David Callender, President & CEO, Memorial Herman

In an interview with Invest:, David Callender, president and CEO of Memorial Hermann, discussed healthcare delivery, workforce development, outpatient care, and the challenges facing healthcare systems as Houston continues to grow. “As Houston grows, we grow,” Callender said.

How would you describe the current healthcare environment in Houston, and how is it affecting Memorial Hermann’s operations?

Memorial Hermann is the largest healthcare system in Greater Houston. We have about 35,000 employees, 6,500 physicians, 18 hospitals that we own or operate, and more than 250 care delivery sites across Greater Houston. We also have a major Level 1 trauma center, our Life Flight air ambulance service, 10 school health clinics serving more than 100 schools, and three dental vans that provide dental care for people who do not have good access to it.

It is a challenging time for healthcare. In this country, we spend more than $5 trillion on healthcare, and we know we do not do it as well as we should. In our community, nearly 25% of the population does not have health insurance on a regular basis. That population tends to be needy, and it puts everyone who delivers healthcare at a bit of risk.

Costs for employers who pay for insurance for their employees are also going through the roof. Memorial Hermann focuses on delivering value. We think about how we deliver the best outcomes at the optimal price, with the best experience for our patients, while making sure our employees also have a great experience. We also try to address the inequities that serve as barriers to people having access to good health.

As Houston continues to grow, how is that shaping your long-term strategy?

We have been around for almost 120 years, and we take great pride in being available to all Houstonians who want or seek our care, advice, and information.

We have been expanding as Houston has expanded, and we plan to continue that as we go forward. As Houston grows, we grow.

However, we do not necessarily go out and build new hospitals. Hospitals are an expensive site for delivery of care. We think about how we put our services into new neighborhoods and make them more accessible in existing neighborhoods. That may include doctors’ offices, clinics, or other forms of support.

We are also thinking about how to enhance our digital offerings so people can access care 24/7, 365 days a year through their digital devices. It is a challenge to continue expanding our service area and doing that in the most cost-effective way.

What are the biggest trends influencing Memorial Hermann right now?

There are a lot of things that are changing in healthcare, and many of them are for the good. We have new digital tool sets that allow us to interact differently, and in many cases more effectively, with our patients. We also have more ways for patients to access our services or the information we provide about how they improve or maintain their health. Also, the reimbursement we receive from commercial insurers or government payers is diminishing per unit of service, while our costs are going up.

We have amazing new drugs available to treat patients with diabetes, heart disease, cancer, and other problems, but they are expensive. Some of those drugs are now $2 million per dose. We have to think about how we manage those rapidly increasing costs for drugs and other resources used to deliver care.

We need to use what we have more effectively, improve our cost structure, improve our services, and grow with Houston as it grows. It is challenging, but I am optimistic about our ability to serve our mission of improving the health of all we serve.

Where is Memorial Hermann directing investment?

We are moving away from inpatient care as much as we can and delivering more outpatient care. We are also trying to communicate more effectively with our patients and with consumers across Greater Houston about what good health looks like and how they attain and maintain it.

When patients do need care, we want to direct them to the best site for care, where they are going to get really great care that delivers the outcomes they need while also getting it delivered in the most cost-effective way.

We are focused on shifting from inpatient to outpatient care, communicating more effectively, and using broader sets of tools to engage patients.

How is Memorial Hermann leveraging AI and other technologies?

It is a great time to think about how we can apply the AI tools that are already available and those we think will become available as we go forward. We have to be cautious about how and where we invest, and we have to think carefully about how we generate a return on investment with AI technology investments.

In many cases, it is clear where we can improve care delivery, reduce costs, and improve the experience of our patients by deploying AI technology, and we are doing that today.

We are also thinking a lot about how we govern and manage AI. We are engaged in speaking with colleagues across the country about what they are doing and trying to assemble best practices for the use of AI in healthcare.

What are the biggest workforce challenges Memorial Hermann is facing?

Workforce is obviously a critical issue when you are delivering services like we deliver. The best way for us to ensure that we have a competent, skilled, capable workforce is to continue to be one of the best places to work, not only in healthcare but across all sectors.

We think constantly about how we best support our employees in achieving the goals they want to achieve with their jobs and careers. We also think about how we support their continued development and acquisition of skills.

We are also engaging more with public schools, universities, colleges, and community colleges to develop pathways for people in early-level healthcare jobs. We want to design ways for them to continue working full time while also advancing their training.

We are also proud of a project underway in partnership with Aldine Independent School District in Northeast Houston called HEAL High School, Health Education and Learning. It is a high school dedicated to producing healthcare workers.

There are five pathways: nursing, pharmacy, occupational and physical therapy, radiologic technology, and healthcare administration. When students graduate, they either have a certification in one of those fields or are eligible for certification, and Memorial Hermann is going to offer every one of them a job if they graduate.

The program is funded by Bloomberg Philanthropies, which provided a $31 million grant to Memorial Hermann and Aldine ISD.

How are patient needs evolving around mental health and behavioral health?

We are focused on making sure our providers, doctors, nurses, and therapists understand how mental health and behavioral health challenges can present themselves, often accompanying another healthcare issue.

We need to identify those challenges, take the stigma away for patients, and channel them to the right diagnostic support and interventions.

We are also focused on outpatient opportunities for care, digital engagement, telehealth support, and support through the devices people carry.

We are also doing that for our own employees. Healthcare employees are often challenged by the sort of work we do, and they also have challenges in their personal lives. We need to think about how we best serve the mental health and behavioral health needs of our employees and their families.

What are Memorial Hermann’s top priorities over the next two to three years?

We are constantly thinking about how we enhance value. That means the best outcomes at the optimal price, the best experience, making sure our employees are well cared for, and working beyond the walls of our hospitals and clinics in the community, both on our own and with partners.

We want to address inequities and do a better job helping people understand how to attain and maintain good health. We are challenged by the current healthcare delivery context, but we have a lot of smart, skilled, experienced people.

I am excited about our ability to continue to care for Houston and to serve as leaders not only in the Greater Houston community but perhaps even nationally.

What would you like readers to know about Houston and Memorial Hermann’s role in the community?

We are so pleased to be in Houston. Houston is a great place to live and work. I have been here for more than 40 years, and I love this community and the people here.

It is a vibrant community, it is diverse, and I think it is exciting because of the way Houston harnesses its diversity to think about its current and future opportunities. We are excited to be here and excited about the opportunities we have. If you are not in Houston, you should think about being here.