This week we hosted a member webinar on an application of artificial intelligence (AI) that’s generating a lot of buzz these days in healthcare—robotic process automation (RPA).
That bit of tech jargon translates to finding repetitive, often error-prone tasks performed by human staff, and implementing “bots” to perform them instead. The benefit? Fewer mistakes, the ability to redeploy talent to less “mindless” work (often with the unexpected benefit of improving employee engagement), and the potential to capture substantial efficiencies. That last feature makes RPA especially attractive in the current environment, in which systems are looking for any assistance in lowering operating expenses.
Typical processes where RPA can be used to augment human staff include revenue cycle tasks like managing prior authorization, simplifying claims processing, and coordinating patient scheduling. Indeed, the health insurance industry is far ahead of the provider community in implementing these machine-driven approaches to productivity improvement.
We heard early “lessons learned” from one member system, Fountain Valley, CA-based MemorialCare, who’s been working with Columbus, OH-based Olive.ai, which bills itself as the only “AI as a service” platform built exclusively for healthcare.
Listening to their story, we were particularly struck by the fact that RPA is far more than “just” another IT project with an established start and finish, but rather an ongoing strategic effort. MemorialCare has been particularly thoughtful about involving senior leaders in finance, operations, and HR in identifying and implementing their RPA strategy, making sure that cross-functional leaders are “joined at the hip” to manage what could prove to be a truly revolutionary technology.
Having identified scores of potential applications for RPA, they’re taking a deliberate approach to rollout for the first dozen or so applications. One critical step: ensuring that processes are “optimized” (via lean or other process improvement approaches) before they are “automated”. MemorialCare views RPA implementation as an opportunity to catalyze the organization for change—“It’s not often that one solution can help push the entire system forward,” in the words of one senior system executive.
We’ll be keeping an eye on this burgeoning space for interesting applications, as health systems identify new ways to deploy “the bots” across the enterprise.
SEOUL, SOUTH KOREA – The COVID-19 testing center at H Plus Yangji Hospital in southern Seoul doesn’t look like much from the outside. Resembling a mobile home, the temporary building sits in a parking lot near a loading ramp, propped up on one end by a wooden plank. Its walls are wrapped in red and white, and billboard-like signage proclaims that the hospital was named one of the 100 best in the Republic of Korea.
But inside is a gleaming bank of four booths with transparent plastic walls; rubber gloves embedded through them in a manner similar to a high-grade biosafety lab. When a person walks into a booth, they consult over an intercom with a doctor who remains outside. The doctor can swab their nose and throat using the gloves without ever coming into contact with the patient. The booths maintain negative air pressure, which sucks in any virus-carrying airborne droplets. After the test, a staff member in protective gear disinfects the booth, scrubbing the walls with a squeegee.
Hundreds of similar “walk-in” testing booths located all over the country have been one of the pillars of South Korea’s highly successful strategy to contain COVID-19, helping officials roll out rapid and extensive diagnostic testing.
The nation of 51 million people has also taken a big data approach to contact tracing, using credit card history and location data from cell phone carriers to retrace the movements of infected people. Surveys show most Korean citizens are OK with sacrificing digital privacy to stop an outbreak. At the same time, authorities have pushed an intense—but mostly voluntary—social distancing campaign, leaving most bars, restaurants, and movie theaters free to operate.
The viral scourge is far from over in South Korea—a recent outbreak connected to several nightclubs was reported with 102 cases as of May 12. Despite this, the country’s response could serve as a model for the rest of the world, but achieving this level of speedy success in the face of a pandemic was not easy.
A major factor shaping South Korea’s response was its ability to apply lessons learned during previous outbreaks, especially the country’s MERS coronavirus outbreak in 2015, which resulted in 186 cases and 38 deaths.
In the immediate aftermath, South Korea’s legislature created the legal foundation for a comprehensive strategy for contact tracing—whereby anyone who has interacted with an infected person is traced and placed in quarantine. Amendments explicitly authorized health authorities to request patients’ transaction history from credit card companies and location data from cell phone carriers—and to release the reconstructed movements in the form of anonymous “travel logs” so people could learn the times and places where they might have been exposed.
A huge push with contact tracing and testing managed to corral an early rise in cases that threatened to spiral out of control—hundreds were reported each day, peaking at 909 cases on February 29 with most associated with a religious sect in the city of Daegu. The strategy also managed to snuff out several subsequent coronavirus clusters at churches, computer gaming cafes, and a call center. By April 15, South Korea safely held a national election, in which 29 million people participated. Voters wore masks and gloves; polling centers took everyone’s temperature and separated anyone with a fever. No cases have been traced to the election.
While people in other countries may consider Korea’s data collection a violation of patient privacy, the measures have broad support from the South Korean public. In a March 4 poll led by the Seoul National University Graduate School of Public Health, 78 percent of 1,000 respondents agreed that human rights protections should be eased to strengthen virus containment efforts. Experience with past outbreaks also meant people were quick to stay at home and wear masks in public even before the government began issuing formal guidelines.
Crucially, South Korea had built up its diagnostic testing capabilities after the 2015 MERS outbreak. Unlike the U.S., which relied on testing kits developed by its Centers for Disease Control and Prevention (CDC) in Atlanta, South Korea enlisted the private sector. At a meeting in late January, officials urged local biotech companies to develop testing kits. Within a month, the nation was running more than 10,000 tests daily.
A recent boom in South Korea’s biotech scene, long predating the pandemic, helped with the ramp-up, says Thomas Shin, the CEO of TCM Biosciences, a company in Pangyo, south of Seoul. “During the last five years, there were many new bioscience companies,” says Shin. TCM was one of the companies that heeded the government’s call to develop kits, and it received approval from the country’s Ministry of Food and Drug Safety in April.
Shin says the decision wasn’t necessarily an easy one from a business perspective—new diseases are difficult to forecast, and if they’re snuffed out quickly, it can be hard to recoup the costs of initial development. But with South Korea’s close connections to the outbreak’s epicenter in China, Shin says TCM could see a similar situation developing rapidly on the home front—and projected a business opportunity in the global market. So far, the company has shipped kits worth roughly $2.6 million.
On April 30, the nation reported just four cases, all of them travelers arriving from abroad, marking the first day with zero local infections in two and a half months. As case numbers have continued to fall, the government has cautiously relaxed its guidelines, while signaling a shift to “everyday quarantine” measures, such as wearing masks and temperature checks at schools.
People’s attitudes have also relaxed, leading some officials to worry about complacency and a second wave of infections. The nightclub outbreak may heighten those fears, but the government has already responded aggressively, tracing and testing thousands of people in a matter of days.
Though testing companies were quick to respond to the demand, rolling out the kits presented difficulties. Through February, demand for tests was still outpacing supply, and there were only enough kits to distribute to a select number of hospitals.
The rotating cast of officials appearing behind President Trump to detail the government’s response to the coronavirus are leading to new criticisms that they reflect a scattered approach from the White House that too often leaves states fending for themselves.
Top Trump administration officials say the appearances by a broad range of administration officials shows the “all of government” undertaken to combat the coronavirus.
But some current and former government officials see a disconnected strategy where it can be unclear who’s in charge of what or whether there is a coordinated long-term plan.
The shifting assignments and addition of officials with unclear responsibilities have contributed to the inefficient distribution of key supplies, those officials argue, which has been exacerbated by Trump’s insistence that the federal government merely play a supporting role for states.
“The approach that’s been taken at the White House with respect to critical inputs – protective gear, testing kits, ventilators, reagents, skilled personnel – there has never been a clear plan,” said Steve Morrison, director of Global Health Policy at the Center for Strategic and International Studies.
“And the alternative has been a very haphazard patchwork approach that has gone from overpromising and underdelivering multiple times and left the states on their own,” added Morrison, a former Clinton administration official.
In recent days, more than a dozen administration officials have appeared behind Trump at the daily briefings.
Attorney General William Barr rolled out new drug interdiction efforts; Defense Secretary Mark Esper spoke about the military pitching in while retaining combat readiness; Treasury Secretary Steven Mnuchin touched on economic relief for businesses; senior adviser Jared Kushner outlined partnerships with the private sector; and top trade adviser Peter Navarro elaborated on the use of the Defense Production Act.
A White House spokesman rejected criticism that the effort has been disconnected. He identified Vice President Pence as the person in charge of coordinating the entire response, and listed dozens of actions taken by the administration that include travel restrictions, disaster declarations for states and funding for businesses and families impacted by the virus.
“As both the President and Vice President have said, this is a locally executed, state managed, federally supported response to a global pandemic,” deputy press secretary Judd Deere said in a statement. “Every level of government needs to deliver solutions and that is what we are doing in partnership. During these difficult times, Americans are receiving comfort, hope and resources from their President, as well as their local officials, because this is an all-of-America effort.”
The White House has shifted responsibilities as it scrambled to get its arms around the magnitude of the pandemic, which Trump downplayed for January and most of February.
The White House created a coronavirus task force at the end of January, putting Health and Human Services (HHS) Secretary Alex Azar in charge.
Trump tapped Pence in late February to oversee the federal response as it became apparent the virus was spreading domestically. Within days, Pence was identifying himself as the leader of the task force, pushing Azar aside and adding officials from across the government to help steer the response effort.
In the weeks since, Azar and Robert Redfield, the head of the Centers for Disease Control and Prevention (CDC), have been largely absent from public briefings, and the CDC has stopped holding its own briefings for reporters even as the public health crisis worsened.
Kushner made his first appearance in the briefing room Thursday, where he elaborated on the work he’s done to facilitate the supply chain at the Federal Emergency Management Agency (FEMA) to try and get ventilators and other equipment out to states in need.
The president’s son-in-law has drawn scrutiny for his increased portfolio in responding to the virus given his lack of medical background. But Kushner rejected the idea that he is operating a “shadow task force.”
“I would just say very simply — look, the president asked the vice president to run the task force. The vice president asked me to assist,” Kushner said. “I’ve been serving really at the direction of the vice president, and he’s asked me to get involved in different projects.”
FEMA was put in charge of organizing the response to states, but only in late March, forcing an agency typically tasked with targeting relief toward a region reeling from wildfires or hurricanes to quickly grasp the logistics of responding to a nationwide pandemic.
But Kushner and some of his allies have set up shop with FEMA to mobilize the private sector. While officials describe the effort as well intentioned, it has further clouded who was responsible for getting desperately needed ventilators and personal protective gear to states facing shortages.
Trump put Navarro in charge of managing the Defense Production Act to push companies to produce essential supplies. And while Navarro spoke at length about that effort from the White House on Thursday, Trump has been the one needling companies like General Motors and 3M on Twitter and invoking the act to ramp up manufacturing of masks and ventilators.
“There have been so many iterations. Who’s in charge has been a constantly evolving item,” said one government official who requested anonymity to speak candidly.
That has been a particular point of frustration for states. Governors in both parties have pushed for the federal government to use a stronger hand in leading the process of procuring equipment so that states aren’t forced to bid against each other. Washington Gov. Jay Inslee (D) last week urged Trump to be more like Tom Brady than a backup quarterback.
But Trump has been adamant that he views the federal government’s role as secondary, going as far as to blame states who failed to foresee the pandemic for their own shortages.
“Remember, we are a backup for them. The complainers should have been stocked up and ready long before this crisis hit,” Trump tweeted Thursday. “Other states are thrilled with the job we have done. Sending many Ventilators today, with thousands being built. 51 large cargo planes coming in with medical supplies. Prefer sending directly to hospitals.”
Kushner adopted that tone on Thursday when he chided state leaders for not having a full accounting of their supplies before suggesting the national stockpile wasn’t intended for states to use.
Trump’s criticism of states; preparedness for the pandemic may be difficult for some local leaders to swallow, given the president was still comparing the death toll from the coronavirus to the flu and automobile accidents as recently as two weeks ago.
The president has adopted a more somber tone in the past week as the White House rolled out grim projections that show hundreds of thousands of Americans could die from the virus even with strong mitigation measures.
But public health experts and former health officials have expressed skepticism that Trump is thinking far enough ahead to address the supply chain and medical problems the virus will pose in the weeks and months to come.
“There is a basic playbook for how to deal with an epidemic,” said Thomas Frieden, who served as CDC director during the Obama administration.
“You have the incident manager, they control the response, they are aligned with political leadership. They tee up the decisions to be made, there are policy decisions to be made,” he said. “I don’t see that happening. That makes me really worried. I don’t see us thinking a week, two weeks, a month ahead.”
Amid the first signs that the novel coronavirus was spreading in the Seattle area, a senior officer at the University of Washington Medical Center sent an urgent note to staffers.
“We are currently exceptionally full and are experiencing some challenges with staffing,” Tom Staiger, UW Medical Center’s medical director, wrote on Feb. 29. He asked hospital staff to “expedite appropriate discharges asap,” reflecting the need for more beds.
That same day, health officials announced King County’s — and the nation’s — first death from the coronavirus. Now as cases of virus-stricken patients suffering from COVID-19 multiply, government and hospital officials are facing the real-life consequences of shortcomings they’ve documented on paper for years.
Medical supplies have run low. Administrators are searching for ways to expand hospital bed capacity. Health care workers are being asked to work extra shifts as their peers self-isolate.
And researchers this week made stark predictions for COVID-19’s impact on King and Snohomish counties, estimating 400 deaths and some 25,000 infections by April 7 without social-distancing measures.
“If you start doing that math in your head, based on every person who was infected infecting two other people, you can see every week you have a doubling in the number of new cases,” state health oficer Dr. Kathy Lofy said.
Hand-washing, staying home from work and other measures were no longer enough to sufficiently slow the virus, Lofy said.
Hospital administrators are rapidly changing protocols as the outbreak stresses the system, while frontline health care workers are beginning to feel the effects of disruptions to daily life. UW Medicine on Thursday told employees it would begin postponing elective procedures, beginning March 16.
“We’ve seen what has happened in other countries where they’ve had really rapid spread. The health care system has become overwhelmed,” Lofy said. “We want to do everything we can to prevent that from happening here.”
King and Snohomish counties offer some 4,900 staffed hospital beds, of which about 940 are used for critical care, according to the researchers — with the Institute for Disease Modeling, the Bill & Melinda Gates Foundation and the Fred Hutchinson Cancer Research Center — who modeled the outbreak’s potential growth. “… This capacity may quickly be filled,” they wrote.
Some of Seattle’s largest hospitals were already near capacity before the outbreak. Harborview Medical Center in downtown Seattle operated at 95 percent of its capacity in 2019, based on its licensed 413 beds and the days of patient care it reported to the Department of Health.
Of 81 hospitals that reported data for all of 2019, excluding psychiatric hospitals, the median hospital operated at 50 percent of its licensed capacity, according to a Seattle Times analysis. Many hospitals staff fewer beds than the maximum their license allows for, so the actual occupancy rate is likely higher.
Katharine Liang, a psychiatry resident physician who works rotations for Seattle-area hospitals, said requests for UW Medicine staffers to discharge patients in a timely fashion are not uncommon as administrators seek extra beds.
“The safety net hospitals, we’re always full,” Liang said, referring to medical centers that care for patients without insurance or means to pay.
Susan Gregg, a spokeswoman for UW Medicine, which operates UW Medical Center, Harborview Medical Center, Valley Medical Center and Northwest Hospital, said that each hospital had a surge-capacity plan being adapted for the outbreak.
“Our daily planning sessions monitor our available beds, supply usage and human resources,” Gregg said in a statement.
While Washington state has a robust system for detecting and monitoring infectious diseases, it has struggled to build the capacity to respond to emergencies like the coronavirus outbreak, according to a review of public data and interviews.
On a per-person basis, the state lags most others in nurses and hospital rooms designed to isolate patients with infectious, airborne diseases, according to a nationwide index of health-security measures.
The U.S. Centers for Disease Control and Prevention launched this initiative — called the National Health Security Preparedness Index — in 2013 to comprehensively evaluate the nation’s readiness for public health emergencies.
The state’s greatest strength, according to the index, is in its ability to detect public-health threats and contain them — scoring 8.5 points out of a possible 10, above the national average.
“It’s a leading state now in terms of how testing capabilities are playing out” for COVID-19, said Glen Mays, a professor at the Colorado School of Public Health who directs the index work.
With the scope of the outbreak becoming clear, the focus is turning to an area that is the state’s weakest on the index: providing access to medical care during emergencies.
When it comes to nurses per 100,000 people, Washington state ranked near the bottom — 46th among states and the District of Columbia — in 2018. It ranked 43rd nationally in the number of hospital isolation rooms — commonly referred to as “negative pressure” rooms, which draw in air to prevent an airborne disease from spreading — per 100,000 people and in neighboring states.
“It’s an area of concern,” Mays said of the state’s health care delivery capacity.
This vulnerability is well known to state policymakers. John Wiesman, Washington state’s health secretary, serves on the national advisory committee of the index and has championed its use as a tool for improvement, Mays said. He recalled Washington seeking lessons from other states that have been more successful and building a “medical reserve corps,” another area where the state has lagged.
The state scored 2.5 points for managing volunteers in an emergency in 2013. In 2018, it had improved to just 2.6.
Less than a week after diagnosed cases of COVID-19 grew rapidly in the Seattle area, administrators at several area hospitals had to hunt for additional medical supplies and called for rationing. They also established fast-shifting isolation policies for sick or potentially exposed staffers.
“Hospitals are being very vigilant. If you have the slightest signs of illness, don’t come to work,” said Alexander Adami, a UW Medicine resident, on Monday.
On March 6, UW Medicine directed employees who tested positive for COVID-19, the illness caused by coronavirus, to remain isolated at home for a minimum of seven days after symptoms developed, according to internal UW documents. Hospital workers told workers with symptoms who hadn’t been tested to remain isolated until they were three days without symptoms. Those who tested negative, or had influenza, could return after 24 hours.
Quarantines for sick workers means others must backfill.
“Programs are having to pull residents in other blocks in other hospitals and other clinics to fill gaps,” Adami said. “There simply aren’t enough people.”
School closures further complicate staffing.
Liang, the resident physician who works rotations for several area hospitals, said she had been pulled into an expanded backup pool on short notice to cover shifts.
Liang is the mother of a 1-year-old. On Wednesday, her family’s day care closed, as it typically does when Seattle schools close. Gov. Jay Inslee has ordered all schools in King, Pierce and Snohomish counties to close until late April.
“I’m not really sure what we’re going to do going forward,” Liang said. “My demands at home are increasing, and now, at the same time because of the same problem, my demands at the hospital are increasing as well.”
Adami, a second-year internal medicine resident, said residents were used to taxing hours, and demands had not been much more excessive than usual, but he remained concerned for the future.
“I would be worried about: We eventually get to the point where there are so many health care workers who become sick we have to accept things like saying, All right: Do you have a fever? No? Take a mask and keep working, because there are people to care for,” he said.
One sign of demand: Some hospitals are asking workers at greater risk of COVID-19 to continue in their roles, even after public health officials encouraged people in these at-risk groups among the broader public to stay home.
Staff over the age of 60 “should continue to work per their regular schedules,” a UW Medicine policy statement said. People who are pregnant, immunocompromised or over 60 and with underlying health conditions were “invited to talk to their team leader or manager about any concerns,” noting that hospital workers’ personal protective equipment would minimize exposure risks.
A registered nurse at Swedish First Hill who is over 60 and who has a history of cardiac issues said she told a manager last week of her concern about working with potential or confirmed COVID-19 patients.
She said a manager adjusted her schedule for an initial shift, but couldn’t guarantee that she would be excused from caring for these patients.
Hours later, the nurse said she suffered a cardiac event and was later admitted to another hospital with a stress-induced cardiomyopathy. The nurse did not want to be named for fear of reprisal by Swedish.
“I’m afraid for my life to work in there,” the nurse said. “I don’t think we’re being adequately protected.”
The nurse is now on medical leave.
In a statement, Swedish said it could not comment on an individual caregiver’s specific circumstances, but that employees at a higher risk are able to request reassignment and if it can not be accommodated, they can take a leave of absence.
“Providing a safe environment for our caregivers and patients is always our top priority, but especially during the current COVID-19 outbreak,” according to the statement.
Anne Piazza, senior director of strategic initiatives for the the Washington State Nurses Association said she had heard from a “flood” of nurses with similar concerns.
Additionally, “we are seeing increased demand for nurse staffing and that we do have reports of nurses being required to work mandatory overtime.”
China might provide an example of what could happen to the U.S. hospital system if the pace of transmission escalates, according to unpublished work from researchers with Johns Hopkins University, Harvard University and other institutions.
In Wuhan, the people seeking care for COVID-19 symptoms quickly outpaced local hospitals’ ability to keep up, the researchers found. Even after the city went on lockdown in late January, the number of people needing care continued to rise.
Between Jan. 10 and the end of February, physicians served an average of 637 intensive-care unit patients and more than 3,450 patients in serious condition each day.
But by the epidemic’s peak, nearly 20,000 people were hospitalized on any given day. In response, two new hospitals were built to exclusively serve COVID-19 patients; in all, officials dedicated more than 26,000 beds at 48 hospitals for people with the virus. An additional 13,000 beds at quarantine centers were set aside for patients with mild symptoms.
The researchers analyzed what might happen if a Wuhan-like outbreak happened here.
“Our critical-care resources would be overwhelmed,” said Caitlin Rivers, an epidemiologist at Johns Hopkins Center for Health Security who helped lead the study.
“The lesson here, though, is we have an opportunity to learn from their experience and to intervene before it gets to that point.”
Hospital administrators are stretching to make the most of their staff, avoid burnout and find space for patients flooding into hospitals.
As of Thursday afternoon, there hadn’t been an unusual uptick in hospitals asking emergency responders to divert patients elsewhere, according to Beth Zborowski, a spokeswoman for the Washington State Hospital Association.
Zborowski said administrators are getting creative to deal with shortages of supplies, staff and space, such as potentially hiring temporary workers.
The state is trying to reduce regulations to help scale up staffing.
The state health department’s Nursing Commission said last Friday it would give “top priority” to reviewing applications for temporary practice permits for nurses to help during the COVID-19 crisis.
After the governor’s emergency proclamation, the Department of Health also said it was allowing volunteer out-of-state health practitioners who are licensed elsewhere to practice without a Washington license.
All the doctors with UW Medicine have been trained, or are being trained on how to care for patients via telemedicine. The number of people using the service has increased tenfold since public health officials urged patients to not visit emergency rooms or visit clinics for minor issues, said Dr. John Scott, director of digital health at UW Medicine.
Some hospitals are creating wards for COVID-19 patients. EvergreenHealth, in Kirkland, converted its 8th floor for the use of these patients.
King County officials last week purchased a motel, which could allow patients to recover outside a clinical setting and free up beds.
“These are places for people to recover and convalesce who are not at grave medical risk, and therefore do not need to be in a hospital,” said Alex Fryer, spokesperson for King County Executive Dow Constantine.
Supply problems are ongoing, even after the federal government fulfilled a first shipment that included tens of thousands of N95 respirator masks, surgical masks and disposable gowns from a federal stockpile.
Piazza said the nursing association continues to receive reports that members at area hospitals are being asked to reuse or share personal protective equipment, wear only one mask a shift or conserve masks for use exclusively with COVID-19 confirmed patients.
“We need to address the safety of frontline caregivers,” Piazza said.
State officials placed a second order for supplies last weekend.
Casey Katims, director of federal affairs for Inslee, said three trucks of medical supplies from the federal stockpile arrived Thursday morning, including 129,380 N-95 respirators; 308,206 surgical masks; 58,688 face shields; 47,850 surgical gowns; and 170,376 glove pairs.
If the measures taken now aren’t enough, state officials have contingency plans they’ve been working on “for a while now,” said Lofy, the state health officer.
“The next step is to start thinking about alternate care systems or alternate care facilities. These are facilities that could potentially be used outside the clinic or the health care system walls.”
Just days after a landslide election victory for the Conservative Party, Britain’s Prime Minister Boris Johnson just made a massive and bold announcement: He’ll get laws passed to guarantee plenty of cash for the state-run healthcare system.
The official announcement will likely come Thursday when the Queen, who is the official head of state, will reopen Parliament and outline the coming legislative agenda. Tucked within her speech will be a call for £34 billion ($45 billion) in annual taxpayer money for the National Health Service (NHS).
While other countries embrace their private health systems, the British love their publicly funded NHS, an employer of 1.5 million people, which services the population of 66 million. In general, the people are concerned about the quality of care provided by the NHS and look to the government for solutions, says Mary Macleod, a senior client partner for Korn Ferry’s Board and CEO Services practice and a former Conservative Party MP. “The NHS does become a bit of a political football,” she says. “And to a large extent, everyone in the UK feels that they are stakeholders in it.”
The pledge to secure NHS money will likely bolster Johnson’s political leadership versus the opposition Labour Party. And the move also neutralizes critics that have barraged the Conservative Party with allegations that it would sell parts of the NHS to foreign investors. In other words, pushing a new funding law through Parliament could partially neutralize political opponents.
But the politics of the matter is only part of the announcement’s strength, Macleod says. Promising the NHS years of generous financing will allow the organization to develop a strategy for how it will care for the country’s population for years into the future. In short, Macleod says, it sends a message to the NHS leadership: You can get busy now. “If you now know you are getting the funding, you can plan ahead,” she says.
Johnson’s lack of specifics about how the NHS should spend the money could be a strength. In a sense, he has empowered the organization’s leadership to make the decisions that they deem suitable. “What the prime minister is not doing is defining the solutions,” Macleod says. But she also notes that he will want results in the form of improved service from the organization. “He will hold them accountable,” she says.
While there are benefits when leaders take bold steps, there are also risks, says Christina Harrington, Korn Ferry’s head of advisory services in Stockholm, Sweden. She says it is good for leaders to act quickly and with conviction, as the public expects that of its leaders. But that alone isn’t enough. She says the problem comes when there’s too much ego involved. “You need an egoless conviction to drive a decision making the greater good,” she says.
Ideally, the driver of proposed changes needs to have a long-term vision of something better than the current situation. If that vision is lacking, then the leader may lack the required stamina to get the job done. Indeed, if headline-grabbing is all that the boss wants, then he or she might wind up doing a U-turn. “If there isn’t a long-term vision, then another fast decision may come in the other direction,” Harrington says. “And that’s what we see a lot of.”
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.
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.
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.
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.
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.
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.