Changing of the guard
In terms of workforce size, UW Health merges and grows its way past its own medical records provider.
The rationale for health care integration is to become economically aligned and rowing in the same direction, according to Dr. Alan Kaplan, UW Health CEO.
Photo courtesy UW Health
From the pages of In Business magazine.
The Affordable Care Act-inspired wave of consolidation in the health care industry has benefited Epic in many ways but in 2015, when doctors at the University of Wisconsin–Madison approved a plan to merge the UW Medical Foundation and UW Hospital, it set the stage for change at the top of our list of the Largest 100 Employers in Dane County.
The plan, which took two years to execute, integrates the medical foundation, the clinical practice organization for UW faculty physicians, and UW Hospital into one organization. Prior to that, they existed separately under the umbrella of UW Health, which also includes the UW School of Medicine and Public Health, and Unity, a medical insurance company.
In the 2016 presentation, which was dominated at the top by local health care providers and insurers, UW Hospitals and Clinics ranked second to Epic with nearly 5,500 full-time and more than 4,200 part-time employees. Meanwhile, UW Medical Foundation ranked No. 5 last year with nearly 3,500 full-time and 770 part-time employers, and the merged entity — which also includes other inpatient and outpatient sites in Wisconsin and northern Illinois — creates a workforce tour de force with a full-time equivalency of 11,673 workers.
Combine that with moderate growth in Epic’s 9,600-member workforce (“only” 200 more employees were added compared to 2016) and you have the basis for a change at the top.
Dr. Alan Kaplan, CEO of UW Health, acknowledges that integration — he does not use the word consolidation — is the biggest factor in the organization’s workforce growth, but it’s not the only one. “Certainly, we are growing [organically],” he states. “We are getting busier and some of it is due to aging populations, some of it is due to gains in market share, and some of it is due to increasing regional referrals. So there is a multitude of factors, but basically we’re busy. We’re busier than we’ve ever been.”
Regarding the referrals, UW Health has partnerships at its cancer center and with organizations such as Pro Health Care in Waukesha and Swedish American Hospital System in Rockford, Ill., and it has built relationships with various provider organizations. “We have capabilities that others don’t have because we’re an academic medical center, so we have higher-than-ordinary services like transplant and complicated surgeries when those needs arise,” he explains, “and we have the ability to offer patients clinical trials when they have very special stages in their disease processes. So there are a number of factors and I don’t think I could tell you legitimately which one is contributing more to the growth.”
In terms of the merger with the UW Medical Foundation, Kaplan says he would also apply the term integration to UW Health’s joint operating agreement with UnityPoint Health – Meriter. If merging was just a matter of consolidation, the value proposition would not have been strong enough, especially in the current environment.
“It’s not about consolidation, it’s about integration,” he explains. “It’s about the need to be economically aligned organizations, all rowing in the same direction so that our focus is on patients and on value-based care, which means improving quality and safety, and working to lower costs and toward better coordination and delivery of care.
“To the extent that we could take other factors off the table, like competition between Meriter and us in an unhealthy way, and create an economically aligned entity so that we can focus on patients and care coordination, that would be the same reason that the hospital and the medical foundation came together as one. It was always in the best interests of UW Health to do it, but the external environment and the challenges that lie ahead of us were the driving factors that brought it together.”
Health care, insurance dominate
Like most years, the 2017 list reflects how dominant the health care and insurance industries are in Dane County. UW Health and Epic Systems are followed by: SSM Health (No. 3), which includes St. Mary’s Hospital and Dean Clinic and Dean Health Plan; American Family Insurance (4); Covance (5), which provides development and testing for pharmaceutical and food companies; WPS Health Solutions (6); CUNA Mutual Group (7); UnityPoint Health – Meriter (8); PPD (9), a global contract research organization that provides drug development services; and TDS Telecom (10).
New or returning to this year’s list are: Old National Bank, which debuts at No. 53 after acquiring AnchorBank and renaming its local branches; Costco (64); Smart Motors (73); The Bruce Co. of Milwaukee (81); Zendesk (92); Home Health United (93); Stevens Construction (94); and Fairway Independent Mortgage (100).
From No. 1 UW Health to No. 100 Fairway Independent Mortgage, we present the Largest 100 employers in Dane County based on full-time equivalency (three part time employees = one full-timer), and we look back at how the list has changed over the years.
The business churn
Needless to say, change has been a constant with this annual presentation. Alternatively known as the Top 100 or Top 200, it began in 1990 with more of a regional group of employers that no longer includes the likes of Oscar Mayer, which then had 15,000 employees; Famous Footwear, which employed 3,000 people; and American TV/Appliance of Madison, where 1,100 people worked at that time.
One is tempted to believe they could not cope or keep pace with change brought on by the internet age, but the truth is that Oscar Mayer was taken over by Kraft Foods, which was taken over by Heinz, which was then lured away to another state. Famous Footwear is still around with stores on the east and west sides of Madison, but the Capital City no longer serves as its headquarters. American TV simply stopped marketing effectively after founder Lenny Mattioli, now the owner of Crazy Lenny’s E-Bikes, departed.
These certainly weren’t the only changes either in name or form or location from that original list, but these were not companies that barely made the list — each of them ranked in the top 20 companies based on annual revenue.
Familiar names — or shall we say survivors — such as American Family Insurance, CUNA Mutual Insurance Group (as it was called then), and General Casualty (now QBE) populated the top 15.
In those early years, Oscar Mayer and American Family Insurance alternated in the top two spots, but American Family topped the list for most of the first 20 years of the presentation. While the multiline insurer is still in the top five, it yielded to UW Hospitals & Clinics (now UW Health) in 2009. Epic began to top the list in 2013, when its workforce swelled to 6,500 employees; the medical software developer first cracked the top 10 in 2009.
Epic, founded in 1979, did not make its first appearance on the list until January 2000, when it reported 370 employees and $50 million in revenues, but it did manage to find its way onto a February 1992 listing of Dane County’s Top 50 High-Technology firms, coming in at No. 47 with a grand total of 33 employees. Back then Nicolet Instruments was the biggest local technology company, with 1,000 employees and $132 million in annual revenue.
Not that Epic CEO Judith Faulkner loses much sleep over losing the largest employer status. Informed of the change at the top, she quipped, “I’m quite happy to fly under the radar.”
Kaplan chuckled when informed of that comment and went on to extoll Epic’s virtues as a partner. He cited an electronic medical records platform that gets better and better with the ability to capture and transfer information to help coordinate patient care, and put reminders and build medical safety features into the software. One knock among physicians and others who toil in medical offices is that medical records software results in less efficiency because they have to input so much data on a computer, but Kaplan says the benefits create a worthwhile trade off.
“If you look at our ability to fully obtain medical records, to share information across the provider team on behalf of a patient, those efficiencies far outweigh what others might consider is an inefficiency if they have to enter data,” Kaplan states. “She [Faulkner] is tremendously changing the face of health care, and it’s been to our benefit.”
As for UW Health’s future staff growth, especially when it looks as though the ACA will survive largely intact, he touted workforce stability. “It’s hard to predict because all of us are engaged in process improvement, trying to maximize the efficiency of our workforce,” he states. “One could imagine that even though we are growing that we may achieve efficiencies to keep our workforce relatively stable. Having said that, we do have strategic plans for growth and depending on how that is realized, we might have a need to grow our employee base.”
Published in January 1990, IB’s very first Top 100 list was part of a special supplement on CEOs of South Central Wisconsin. While it had a more regional favor, the poignant part is that the top company (then based on annual revenue) was Oscar Mayer Foods Corp., which recently closed in Madison. With then #1 Oscar Mayer the lone exception, here is a lineup of companies that survived long enough to be on both the original and the 2017 list, preceded by their 1990 rank. (Several of the company names have changed.)
1. Oscar Mayer Foods Corp., Madison
2. American Family Group, Madison
3. Wisconsin Power & Light Co. Inc., Madison (now Alliant Energy)
5. CUNA Mutual Insurance Group, Madison
7. Rayovac Corp., Madison (now Spectrum Brands)
9. Wisconsin Physicians Service Insurance, Madison
10. Madison Gas & Electric Co., Madison
19. General Casualty Companies of Wisconsin, Sun Prairie (now QBE)
22. Meriter Health Services Inc., Madison
23. Stoughton Trailers Inc., Stoughton
29. Dean Medical Center, Madison (now part of SSM)
34. National Guardian Life Insurance Co., Madison
35. SSM Health Care, Madison
36. Certco, Inc., Madison
42. Webcrafters Inc., Madison
52. Zimbrick Motors, Madison
56. Sub Zero Freezer, Madison
59. Physicians Plus Insurance Corp., Madison
66. J.H. Findorff & Son Inc., Madison
67. Kayser Ford Inc., Madison
68. Kippcast Division, Madison (then part of Madison-Kipp Corp.)
74. Madison Newspapers Inc., Madison
83. Evco Plastics, DeForest
87. Demco Inc., Madison
88. Group Health Cooperative of South Central Wisconsin, Madison
* Gordon Flesch Co. Inc., Madison
* Woodman’s Food Market, Madison
* Most likely within the Top 100, but In Business was unable to obtain revenue data for this original list.
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