What would you do if your nearest hospital closed? And what if the next closest one was 50 miles away? As the healthcare world is changing, more and more Americans are facing questions like this, and hospital CEOs are faced with evolving questions about how to deliver quality healthcare in a shifting system.
This week I’m happy to welcome Earl Rogers, CEO of the Georgia Hospital Association, and Fran Baker-Witt, CEO of the Effingham Health System. The Georgia Hospital Association represents every hospital in Georgia (Effingham Health System included), which means over 170 hospitals – from rural to urban and from investor-owned to not-for-profit, working for advocacy, education and communication.
Listen to a clip on SOUNDCLOUD.
What’s Changing in Healthcare?
A lot. And as we move into a new political administration, no one is exactly sure what changes are on the horizon. Currently, according to Rogers, hospitals get 86 cents on the dollar for every Medicaid patient that comes through the door, and 96 cents on the dollar for every Medicare patient. To be clear, that’s reimbursement for basic costs to deliver services, not profit, and means that with 65% of the patients who walk through the door, hospitals are actually losing money. And who makes up the loss? The rest of us! Hence the rising costs of insurance coverage, and the uproar coming from many businesses about covering insurance for employees.
Not only are hospitals closing, but the ones staying open are operating on smaller staffs. People are getting laid off, and there is a general shortage of doctors and nurses available to staff medical centers.
The Affordable Care Act had plans to decrease Medicare, and make up for those losses with increased Medicaid, however with the Supreme Court ruling making Medicaid Expansion optional, states like Georgia are seeing cuts without the concurrent increases to balance things out.
There are good things happening, too. Drugs are getting better, technology is seeing amazing advances, and healthcare is becoming more streamlined and integrated – allowing more effective services and sharing of patient information amongst providers.
With the changing healthcare world, hospital CEOs are being called on to find new solutions to providing quality healthcare to patients, while still keeping the hospital business systems afloat. Here are 7 ways they are making that happen.
Streamline and Integrate
One of the things advanced technology makes available is increased integration of patient care. The ability to easily share patient information cuts down on admin time, and also decreases the likelihood of bad interactions between treatments.
Cost valuation and assessment allow service providers to assess their strengths, and where they need to partner with others to provide the most effective services.
Focus on Health
Bundled payments is becoming a new frequently used term in healthcare. This means that conditions are researched and priced, and providers are paid, essentially, a lump sum for providing care for the patient. This means the focus for the provider becomes one of efficient and effective treatment. Focusing on supporting patient in pursuing health becomes a financial motivation for healthcare providers. It also offers a major paradigm shift in the focus of the healthcare industry.
Baker-Witt explains, “Strokes, and hypertension, and diabetes, those diseases cost hospitals and other healthcare providers across the country a great deal of money, dollars and resources, particularly when you’re dealing with populations of patients that are not compliant.” By focusing on lifestyle change and encouragement for chronically ill patients, hospitals will be doing better in the long run.
Bring your team on board to create new strategies around this model. Said Fran, “Recently I asked my C-suite team to assess the top five diagnoses that are admitted to my health system, so that I could collectively, with my team, develop a strategy using evidence-based practices, which is a driver in the value based delivery model that CMS, and federal and state payer sources, are mandating that hospitals start to adopt.”
Community and Political Collaboration
Politics, particularly in today’s world, offer a big influence on healthcare. Community has a large affect on politics – so building powerful relationships with the community, and with the politicians that represent them, is a major focus for successful healthcare institutions.
Rogers says, “People sometimes forget how important it is to get to know your elected officials. Not only get to know them, they need to get to know you and you need to have a relationship with your local elected officials, and your state representatives, and your state senators, as well as your members of Congress. Don’t wait until you need something; don’t wait until there is a crisis before you…I promise you it will pay huge dividends.”
Fran agrees, “My needs are much different in rural Georgia than they are in Atlanta. So I need my legislators to be well equipped, and be able to clearly articulate what my needs are for my institutions.” Legislators are not experts in the medical field, and they need our input to be able to effectively support the medical industry and the patients it serves.
Expanded Skill Sets
What the medical world needs today is not what it needed 10 years ago. It’s time to expand and develop new skill sets. Baker-Witt says, “You have to be willing to take a risk and step outside your comfort zone, and I tell my team we have to stretch ourselves. And we’re in an era that it’s going to require us to wear more hats and stretch ourselves, and do more, and with doing more requires a different skill set, a different level of competency.”
When selecting C-suite team members it’s key to know your hospital well. What competencies are you looking for? What skills do you need to balance what’s already on your team?
A strong team today is also about accountability. “The delivery system is holding us accountable based on the outcomes that are reported, with quality core measures and quality outcomes – as well as the patient’s experience,” explains Baker-Witt.
Expand Outpatient Services
In-patient stays have long been the financial staple of hospitals, but as stays are getting shorter, hospitals need to look at ways to increase income on outpatient services.
Fran says, “I usually tell my team, can we blow this up? Can we make this big? And who are we going to attract when we blow this up? So, that’s a leadership style that I would say, let’s put it on the table and let’s see what we can do with it, and ask those questions, what do we want it to look like? So, I would encourage my colleagues, other CEOs, to take a similar approach.
Approach Technology as a Means, Not a Panacea
Technology in healthcare is definitely improving. We’ve already talked about ways technology makes it easier to integrate care. There are also all sorts of new ways technology serves patients, right up to in-the-works Big Hero Six style healthcare robots.
Baker-Witt reminds healthcare executives to look at technology as a tool to bring about necessary changes, not the panacea that will save the medical industry.
Company Culture Still Matters
Even with all the changes going on, at the end of the day, it all comes down to team. Finding ways to create a strong culture in the midst of the uncertainty of the healthcare industry is a challenge. Start with knowing where you are. Look at your leadership. Baker-Witt suggests, “If I had to give some advice, look at your overall turnover rate, look at your voluntary turnover rate, look at your involuntary turnover rate, and drill down and peel back that onion, and see the areas in your organization, where is that most happening? Because most people leave because of their leaders, not because of their colleagues.”
Know your governing structure, and get them on board with the culture you are creating. They drive many of the decisions that affect staff, and having them enrolled in your plan is crucial. Baker-Witt sees a change happening in the C-suite as well. In the past, she says, “CEOs would just sit in the office and manage from their desk. I know a lot of my colleagues, just like myself, we go to work, and we’re out there with the people. You have got to engage your employees. Statistics support that happy employees equal happy patients.”
Effective employees also help with the innovation and success needed to survive in today’s healthcare economy. Baker-Witt says, “We have got to switch from tradition to innovation.” The change to the healthcare world shows no sign of slowing down in the near future. As in any industry, adaptability is key, and much of that comes from being aware of what’s around you, who’s on your team, and being ready the creativity and innovation needed to survive in a changing world.