Monthly Archives: February 2024

The most important elements of emotional IQ for healthcare leaders today

Posted on by • Posted in Decentralization, Delegation, Emotional IQ, Empathy, Humility, Leadership, Leadership Emotional State, Leadership Integrity, Success, Vulnerable • Leave a comment

https://mailchi.mp/f9bf1e547241/gist-weekly-february-23-2024?e=d1e747d2d8

At a recent dinner with my good friend and colleague Dave Blom, the former President and CEO of Ohio Health, he and I discussed the difficulties of leading and managing complex healthcare organizations in the post-Covid era.

We agreed that the leadership issues that matter most right now center around the ability of executives to possess and demonstrate an authentic emotional IQ. 

Taking care of patients—in fact, taking care of communities—is not only managerially complicated but also emotionally testing. 

Success cannot be achieved by technical and clinical excellence alone; rather, it must be built on a platform of an emotional IQ that is supported, valued, and shared by the entire organization.
 


The below list is what Dave and I settled on as the most important elements of emotional IQ for healthcare leaders today, and we think that leadership teams that fully embrace these behaviors unlock a higher level of organizational trust, as well as corporate and managerial integrity.
 


–Empathy. 

A leader needs to understand and share the feelings of his or her entire organization, as well as understand the difference between sympathy and empathy: sympathy is a passive emotion while empathy is an active emotion. A leader with empathy not only notes the problem but immediately moves to be of help at either the personal or organizational level, whichever is required.
 


–Vulnerability. 

Historically, executive leadership, especially in corporate situations, has been trained and encouraged not to show emotion or weakness. But organizations are changing, and the composition of the today’s workforce is different. The patient care process is emotional in and of itself, and daily operational interactions demand a different kind of leadership—a leadership that is comfortable with both emotion and weakness.
 


–Humility. 

Executives who show humility are willing to ask for help, and don’t insist on everything being done their way; they are quick to forgive and are known for their patience. Humility supports a collaborative and cooperative leadership model, which has at its core a heavy dose of decentralization and delegation.

CMS finalizes DSH cuts for some hospitals

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Health System, Hospital, Hospital Industry, Medicaid Disproportionate Share Reimbursement (DSH), Safety Net Hospitals • Leave a comment

https://mailchi.mp/f9bf1e547241/gist-weekly-february-23-2024?e=d1e747d2d8

On Tuesday, the Centers for Medicare and Medicaid Services (CMS) published a final rule redefining how disproportionate share hospital (DSH) payments are determined.

Hospitals used to calculate their Medicaid shortfalls based on the costs and payments associated with all of their Medicaid-eligible patients, even if some of those patients used a different primary payer. Prompted by Congress to address this issue in 2021, CMS is now limiting the scope of Medicaid shortfall to only patients for whom Medicaid is their primary payer. The rule exempts safety-net hospitals providing care to the highest percentages of low-income patients, defined as those in the 97th percentile of inpatient days treating Medicare SSI (Social Security Income) recipients.

This change is expected to amount to an $8B annual reduction in DSH payments over the next four years. Congress has repeatedly delayed the implementation of these cuts, which are now set to go in effect on March 8, 2024.

The Gist: Though the formula for calculating appropriate DSH payments has always been complex, the point of the program is to provide additional support to hospitals caring for underserved, low-income populations.

This $8B cut may be targeted at hospitals with slightly better payer mixes, but it will be felt heavily by many safety-net providers reliant on the payments, especially in today’s challenging financial operating environment where over 40 percent of hospitals are still losing money on operations.

Thought of the Day: Advice from a Farmer

Posted on by • Posted in Advice, Thought Leaders, Thought of the Day, Wisdom • Leave a comment

Your fences need to be horse-high, pig-tight and bull-strong.

Keep skunks, bankers, and lawyers at a distance.

Forgive your enemies. it messes up their heads.

Do not corner something that you know is meaner than you.

Every path has a few puddles.

When you wallow with pigs, expect to get dirty.

If you find yourself in a hole, the first thing to do is stop diggin’.

Always drink upstream from the herd.

Lettin’ the cat outta the bag is a whole lot easier than puttin’ it back in.

Life is simpler when you plow around the stump.

Live a good, honorable life. Then when you get older and think back, you’ll enjoy it a second time.

Financial distress increasingly prevalent in health system M&A deals

Posted on by • Posted in Financial Stewardship, Financial Viability, Financially Distressed, Health System, Hospital, Hospital Industry, Market Consolidation, Market Trends, Mergers & Acquisitions, Operating Margin, Operating Margin Drivers, Operating Performance • Leave a comment

https://mailchi.mp/1e28b32fc32e/gist-weekly-february-9-2024?e=d1e747d2d8

This week’s graphic highlights data from Kaufman Hall’s recently released 2023 Hospital and Health System M&A Report on the current dynamics in health system mergers and acquisitions (M&A) activity.

After a slowdown during the pandemic, 2023 saw an uptick in M&A activity with 65 announced transactions, the most since 2020. Continuing the trend of the past two years, the number of announced “mega mergers,” in which the smaller party had at least $1B in annual revenue, represented more than a tenth of total announced transactions. 

However, the average size of mergers fell in 2023, as financial distress emerged as a key driver of M&A activity. The percent of mergers involving a financially distressed party spiked to nearly 28 percent in 2023, almost double the level seen in prior years. 

CARES Act funding had buoyed some health systems’ balance sheets through the pandemic, but with the end of federal aid, more systems needed to seek shelter through scale. 

With the median hospital operating margin still barely hitting two percent, we anticipate this heightened level M&A activity to continue in 2024 as health systems search for stronger partners that can help them stabilize financially. 

How GoFundMe use demonstrates the problem of healthcare affordability

Posted on by • Posted in Affordability, Bankruptcy, Crowdfunding, Health Insurance Coverage Adequacy, High Deductible Health Plans, High Prices, Medical Debt, Out of Pocket Expenses • Leave a comment

https://mailchi.mp/1e28b32fc32e/gist-weekly-february-9-2024?e=d1e747d2d8

Published this week in The Atlantic, this piece chronicles the increase in Americans using crowdfunding sites like GoFundMe to cover—or at least attempt to cover—their catastrophic medical expenses. Envisioned as a tool to fund “ideas and dreams,” the GoFundMe platform saw a 25-fold increase in the number of campaigns dedicated to medical care from 2011 to 2020.

Medical campaigns have garnered at least one third of all donations and raised $650M in contributions.

The article’s accounts of life-saving care leading to bankrupting medical bills are heartbreaking and familiar, and despite some success stories, the average GoFundMe medical campaign falls well short of its target donation goal. 

The Gist: 

Although unfortunately not surprising, these crowdfunding stats reflect our nation’s healthcare affordability crisis. 

Online campaigns can alleviate real financial burdens for some people; however, they come at the costs of publicly exposing personal medical information, potentially offering false hope, and financially imposing on friends and family. 

The majority of personal bankruptcies are caused by medical expenses, and recent changes like removing some levels of medical debt from credit reports are only a small step toward reducing the personal financial effects of medical debt. 

Absent larger-scale healthcare payment and coverage reform, healthcare industry leaders continue to be challenged with finding ways to decouple the provision of essential medical care from the risk of financial ruin for patients.