Critical Steps for a Hospital Turnaround

https://www.modernhealthcare.com/hospitals/critical-steps-hospital-turnaround

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Operational changes can improve a hospital’s performance and prospects, but time is of the essence.

The challenges many community hospitals face have become so unrelenting as to threaten long-term financial viability. It’s important that this threat be met with prompt action and operational changes that can improve the immediate situation as well as sustainability. A formal turnaround plan includes analyses and actions, and becomes a roadmap to redirect hospitals and help them stay on track to serve as community resources for years to come.

What prevents some struggling hospitals from getting an earlier start on a turnaround plan?

JK: Leaders from ailing community hospitals sometimes don’t recognize the severity of their problems or that certain indicators call for quick, corrective action. Some common alarm signals that leaders may tune out at first include a downward trend of days cash on hand, shifts in patient volume across the delivery spectrum, medical staff dissatisfaction or defection, and even bond covenant concerns. Recognizing that problems need to be addressed and changes must be made is the first step toward improvement.

Once it’s clear that “business as usual” isn’t working, how does the turnaround process start?

JK: Typically, the process starts with an operational assessment to evaluate strategy, operations, supply chain, revenue cycle and leadership with the aim of reducing costs and increasing revenue—the tried-and-true formula for financial solvency. The analysis includes a review of data and documents, as well as interviews with board, executive and physician leaders. The process reveals any organizational problems or vulnerabilities that aren’t immediately apparent, and it forms the basis for a turnaround plan, including a detailed action plan. An open mind and fresh perspective are important to be able to see options to go beyond operations as they have always been.

What are some of the key areas an operational assessment looks at for potential savings and cost reduction?

JK: Almost every hospital has room to improve staff productivity. Labor is a hospital’s greatest expense, so optimizing productivity by having the right number and mix of staff can make a big impact. Community hospitals that do not have a productivity tool to achieve and maintain the right staffing levels can typically find savings of 15 to 20 percent in salaries and benefits by implementing a tool. In those hospitals where there’s already some productivity monitoring, implementing a more effective tool or improving processes can result in 5 to 10 percent savings. After labor, supply costs are the second highest expense for a hospital, so that’s another key focus area for cost reduction and savings. Industry benchmarks show that many community hospitals have an opportunity to reduce supply costs by as much as 20 percent.

Assessing revenue cycle is also imperative to help identify, monitor and collect every dollar a hospital is due. Gains can be made in this area by renegotiating health plan contracts, streamlining billing for faster payment, auditing medical record coding and reviewing the chargemaster.

Why do the early stages of a turnaround include benchmarking?

JK: Hospitals can potentially identify significant cost-saving opportunities by comparing themselves to hospitals of similar size and volume. Comparing clinical, operational and financial data also identifies areas for improvement and where to allocate time and money for improvement initiatives. For example, a CHC-managed hospital that recently underwent a successful turnaround had discovered through benchmarking that its staff ratios were higher and its benefits were more expensive compared to similar hospitals. This information prompted leaders to take a closer look at the hospital’s situation, and they found it made sense from a sustainability perspective to downsize staff and bring benefit packages to competitive levels. These actions slashed the hospital’s annual expenses by $5.3 million.

To support and sustain a turnaround effort, who needs to be involved?

JK: It’s a collaborative process requiring the participation of the board of trustees, executive leaders, physician leaders, and in many cases an outside management firm to evaluate the situation and develop a specific plan of action. As we discussed, leaders of struggling hospitals usually see the need for improvement but don’t recognize the severity of their situation. Because of that blind spot, it’s often external stakeholders or bondholders who set corrective action in motion by seeking outside assistance.

 

Catholic Health Senior Leadership Undergoes ‘Major Reorganization’: 7 Changes

https://www.healthleadersmedia.com/strategy/catholic-health-senior-leadership-undergoes-major-reorganization-7-changes?spMailingID=16126344&spUserID=MTg2ODM1MDE3NTU1S0&spJobID=1701043585&spReportId=MTcwMTA0MzU4NQS2

The president and CEO says this new leadership structure will help the system innovate and become more efficient in the face of a shifting healthcare landscape.

Catholic Health, based in Buffalo, New York, has dramatically restructured its senior leadership team.

President and CEO Mark Sullivan announced what the organization described as a “major reorganization” this week, about a year and a half after he was named to the system’s top executive job.

“Change is happening all around us in healthcare and rather than react to the pressures of our industry, we must lead change in the region to sustain our mission and meet the needs of the patients and communities we serve,” Sullivan said in a statement. “This new leadership structure will build on the high quality care that already exists within our system and drive development, innovation and efficiencies that will have an even greater impact on the health of our community.”

The team will spend the next several months transitioning into their new roles, Sullivan said.

“We are all excited about the opportunities before us to lead the transformation of healthcare in our community, but we also know how important smooth transitions are,” he added, “not only for our physician partners and associates, but more importantly, for the patients and long term care residents we serve.”

Here are seven significant changes outlined in Sullivan’s announcement:

  1. Joyce Markiewicz, who had served as president and CEO of Home and Community Based Care, has been named Chief Business Development Officer for Catholic Health. Sullivan called Markiewicz “the ideal person” for the job, citing her experience developing strategic partnerships and new business initiatives.
  2. Tom Gleason, who has served as chief operating officer for Home and Community Based Care, has been promoted to senior vice president of Home and Community Based Care, in light of Markiewicz’s expanded role. Gleason will oversee Catholic Health’s skilled nursing facilities and home care agencies, according to the announcement.
  3. Gary Trucker, president and CEO of Mount St. Mary’s Hospital, will retire this fall.
  4. Marty Boryszak, former president and CEO of Sisters of Charity Hospital, has been named senior vice president of acute care services at Catholic Health. In light of Tucker’s retirement, Sullivan decided to restructure Catholic Health’s hospital presidents, who will report to Boryszak.
  5. CJ Urlaub, former president and CEO of Mercy Hospital of Buffalo, has been named senior vice president of strategic partnerships, integration, and care delivery in Niagara County for Catholic Health. As part of these responsibilties, he will assume the role as president of Mount St. Mary’s Hospital when Tucker retires.
  6. Eddie Bratko, who had been chief operating officer of Mercy Hospital of Buffalo, has been named president of Mercy Hospital.
  7. John Sperrazza, who had been chief operating officer of Sisters of Charity Hospital, has been named president of the hospital and its St. Joseph campus.

Walt Ludwig, who was named president and CEO of Kenmore Mercy Hospital just last year, will keep his position, according to the announcement.

The overhaul comes after two recent high-level hires. William Pryor was named Catholic Health’s new chief administrative officer, and Dr. Hans Cassagnol was named chief clinical officer and physician executive. And it comes as Catholic Health is currently conducting a national search for a chief operating officer and chief transformation & innovation officer, according to the announcement.

“How healthcare is delivered in the future will be different than it is today and our executive team must be reflective and responsive to these changes,” Sullivan said. “With the new talent we are recruiting to the region and the experienced leaders we have assuming new roles within our system, I am confident we have the right team in place to fulfill our Mission and drive change where it is needed to better serve the community and build upon our success as the quality, safety and patient satisfaction leader in Western New York.”

 

 

 

 

Trump’s Next Phase on Health Care: Everywhere and Nowhere

https://www.bloomberg.com/opinion/articles/2019-07-09/trump-health-care-reform-he-s-everywhere-and-nowhere

A scattershot and at times contradictory approach to fixing the system is impeding progress.

A hodgepodge of news this week is telling the confusing and contradictory story of President Donald Trump’s efforts to change American health care.  

On Monday, a federal judge blocked the administration’s efforts to force drugmakers to disclose the often astronomical list prices of medicines in their TV ads. It was intended to shame pharma into lowering prices, and would have been the first of the Trump administration’s major drug-cost initiatives to actually take effect.

On Tuesday, oral arguments were set for a Department of Justice-backed case that could wipe out the Affordable Care Act. 

Wednesday will reportedly see the president reveal an ambitious set of initiatives intended to rein in spending on kidney costs. 

The kidney initiative is among the administration’s better notions, along with its effort to index some drug costs covered by Medicare to the lower prices available abroad. Yet even when the administration lands on a good idea in health care, it seems to get in its own way. The Trump-backed ACA lawsuit, for example, would directly undermine the kidney initiative and price-indexing plan. And while the president has a variety of other proposals in the works – from an effort to pass drug discounts directly to consumers to a plan to force hospitals to make their pricing transparent – many could be exposed to the kind of legal risks that killed the drug-ad initiative. It’s all part of a scattershot and often incoherent approach that isn’t as effective as it could be.

Take the kidney-care push: this area of treatment is costly in part because the current system incentivizes expensive care at dialysis centers that are largely run by two companies: DaVita Inc. and  Fresenius Medical Care AG. (Peter Grauer, the chairman of Bloomberg LP, is the lead independent director at DaVita.) The Department of Health and Human Services reportedly wants to change that dynamic with new payment models intended to shift patients to more cost-effective treatment at home. At least part of the administration’s ability to implement those models comes from the Center for Medicare and Medicaid Services’ Innovation Center, which was created by the ACA and is threatened by the lawsuit.

The contradictions don’t end there. People with end-stage kidney disease are covered by Medicare, so the lawsuit wouldn’t strip their coverage. However, the administration’s plan reportedly emphasizes intervening before people get to the point where they need dialysis or transplants. Killing the ACA is at direct odds with that goal. It would see millions lose insurance coverage, would eliminate protections for people with pre-existing conditions like chronic kidney disease, and crimp access to preventative care.

Though it is a long shot, the court case demonstrates the administration’s inconsistency in health care. Just about every health initiative would be harmed by the disruption that would result if this lawsuit succeeds, especially considering that the administration doesn’t have a replacement plan. If it were serious about keeping people off of dialysis or curing HIV, it would oppose this suit and stop other ongoing efforts that harm the ACA’s individual market and Medicaid.

The administration hasn’t detailed an ACA alternative because its previous effort to pass one was a political disaster that helped Democrats seize control of the House of Representatives in 2018. Instead, its health-care efforts have largely been confined to executive orders and rule-making. That approach narrows the scope of what the administration can accomplish, and comes with significant risks. If a federal judge thinks that forcing the disclosure of drug prices in ads is an overreach, there’s clearly a chance that the administration’s more ambitious plans will also have issues.

I’m rooting for the kidney effort. It targets a real problem and could have an impact, depending on the details. I’d be more optimistic about the plan’s chances if it were part of a cohesive set of policies that had Congressional backing, rather than the current jumble. 

6 DEFINING VALUES OF A LEADERSHIP CULTURE

http://www.leadershipdigital.com/edition/daily-innovation-leadership-2019-06-16?open-article-id=10712652&article-title=6-defining-values-of-a-leadership-culture&blog-domain=n2growth.com&blog-title=n2growth-blog

Twelve years after launching culture change consulting services, I am finally sitting down to write about six defining values of a leadership culture. These are factors I’ve learned that define whether an organization can improve their Culture or not. No surprise that all six values rise and fall on leadership.

Before I unpack the six values, let me paint the backdrop of how it all began. In 2006, one of my CEO clients in Sarasota, FL shared with me his annual employee engagement survey. Most Type A leaders are charming, demanding, and unlovable, but not Steve. He had a caring heart just below the surface of his Type A layer. Even in his frustration, he oozed care and concern for people. We sat in his office while he shared his most recent employee engagement survey, and because he cared so much, he was frustrated. He didn’t like the pre-formulated questions, and he didn’t know what to do with the report results. He was delivered a canned report with no clear direction. “David,” he asked, “can you build me an employee engagement survey that we can customize around the kind of culture I want to create?” Like all good consultants, I said, “probably, let me do a little research and get back to you.” After I flew home from my monthly trip to sunny Sarasota, I did as I said and began to research and evaluate his request. As I dug around the internet, three data points came to light.

The first data point revealed that most employee engagement surveys were un-customizable. Surveys were built for mass production, not carefully and strategically customized for unique cultures. Why should the 8-year old, first generation, 88-person software development company in San Diego expect to have the same desired culture as the 48-year old, 3rd generation, 268-person manufacturing company in Rochester, NY? To me, that made no sense for the client, but all the sense to the vendors who mass-produced their expertise to increase profit over quality. Their research determined that one of the most important questions that define a good corporate culture is “Do you have a best friend at work.” Really? How does that define one’s culture? I am quite blessed to have had many best friends over the years, but none of them worked with me. Whether my best friend worked in Chicago or with me in Allentown never impacted my like or dislike of corporate culture.

The second data point was that most employee engagement surveys and the firms that employed them were extremely heavy on reporting data overload, but weak on meaningful implementation. Before starting Walton Consulting, Inc. in 2001, I worked for a boutique strategy consulting firm out of Princeton, NJ that developed and delivered high-cost elaborate strategic plans. The client would outwardly applaud the mountain-sized strategic planning document full of analysis, logic, and recommendations. However, inside I am sure they were asking themselves, “what the hell do I do now, and why did I pay so much for something I don’t know what to do with…maybe I should hide it on the bookshelf and refer to it in ‘name’ whenever I want to drive a random point home to my employees.” It is the same way with employee engagement surveys. The client gets a pretty report, but without the creator of the report, the expert on the topic to help with implementation, the report becomes an article of affection or dissatisfaction (depending on the results of course). As with many consultants, the implementation phase becomes an afterthought, a monumental chore that gets swept under the carpet and ignored.

The third data point was an epiphany that corporate culture was the missing cog. At this juncture of Walton, I had been focused on delivering consulting services to CEOs and business owners to help them grow healthy organizations. I was already delivering strategic planning, sales and marketing strategy and leadership recruiting services, all of which helped grow organizations, but the culture cog was missing. As I pondered on the importance of corporate culture, I intuitively understood that the culture cog acted as a fuel valve that could either spur on growth or squelch it. I reflected on how much corporate culture was really the vineyard soil that determined the environment’s capability and capacity for growing good fruit and producing a rich yield.

Wow, I must build this tool for my client I thought. It is not only critical as a foundation for successful organizational growth, but it also fits neatly into my core service offerings focused on “healthy” growth. In 2006 I launched the Culture offering. Now, 13 years later, with over 3,000 employees surveyed, and a marketplace foaming at the mouth about culture with quotes like Peter Drucker’s, “Culture Eats Strategy for Breakfast,” I am ready to share six values that leadership needs to employ if they plan on truly Changing Culture. Check back next issue where I will reveal what they are and why they are so important to growing a healthy organization.

Here are six leadership values that impact culture:

  1. Leadership Cares
  2. Leadership Alignment
  3. Leadership Listens
  4. Leadership Commitment
  5. Leadership Implementation
  6. Leadership Flexibility

For the purposes of this article, leadership is defined as the CEO and his or her executive team. Let’s deep dive into each factor…

LEADERSHIP CARES

There are different reasons why leaders care.  I had one client who cared because he was experiencing an employee revolt.  He was truly concerned that if he did not get his arms wrapped around his dysfunctional corporate culture that he would have a mass exodus on his hands.  Some leaders care because they understand that improved culture leads to improved profitability.  Other leaders care because they want to enrich the lives of their employees.  Bottom line, the leadership needs to care.  A friend and colleague of mine who was the President of a mid-market global firm told me flat out; he just didn’t care.  The employees to him were a means to an end.  Another human resource colleague of mine cares deeply about changing their culture, but she isn’t the CEO, and without the CEO caring, it will never get the attention it needs.

LEADERSHIP ALIGNMENT

When beginning a culture change endeavor, the likelihood that the CEO and all of the executive team really cares, views culture impact with the same gravity, and has the same cultural values is rare.  For successful culture change to occur, leadership needs to be aligned.  This is not an easy task, but my pill for the cure is training.  With each culture change engagement I deliver, I interview and train the leadership team together.  We review how it impacts their business, and we talk about what kind of culture they have and want.  We even design the employee engagement survey together for aligned executive level buy-in.  People own what they help to create, so in this manner, the leadership team owns their culture and shifts into alignment.

LEADERSHIP LISTENS

One of the most important messages you can send to people that follow you is that you listen.  That means you ask for opinions and give others an opportunity to influence.  When you incorporate a strong feedback mechanism in your employee engagement survey, you create a pathway for communication that fuels employees’ personal value.  The key though is to listen.  The biggest mistake to corporate culture change is to ask and not act.  Essentially communicating that you are not listening.  I encourage my clients to respond to culture change feedback even if the ideas cannot be adopted—this reinforces that you have listened.

LEADERSHIP COMMITMENT

As a leader of your organization, if you are not ready to commit to the adventure of change, then don’t get off the porch.  I mean that—do not start unless you are committed to finish!  I have seen firsthand companies that have turned culture change into an organizational minefield.  The CEO will tell me it didn’t work, and unfortunately, I have to remind them that they weren’t committed to change and that the entire initiative turned into a hollow promise.  Yes, it will backfire if there is a lack of commitment.

LEADERSHIP IMPLEMENTATION

As a 20-year consultant veteran, I differentiate myself by emphasizing implementation.  When an organization begins culture change, the transformation will only occur through implementation.  I do not stop with a report and recommendations. I help my clients build actionable implementation plans.  I work with the leadership team to identify and select employees who can play a role in helping the execution of those plans.  This spreads the implementation buy-in throughout the company and ensures greater success of implementation.  Leadership’s role is to coach and facilitate implementation.

LEADERSHIP FLEXIBILITY

When a company embarks on transforming their corporate culture, they are embarking on a journey into the unknown.  Culture is fluid, ever-changing, impacted by the daily weather, disruptive, moody and explosive.  During culture change implementation, leaders need to be flexible, understanding that the environment will shift actions and initiative throughout the process.  Leaders need to use their corporate values as the compass, to ensure they are going in the right direction, yet be flexible to allow deviations.

The bottom line is simple. Culture change rises and falls on leadership, but a strong culture can make the difference between winning and losing, so I encourage leaders to embrace the challenge and lead their organizations toward a healthy corporate culture.