Arizona-based healthcare system HonorHealth says it’ll be getting a new CEO early next year.
Dr. John Neil will take over from the current CEO Todd LaPorte. Neil currently serves in leadership roles at HonorHealth, including as executive vice president and chief strategy officer.
Other healthcare systems in the state have taken a variety of approaches to finding their new leaders. Banner Health did a national search to hire a chief operating officer, who eventually moved into the CEO role. Phoenix Children’s Hospital also did a national search last year for its current CEO. Valleywise is currently doing a national search to find the successor for its leader, who’s retiring this fall.
Jim Hammond is the publisher and CEO of the Hertel Report, a newsletter and website connecting the Arizona healthcare industry.
Full conversation
MARK BRODIE: Jim, what do you make of the fact that HonorHealth went with an in-house candidate, rather than doing a national search?
JIM HAMMOND: Well, I’m not surprised. That system has been very kind of self-sustaining for a long time. They’ve had good success with their leadership using succession planning and not having to go outside the system. So, I’m not surprised. We also don’t really know if they didn’t do a search, you know, a quiet one or a loud one. I don’t think they did a loud one, but they might have done a quiet search. But I think, you know, John Neil is a real natural successor.
BRODIE: In what way?
HAMMOND: Well, he knows the system, he is excited about what they’re doing. He’s been involved in this growth and their embracing of the value-based system. You know, they’re very active in what we call the ACO world. They have an accountable care organization, they call it Innovation Care Partners, and John has been involved in that since it was an idea, you know, back before it really even got a contract with Medicare. So, he’s a value-based and network-driven guy. He wants to build through relationships, and he’s really good at that. So, I think he’s a natural fit.
BRODIE: Is it desirable or in any way better for a company like HonorHealth to promote from within as opposed to bringing in somebody new to run it?
HAMMOND: Well, I think it’s potentially less disruptive. And when you have a leadership change like this, you don’t want there to be disruption. There were a couple of examples recently in the rural markets where they’ve made searches and then had disruption. They’ve had somebody have to leave, not be a good fit or in one case, somebody got ill. So, kind of having your bench ready and having leaders lined up behind you, I think is a thoughtful way to do it. And a lot of the systems have done that. Not all of them, but a lot of them have.
BRODIE: So, if you are John Neil, what are your top priorities going forward now for HonorHealth?
HAMMOND: Well, they have to keep the momentum on the value-based side. It’s very hard work to go in and and do a better job every year than you did the year before, which is kind of a metric we use in in managed care, in value-based care. That you should keep your cost down every year, you should try not to let anybody grow their cost. Well, that’s impossible.
So it’s a very hard task to to manage costs of patients. So they have to keep their eye on that, but they also, you know, have been keeping their eye on growth through buying existing assets. And not just networking, but actually buying other hospitals, buying radiology centers or urgent care centers. So, they’re really in a multi-phase, multi-armed growth pattern right now.
BRODIE: So, is it safe to say that they’re almost trying to become like a self-contained healthcare unit where they have physician practices, they have a radiology facilities, they have urgent care, they have hospitals? They have pretty much anything that a patient could need?
HAMMOND: Right. Yeah, that’s exactly true. And, you know, they’re emulating Banner. Banner’s been a leader in our market doing that. But it’s more than just having the network and that’s what we call it, you know, it’s a network that’s attached to them. Some of the buildings they own, some of the buildings they don’t, some of the doctors they have contracts with, some of the doctors they actually pay their payroll.
But it very many different models of working with each other, and that’s kind of where the art of the deal is right now in in healthcare is, how do you connect with these other organizations and know how much you need to actually integrate with them? Do you have to own them or can you just have a deal where they’re in your value-based network and you’re trying to meet the same goals and get money back from Medicare at the end of the year? And they’re doing all those things.
And it’s very tough at this time because there’s also kind of a contraction of the money. You know, the money’s going to get tighter. We’ve all heard about the what we call HR 1, the president calls the great Big Beautiful Bill. I call it Bub. It’s a big bill that essentially is going to cut some revenue from hospital systems um, and they’ve got to be prepared for that now, too.
BRODIE: Yeah, so in the universe of challenges that John Neil and other hospital CEOs around the Valley are going to have to be dealing with, how big is that one?
HAMMOND: Oh, it’s huge. It’s it’s fundamental. It it may be, I don’t know, 5-10% of their revenue that’s that’s potentially at risk. That’s a lot, that’s a big number. So they’ve got to figure out how to take care of people that don’t have insurance. And that’s that’s something that’s kind of new and I think it’s going to be a challenge for these big systems.
So I think the next level of this network building is going to be with what we call FQHCS — federally qualified health centers. And these are organizations that get money directly from the federal government, and they’re designed to take people that don’t fit into any of the other systems. So, these folks that are going to get knocked out of Medicaid, they can still go to their FQHC, and their FQHC doesn’t get paid by the Medicaid plan anymore, but they get paid by the federal government. So, I expect a lot of care ... being directed toward them.
BRODIE: Would you expect that to be the kind of thing where an HonorHealth or a Banner would contract with those facilities? Do you think they might just try to buy them up out right?
HAMMOND: Well ... they have different ways of doing that. Yes, the answer is yes. HonorHealth has a relationship with NOAH, which is a network of FQHCs. So they already have I don’t know exactly what the ownership relationship is, but they’re connected with NOAH. Banner, I think, has more direct relationships with certain FQHCs that are in their network, the Banner Health Network.
So they’re connected to these organizations. I think what’s going to be interesting to see is how these systems, how much they reach out to patients that are potentially in this — going to fall through the cracks, for lack of a better term, and get them taken care of by somebody. Somebody should be their primary care physician.
And I think that the health systems because they’re, like I said earlier, they’re all connected, they’re all networked. They all have primary care physicians in their networks, they’ve got to figure out how to take care of these patients even though there’s not money coming with them.
BRODIE: Does the scale of a place like HonorHealth or Banner help them in a situation like this?
HAMMOND: I think so. You know, they should be able to absorb some costs, you know, more than just a regular primary care office or a rural hospital. Yes, I think the big systems are stable enough that they can they can handle it.
But how they do it is going to be interesting. You know, do they really go out and, you know, like call their patients and say, “Hey, look, we think you’re in this group that might be losing their coverage. We want you to do X, we want you to start seeing this doctor.” Or, you know, is there is there a plan? I’m I’m very curious about that.
BRODIE: All right, that is Jim Hammond, publisher and CEO of the Hertel Report. Jim, good as always to talk to you. Thank you.
HAMMOND: Thanks, Mark.
-
Samples from the Sedona Wastewater Treatment Plant tested positive for the measles virus. That indicates that at least one person with a recent infection has been in the area. -
Dr. Kim Olson Gibbs at HonorHealth believes desert dwellers could be underestimating their risk of mosquito-borne illnesses. -
The latest data captures the number of people who enrolled and paid their first month's premium in February. Compared to February 2025, 30% fewer people had enrolled by the same time this year. -
Health experts are advising people to wash their fresh produce before consuming it. The warning comes as a parasitic infection called Cyclosporaisis has been reported in 31 states, including Arizona. -
The state passed a law earlier this year that expands restrictions on using firefighting foams that contain PFAS.
