Will ED volumes ever bounce back?

https://mailchi.mp/f5713fcae702/the-weekly-gist-september-18-2020?e=d1e747d2d8

Hospitals' ED volumes rebounding slower than other areas

We’re hearing from health systems across the country that physician office, surgery and diagnostic volumes have mostly returned to pre-pandemic levels. Consumers appear to feel comfortable coming back to scheduled appointments as long as social distancing and capacity can be managed. But they’re more reticent to return to “unscheduled” care settings that may involve a long wait, like urgent care clinics and emergency departments, where visits have stabilized at 75 to 85 percent of pre-pandemic levels.

The latter in particular has proved concerning to hospitals leaders, who have begun to ask, what if ED volumes never fully come back? (Around 15 percent of ED visits convert to inpatient stays, on average, making the ED an important source of downstream revenue for hospitals.) We spoke recently with a health system COO who realistically thinks that 10 percent of the volume could be gone for good, and recognizes that “from a public health perspective, that’s probably a good thing”, given that lower-acuity, non-emergent patients account for a portion of the “lost” volume.

But concerns about patients delaying much-needed care persist—amplifying the need for alternate channels, both virtual and in-person, for patients to access care and quickly connect to more intensive services if needed. Hospital leaders would be wise to prepare for a “90 percent future”, and adjust revenue models and cost structures to be less dependent on admissions and procedures that come through the emergency department.

 

 

 

 

Three Predictable Covid Nightmares — and How Congress Can Help Prevent Them

https://www.politico.com/news/agenda/2020/07/29/states-congress-covid-nightmare-vaccine-385217?mkt_tok=eyJpIjoiTVRNNU0yWXpNMlk1TVRsaiIsInQiOiJ1Vlg3dlBCYytaWTdtcGtMd3ZaUVh6TTBZRlMxXC9MaW9UMk9MRHhpdkFpSFFJMHFVWWpocUhWR1ZEZTM2NFBXb0xOVUZTSXNJMzYxWk90Yld

Opinion | Three Predictable Covid Nightmares — and How Congress ...

The good news is that they aren’t partisan, and they’re fixable.

In our response to the Covid-19 pandemic, the United States has all too often been caught flat-footed. Our public officials have tried to avoid or deny problems until they have been right on top of us, and legislative measures have tended to react to major challenges rather than avert them.

That has left policymakers with a lot to react to. And the relief and assistance bill now being worked out in the Senate will need to do that on several fronts. But to do better in the future, that bill should also take on several predictable problems that will face our country over the remainder of the year and which could benefit enormously from some advance attention and action.

Three sets of such predictable problems stand out above all, and in all three cases there are measures that can be taken now that should be able to attract bipartisan support.

First, states are going to face a monumental fiscal crisis.

The pandemic and the ensuing shutdowns of economic activity have left state governments with immense revenue shortages. Balanced-budget amendments in all but one state severely restrict their capacity to run deficits, in many cases even in major emergencies. That means states will have to either find other ways to raise revenue quickly or make major cuts to basic services. Such cuts in spending, jobs and public assistance would exacerbate the deep recession we are in and leave millions who need help in the lurch.

Most state fiscal years begin in July, so in many cases budgets designed or enacted before the severity of the crisis was clear are now starting to take effect, leaving states facing gaps they can easily predict but haven’t formally accounted for. In fact, 16 states are now starting the second year of biennial budgets enacted in 2019, before anyone could have imagined the sort of crisis we now face. Over the coming months, there will be no avoiding the fiscal crunch.

The states have already begun pleading with Congress for help, and sooner or later Congress will need to provide it. Taking steps sooner rather than later would make an enormous difference. The federal government has often been called on to serve as a fiscal backstop for states in extreme emergencies, since its borrowing power vastly exceeds that of the states. And that role is particularly appropriate in a truly national—indeed global—crisis of this magnitude.

But to provide such help responsibly, Congress will need to clearly delineate what kinds of assistance it can offer and on what terms. Congressional Republicans are not wrong to be wary of state efforts to use the emergency to fill fiscal holes dug over decades of irresponsible state policies. Yet that can’t mean that they deny state governments the help they need to contend with this crisis. Rather, it means they must draw some distinctions.

As I’ve argued elsewhere, Congress would do well to divide state needs into three tranches: direct pandemic spending (which should be covered by federal dollars), lost state revenue (which states should be given the opportunity to make up with federally guaranteed loans on favorable terms), and longstanding obligations like pension and retiree health costs made untenable by the recession (for which affected states should be given options only for strictly conditional support, like a new state bankruptcy code or federal support conditioned on major pension reforms).

To be effective, that sort of response would need to take shape now, before states have truly hit the wall. It should be part of the bill the parties are now beginning to negotiate.

Second, this fall’s election is going to be seriously complicated by the pandemic.

There is pretty much no way around that. We’ll be voting while the virus is still spreading, which means that far more people than usual will vote by mail. Only a few states have real experience with voting by mail in large numbers, and the logistics involved are not simple. Primary elections in many states have already made the challenge clear.

To take just one example among many, mailed ballots require signature verification. In states that haven’t spent years building the required infrastructure, such verification will probably need to be done by hand, creating huge risks of confusion and error. States will need to develop new processes to handle this, to train election workers to use unfamiliar equipment, and to take on problems in real time. Signature verification also requires a process for notifying voters whose handwriting is challenged and giving them time to respond. All that, and similar challenges on other election administration fronts, makes it easy to imagine that many races will be impossible to call on election night, and perhaps for quite some time afterward.

Particularly in an era already overflowing with cynical mistrust and conspiracy mongering, such problems raise the prospect of a legitimacy crisis around the election. And policymakers need to take steps now to reduce the risk of such a crisis.

The first step must be to prepare the public. Elected officials, candidates, journalists and others must start speaking plainly about the likelihood of logistical challenges around the election so that voters are not shocked if things don’t go smoothly. People must know in advance that we should not expect every race to be called straight away and that results which take days or even weeks to determine are not therefore illegitimate.

But beyond setting voter expectations, policymakers should also be looking for ways to reduce the strain on the system and to deal with predictable problems. One simple step Congress could take now is to push back the deadlines involved in the work of the Electoral College, to give the states more time to count votes in the presidential race if they need it. A simple change in the federal law governing these dates, which wouldn’t give either party an advantage, could give every state about three more weeks to count. Such a change would be essentially impossible after the election—when partisans looking at partial results would argue over which side it would advantage. But it could easily be done today, it would just take a few sentences of legislative language, and it too should be part of the relief bill now being worked out.

Opinion | Three Predictable Covid Nightmares — and How Congress ...

Finally, if we’re lucky, we’re going to need to figure out how to distribute a Covid-19 vaccine early next yearThat would be a good problem to have, of course, but a huge problem nonetheless. And getting it wrong could catastrophically undermine the effort to defeat the virus.

Vaccine development itself is one area where our country has not been behind the curve: The federal government has invested heavily in the effort, the National Institutes of Health has played a key coordinating role, and the administration is prepared to pay for “at risk” manufacturing of millions of doses of any vaccine that makes it into Phase III trials, so that if a vaccine is found to be safe and effective there will immediately be doses to provide to high-risk individuals. But who will be first in line to get these early doses? And who will decide?

Here, too, there is an enormous danger of a legitimacy crisis. Both public fear about the safety of a vaccine (building on decades of anti-vaccine conspiracy theories on the right and left alike) and the danger of corruption, or at least perceived corruption, in the distribution of doses could undermine the potential of effective vaccination to end the nightmare of this pandemic.

Widespread uptake is essential to the effectiveness of any vaccine. It is not so much by protecting each vaccinated individual as by vaccinating enough Americans to achieve broad-based communal (or “herd”) immunity that a vaccine could truly change the game. That means public trust in the process and wholesale vaccination across our society will be crucial.

To achieve that, it is essential that both the safety of the vaccine-development process and the basic fairness of the ultimate distribution formula be established in advance, and in a very public way. Congress has a crucial role to play here, too. Hearings should begin very soon to put before the public all available information about the efforts taken by the Food and Drug Administration to ensure the safety of the vaccine-development process, even as that process proceeds with unprecedented speed. And Congress should establish, ideally in this next relief bill, a public commission to develop a formula for equitable distribution of early vaccine doses: setting out tiers of priority (for front-line health workers, vulnerable populations, the elderly, and those with particular preexisting conditions), and seeking out ways to make sure that economic and other disadvantages do not translate into lesser or later access to vaccination.

The work of such a group should be reasonably transparent and would need to begin very soon if it is to bear fruit in time to be useful. Policymakers must not underestimate the danger of a loss of public confidence in a Covid-19 vaccine, and must take steps now to avoid such a foreseeable disaster.

The same is true on all three of these fronts. These may not be the greatest problems we confront in the remainder of this dark and difficult year, but they share some features that ought to make them high priorities: All three are predictable and serious, each would amount to a disaster if left unchecked, but each could be made much easier to handle with some straightforward preparation. The relief bill being negotiated this summer could easily, without sparking a partisan war, take concrete steps on all three fronts.

Leadership in a crisis demands a combination of planning for foreseeable difficulties and responding to the unexpected. Getting the former right can make the latter far more doable. To make the rest of this year less disastrous, our leaders need to look ahead.

 

Coronavirus’s painful side effect is deep budget cuts for state and local government services

https://theconversation.com/coronaviruss-painful-side-effect-is-deep-budget-cuts-for-state-and-local-government-services-141105

Coronavirus's painful side effect is deep budget cuts for state ...

Nationwide, state and local government leaders are warning of major budget cuts as a result of the pandemic. One state – New York – even referred to the magnitude of its cuts as having “no precedent in modern times.”

Declining revenue combined with unexpected expenditures and requirements to balance budgets means state and local governments need to cut spending and possibly raise taxes or dip into reserve funds to cover the hundreds of billions of dollars lost by state and local government over the next two to three years because of the pandemic.

Without more federal aid or access to other sources of money (like reserve funds or borrowing), government officials have made it clear: Budget cuts will be happening in the coming years.

And while specifics are not yet available in all cases, those cuts have already included reducing the number of state and local jobs – from firefighters to garbage collectors to librarians – and slashing spending for education, social services and roads and bridges.

In some states, agencies have been directed to cut their budget as much as 15% or 20% – a tough challenge as most states prepared budgets for a new fiscal year that began July 1.

As a scholar of public administration who researches how governments spend money, here are the ways state and local governments have reduced spending to close the budget gap.

Cutting jobs

State and local governments laid off or furloughed 1.5 million workers in April and May.

They are also reducing spending on employees. According to surveys, government workers are feeling personal financial strain as many state and local governments have cut merit raises and regular salary increases, frozen hiring, reduced salaries and cut seasonal employees.

Washington state, for example, cut both merit raises and instituted furloughs.

survey from the National League of Cities shows 32% of cities will have to furlough or lay off employees and 41% have hiring freezes in place or planned as a result of the pandemic.

Employment reductions have met some resistance. In Nevada, for example, a state worker union filed a complaint against the governor to the state’s labor relations board for violating a collective bargaining statute by not negotiating on furloughs and salary freezes.

Most of the employee cuts have been made in education. Teachers, classroom aids, administrators, staff, maintenance crews, bus drivers and other school employees have seen salary cuts and layoffs.

The job loss has hurt public employees beyond education, too: librarians, garbage collectors, counselors, social workers, police officers, firefighters, doctors, nurses, health aides, park rangers, maintenance crews, administrative assistants and others have been affected.

Residents also face the consequences of these cuts: They can’t get ahold of staff in the city’s water and sewer departments to talk about their bill; they can’t use the internet at the library to look for jobs; their children can’t get needed services in school.

Most of these cuts have been labeled temporary, but with the extensions to stay-at-home orders and a mostly closed economy, it will be some time before these employees are back to work.

Suspending road, bridges, building and water system projects

As another way to reduce costs quickly, a National League of Cities survey shows 65% of the municipalities surveyed are stopping temporarily, or completely, capital expenditure and infrastructure projects like roads, bridges, buildings, water systems or parking garages.

In New York City, there is a US$2.3 billion proposed cut to the capital budget, a fund that supports large, multiyear investments from sidewalk and road maintenance, school buildings, senior centers, fire trucks, sewers, playgrounds, to park upkeep. There are potentially serious consequences for residents. For example, New York housing advocates are concerned that these cuts will hurt plans for 21,000 affordable homes.

Suspending these big money projects will save the government money in the short term. But it will potentially harm the struggling economy, since both public and private sectors benefit from better roads, bridges, schools and water systems and the jobs these projects create.

Delaying maintenance also has consequences for the deteriorating infrastructure in the U.S. The costs of unaddressed repairs could increase future costs. It can cost more to replace a crumbling building than it does to fix one in better repair.

Cities and towns hit

In many states, the new budgets severely cut their aid to local governments, which will lead to large local cuts in education – both K-12 and higher education – as well as social programs, transportation, health care and other areas.

New York state’s budget proposes that part of its fiscal year 2021 budget shortfall will be balanced by $8.2 billion in reductions in aid to localities. This is the state where the cuts were referred to in the budget as “not seen in modern times.” This money is normally spent on many important services that residents need everyday –mass transit, adult and elderly care, mental health support, substance abuse programs, school programs like special education, children’s health insurance and more. Lacking any of these support services can be devastating to a person, especially in this difficult time.

Fewer workers, less money

As teachers and administrators figure out how to teach both online and in person, they and their schools will need more money – not less – to meet students’ needs.

Libraries, which provide services to many communities, from free computer use to after-school programs for children, will have to cut back. They may have fewer workers, be open for fewer hours and not offer as many programs to the public.

Parks may not be maintained, broken playground equipment may stay that way, and workers may not repave paths and mow lawns. Completely separate from activists’ calls to shift police funding to other priorities, police departments’ budgets may be slashed just for lack of cash to pay the officers. Similar cuts to firefighters and ambulance workers may mean poorly equipped responders take longer to arrive on a scene and have less training to deal with the emergency.

To keep with developing public safety standards, more maintenance staff and materials will be needed to clean and sanitize schools, courtrooms, auditoriums, correctional facilitiesmetro stations, buses and other public spaces. Strained budgets and employees will make it harder to complete these new essential tasks throughout the day.

To avoid deeper cuts, state and local government officials are trying a host of strategies including borrowing money, using rainy day funds, increasing revenue by raising tax rates or creating new taxes or fees, ending tax exemptions and using federal aid as legally allowed.

Colorado was able to hold its budget to only a 3% reduction, relying largely on one-time emergency reserve funds. Delaware managed to maintain its budget and avoided layoffs largely through using money set aside in a reserve account.

Nobody knows how long the pandemic, or its economic effects, will last.

In the worst-case scenario, budget officials are prepared to make steeper cuts in the coming months if more assistance does not come from the federal government or the economy does not recover quickly enough to restore the flow of money that governments need to operate.

 

 

 

The Memo: Scale of economic crisis sends shudders through nation

https://thehill.com/homenews/administration/490938-the-memo-scale-of-economic-crisis-sends-shudders-through-nation

Pandemic derails resilient US economy | TheHill

New data released Thursday revealed the scale of the economic devastation wrought by the coronavirus crisis — and experts say there is no end in sight.

More than 6.6 million new unemployment claims were filed during the week ending March 28, according to the Department of Labor. The figure was double that of the previous week, which had itself been by far the highest since records began.

The stark reality is that roughly 10 million people have been dumped from their jobs in two weeks. A previously robust economy has been scythed down by the virus. A nation that had been enjoying its lowest unemployment rate for decades is now virtually certain to see jobless totals surpass those of the Great Recession a decade ago.

“The present economic situation is awful,” said Jason Furman, a Harvard University professor who served as chairman of President Obama’s Council of Economic Advisers. “The data is just telling us what we can see with our own eyes — there is very little business happening.”

Economists who had already been deeply worried about the immediate outlook are now wondering if their earlier projections were in fact too rosy.

“In our earlier scenario, we had expected 6.5 million job losses by May,” said Beth Ann Bovino, the chief U.S. economist at Standard & Poor’s. That figure will be exceeded, she now believes, given that there were “more lockdowns, more business closures and more businesses just trying to keep themselves alive” by laying off workers.

Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, said that even the 10 million figure for new unemployment claims was “likely a massive undercount” of actual losses because, during that period, self-employed people and workers in the so-called “gig economy” were generally not eligible to apply. This is changing as a consequence of the package recently passed by Congress that extends eligibility for unemployment benefits, as well as providing other aid for businesses and individuals.

“Our estimate is that by the end of June, 20 million people will have lost their jobs — and I am wondering if even that is optimistic,” Shierholz said.

The political ramifications of such a huge economic shock are unknowable.

President Trump had been looking forward to using the economy as his strongest card as he seeks a second term in November. That card has been shredded.

Trump has promised repeatedly during his White House briefings on the crisis that the nation can bounce back very fast once the public health dangers have receded.

Trump’s approval ratings have also ticked up modestly since the crisis began in many polls. He may be benefitting from the traditional “rallying around the flag” effect that has occurred in previous moments of crisis.

President George W. Bush, for example, hit 90 percent approval in a Gallup poll — the highest result for any president in the polling organization’s history — right after the terrorist attacks of Sept. 11, 2001.

In a statement on Thursday, probable Democratic nominee Joe Biden hit Trump for “failing to prepare our nation” for the ramifications of the coronavirus crisis. Biden called on Trump to allow open enrollment in the Affordable Care Act and also jabbed at Treasury Secretary Steven Mnuchin for having referred to previous unemployment figures as “not relevant.”

In response, Trump campaign communications director Tim Murtaugh blasted back at Biden for “ineffectively sniping from the sidelines, stumbling through television interviews, and hoping for relevance and political gain.”

Economic experts caution that Trump’s promises of a v-shaped recovery, in which the nation jolts itself back into strong economic shape quickly, are almost certainly unrealistic. It will not be a matter of the nation simply rolling the shutters back up and returning to business as usual.

“The economy is not symmetrical,” said Furman. “It is easier to separate someone from a job than to connect someone to a job. In recessions, the unemployment rate can go up very quickly and it comes down very slowly. The worry is that this will be like that.”

Several economic experts who spoke with The Hill made similar points, unprompted, as to the ways the federal government could ease the crisis.

One refrain was that huge assistance needs to be made available to states. States are generally required to balance their budgets. In a situation like the current one, where their tax revenue is cratering, this means they are obligated to severely cut spending — something that most economists believe would deepen and prolong the recession.

Another theme was the need to tie together financial assistance for businesses and the retention of employees.

The recently passed stimulus package makes some effort to do that, particularly in the case of small businesses. The Paycheck Protection Program extends loans to small businesses based upon eight weeks of payroll costs plus an additional 25 percent of the total.

The payroll portion of the loans would be forgiven — rendering them in effect a grant, not a loan — so long as the workforce was maintained at existing levels.

Economic experts praise the principle but worry that the total amount of money in the pot for these loans — $349 billion — may not be enough. 

“The small business subsidies will be critical,” said Steven Hamilton, an assistant professor of economics at The George Washington University. “The government needs to get the word out on those, and Congress will likely need to pass an expansion both to adequately fund the existing scheme and to make the scheme more generous to businesses to keep them from laying off workers.”

The public seems to share the view that the aid package, which also includes checks of up to $1,200 for individuals, is a move in the right direction — but unlikely to suffice.

A CBS News poll released late Thursday afternoon indicated 81 percent of Americans support the recent legislation but 57 percent also say it likely won’t be enough.

The same trepidation is shared by the experts, given the unprecedented nature of the coronavirus and the economic crisis it has created.

“It’s like nothing we have ever seen before,” said Shierholz.

 

 

 

 

The top 10 questions from the 2020 J.P. Morgan Healthcare Conference that every CEO must answer

https://www.beckershospitalreview.com/strategy/the-top-10-questions-from-the-2020-j-p-morgan-healthcare-conference-that-every-ceo-must-answer.html

Related image

As we enter a new decade, everyone is searching for something to truly change the game in healthcare over the next 10 years. To find that answer, an estimated 50,000 people headed to San Francisco this week for the prestigious J.P. Morgan Healthcare Conference. Every one of them is placing big bets on who will win and lose in the future of healthcare. The shortcut to figuring this out is actually a question — or 10 questions to be more precise. And what matters most is whether or not the right people are asking and answering those questions.  

While the prophets are ever present and ever ready to pitch their promises in every corner of the city, the pragmatists head up to the 32nd floor of the Westin St. Francis Hotel to hear from the CEOs and CFOs of close to 30 of the largest and most prestigious providers of care in the country. Why? Remember, this is an investor conference and if you want to understand any market, the first rule is to follow the money. And if you want to understand the future business model of healthcare, you better listen closely to the health providers in that room and take notes. 

What providers are saying matters to everyone in healthcare

Healthcare is the largest industry in our economy with over $4 trillion spent per year. Healthcare delivery systems and healthcare providers account for over $2 trillion of that spend, so that feels like a pretty good place to start, right? For that reason alone, it’s critical to listen closely to the executives in those organizations, as their decisions will affect the quality, access and cost of care more than any other stakeholder in healthcare.

Some will say that what they saw this year from healthcare providers was more of the same, but I encourage you to ignore that cynicism and look more closely. As the futurist William Gibson once said, “The future is already here — it’s just not evenly distributed.” The potential for any health system to drive major change is certainly there and the examples are everywhere. The biggest blocker is whether they are asking the right questions. One question can change everything. Here’s proof. 

The stunning power of and need for good questions 

Last year I titled my summary The #1 Takeaway from the 2019 JP Morgan Conference – It’s the Platform, Stupid.” The overwhelming response to the article was pretty surprising to me  — it really resonated with leaders. One example was Jeff Bolton, the chief administrative officer of Mayo Clinic, who told me that the article had inspired their team to ask a single question, “Does Mayo need to be a platform?” They answered the question “yes” and then took aggressive action to activate a strategy around it. Keep reading to learn about what they set in motion. 

Soon after, I had a discussion with John Starcher, CEO of Cincinnati-based Bon Secours Mercy Health, one of the largest health systems in the country, who shared with me that he is taking his team off site for a few days to think about their future. It occurred to me that the most helpful thing for his team wouldn’t be a laundry list of ideas from the other 30 healthcare delivery systems that presented, but rather the questions that they asked at the board and executive level that drove their strategy. Any of those questions would have the potential to change the game for John’s team or any executive team. After all, if you’re going to change anything, the first thing you need to do is change is your mind. 

The wisdom of the crowd 

So, I set out to figure this out: If you were having a leadership or board retreat, what are the 10 questions you should be asking and answering that may change the future of your organization over the next 10 years? I didn’t have the answers, so I decided to tap into the wisdom of the crowd, listening to all 30 of the nonprofit provider presentations, spending additional time with a number of the presenters and reaching out to dozens of experts in the market to help define and refine a set of 10 questions that could spark the conversation that fires up an executive team to develop to the right strategy for their organization. 

A special thank you to a number of the most respected leaders in healthcare who took their time to contribute to and help think through these questions: 

  • Mike Allen, CFO of OSF Healthcare (Peoria, Ill.)
  • Jeff Bolton, CAO of Mayo Clinic (Rochester, Minn.)
  • Robin Damschroder, CFO of Henry Ford Health System (Detroit)
  • JP Gallagher, CEO of NorthShore University HealthSystem (Evanston, Ill.)
  • Kris Zimmer, CFO of SSM Health (St. Louis) 
  • Wright Lassiter, CEO of Henry Ford Health System (Detroit)
  • Mary Lou Mastro, CEO of Edwards-Elmhurst Health (Warrenville, Ill.)
  • Dominic Nakis, CFO of Advocate Aurora Health (Milwaukee and Downers Grove, Ill.) 
  • Dr. Janice Nevin, CEO of ChristianaCare (Newark, Del.)
  • Randy Oostra, CEO or ProMedica (Toledo, Ohio)
  • John Orsini, CFO of Northwestern Medicine (Chicago)
  • Lou Shapiro, CEO of Hospital for Special Surgery (New York City) 
  • John Starcher, President & CEO, Bon Secours Mercy Health (Cincinnati)
  • Vinny Tammaro, CFO, Yale New Haven Health (New Haven, Conn.)
  • Bert Zimmerli, CFO of Intermountain Healthcare (Salt Lake City)

Here are the top 10 questions from the 2020 J.P. Morgan Healthcare Conference

Based on the wisdom of the crowd including the 30 nonprofit provider presentations at the 2020 JP Morgan Healthcare Conference, here are the Top 10 Questions that every CEO needs to answer that may make or break their next 10 years.

1. Business model: Will we think differently and truly leverage our “platform?” As referenced earlier in this article, this was the major theme from last year — health systems leveraging their current assets to build high-value offerings and new revenue streams on top of the infrastructure they have in place. Providers are pivoting from the traditional strategy of buying and building hospitals and simply providing care toward a new and more dynamic strategy that focuses on leveraging the platform they have in place to create more value and growth. Mayo Clinic is an organization that all health systems follow closely. Mayo adopted the platform model around their ‘digital assets’ into what they refer to as Mayo Clinic Platform, which initially targets three game-changing initiatives: a Home Hospital to deliver more health in the home even for high acuity patients, a Clinical Data Analytics Platform for research and development and an Advanced Diagnostics Platform focused on predictive analytics, using algorithms to capture subtle signals before a disease even develops. Children’s Hospital of Philadelphia, one of the top pediatric hospitals in the world, is leveraging their platform to drive international volume, where revenue is 3.5x more per patient. They are also making investments in cell and gene therapy, where their spinoff of Spark Therapeutics returned hundreds of millions of dollars back to their organization. Both organizations were clear that any returns that they generate will be re-invested back into raising the bar on both access to care and quality of care.

 

2. Market share: Are we leveraging a “share of cup” strategy? Starbucks had dominant share in the market against Caribou Coffee, Peet’s Coffee and Dunkin’ Donuts. Instead of solely focusing on how to grab a little more market share, they reframed the definition of their market. They called it “share of cup” meaning that anywhere and any time a cup of coffee was consumed, they wanted it to be Starbucks. In that definition of the market, they had very little share, but enormous growth potential. Hospital for Special Surgery in New York is the largest and highest volume orthopedic shop in the world. Their belief is that wherever and whenever a musculoskeletal issue occurs, they should be part of that conversation. This thinking has led them to build a robust referral network, which 33 percent of the time leads to no surgical treatment. So instead of fighting for share of market in New York, they have a very small share and a very big opportunity in a “share of cup” approach. NorthShore University Health System in Illinois has taken a similar approach on a regional level, converting one of their full-service hospitals into the first orthopedic and spine institute in the state. The results have exceeded expectations on every measure and they already have to increase their capacity due to even higher demand than they originally modeled. 

 

3. Structure: Are we a holding company or an operating company? There has been a tremendous amount of consolidation over the last few years, but questions remain over the merits of those moves. The reality is that many of these organizations haven’t made the tough decisions and are essentially operating as a holding company. They are not getting any strategic or operational leverage. You can place all health systems on a continuum along these two endpoints — being a holding vs. an operating company — but the most critical step is to have an open conversation about where you’re at today, where you intend to be in the future, when you’re going to get there and how you’re going to make it happen. Bon Secours Mercy Health’s CEO John Starcher shared, “It makes sense to merge, but only if you’re willing to make the tough decisions.” His team hit the mark on every measure of their integration following their merger. They then leveraged that same competency to acquire the largest private provider of care in Ireland, as well as seven hospitals in South Carolina and Virginia. Northwestern Medicine has leveraged a similar approach to transform from a $1 billion hospital into a $5 billion health system in a handful of years. Both of these organizations prioritized and made tough decisions quickly and each has created an organizational competency in executing efficiently and effectively on mergers and acquisitions. 

 

4. Culture: Do we have employees or a team? Every organization states that their employees are their most important asset, but few have truly engaged them as a team. Hospitals and healthcare delivery systems can become extraordinarily political, and it’s easy to see why. These are incredibly complex businesses with tens of thousands of employees in hundreds of locations and thousands of departments. Getting that type of organization to move in the same direction is incredibly challenging in any industry. At the same time, the upside of breaking through is perhaps the most important test of any leadership team. JP Gallagher, CEO of North Shore University Health System, shared his perspective that, “Healthcare is a team sport.” The tough question is whether or not your employees are truly working as a team. Christiana Care provides care in four states — Delaware, Maryland, Pennsylvania and New Jersey. They have taken a unique approach that they frame as “for the love of health,” incorporating the essence of what they do in every communication both internally and externally, in their values and in their marketing. In a multi-state system, it is tricky to create a caring and collaborative culture, but it’s critical and they’ve nailed it. Their CEO shared that, “If you lead with love, excellence will follow.” That’s not only well said but spot-on. Creating a world-class team requires not only loving what you do, but the team you’re part of.

 

5. Physicians: Are our physicians optimistic or pessimistic? There’s a lot of concern about “physician burnout” with a reflex to blame it on EHRs, cutting off the needed conversation to dive deeper into where it really comes from and how best to address it. The challenge over the next decade is to create an optimistic, engaged and collaborative culture with physicians. In reading this, some will react with skepticism, which is exactly why leadership here is so important. One suggestion I was given was to make this question edgier and ask, “Are our physicians with us or not?” However the question is asked, the bottom line is that leadership needs to find a way to turn this into a dynamic, hyper-engaged model. A little while back I spent the day with the leadership team at Cleveland Clinic. At the end of the day, their CEO Dr. Tom Mihaljevic was asked what he would tell someone who was thinking of going to medical school. He said he would tell them that, “This is absolutely the best time to be a doctor.” His answer was based on the fact that there has never been a time when you could do more to help people. He wasn’t ignoring the challenges, he was simply reframing those issues as important problems that smart people need to help solve in the future. Those who adopt that type of optimism and truly engage and partner with their physicians will create a major competitive advantage over the next decade.

 

6. Customer: Do we treat sick patients or care for consumers? Words matter here – patients vs. consumers. Most hospitals are in a B2B, not B2C, mindset. Patients get sick, they try to access care, they check into an ER, they get admitted, they are treated, they get discharged. People get confused, anxious and concerned, then they seek not only care, but simplicity, compassion and comfort. With half of America coming through their stores every week, Walmart is already the largest provider organization that no one thinks of as they provide ‘consumer’ care, not ‘patient’ care. But they are starting to broaden their lens, and health systems will need to make moves as well. Competing with Walmart, CVS and other consumer-centric models will require a different mindset. I think Dr. Janice Nevin, the CEO ChristianaCare, captured this really well when she said, “Our mindset is that our role is to ensure everything that can be digital will be digital. Everything than can be done in the home will be done in the home.” Henry Ford Health System CEO Wright Lassiter commented, “Trust is the fundamental currency in healthcare.” Building that trust will require a digital experience in the future that is just as compassionate and caring as what health systems strive to deliver in person in the past. 

 

7. Data: Will we make data liquid? The most undervalued and misunderstood asset of health systems may be their data. While some at the conference refer to this as having the economic equivalent of being the “oil of healthcare,” the real and more practical question is whether or not your organization will make data liquid, available and accessible to the right players on your team at the right time. Jeff Bolton from Mayo commented that, “The current model is broken. Data and tech can eliminate fragmentation.” In a recent Strata survey, we asked leaders in health systems whether they had access to the information they needed to do their job, and 90 percent said no. For many health systems, data is a science project, hidden behind the scenes primarily used for research and impossible to access for most stakeholders. The call to action is activating that data to improve clinical outcomes, operations and/or financial performance. 

 

8. Cost: Are we serious about reducing the cost of care and delivering value? Affordability is a hot topic, and for good reason, as high deductible plans, price transparency and other factors have accelerated its urgency. As Intermountain Healthcare CEO Dr. Marc Harrison shared, “We have an absolute responsibility to make healthcare affordable.” While the consumer side will be a moving target for some time, the No. 1 challenge for hospitals right now is to lower their cost structure so they can compete more effectively in the future. Advocate Aurora HealthBaylor Scott & White Health, CommonSpirit Health and many others are targeting cost reductions of over $1 billion over the next few years. As most hospitals are now in a continuous process to reduce cost in order to compete more effectively in the future, organizations like Yale New Haven Health in Connecticut have implemented advanced cost accounting solutions to better understand both cost and margins. Yale is using this data to understand variation, supporting an initiative that drove over $150 million in savings. Additionally, they have combined cost data with clinical feeds from their EHR to understand the cost of harm events, which turn out to be 5x more expensive. As more providers take on risk, having a “source of truth” on the cost of care will be essential. Advocate Aurora Health CFO Dominic Nakis shared that, “We believe the market will continue to move to taking on risk.” Many of the presenting organizations shared that same perspective, but they won’t be able to manage that risk unless they understand the cost of care for every patient at every point of care across the continuum every day.

 

9. Capital: Do we have an “asset-light” strategy? Traditional strategy for health systems was defined primarily by what they built or bought. Many hospitals still maintain an “if you build it, they will come” strategy at the board level. Yet, Uber has become the biggest transportation company in the world without owning a single car and Airbnb has become the biggest hospitality company in the world without owning a single room. These models are important to reflect upon as healthcare delivery systems assess their capital investment strategy. Intermountain Healthcare CFO Bert Zimmerli refers to their overall thought process as an “asset-light expansion strategy.” In 2019, they opened a virtual hospital and they have now delivered over 700,000 virtual interactions. The number of virtual visits at Kaiser Permanente now exceeds the number of in-person visits at their facilities. With that said, there will be a balance. I really like how Robin Damschroder the CFO of Henry Ford Health System framed it: “We believe healthcare will be more like the airline and banking industry, both of which are fully digitally enabled but have a balance of ‘bricks and clicks’ with defined roles where you can seamlessly move between the two. Clearly, we have a lot of ‘bricks’ so building out the platform that integrates ‘clicks’ is essential.” 

 

10. Performance: Do we want our team to build a budget or improve performance? The most significant barrier to driving change that many organizations have baked into their operating model is their budget process. The typical hospital spends close to five months creating a budget that is typically more than $100 million off the mark. After it’s presented to the board, it is typically thrown out within 90 days. It creates a culture of politics, entitlement and inertia. According to a Strata survey of 200 organizations, close to 40 percent are now ditching the traditional budget process in favor of a more dynamic approach, often referred to as Advanced PlanningOSF HealthCare leverages a rolling approach, radically simplifying and streamlining the planning process while holding their team accountable for driving improvement vs. hitting a budget. When it comes to driving performance, SSM Health CEO Laura Kaiser captured the underlying mindset that’s needed: “We have a strong bias toward purposeful action.” Well said, and it certainly applies to all of the questions here among the top 10.

 

5 additional questions to consider

As you would imagine or might suggest, the questions above can and in some cases should be replaced with others. Additional critical questions to answer that came from the group included the following:

  1. Competition: Who else will we compete with in the future and are we positioned to win?
  2. Digital health: Are we going to be a “digital health” company, providing tech-enabled services?
  3. Affordability: How are we making care more affordable and easier to understand and access?
  4. Social determinants: Is this a mission, marketing or operations strategy?
  5. Leadership: Have we made the tough decisions we need to make, and will we in the future?

 

Start asking questions

The point here isn’t to get locked into a single list of questions, but rather to force your team to ask and answer the most important and challenging ones that will take you from where you are today to where you want to be in the future. After reviewing these questions with your team, the one additional question you need to consider is one of competency: Do you have the ability and bandwidth to execute on what you’ve targeted? In the end, that’s what matters most. While there are many interesting opportunities, too many teams end up chasing too much and delivering too little.

The next 10 years can and should be the best 10 years for every health system and every healthcare provider, but making it happen will require some really tough questions. “The current path we’re on will leave us with a healthcare delivery model that is completely unsustainable,” stated Randy Osstra, CEO of ProMedica Health System. “We need to take meaningful action toward creating a new model of health and well-being — one that supports healthy aging, addresses social determinants of health, encourages appropriate care in the lowest cost setting, and creates funding and incentives to force a truly integrated approach.”

Strong leaders are needed now more than ever. The rest of healthcare is watching, not just professionally but personally. We are all grateful to you for the extraordinary and often heroic care that you deliver without hesitation to our family and friends every day both in our communities and across our country. But now we all need you to not only deliver care, but a new and better version of healthcare. So, ask and answer these and other tough questions. We know you will do everything that you can to help make healthcare healthier for all of us over the next 10 years.