, a
(13:47):
global healthcare servicesorganization that had deep
history in, in commercialinsurance , uh, and was really
transforming itself into a truehealthcare organization. So it
, it does, I I always bring upstrategy because from my
perspective , the confluence ofstrategy and culture end up
(14:10):
defining the journey , uh, inmany respects. And I'm curious,
Jim, what role do you and yourteam play , uh, vis-a-vis
nurturing the culture at DaVita?
Speaker 4 (14:22):
Yeah, I think , um, I think it's hugely important.
I think the more time I've beenin the role, the more
appreciation I've had for that.
And frankly, the more that I, Ireally try to invest in
figuring out ways to , um,strengthen the culture and
ensure the culture remainsrobust. One of the things that
over time I've definitelyrecognized is you can never
(14:44):
take it for granted. Theculture's constantly changing
between turnover and staff,what we were just talking
about, new business lines andbusiness opportunities , um,
uh, integration of newbusinesses. There's all of
those dynamics , um, that arechanging. Covid, of course,
that was a example that reallyput strain on a culture. Um,
staffing challenges in thefield with caregivers has put a
(15:06):
strain on the culture. There'sall kinds of things like that
are constantly dealing with,and so you can't take it for
granted. And so I think one ofthe most important things, and
maybe one of the more obviousthings is linking to the
company's values. And so atDaVita , um, culture is very
important at DaVita , not justin compliance, but all the way
across the organization as wetry to link to that. And so
(15:28):
just a couple of examples is atDaVita , one of our mantras is
that you , we are a communityfirst and a company second. And
so that is a nice linkage for,for compliance and ethics and
doing the right thing andmaking sure that , um, being a
community first, that we'redeveloping high trust with our,
with our employees, with ourpatients, with our key
(15:51):
stakeholders. Um, and then theother thing is, is very
prominent at DaVita are , areour core values. And so we have
seven core values that we talkabout a lot at DaVita , across,
across all kinds of differentaspects of the organization.
And two of those I really tryto link to our compliance
program with, and that isintegrity and accountability.
(16:11):
And so we kind of grab ontothose, those other, those core
values that, that are sobedrock really in our culture
here, and then anchor to thosethings , uh, when we talk about
compliance and ethics and doingthe right thing. The the one, I
guess one other thing I wouldsay too , Tom, on this one is
really wanna support , um, thebusiness leaders because it's
(16:35):
important for them to talkabout culture. And so providing
them information where they canclearly articulate the
importance of compliance andthe importance of ethics, that
they personally believe that.
And then for them to say thatfrequently in different
settings, and not just throughwords, but also through their
actions, actually demonstratingthat commitment , um, is
(16:56):
important. So I think all ofthose things are, are really
ways that, that you can try tokeep a really strong and
healthy culture of compliancein the organization.
Speaker 3 (17:07):
And as you dramatically expand the
portfolio of services offeredto patients, and obviously the
co company ideally will grow ,uh, as a result of those
initiatives, how do you keepyour hand on the organizational
pulse, if you will, to, to feelcomfortable that all those
things you're doing areactually resonating and taking
(17:29):
root?
Speaker 4 (17:30):
Yeah, I think one of the things that, that we
started doing a couple of yearsago that's been really useful
is we have an employeeengagement survey that, that we
administer to all of ouremployees twice a year. And
then it is a poll survey thatwe have, and we've included
compliance questions on thatsurvey. And what's nice about
it is it , it's, it's aninternal survey tool that we
(17:51):
get really good granularinsights and can analyze that
data by, by role, by , um, by ,uh, geography under different
leaders , um, by how long thatthe employee has been an
employee. You can slice anddice the information a lot of
different ways and then actionthat information and try to
(18:13):
create greater visibility tothe business leaders and
greater accountability to themto action where there are
opportunities or there's beenchanges because the longer
we've been doing that rightnow, we can see trending and
see where things have improvedor things haven't improved or
have gone down, and then actionthose directly. So I think
that's, that's been a reallygood tool for us is , is we
(18:34):
also do, you know, kind of abroader deeper dive on , um,
ethics and compliance culture,but this kind of more of a
pulse snapshot that we get on aregular basis has been a really
strong tool. And then the otherthing I'd say too, on from a ,
from a , uh, efficiencyperspective as we grow to kind
of get to that point, is reallylooking to try to use
(18:56):
technology to create moreautomations , uh, and have
greater automations and spendless of my team's time on
manual , um, manual tasks thatwe can automate.
Speaker 3 (19:10):
Have you guys embarked on inorganic growth,
meaning mergers andacquisitions or tuck-ins, those
type of transactions?
Speaker 4 (19:18):
Yeah, I think in, in my time here, there's been, on
the domestic side of thebusiness, there's been smaller
, um, acquisitions, but therestill has been some
acquisitions in the domesticside. Um, on the international
side. On the other hand , um,almost all of our growth
internationally has beenthrough acquisitions.
Speaker 3 (19:35):
And how do you guys think about , um, the
integration process after thosedeals close?
Speaker 4 (19:42):
Yeah. Um, so first I , when I think about
integration, I really do thinkit starts in diligence. And so
in order to be able to, to puttogether a strong integration
plan, you kind of want to knowwhat you're dealing with. And I
think diligence, if you'reinvolved in compliance, being
involved in diligence on thefront end, you have a better
sense of what you're dealingwith when you're getting to the
(20:04):
integration , um, stage. And soyou can have a, a more
targeted, focused andprioritized integration plan.
And then also even understand,you know, depending on the ,
um, the acquisition, sometimesyou're acquiring compliance
staff and of course businessleaders to varying degrees, and
then having a sense of kind ofwhat the culture is , um, and
(20:26):
the , um, uh, the talent levelthere is and the buy-in to
compliance from some of thoselegacy , legacy employees is an
important piece of kind ofunderstanding what you need to
do from a winning the heartsand minds , um, af
post-integration. Um, and thenthe other thing too is it's not
all, there's things we canlearn too. I mean, sometimes
the, when you look at the , um,the acquired business, there's
(20:50):
things that they're doingreally well, we wanna learn
from those and their processesand their, the technology that
they're using too, and see ifwe can get better that way.
Speaker 3 (21:00):
Very helpful, and certainly, at least for me, fa
fascinating. Um, how do youguys think, my last question
for this section of ourdiscussion is how do you guys
think about scalability andsustainability when you look at
the program at the end of everyyear and start to design your
work plan , um, for the nextyear or so?
Speaker 4 (21:21):
Yeah. Um, well, what , I'll start with team again.
You know, none of it. Um, we ,you know , we can't do anything
that we do from a complianceprogram perspective without a
strong team. So we do spend alot of time on talent planning
, um, growth , uh, thinkingabout succession , um, looking
at , uh, do we have , um, areaswhere there are , uh, staff on
(21:44):
my team that would benefit fromlearning a different area than
they're currently in to kind ofbroaden their experience and
also also makes the departmentstronger that way. Um, we have
been on a journey, I think likemany compliance programs , um,
to use technology and data moreeffectively as part of our
program to create greaterefficiencies, to be able to be
(22:05):
more targeted in where we spendour, our efforts and to , um,
to also hopefully be moreproactive in what we're doing.
So I think those would be acouple ways. And then I think
the one, the , the topic wejust talked about, actually, I
probably , maybe I should havestarted with that one, and that
is culture. I mean, the cultureand having that strong culture
(22:26):
is critical to sustainability.
Speaker 3 (22:29):
You know, we've spent a lot of time, certainly
over the last few decadesdiscussing the importance of
distinguishing between the roleof the chief legal officer and
the chief compliance officer,as well as the chief financial
officer. And suffice it to say,I, I believe that's a very
valid distinction and ought notbe blurred. On the other hand,
(22:51):
as I listen to you and reflecton the journey that you've been
through, it strikes me thatquite apart from the separation
and acknowledging the differentroles, effective c
collaboration is missioncritical. And particularly
given some of the initiativesyou've described, I'm very
(23:12):
interested to hear about howyou collaborate with your
general counselor , chief legalofficer, and more importantly
than you two are as leaders,how do the teams work together
in an optimal way?
Speaker 4 (23:24):
Yeah, it's, it's a really important relationship
for us is our relationship withthe, with the legal department.
And so , um, we, we try to stayin very close contact with the
legal department. Of course, weseek legal guidance from them
regularly, and then we're alsopartnering , um, with them and
aligning as much as possibleand providing guidance to the,
the business. So the businessdoesn't feel either whipsaw by
(23:47):
guidance coming from thecompliance department and the
legal department differently orat different times. And so we
try to coordinate that guidanceto the business. And then , um,
and then for like myself andthe general counsel, we stay
close , closely connected, andthen demonstrate , um,
partnerships for the rest ofour team that they see the fact
(24:07):
that we partner closely andcollaborate closely. And then I
think that does, that does ,uh, set a good example for the
rest of the team. And I thinkit's a very , uh, very strong
and collaborative relationshipthat we have with the legal
department.
Speaker 3 (24:21):
And undoubtedly there are times when , uh, each
of you and your respectiveteams see the world through
different classes , and thatrequires some form of
communication , um, anddiscussion, I would assume.
Speaker 4 (24:34):
Yeah, I think one of the things by staying closely
coordinated is , um, beingaware of when we have different
perspectives on a particulartopic , um, and , uh, then
sharing those perspectives. Andwe obviously reconciling them
as much as we can , um, youknow, before the business, you
know, hears differentperspectives from the
(24:54):
respective departments first.
But then at times, you'reright, that there's, that we
will have a differentperspective than the legal
department and then justsharing that in a clear , uh,
direct way , um, with thebusiness as we work through
different challenges andproblem solve together. And
Tom, you know, one of thethings now is we've worked
together for years , um, that Ithink has , is been so
(25:17):
interesting is the differentseats that you've sat in in the
course of your career. Sointerested in, you know, as I
talk, as you hear me talk aboutsome of the perspectives from a
chief compliance officer,you've worn that hat , um,
you've worn the hat of the, ofthe general counsel , um, that
we were just talking aboutthose relationships. And then
of course , um, as a, as aboard member and a committee
(25:39):
chair in your roles withoversight and governance, I'd
be interested to hear, youknow, what are some of the
things that you've seen andkind of how your perspectives
have have changed on that asyou've moved into the seat as a
board member and looking down,looking back at the
organization and the role ofthe Chief compliance officer in
compliance programs and whatmakes them effective?
Speaker 3 (26:02):
It's a great question, and my perspective
for sure has changedmaterially. I think as a
threshold matter, when you'rein the C-suite, particularly in
the chief compliance officerrole versus the general counsel
, uh, and depending on therealities of the organization,
(26:23):
crisis management can becomepsychologically addictive. Um,
and that happens to manycompliance teams , um, usually
not , uh, at , at their fault,but they embark on a series of
crisis management exercises .
And before you know it, thedefinition of success becomes a
(26:46):
very myopic one where peopleare high fiving each other that
they put out a fire before ittook down, you know, a national
park. And at what I think isdifferent now about all that
from the boardroom perspectiveis all of that is for naught if
you're not building asustainable, strategically
(27:08):
driven program like the onethat you've described. And
certainly that's the kind of ,um, commitment that as a board
member, I expect from thecompliance leader and from the
team. And that is to say, alonger view with really
(27:31):
effective near term managementand direction. And that's when
you really do start to add thevalue that we've been talking
about during this conversation,at least in my view.
Speaker 4 (27:43):
And , and how do you , um, how do you assess that as
a board member and you'reworking with the chief
compliance officer, how are youstaying on top of that and
assessing that long-term viewand as opposed to a incident or
crisis management?
Speaker 3 (27:55):
It's a great question. Uh , I have two
vantage points because Iusually chair the committee ,
um, to which the board hasdelegated primary oversight
responsibility for the program.
So I'm fortunate to be able tohave a one-on-one dialogue with
the chief compliance officer,and that's something that I
place a tremendous value on ,um, not for me to tell them
(28:19):
what to do, because it'simportant to stay in your lane
as a board member, but as astrategic partner in certain
respects. So that dialogue isimportant to me, but also the
reporting that occurs. And forme, there's the reporting about
what happened in a givenquarter, and I think that's
(28:40):
historically been the focalpoint when people think of
governance and oversight cominginto a management compliance
committee meeting or a boardcompliance committee meeting
and providing a bevy of slidesand data that show what
happened during the pastquarter, perhaps a one year
report on compliance andtraining or the disclosure
(29:00):
program and the like. But Ipush the teams with which I
work to present a forwardlooking view as well. What are
the key initiatives you hope toachieve in the upcoming
quarter, and where do you wannabe a year from now in the team
development, the , um,leveraging technology to take
you to take us as anorganization to a different
(29:22):
place, and then obviously the,the resources that you need to
get the job done. The reason Iopened Jim with an observation
about crisis management is it'svery easy in our field for
crisis management to drive allthat we do. Uh, and that's
often not within our control,but one of the things that does
(29:45):
not resonate with me as a boardmember are resource decisions
long-term based on near termcrises. And by , by that I mean
just throwing bodies withoutmore at problems that need more
holistic solutions. You know,there's a benefit to a
corrective action plan, but thelong-term benefit of a
(30:07):
corrective action plan issystemic improvement, not just
addressing the near termproblems. So that's really
important to me. And look, itis a journey and , um, I feel
like a good board member aswell as a vigilant and, and
collaborative board can beimmeasurably helpful to
somebody in your role in thatregard.
Speaker 4 (30:28):
Yeah, that's great.
And, and how, if, if , um, fora chief compliance officer like
me or or anybody else outthere, what advice would you
give us on how to build asuccessful relationship with
our board and our committeechairs?
Speaker 3 (30:45):
First and foremost, for me it's candor and
transparency. I think the twogo hand in hand . Um, and that
you , you can't force trust onone another, you have to build
it bit by bit. And so knowingthat when I turn the light off
at night, the chief complianceofficer is comfortable letting
(31:07):
me know on behalf of the boardcommittee not just
unilaterally, that somethinghas come up that we ought to
know about. So near termreporting with exercising the
right pragmatic judgment isvery helpful. If there's a data
matter, nobody would expect youto have all of the information
(31:27):
about an incident and itsramifications. But the fact
that it occurred is likelysufficient enough to let not
just the, the audit committeechair or the compliance
committee chair, but obviouslyother board members know as
well. If you come to believethat there is a potential
overpayment, for example, ofsignificance in a program, the
(31:51):
committee chair that overseesthe program ought to have a
near term notification, youknow, as those facts begin to
crystallize sooner rather thanlater. But that's just near
term , um, near termrelationship building and, and
earning the confidence of theboard and, and the folks who
(32:11):
have the leadership position.
For me, it's all about lookingat, for example, the work plan
that you generate. How incisiveis it? Or is it just a series
of tactical initiatives thatare being treated like a
checklist? Those are the kindsof leadership attributes that
earn my confidence, certainlywhen I'm sitting in the board
(32:31):
chair.
Speaker 4 (32:33):
Do you have a view on , um, the, the board chair's
role in , um, either selectionof a chief compliance officer
or evaluating the performanceof a chief compliance officer?
Speaker 3 (32:44):
Yeah, those are really important questions.
I'll take the recruitmentfirst. Uh , again, I don't know
that there's a best practice,it's just a matter of judgment
for me. But the way I typicallyhandle it is, you know me well
enough to know that I have astrong point of view that the
compliance officer ought toreport to the CEO , uh,
therefore , um, the CEO and theELT and that the CHRO ought to
(33:09):
drive that search process. Ithink it's very helpful to
ensure that the boardcommittee's views on the
attributes that ought to beprioritized in the search, be
factored in , um, before theteam goes to market. And as the
process evolves and thecandidates are assessed , uh, I
(33:29):
do like to be involved when thefinalists are being considered.
I don't insist on it. I waitfor the management team to ask
, uh, me to get involved, butI, I think it's helpful when
the list is down to say two orthree and the management team
is torn or wants ratificationto spend time with each of them
(33:51):
to ensure that they understandthe big picture. Uh, and and
you also, the board work that Icurrently do is by definition
much more episodic than whatyou're doing right now. I mean,
it is inappropriate for us totry to be part of the company's
affairs five to six days a weekthe way you work, and I know
you well enough to know it'smore like six or seven. So we
(34:14):
have a different prism, youknow, how well will this person
, um, lead within, within the,the lane at the company, but
also create reportingmechanisms and systems that
enable the board to engage ineffective oversight. And that's
not as easy to measure,frankly, for the management
team when they assess thecandidate. So that's really how
(34:37):
I like to tackle it. And I doso at the invitation of, of the
leadership team.
Speaker 4 (34:42):
Mm-hmm
. Yeah, no , I think it's
interesting. I think yourcomments that , what it makes
me think about is , um, yourinvolvement in engagement with
the compliance officer , um,I'm sure create , um, greater
support and that complianceofficer feels greater support
from you and then from theboard generally, and also , uh,
(35:03):
greater independence, I think,in their function by having
that support from the, from theboard. So I think those are,
those are great comments.
Speaker 3 (35:11):
That's certainly the , the end game or the vision. I
will say, as a caveat, when Italk to the compliance officer
, uh, if I join a new board, Ido emphasize that the dialogue
that we have, whatever thecadence may be, is not a
lobbying exercise. And by thatI mean you have your own stasis
(35:33):
at the management team level.
You have fiscalresponsibilities just like
everyone else. You do have tobe a source of truth. But the
purpose of engagement with acommittee chair on behalf of
the board or the committee isnot merely merely the lobby for
more resources and gr anddisproportionate budget
allocations. I , I reallyexpect the compliance officer
(35:56):
to present evidence-based,fact-driven analysis for those
kinds of initiatives so thatthey're well-founded , uh, and,
and sustainable long-term . Andknock on wood, I've been very
fortunate to work withcompliance officers who do
exactly that.
Speaker 4 (36:14):
Yeah. Well, that's great. Um, appreciate those
insights that you have a unique, uh, you're , you have a
unique experience and that's ,uh, really great to hear.
Speaker 3 (36:24):
So this has been terrific. I , it is been great
to catch up with you as always.
And I would ask, you know, toput on your calendar next
October, if you can come backto Baltimore to get together. I
know that there will be a 2025conference up here and I'd love
to see you up here then, andI'm sure the folks at A HLA
would as well.
Speaker 4 (36:43):
That sounds great. I will look forward to seeing you
there.
Speaker 3 (36:45):
Have a great day.
Speaker 4 (36:46):
Okay, thanks Tom.
Speaker 2 (36:53):
Thank you for listening. If you enjoyed this
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health law community, visitAmerican health law.org.
Speaker 2 (00:04):
Support for A HLA comes from BRG, which combines
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(00:24):
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Speaker 3 (00:45):
Hi, Jim, good to see you, and thanks for joining us
today.
Speaker 4 (00:48):
Hey, Tom. Thank you.
Good to see you and, and , uh,good to be here.
Speaker 3 (00:52):
So, last fall, you and I got together in Baltimore
at the A HLA Fraud andCompliance Forum, and we did a
deep dive in a lot of thedimensions of the role of the
Chief compliance officer todayin the field of healthcare ,
both as the source of truth andas the strategic partner , uh,
to the leadership team, andalso to the board of directors.
(01:15):
I wanted to build on thatconversation if we could, and
this time, perhaps focus alittle bit more on the
strategic dimension of yourjob, and then later, if we have
time, perhaps we can go backand talk about , uh, uh, other
aspects of your role and, andhow to fulfill stakeholder
expectations. Does that work?
Yeah,
Speaker 4 (01:33):
That sounds good, though . Look forward to it.
Terrific.
Speaker 3 (01:35):
So, one of the things that fascinates me about
your journey at DaVita , uh, isthat when I got to know DaVita
as a Baltimore resident, Ialways associated the company
with being an iconic dialysisprovider. And as you and I have
gotten to know each otherprofessionally over the years,
it's at least my perceptionthat the company has embraced a
(01:59):
much more holistic view from astrategic perspective of the
care that it provides topatients, really as a global
kidney care organization. And Iwas wondering if you could just
set the table by talking aboutthat a little bit.
Speaker 4 (02:14):
Yeah. Um, so I think you're right about that. We ,
we have been on a journey to be, um, first global. I think
back when we first met , uh,DeVito was just embarking on
our global journey. We're nowin 15 countries, and so we've
continued to growinternationally, which has been
a , a really interesting andfulfilling part of the, part of
(02:36):
the business and thetrajectory. And the other place
is really a , a focus on , um,value-based care, and also ,
uh, being able to providereally a full continuum of
kidney care for our patientsand really being a kidney care
organization, not a dialysisorganization. So that's been
where much of the focus hasbeen on. And then in that space
(02:58):
, um, it's really been on beingable to provide
patient-centered care and , uh,value-based care has really ,
um, in the last several yearsand, and a lot having to do
with some government programsand government sponsored
programs has really scaled in avalue-based care space in
kidney care. Uh, and so thathas been another kind of
(03:22):
interesting and dynamic areathat we've spent a ton of time
, uh, focused on and, andreally trying to , um, increase
and improve our capabilities inthat space to serve our
patients.
Speaker 3 (03:33):
So, Jim, what accelerated , um, Davida's
strategic , uh, trajectory?
Speaker 4 (03:41):
You know, I think it's been a recognition that
that's, that's been there for along time, but a rec
recognition of the gaps thatexist in the healthcare
delivery system and trying toreduce those gaps that we have
from the fragmented healthcaresystem and have more holistic
care for patients. And , and inDaVita space , uh, you know,
(04:02):
kidney care patients arecomplex patients that are
vulnerable and have a lot ofcomorbid conditions. And so
trying to bring more holisticcare delivery for those
patients , um, is a reallyworthy goal for both DaVita and
for other folks , um, in thehealthcare system, including
the government and payers. Andto give you a sense from a,
(04:24):
from a , a metrics perspective, um, and first, let me just
explain what, what, what I meanby a value-based care program.
So, a value-based care programfor us provides holistic care
services , um, to the patienttrying to have, trying to help
manage the patient's entirecare journey , um, that's
(04:45):
focused on their personalizedneeds. And then in those
situations, we take, we,meaning DaVita as a provider,
take full risk for the patientsand the cost of their care. And
so, to give you a sense , um,the , uh, DaVita currently
provides, has 80,000 patientsthat partic participate in a
value-based care program. Andthat accounts for about $5
(05:09):
billion of risk healthcare riskunder management today. Um,
that is, that represents about40% of DaVita's patients that
participate in some kind ofvalue-based care arrangement.
And so it has grown a lot, asyou said , um, from back when
we first met, you know , 10years ago or so. Hmm .
Speaker 3 (05:27):
So clearly providing , um, greater access to
holistic care. But it soundslike one of your , um,
strategic pillars is also todrive better outcomes within
the system.
Speaker 4 (05:42):
Yeah, I think, I think the two things that, that
at least I think about in thatspace is one, is the goal of
having greater collaborationbetween the different players
in the system. And so that isfor us , um, with
nephrologists, with other , um,providers and, and physicians,
specialty physicians, and with, um, healthcare systems that
(06:05):
will reduce the total cost ofcare for the system and then
improve the quality of care forour patients. And those are
really the twin goals I thinkthat exists there.
Speaker 3 (06:15):
And I have to believe that the ramifications
of that strategy have beenpretty profound for you and
your team.
Speaker 4 (06:23):
Yeah, it has. And, and I think for the entire
organization. So it startsthere, and I think that , that
, one of the things that I'venoticed is really the
organization and, and , um,the, our, our clinical teams
and our business teams reallybeing more nimble and focused
on innovation and then findingways to continuously improve.
And so there's a lot of thingswhere it's using technology to
(06:46):
enable healthcare deliveryusing technology and data to
get quicker feedback on what'sworking, what's not working ,
uh, piloting different modelsof care and delivery systems as
a way to, to , um, innovate andfind better ways to deliver
care. And then for me and myteam, it is then making sure
that we are plugged in upstreamand early, working with the
(07:08):
business to be number one,understanding what the business
is trying to do. And thennumber two, providing guidance
and collaboration early in theprocess.
Speaker 3 (07:19):
And , and one of the things that I've long believed
is that the role of the chiefcompliance officer is very much
at the same stature or , um, onpar with the chief financial
officer and the chief legalofficer. And certainly
listening to , um, you describethe strategic trajectory that
(07:39):
DaVita has been on, I wouldassume that kind of tripartite
collaboration has been prettyimportant for your colleagues
on the executive leadershipteam.
Speaker 4 (07:48):
Yeah, for sure. And , uh, the one that I would add
there, it is really beingplugged in closely with the
business. And so for us in ourintegrated kidney care side of
the business , um, where theyare doing a lot of the
innovation and the ideation,it's being plugged in closely
with them early on, and thenalso close with our legal
partners , um, and evaluating,you know, trying to understand
(08:11):
what they're doing first,evaluating what kinds of, what
, what are the regulatoryrequirements in those areas,
and then working with thebusiness to design controls ,
um, to mitigate risks in thatspace.
Speaker 3 (08:23):
And again, without delving into anything , um,
confidential or proprietary orprivileged, what have been some
of the greatest , um, internaland external challenges as
you've embarked on thatjourney?
Speaker 4 (08:39):
Yeah, I think, I think one of the things that's
been a a real challenge is justyou're going into areas of
uncertainty. So, and , and ,and new areas , um, of new
business areas that aresomething that were new to us
and our team, and frankly, tothe entire company. An example
of that is , um, in integratedkidney care, we have risk
adjusted coding mm-hmm
(08:59):
that has been an area that'sexisted in other, other
businesses for quite some time,but was new to our business.
And so both, you know, kind ofunderstanding that business,
working, working with ourbusiness leaders , um, to
implement systems, to be ableto do that effectively and to
do it appropriately has been animportant thing that we've
done. And then also learning ,um, uh, new risk areas. And so
(09:22):
for instance, there's new safeharbors that exist in
value-based care, where thegovernment has created safe
harbors to encourage , um,providers to embark on and
invest in value-based care. Andso those are new, new safe
harbors, new regulations thatwe're trying to interpret and
understand that there isn'tprecedent for. And then , uh,
(09:45):
consulting with outside expertsto make sure that we understand
them and have, have a , a goodunderstanding of them. So those
are a couple of the areas Ithink that have been , um,
challenging and alsointeresting.
Speaker 3 (09:56):
It sounds like it's, on the one hand , um, a bit
uncomfortable as the spectrumof risk broadens and they're
less well known . But has italso provided sort of a
strategic impetus or north starfor your team in being mission
driven ?
Speaker 4 (10:14):
Yeah, for sure. Uh , I think the entire
organizations are even comingout, you know, moving outside
the compliance department hasbeen very exciting, excited
about delivering holistic careto patients and then trying to
reduce barriers , um, forpatients and actually improve
the care that they'rereceiving. And so that, that's
been, I think, exciting for theentire organization. And then ,
(10:36):
uh, for my team, I think that'salso been exciting is, is to be
part of that effort and thosegoals to deliver that kind of
care and really change thehealthcare system for the
better and change it for thebetter for our patients, has
been something that, that Ithink , um, the entire company
and my team in particular havereally rallied, rallied around
and been excited about.
Speaker 3 (10:57):
And recognizing that this is occurring in some
different way across thespectrum of healthcare
delivery. Do you have anythoughts or pearls of wisdom
that you'd share with otherchief compliance officers or
even chief legal officers whoare finding themselves in the
same position?
Speaker 4 (11:15):
Yeah, I think there's maybe three things that
I'd say on that. One is , is ,um, number one, you really, it
is really critical to have acapable team and a capable
staff because in order for usto be able to effectively
advise the business in kind ofdynamic areas like this, my
staff needs to be viewed ascredible by their business
partners to be effectivecollaborators. Um, and so
(11:37):
that's really an importantpiece of them being brought in
early. My team being brought inearly , um, to help problem
solve with the business hasbeen, has been critical to them
being seen as, as reallyeffective partners to the
business. Um , the second is,is having a culture that even
if you don't know exactly whatthe answer is, culturally, our
(12:00):
business leaders are committedto doing the right thing. So
even if you don't know what theright answer is, the fact that
they're bringing in legal andbringing in compliance early in
a collaborative way of tryingto get to the right answer,
even if it's slowing them downat times and creating
frustration, that that cultureof doing the right thing
becomes really imperative andkind of dynamic times in new
(12:22):
areas. And then the , um, Iguess the third one I would say
is be involved early. Um, it'simportant for me and my team to
be adaptable and open-minded,and then also to acknowledge
when we don't know the answerand to seek guidance and, and
do research and get externalhelp to make sure we're
advising the business the rightway. Tom, what , what is , um,
(12:48):
it actually makes me think ofyou've been involved in, in
companies that have also gonethrough dynamic times and
challenges as a general counseland chief compliance officer.
Anything that you would add tothat list?
Speaker 3 (13:00):
Yeah, and I, I think culture at the end of the day
ends up being a bedrock of muchof what we're talking about.
The interesting thing for me iscompliance officers are often
recruited or appointed undervery different circumstances.
So when I was the chief , um,the general counsel , I should
say, of WellCare and then laterthe vice chairman, that was
(13:23):
obviously a well storiedcrisis, if you will, in the
sense that the company wastrying to address a lot of
external scrutiny effectivelywhile ensuring that it was in a
position to emerge from thatstorm in a , in a healthy state
ready to serve , uh, programbeneficiaries. The journey at
Cigna was different. It was thestory of creating , um, a
(13:47):
global healthcare servicesorganization that had deep
history in, in commercialinsurance , uh, and was really
transforming itself into a truehealthcare organization. So it
, it does, I I always bring upstrategy because from my
perspective , the confluence ofstrategy and culture end up
(14:10):
defining the journey , uh, inmany respects. And I'm curious,
Jim, what role do you and yourteam play , uh, vis-a-vis
nurturing the culture at DaVita?
Speaker 4 (14:22):
Yeah, I think , um, I think it's hugely important.
I think the more time I've beenin the role, the more
appreciation I've had for that.
And frankly, the more that I, Ireally try to invest in
figuring out ways to , um,strengthen the culture and
ensure the culture remainsrobust. One of the things that
over time I've definitelyrecognized is you can never
(14:44):
take it for granted. Theculture's constantly changing
between turnover and staff,what we were just talking
about, new business lines andbusiness opportunities , um,
uh, integration of newbusinesses. There's all of
those dynamics , um, that arechanging. Covid, of course,
that was a example that reallyput strain on a culture. Um,
staffing challenges in thefield with caregivers has put a
(15:06):
strain on the culture. There'sall kinds of things like that
are constantly dealing with,and so you can't take it for
granted. And so I think one ofthe most important things, and
maybe one of the more obviousthings is linking to the
company's values. And so atDaVita , um, culture is very
important at DaVita , not justin compliance, but all the way
across the organization as wetry to link to that. And so
(15:28):
just a couple of examples is atDaVita , one of our mantras is
that you , we are a communityfirst and a company second. And
so that is a nice linkage for,for compliance and ethics and
doing the right thing andmaking sure that , um, being a
community first, that we'redeveloping high trust with our,
with our employees, with ourpatients, with our key
(15:51):
stakeholders. Um, and then theother thing is, is very
prominent at DaVita are , areour core values. And so we have
seven core values that we talkabout a lot at DaVita , across,
across all kinds of differentaspects of the organization.
And two of those I really tryto link to our compliance
program with, and that isintegrity and accountability.
(16:11):
And so we kind of grab ontothose, those other, those core
values that, that are sobedrock really in our culture
here, and then anchor to thosethings , uh, when we talk about
compliance and ethics and doingthe right thing. The the one, I
guess one other thing I wouldsay too , Tom, on this one is
really wanna support , um, thebusiness leaders because it's
(16:35):
important for them to talkabout culture. And so providing
them information where they canclearly articulate the
importance of compliance andthe importance of ethics, that
they personally believe that.
And then for them to say thatfrequently in different
settings, and not just throughwords, but also through their
actions, actually demonstratingthat commitment , um, is
(16:56):
important. So I think all ofthose things are, are really
ways that, that you can try tokeep a really strong and
healthy culture of compliancein the organization.
Speaker 3 (17:07):
And as you dramatically expand the
portfolio of services offeredto patients, and obviously the
co company ideally will grow ,uh, as a result of those
initiatives, how do you keepyour hand on the organizational
pulse, if you will, to, to feelcomfortable that all those
things you're doing areactually resonating and taking
(17:29):
root?
Speaker 4 (17:30):
Yeah, I think one of the things that, that we
started doing a couple of yearsago that's been really useful
is we have an employeeengagement survey that, that we
administer to all of ouremployees twice a year. And
then it is a poll survey thatwe have, and we've included
compliance questions on thatsurvey. And what's nice about
it is it , it's, it's aninternal survey tool that we
(17:51):
get really good granularinsights and can analyze that
data by, by role, by , um, by ,uh, geography under different
leaders , um, by how long thatthe employee has been an
employee. You can slice anddice the information a lot of
different ways and then actionthat information and try to
(18:13):
create greater visibility tothe business leaders and
greater accountability to themto action where there are
opportunities or there's beenchanges because the longer
we've been doing that rightnow, we can see trending and
see where things have improvedor things haven't improved or
have gone down, and then actionthose directly. So I think
that's, that's been a reallygood tool for us is , is we
(18:34):
also do, you know, kind of abroader deeper dive on , um,
ethics and compliance culture,but this kind of more of a
pulse snapshot that we get on aregular basis has been a really
strong tool. And then the otherthing I'd say too, on from a ,
from a , uh, efficiencyperspective as we grow to kind
of get to that point, is reallylooking to try to use
(18:56):
technology to create moreautomations , uh, and have
greater automations and spendless of my team's time on
manual , um, manual tasks thatwe can automate.
Speaker 3 (19:10):
Have you guys embarked on inorganic growth,
meaning mergers andacquisitions or tuck-ins, those
type of transactions?
Speaker 4 (19:18):
Yeah, I think in, in my time here, there's been, on
the domestic side of thebusiness, there's been smaller
, um, acquisitions, but therestill has been some
acquisitions in the domesticside. Um, on the international
side. On the other hand , um,almost all of our growth
internationally has beenthrough acquisitions.
Speaker 3 (19:35):
And how do you guys think about , um, the
integration process after thosedeals close?
Speaker 4 (19:42):
Yeah. Um, so first I , when I think about
integration, I really do thinkit starts in diligence. And so
in order to be able to, to puttogether a strong integration
plan, you kind of want to knowwhat you're dealing with. And I
think diligence, if you'reinvolved in compliance, being
involved in diligence on thefront end, you have a better
sense of what you're dealingwith when you're getting to the
(20:04):
integration , um, stage. And soyou can have a, a more
targeted, focused andprioritized integration plan.
And then also even understand,you know, depending on the ,
um, the acquisition, sometimesyou're acquiring compliance
staff and of course businessleaders to varying degrees, and
then having a sense of kind ofwhat the culture is , um, and
(20:26):
the , um, uh, the talent levelthere is and the buy-in to
compliance from some of thoselegacy , legacy employees is an
important piece of kind ofunderstanding what you need to
do from a winning the heartsand minds , um, af
post-integration. Um, and thenthe other thing too is it's not
all, there's things we canlearn too. I mean, sometimes
the, when you look at the , um,the acquired business, there's
(20:50):
things that they're doingreally well, we wanna learn
from those and their processesand their, the technology that
they're using too, and see ifwe can get better that way.
Speaker 3 (21:00):
Very helpful, and certainly, at least for me, fa
fascinating. Um, how do youguys think, my last question
for this section of ourdiscussion is how do you guys
think about scalability andsustainability when you look at
the program at the end of everyyear and start to design your
work plan , um, for the nextyear or so?
Speaker 4 (21:21):
Yeah. Um, well, what , I'll start with team again.
You know, none of it. Um, we ,you know , we can't do anything
that we do from a complianceprogram perspective without a
strong team. So we do spend alot of time on talent planning
, um, growth , uh, thinkingabout succession , um, looking
at , uh, do we have , um, areaswhere there are , uh, staff on
(21:44):
my team that would benefit fromlearning a different area than
they're currently in to kind ofbroaden their experience and
also also makes the departmentstronger that way. Um, we have
been on a journey, I think likemany compliance programs , um,
to use technology and data moreeffectively as part of our
program to create greaterefficiencies, to be able to be
(22:05):
more targeted in where we spendour, our efforts and to , um,
to also hopefully be moreproactive in what we're doing.
So I think those would be acouple ways. And then I think
the one, the , the topic wejust talked about, actually, I
probably , maybe I should havestarted with that one, and that
is culture. I mean, the cultureand having that strong culture
(22:26):
is critical to sustainability.
Speaker 3 (22:29):
You know, we've spent a lot of time, certainly
over the last few decadesdiscussing the importance of
distinguishing between the roleof the chief legal officer and
the chief compliance officer,as well as the chief financial
officer. And suffice it to say,I, I believe that's a very
valid distinction and ought notbe blurred. On the other hand,
(22:51):
as I listen to you and reflecton the journey that you've been
through, it strikes me thatquite apart from the separation
and acknowledging the differentroles, effective c
collaboration is missioncritical. And particularly
given some of the initiativesyou've described, I'm very
(23:12):
interested to hear about howyou collaborate with your
general counselor , chief legalofficer, and more importantly
than you two are as leaders,how do the teams work together
in an optimal way?
Speaker 4 (23:24):
Yeah, it's, it's a really important relationship
for us is our relationship withthe, with the legal department.
And so , um, we, we try to stayin very close contact with the
legal department. Of course, weseek legal guidance from them
regularly, and then we're alsopartnering , um, with them and
aligning as much as possibleand providing guidance to the,
the business. So the businessdoesn't feel either whipsaw by
(23:47):
guidance coming from thecompliance department and the
legal department differently orat different times. And so we
try to coordinate that guidanceto the business. And then , um,
and then for like myself andthe general counsel, we stay
close , closely connected, andthen demonstrate , um,
partnerships for the rest ofour team that they see the fact
(24:07):
that we partner closely andcollaborate closely. And then I
think that does, that does ,uh, set a good example for the
rest of the team. And I thinkit's a very , uh, very strong
and collaborative relationshipthat we have with the legal
department.
Speaker 3 (24:21):
And undoubtedly there are times when , uh, each
of you and your respectiveteams see the world through
different classes , and thatrequires some form of
communication , um, anddiscussion, I would assume.
Speaker 4 (24:34):
Yeah, I think one of the things by staying closely
coordinated is , um, beingaware of when we have different
perspectives on a particulartopic , um, and , uh, then
sharing those perspectives. Andwe obviously reconciling them
as much as we can , um, youknow, before the business, you
know, hears differentperspectives from the
(24:54):
respective departments first.
But then at times, you'reright, that there's, that we
will have a differentperspective than the legal
department and then justsharing that in a clear , uh,
direct way , um, with thebusiness as we work through
different challenges andproblem solve together. And
Tom, you know, one of thethings now is we've worked
together for years , um, that Ithink has , is been so
(25:17):
interesting is the differentseats that you've sat in in the
course of your career. Sointerested in, you know, as I
talk, as you hear me talk aboutsome of the perspectives from a
chief compliance officer,you've worn that hat , um,
you've worn the hat of the, ofthe general counsel , um, that
we were just talking aboutthose relationships. And then
of course , um, as a, as aboard member and a committee
(25:39):
chair in your roles withoversight and governance, I'd
be interested to hear, youknow, what are some of the
things that you've seen andkind of how your perspectives
have have changed on that asyou've moved into the seat as a
board member and looking down,looking back at the
organization and the role ofthe Chief compliance officer in
compliance programs and whatmakes them effective?
Speaker 3 (26:02):
It's a great question, and my perspective
for sure has changedmaterially. I think as a
threshold matter, when you'rein the C-suite, particularly in
the chief compliance officerrole versus the general counsel
, uh, and depending on therealities of the organization,
(26:23):
crisis management can becomepsychologically addictive. Um,
and that happens to manycompliance teams , um, usually
not , uh, at , at their fault,but they embark on a series of
crisis management exercises .
And before you know it, thedefinition of success becomes a
(26:46):
very myopic one where peopleare high fiving each other that
they put out a fire before ittook down, you know, a national
park. And at what I think isdifferent now about all that
from the boardroom perspectiveis all of that is for naught if
you're not building asustainable, strategically
(27:08):
driven program like the onethat you've described. And
certainly that's the kind of ,um, commitment that as a board
member, I expect from thecompliance leader and from the
team. And that is to say, alonger view with really
(27:31):
effective near term managementand direction. And that's when
you really do start to add thevalue that we've been talking
about during this conversation,at least in my view.
Speaker 4 (27:43):
And , and how do you , um, how do you assess that as
a board member and you'reworking with the chief
compliance officer, how are youstaying on top of that and
assessing that long-term viewand as opposed to a incident or
crisis management?
Speaker 3 (27:55):
It's a great question. Uh , I have two
vantage points because Iusually chair the committee ,
um, to which the board hasdelegated primary oversight
responsibility for the program.
So I'm fortunate to be able tohave a one-on-one dialogue with
the chief compliance officer,and that's something that I
place a tremendous value on ,um, not for me to tell them
(28:19):
what to do, because it'simportant to stay in your lane
as a board member, but as astrategic partner in certain
respects. So that dialogue isimportant to me, but also the
reporting that occurs. And forme, there's the reporting about
what happened in a givenquarter, and I think that's
(28:40):
historically been the focalpoint when people think of
governance and oversight cominginto a management compliance
committee meeting or a boardcompliance committee meeting
and providing a bevy of slidesand data that show what
happened during the pastquarter, perhaps a one year
report on compliance andtraining or the disclosure
(29:00):
program and the like. But Ipush the teams with which I
work to present a forwardlooking view as well. What are
the key initiatives you hope toachieve in the upcoming
quarter, and where do you wannabe a year from now in the team
development, the , um,leveraging technology to take
you to take us as anorganization to a different
(29:22):
place, and then obviously the,the resources that you need to
get the job done. The reason Iopened Jim with an observation
about crisis management is it'svery easy in our field for
crisis management to drive allthat we do. Uh, and that's
often not within our control,but one of the things that does
(29:45):
not resonate with me as a boardmember are resource decisions
long-term based on near termcrises. And by , by that I mean
just throwing bodies withoutmore at problems that need more
holistic solutions. You know,there's a benefit to a
corrective action plan, but thelong-term benefit of a
(30:07):
corrective action plan issystemic improvement, not just
addressing the near termproblems. So that's really
important to me. And look, itis a journey and , um, I feel
like a good board member aswell as a vigilant and, and
collaborative board can beimmeasurably helpful to
somebody in your role in thatregard.
Speaker 4 (30:28):
Yeah, that's great.
And, and how, if, if , um, fora chief compliance officer like
me or or anybody else outthere, what advice would you
give us on how to build asuccessful relationship with
our board and our committeechairs?
Speaker 3 (30:45):
First and foremost, for me it's candor and
transparency. I think the twogo hand in hand . Um, and that
you , you can't force trust onone another, you have to build
it bit by bit. And so knowingthat when I turn the light off
at night, the chief complianceofficer is comfortable letting
(31:07):
me know on behalf of the boardcommittee not just
unilaterally, that somethinghas come up that we ought to
know about. So near termreporting with exercising the
right pragmatic judgment isvery helpful. If there's a data
matter, nobody would expect youto have all of the information
(31:27):
about an incident and itsramifications. But the fact
that it occurred is likelysufficient enough to let not
just the, the audit committeechair or the compliance
committee chair, but obviouslyother board members know as
well. If you come to believethat there is a potential
overpayment, for example, ofsignificance in a program, the
(31:51):
committee chair that overseesthe program ought to have a
near term notification, youknow, as those facts begin to
crystallize sooner rather thanlater. But that's just near
term , um, near termrelationship building and, and
earning the confidence of theboard and, and the folks who
(32:11):
have the leadership position.
For me, it's all about lookingat, for example, the work plan
that you generate. How incisiveis it? Or is it just a series
of tactical initiatives thatare being treated like a
checklist? Those are the kindsof leadership attributes that
earn my confidence, certainlywhen I'm sitting in the board
(32:31):
chair.
Speaker 4 (32:33):
Do you have a view on , um, the, the board chair's
role in , um, either selectionof a chief compliance officer
or evaluating the performanceof a chief compliance officer?
Speaker 3 (32:44):
Yeah, those are really important questions.
I'll take the recruitmentfirst. Uh , again, I don't know
that there's a best practice,it's just a matter of judgment
for me. But the way I typicallyhandle it is, you know me well
enough to know that I have astrong point of view that the
compliance officer ought toreport to the CEO , uh,
therefore , um, the CEO and theELT and that the CHRO ought to
(33:09):
drive that search process. Ithink it's very helpful to
ensure that the boardcommittee's views on the
attributes that ought to beprioritized in the search, be
factored in , um, before theteam goes to market. And as the
process evolves and thecandidates are assessed , uh, I
(33:29):
do like to be involved when thefinalists are being considered.
I don't insist on it. I waitfor the management team to ask
, uh, me to get involved, butI, I think it's helpful when
the list is down to say two orthree and the management team
is torn or wants ratificationto spend time with each of them
(33:51):
to ensure that they understandthe big picture. Uh, and and
you also, the board work that Icurrently do is by definition
much more episodic than whatyou're doing right now. I mean,
it is inappropriate for us totry to be part of the company's
affairs five to six days a weekthe way you work, and I know
you well enough to know it'smore like six or seven. So we
(34:14):
have a different prism, youknow, how well will this person
, um, lead within, within the,the lane at the company, but
also create reportingmechanisms and systems that
enable the board to engage ineffective oversight. And that's
not as easy to measure,frankly, for the management
team when they assess thecandidate. So that's really how
(34:37):
I like to tackle it. And I doso at the invitation of, of the
leadership team.
Speaker 4 (34:42):
Mm-hmm
interesting. I think yourcomments that , what it makes
me think about is , um, yourinvolvement in engagement with
the compliance officer , um,I'm sure create , um, greater
support and that complianceofficer feels greater support
from you and then from theboard generally, and also , uh,
(35:03):
greater independence, I think,in their function by having
that support from the, from theboard. So I think those are,
those are great comments.
Speaker 3 (35:11):
That's certainly the , the end game or the vision. I
will say, as a caveat, when Italk to the compliance officer
, uh, if I join a new board, Ido emphasize that the dialogue
that we have, whatever thecadence may be, is not a
lobbying exercise. And by thatI mean you have your own stasis
(35:33):
at the management team level.
You have fiscalresponsibilities just like
everyone else. You do have tobe a source of truth. But the
purpose of engagement with acommittee chair on behalf of
the board or the committee isnot merely merely the lobby for
more resources and gr anddisproportionate budget
allocations. I , I reallyexpect the compliance officer
(35:56):
to present evidence-based,fact-driven analysis for those
kinds of initiatives so thatthey're well-founded , uh, and,
and sustainable long-term . Andknock on wood, I've been very
fortunate to work withcompliance officers who do
exactly that.
Speaker 4 (36:14):
Yeah. Well, that's great. Um, appreciate those
insights that you have a unique, uh, you're , you have a
unique experience and that's ,uh, really great to hear.
Speaker 3 (36:24):
So this has been terrific. I , it is been great
to catch up with you as always.
And I would ask, you know, toput on your calendar next
October, if you can come backto Baltimore to get together. I
know that there will be a 2025conference up here and I'd love
to see you up here then, andI'm sure the folks at A HLA
would as well.
Speaker 4 (36:43):
That sounds great. I will look forward to seeing you
there.
Speaker 3 (36:45):
Have a great day.
Speaker 4 (36:46):
Okay, thanks Tom.
Speaker 2 (36:53):
Thank you for listening. If you enjoyed this
episode, be sure to subscribeto ALA's speaking of health
law, wherever you get yourpodcasts. To learn more about
ah a and the educationalresources available to the
health law community, visitAmerican health law.org.
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