Creating an Outcomes-Focused System at Lutheran Social Services
An Insight from the 2017 Health and Human Services Summit
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In fall 2014, Mark Stutrud was fishing for salmon in Michigan’s Pere Marquette River when a colleague introduced an intriguing but fraught proposition: interviewing to become the CEO of Lutheran Social Services of Illinois (LSSI), the largest statewide social service agency in the state. As Stutrud cast his line, he considered the challenges: low morale, a looming state fiscal crisis that could imperil LSSI’s funding, and a litigious environment that had led to 80 consent decrees. “My first question,” recalled Stutrud, then the President and CEO of Lutheran Social Services of Michigan, “was, ‘Why, God, would you ever call me to this situation?’”

Upon further reflection, Stutrud realized that the difficulties meant that the environment was ripe for reform. More specifically, Stutrud recognized a chance to create a partner-driven ecosystem that prioritized “whole-person care.” This would enable him and his colleagues to help tens of thousands of people in need, identify strategies that could permeate the national network of Lutheran social services organizations, and position him to pursue what he considered a higher purpose. “It is a faith-based journey, a call for me,” he said of his decision to lead LSSI.

Nonetheless, Stutrud, his staff, and their partners at the local, state, and national level faced vexing challenges. Could they solve a looming fiscal crisis? Could they design an ecosystem that supported a whole-person approach? Could they incubate programs that seeded the ecosystem’s development? Could they create the technological and data infrastructure, financial support, and leadership and governance structure to ensure that the ecosystem would thrive for years to come?

Background on LSSI and Lutheran Services in America

LSSI provides diverse services—including “foster care, adoption, mental health and substance use treatment, home care, and affordable housing”—to approximately 63,000 people per year in programs and at sites across the state. LSSI is also part of Lutheran Services in America (LSA), a network of more than 300 Lutheran nonprofit organizations that together provide $21 billion in services to approximately 6 million of the highest-need Americans per year. LSA leverages the power of its national network by bringing together the collective knowledge and experience of member organizations to go beyond what any one organization could achieve on its own. LSA identifies best practices, engages national partners, designs pilots and shares outcomes, trains adaptive and resilient leaders, and advocates for public policies that advance the interests of vulnerable Americans. As a national network, LSA incubates new ideas that not only accelerate learning but also create collective solutions that improve client outcomes and strengthen member organizations.

What’s more, under the leadership of Charlotte Haberaecker, who became LSA’s President and CEO in 2012, the network recognized the power of person-centered care to achieve strong health outcomes, and LSA is working with leaders throughout the network to develop new models of care and revenue strategies that promote a whole-person, outcome-focused approach. “We recognized,” Haberaecker explained, “that unless we…understand and resolve the underlying symptoms and the causes of the problems, we’re not going to be able to afford people the care they need. That means we need to look holistically at people.”

“You’re listening and leading at the same time, and that’s a fine balance.”

Charlotte Haberaecker
President and CEO, Lutheran Services in America

October 2014 – January 2016: Navigating a Budget Crisis and Envisioning an Ecosystem

Soon after becoming LSSI’s CEO in October 2014, Stutrud had to help pull the organization back from a budget crisis that was precipitated by the State of Illinois’ unprecedented fiscal woes. Beginning in July 2015, Illinois operated without an official budget for more than two years. Described by The New York Times as “the longest state budget impasse in the nation’s modern history,” the standoff caused the state to miss payments to creditors and forced a range of organizations to make cutbacks. This included LSSI, which, after not receiving more than $8 million in payment from the state for services provided, announced that it was closing 30 programs and eliminating over 750 positions (43 percent of LSSI’s staff). “These decisions were the result of a thorough and painful process,” Stutrud said in a press release. “We know this will impact clients, their families, our employees, and communities throughout Illinois.” ,

As Stutrud, his colleagues, and their partners evaluated their spending, they realized that the fiscal woes coincided with other environmental shifts that created an opportunity for LSSI to reimagine its work in an outcome-driven ecosystem. Over the past decade, many human services that had previously been provided through standalone initiatives had, as Stutrud said, been “baked into the benefit package of Medicaid to leverage federal [funds].” This migration, Stutrud realized, could create an opportunity for LSSI—which had extensive ties, experience, and expertise across a range of services—to play a convening role. Another major change in the operating environment was the establishment of dozens of consent decrees. Although these punitive agreements suggested that there were serious problems in the delivery of human services in Illinois, they also led to legal mandates compelling service providers to achieve health outcomes. This dovetailed with LSSI’s interest in taking a more holistic approach. “We have to focus on outcomes,” Stutrud summarized, “because it’s now court-ordered.”

Thus, Stutrud began his tenure by focusing on not only reducing spending but also working with a range of stakeholders—including LSSI staff, local partners, and LSA—to devise a new organizational strategy and vision. LSSI staff provided valuable input about the organization’s culture, while local partners offered insights about the shape of a potential ecosystem. Meanwhile, LSA and other local nonprofits in the Lutheran network helped Stutrud—who participated in many of LSA’s collaborative efforts and CEO academy—think about how to effect a broader organizational shift focused on creating an outcome-driven ecosystem. Of the benefits of the cross-pollination among LSA members, Stutrud said, “It’s an exciting time because we share this trust and willingness to collaborate and to share evidence-based practices, best practices, and innovation which allows us to achieve change exponentially. These networks are key to our success in Illinois and many of our sister organizations throughout the United States.”

This dialogue crystallized around a three-pronged vision for LSSI. First, LSSI would become a “high-performance organization,” which entailed “developing a culture that fosters learning, adaptability, and achievement.” LSSI also decided that it would strive to create “permanency” for its clients, meaning that it would aim to support them in their “natural setting” (e.g., their home). Still, the most important priority was advancing “whole person health.” LSSI defined this as “viewing the whole person when determining needs and addressing them through a full continuum of services.” This dovetailed nicely with LSSI’s faith-driven mission. Stutrud explained, “Theologically, we say, ‘Nothing is hidden from God’s sight.’ So how is it we don’t strive to view the whole person?’” Embedded in this view were the importance of exhibiting compassion and helping a person to achieve his/her far-reaching aspirations. Stutrud said, “It’s not about the regulative things that have to happen. We have to understand what the hopes and dreams of people are in order to understand their wholeness.... That’s a hard-and-fast issue.”

February 2016 – September 2017: Incubating and Expanding the Ecosystem

While the establishment of a vision for an ecosystem represented significant progress, Stutrud and his colleagues still faced an enormous challenge: implementing the new approach. Recognizing that full implementation would be a long-term endeavor, LSSI initially sought opportunities to incubate the whole-person ecosystem in existing provider settings. A case in point involved LSSI’s support for the high-need behavioral health population in Chicago hospitals. LSSI had a physical presence in three hospitals (and planned to expand that footprint to two more) along with a mobile case management unit that could respond to 15 additional hospitals. Thus, the organization was positioned to conduct interventions for people with behavioral health issues and, when appropriate, redirect them away from expensive, in-patient treatment to a broad cross-section of out-patient services from a network of providers focused on the whole-person approach. This soon led to impressive results, including the transformation of the life of a patient who had been in a nursing home for six years. This client had severe psychiatric problems but, under the support of LSSI’s whole-person approach, transitioned to an independent living setup. According to Stutrud, the key to the patient’s success was the creation of an ecosystem—ranging from doctors to dietary experts to building managers—that “surrounded and supported him.”

Building on this success, LSSI began exploring opportunities to expand the ecosystem and whole-person approach. This included a partnership with a local Managed Care Organization (MCO) to address the needs of a high-risk, behavioral health population. LSSI contracted with the MCO to take on responsibility for coordinating the care of 120 patients with an “extremely high hospital admission and readmission utilization history.” LSSI’s goal was to reduce spending and care utilization and improve health outcomes for the patient population. Although this was a small initial client population, it held promise for the future. “It’s the beginning,” Stutrud said, “of what we’ve envisioned to be our growth as an organization and what we want to grow into.”

LSSI simultaneously strove to develop the metrics and technological infrastructure to support the ecosystem. Having a data-driven approach was imperative to capture health, utilization, and financial outcomes. Thus, LSSI was in the process of creating a data warehouse to bolster its data analysis. LSSI also focused on identifying technologies that would facilitate efficient and effective coordination and case management. This included creating a Health Information Exchange that allowed for data sharing among not only providers and insurers but also family members and community organizations. Finally, LSSI partnered with Fjord, a global design and innovation consultancy within Accenture, to create “Care Journey,” a prototype for a care management app that “visualizes linkages and the success of those linkages across multiple systems and organizations.”

Finally, LSSI was developing a leadership and governance structure to manage the ecosystem’s evolution. This was a delicate process because, as the ecosystem expanded, it became harder to accommodate the sometimes-competing interests of different stakeholders. “There’s a lot of complexity,” Stutrud said. “You don’t get what you want all the time.” Initially, LSSI created contractual relationships that clearly delineated goals and expectations and therefore helped to align potentially competing interests. At the same time, Stutrud anticipated transitioning over time to a model of distributed ownership that allowed for ambiguity in the power structure and encouraged experimentation. “In my vision,” he said, “LSSI will own less and less of the ecosystem.”

October 2017 and Beyond: Impact and The Path Ahead

Just a few years into their reform efforts, Stutrud and Haberaecker still see room for improvement. Stutrud highlighted the importance of raising more funds to sustain LSSI’s efforts, especially surrounding the creation of more technological infrastructure. Haberaecker similarly emphasized that LSA’s transformation—and that of its member organizations—was an ongoing journey from accelerated learning as a network to creating unique network solutions that transform the lives of people and communities and strengthen non-profit organizations. Nonetheless, even as Stutrud and Haberaecker saw opportunities for growth, they had demonstrated the possibilities that could develop when an organization pairs an ambitious goal with a carefully planned and widely supported ecosystem. And in the process, they had identified valuable lessons for organizations seeking to scale the Health and Human Services Value Curve and create ecosystems to yield generative outcomes. One was the importance of balancing engagement and action. “You’re listening and you’re leading at the same time,” said Haberaecker, “and that’s a fine balance.” Equally important was the importance of establishing a vision while simultaneously creating the structures and systems to support it. “An ecosystem needs a pH balance,” Stutrud argued.

Above all, Stutrud advocated remembering the higher purpose that inspires leaders in the health and human services field. “I think all of us see the end of things in many ways that are similar,” he said. “The beautiful things that happen in the transformation of the lives of people…. And when we experience that, it is a beautiful thing to be a part of it. It’s a privilege.”

“One of the most important things about developing outcomes in the whole-person approach is that we actually understand to the best of our ability the hopes and dreams of each individual.”

Mark Stutrud
CEO, Lutheran Social Services in Illinois


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