Category Archives: Leadership Vision

‘An opportunity to enhance our model’: Geisinger CEO Dr. Jaewon Ryu on Risant Health

Posted on by • Posted in Health System, Kaiser Permanente, Leadership, Leadership Values, Leadership Vision, Success, Value-Based Healthcare • Leave a comment
https://www.beckershospitalreview.com/hospital-management-administration/an-opportunity-to-enhance-our-model-geisinger-ceo-dr-jaewon-ryu-on-risant-health.html?utm_medium=email&utm_content=newsletter

As Danville, Pa.-based Geisinger Health awaits the closure of a deal that will make it the first health system to join Kaiser Permanente’s new nonprofit organization, Risant Health, President and CEO Jaewon Ryu, MD, said the system must remain focused on driving its strategy forward with “the same rigor to address the challenging headwinds our industry and our communities continue to face.”

Oakland-based Kaiser said in a May 15 financial report that it expects its deal to acquire Geisinger to close in 2024, pending regulatory approval. 

The newly created Risant Health, which will be headquartered in Washington, D.C., aims to “expand and accelerate the adoption of value-based care in “diverse, multipayer, multiprovider, community-based health system environments.” 

Dr. Ryu will transition to the role of Risant Health CEO as the deal approaches closure. He recently connected with Becker’s about why Geisinger joined Risant and how the new organization will measure success. 

Editor’s note: Responses have been lightly edited for brevity and clarity.

Q: Geisinger is the first health system to join Risant Health. How did Geisinger get involved and why did it decide to be the first to join? 

Dr. Jaewon Ryu: This came on the heels of strategic planning work that we had started over four years ago, when we were looking at ways that we might accelerate our goal — to make better health easier for the communities we serve. This path with Kaiser Permanente through Risant Health presented a great way to join with a fellow nonprofit, mission-aligned organization that is like minded and focused on improving health outcomes, affordability and access. Kaiser Permanente has been a best-in-class organization of this approach for quite some time, often viewed as the gold standard in value-based care, with operations across eight states and the District of Columbia, 39 hospitals, and top-notch physician groups. And Geisinger has been similarly committed to advancing innovation and value-based care models, partnering with other payers and other physician groups and health systems to do so.

Being part of Risant Health will allow Geisinger to access tools, capabilities and investments required to accelerate our charitable mission and strategy and continue to expand our impact to our communities.

Q: What is the most exciting aspect of joining Risant? 

JR: In addition to accelerating our ability to deliver on our mission and carrying forth the vision of our founder Abigail Geisinger, we’re excited to have a broader impact in healthcare. 

We’ve always believed Geisinger’s model in Pennsylvania — with a focus on value-based care leveraging multipayer and multiprovider capabilities — could be scaled to other places and benefit more people and communities. This “pluralistic” approach to value-based care, across communities less dense than more urban areas, is a capability that complements Kaiser Permanente’s other capabilities. Through Risant Health, we see an opportunity to further enhance our model and add to the suite of Risant Health capabilities so that more communities can benefit. As the first health system to become part of Risant Health, Geisinger will participate in building out the organization’s strategy and operational model. Working with Kaiser Permanente and connecting with like-minded health systems through Risant Health will allow us to be a part of the solution for the industry’s challenges in a rapidly changing healthcare environment.

Q: The deal is now awaiting regulatory approval. As that process unfolds, what is Geisinger doing to prepare for the transition? 

JR: Geisinger remains focused on delivering on our mission of making better health easier for the communities that we serve. In other words, our good work continues. Should the acquisition be approved, Risant Health’s model will be designed to support local ownership over operations and regional strategy while also preserving strong community engagement. This local ownership means that while we await a regulatory decision, but even beyond, we must remain focused on driving our strategy forward with the same rigor to address the challenging headwinds our industry and our communities continue to face. 

Q: You will be transitioning into the role of Risant CEO. Will that be in addition to your role at Geisinger, or will the system be getting a new CEO? If the latter, is there a succession plan in place? 

JR: I’m focused on my role as the president and CEO of Geisinger, ensuring our organization is delivering on our stated mission. Should we receive the necessary state and federal regulatory approvals, I will transition from my current role to serve as CEO of Risant Health as the transaction nears completion. While no definitive plans have been made, there will be a formal process to select a new CEO at the appropriate time, just as we have with prior leadership transitions.

Q: How will joining Risant benefit or enhance Geisinger’s health plan? 

JR: Geisinger will deliver the same quality care programs, benefits coverage and prevention support. We will enhance our capabilities over time in areas such as digital tools that make things easier for our members, or using augmented data and analytic tools that help target care programs at the right time so that we can address clinical needs before disease worsens. So while Geisinger’s approach to care will remain one anchored around outcomes and caring, how we go about this work will be bolstered with these and other capabilities.

Q: How will the success of Risant Health be measured?  

JR: Through Risant Health, Kaiser Permanente has shared its desire to seek out like-minded entities that are committed to quality care and improving access and affordability by promoting value-based care models through a “pluralistic” chassis, as mentioned earlier. In a very simple sense, success will be evaluated through better measures of health across more populations. For example, success could be lower blood sugars in diabetic patients, fewer ER or hospital visits for those with congestive heart failure or earlier detection of cancers through more effective preventive screening rates.

Hospital Boards are Not Prepared for the Future

Posted on by • Posted in Board, Board Competency, Health Policy, Health System, Healthcare Reform, Hospital, Hospital Industry, Leadership, Leadership Vision • Leave a comment
Hospital Boards are Not Prepared for the Future

While Congressional leaders play chicken with the debt ceiling this week, antipathy toward hospitals is mounting.

To be fair, hospitals are not alone: drug companies and PBMs share the distinction while health insurers, device companies, medical groups and long-term care providers enjoy less attention…for now.

Hospitals are soft targets. They’re also vulnerable.

They operate in a sector that’s labor intense, capital intense and highly regulated by federal, state and local governments. They’re high profile: many advertise regionally/nationally, all claim unparalleled clinical excellence and unfair treatment by health insurers.

Hospitals operate locally, so storylines like these get attention

  • In Minnesota, Mississippi and Pennsylvania, hospitals are in court alleging under-payments and/or adverse coverage policies by dominant insurers in their markets.
  • In NC, the state treasurer and others are challenging a unanimous State Senate vote last week granting the UNC Health System a waiver from antitrust concerns as it builds out its system.
  • In CA, nurses are striking for higher wages, improved work conditions in 5 HCA hospitals.
  • And in Nashville today, private equity-owned Envision will declare bankruptcy throwing its emergency room staffing contracts with hospitals into limbo.

The future for hospitals is unclear

Inpatient demand is shrinking/shifting. Outpatient, virtual, and in-home services demand is growing. Discontent among workers and employed physicians is palpable. Labor and supply chain costs wipe-out operating margins and price sensitivity among consumers and employers is soaring. Most are trying to survive any way they can. Some won’t.

Per Syntellis’ latest analysis, the tide may be turning:

  • Total hospital expenses rose for an 11th consecutive month, but growth in labor expenses slowed for the first three months of 2023; Total Expense rose 4.7% YOY for the month while Total Non-Labor Expense rose 5.5% YOY due to higher costs for drugs, supplies, and purchased services. Total Labor Expense was up 1.8% YOY — a slight uptick after YOY labor expense increases eased to less than 1% in January and February.
  • Hospital margins remained extremely narrow but inched back into the black for the first time in 15 months as revenue growth outpaced expense increases. The median, actual year-to-date Operating Margin was 0.4% for March, up from -1.1% in February.
  • Surgery expenses increased despite lower volumes, while levels of patient care remained relatively steady.

Syntellis March Performance Report performance_trends_april_hc.1105.05.23.pdf (syntellis.com)

But no one knows for sure how long a full recovery will take, how debt ceiling negotiations will impact payments by Medicaid or Medicare or how court and antitrust actions by the DOJ will impact hospitals in the future.

What we know with a fair amount of confidence is this:

  • Bigger organizations in each sector—hospitals, drug & device manufacturers, medical groups, and health insurers—will have advantages others don’t.
  • Private equity will play a bigger role in the delivery and financing of care through strategic investments that drive low cost, high value alternatives for consumers and employers.
  • Regulators will enact selective price controls in targeted domains of the health system.
  • Large self-insured employers will be the primary catalyst for transformative changes.
  • Inpatient demand will shrink and tertiary services will be centralized in regulated hubs.
  • Structural remedies—convergence of social services and health systems, integration of financing and delivering care and direct alignment of insurer and provider incentives—will be key features of systemness choices to consumers and purchasing groups.

Most hospital boards of directors, especially not-for-profit organizations, are not prepared to calibrate the pace of these changes nor active in developing scenario possibilities for their future. That’s the place to start.

Post-pandemic recovery is not a technology-empowered 2.0 version of hospital operations: it is a fundamentally different business model based on new assumptions and bold leadership.

What Hospital Systems Can Take Away From Ford’s Strategic Overhaul

Posted on by • Posted in Board, Capital, Caution, Clinical Treatment Process, Competition, Cost Management, Cost Reduction, Cost Structure, Death by a Thousand Cuts, Downsized, Downsizing, Duty of Care, Financial Distress, Financial Performance, Financial Viability, Financially Distressed, Health System, Hospital, Hospital Industry, Hospital Portfolio, Labor Spend Management, Leadership, Leadership Crisis, Leadership Vision, Macro Economic Developments, Market Outlook, Market Trends, Market Uncertainty, Mission, Mission Critical, Operating Income, Operating Margin, Operating Metrics, Outpatient Care, Private Equity, Reduction in Force, Reluctance, Right Size, Strategy • Leave a comment
What Hospital Systems Can Take Away From Ford’s Strategic Overhaul

On today’s episode of Gist Healthcare Daily, Kaufman Hall co-founder and Chair Ken Kaufman joins the podcast to discuss his recent blog that examines Ford Motor Company’s decision to stop producing internal-combustion sedans, and talk about whether there are parallels for health system leaders to ponder about whether their traditional strategies are beginning to age out.

Has U.S. Healthcare Reached its Tipping Point?

Posted on by • Posted in Board, Board Competency, Board Structure, Board Weakness, Health Policy, Health System, High Drug Prices, Hospital, Hospital Industry, Leadership, Leadership Legacy, Leadership Vision, Medicaid, Medicaid Expansion, Medicare, Medicare Advantage, Private Equity, Strategy, Tipping Point • Leave a comment
Has U.S. Healthcare Reached its Tipping Point?

At a meeting with hospital system CEOs last Wednesday, one asked: “has healthcare reached the tipping point?”  I replied ‘not yet but it’s getting close.’

I iterated factors that make these times uniquely difficult in every sector:

  • An uncertain economy that’s unlikely to fully recover until next year.
  • The growth of Medicaid and Medicare coverage that shifts their financial shortfall to employers and taxpayers who are fed up and pushing back.
  • A vicious political environment that rewards partisan brinksmanship and focus-group tested soundbites to manipulate voters on complex issues in healthcare.
  • The growing domination of Big Business in each sector that have used acquisitions + corporatization to their advantage.
  • The widening role of private equity in funding non-conventional solutions that disrupt the status quo (and the uncertain future for many of these).
  • The federal courts system that’s increasingly the arbiter over access, fairness, quality and freedoms in healthcare.
  • The lingering impact of the pandemic.
  • And growing public disgust and distrust as the system’s altruism and good will is undermined by pervasive concern for profit.

Unprecedented! But events like those last week prompt hitting the pause button: not everyone pays attention to healthcare like many of us. The slaughter of 6 innocents in Nashville hit close to home: it’s about guns, mental health and life and death. The appeal of tech-giants to press the pause button on Generative AI for at least 6 months was sobering. The ravage of tornados that left thousands insecure without food, housing or hope seemed unfair. Mounting tensions with Russia and complex negotiations with China that reminded us that the U.S. competes in a global economy.  And President Trump’s court appearance tomorrow will stoke doubt about our justice system at a time when it’s role in healthcare and society is expanding.

I am a healthcare guy. I am prone to see the world through the lens of the U.S. health industry and keen to understand its trends, tipping points and future. There’s plenty to watch: this week will be no exception. The punch list is familiar:

  • Medicaid coverage: Many will be watching the fallout of from state redetermination requirements for Medicaid coverage starting as soon as this week with disenrollment in Arizona, Arkansas, Idaho, New Hampshire and South Dakota.
  • Medicare Advantage: Health insurers will be modifying their Medicare Advantage strategies to adapt to CMS’ risk adjustment and Value-based Insurance Design modifications announced last week.
  • Prescription drug prices: PBMs and drug companies will face growing skepticism as Senate and House committees continue investigations about price gauging and collusion. Hospitals will be making adjustments to higher operating losses as states cut their Medicaid rolls.
  • Technology: The 7500 VIVA attendees will be doing follow-up to secure entrées for their technologies and solutions among prospective buyers.
  • Physicians: And physicians will intensify campaigns against insurers and hospitals now seen as adversaries while lobbying Congress for more money and greater income opportunities i.e., physician-owned hospitals.
  • Hospitals: On the offense against site-neutral payments, physician owned hospitals, drug prices and inadequate reimbursement from health insurers.

All will soldier on but the food fights in healthcare and broader headwinds facing the industry suggest a tipping point might be near.

I am not a fatalist: the future for healthcare is brighter than its past, but not for everyone. Strategies predicated on protecting the past are obsolete. Strategies that consider consumers incapable of active participation in the delivery and financing of their care are archaic. Strategies that depend on unbridled consolidation and opaque pricing are naïve. And strategies that limit market access for non-traditional players are artifacts of the gilded age gone by when each sector protected its own against infidels outside.

These times call for two changes in every board room and C Suite in of every organization in healthcare:

Broader vision: Understanding healthcare’s future in the broader context of American society, democracy and capitalism: Beltway insiders and academics prognosticate based on lag indicators that are decreasingly valid for forecasting. Media pundits on healthcare fail to report context and underpinnings. Management teams are operating under short-term financial incentives lacking longer-term applicability. Consultants are telling C suites what they want to hear. And boards are being mis-educated about trends of consequence that matter. Understanding the future and building response scenarios is out of sight and out of mind to insiders more comfortable being victims than creators of the new normal.

Board leadership: Equipping boards to make tough decisions: Governance in healthcare is not taken seriously unless an organization’s investors are unhappy, margins are shrinking or disgruntled employees create a stir. Few have a systematic process for looking at healthcare 10 years out and beyond their business. Every Board must refresh its thinking about what tomorrow in healthcare will be and adjust. It’s easier for board to approve plans for the near-term than invest for the long-term: that’s why outsiders today will be tomorrow’s primary incumbents.

So, is U.S healthcare near its tipping point? I don’t know for sure, but it seems clear  the tipping point is nearer than at any point in its history. It’s time for fresh thinking and new players.

‘We’re going to come out of this winning:’ Northwell CEO on labor challenges and the system’s biggest growth area

Posted on by • Posted in CEO, Health Policy, Health System, Hospital, Hospital Industry, Labor Shortages, Labor Spend Management, Leadership, Leadership Vision, Medicaid, Medicare, Outpatient Care, Outpatient Migration, Strategic Leadership, Strategy • Leave a comment
https://www.beckershospitalreview.com/hospital-management-administration/were-going-to-come-out-of-this-winning-ceo-michael-dowling-on-northwells-labor-challenges-growth-areas.html?utm_medium=email&utm_content=newsletter

New Hyde Park, N.Y.-based Northwell Health began 2023 with a low, but positive operating margin, but labor costs are expected to increase again this year on the back of recent union activity in the state. 

To offset such increases that were not anticipated in the 2023 budget, Northwell is evaluating opportunities to reduce expenses and increase revenue across the health system, which includes 21 hospitals and about 83,000 employees.

Michael Dowling, CEO of Northwell, spoke to Becker’s Hospital Review about the health system’s biggest challenge this year, how it approaches cost-cutting and why outpatient care is its biggest growth area.

Editor’s note: Responses are lightly edited for length and clarity.

Question: Many health systems saw margins dip last year amid rising inflation, increased labor costs and declining patient volumes. How have you led Northwell through the challenges of last year? 

Michael Dowling: We ended 2022 with a low, but positive margin. We’ve been coming back from COVID quite successfully, and we’re back pretty much in all areas to where we were prior to the pandemic. Volumes have returned and we’re very busy. We came into 2023 with a positive budget and a positive margin. We anticipate that you’re always going to have challenges and disturbances, but it’s important to stay focused and deal with it. We have a very detailed strategic plan, which outlines our various goals, and we stick to it. 

Q: What is your top priority today?

MD: The biggest issue for us today is labor costs. We have lots of union activity in New York at the moment. There were various nurse strikes in New York City at the beginning of the year. None of our hospitals were involved in those deliberations, but some of those hospitals agreed to contracts that have increases that were not anticipated in anybody’s 2023 budget. That’s going to have an effect on us. We have negotiations ongoing with the nurses’ union, and have 10 unions overall. About 90 percent of Northwell’s facilities have unions, so the bottom line is we are going to have expenses as a result of these contracts that were not anticipated in the budget. I don’t know the final number on these contracts yet, but it’s definitely going to be more than what we anticipated. 

The unions in New York get a lot of government support and have become very empowered and quite aggressive. The bottom line is there’s more expense than we anticipated in our budget, so we need to figure out how to address that. We’re looking at everything across our health system to find expense reductions or revenue enhancements to be able to make up for the increased labor costs and be optimistic about ending the year with a positive margin. But we’re in a good place and are not like some other health systems that are struggling financially. 

Q: Where are the biggest opportunities to reduce expenses or increase revenue to offset the increased labor costs?

MD: It’s a combination of a lot of things. We have a detailed capital plan that we may slow down. We hire about 300 people a week, so maybe we’ll target that hiring into specific areas and not be as broad based as we thought we could be. We will examine if we have specific programs or initiatives we can curtail without doing any damage to our core mission. It will end up being a portfolio of items; it won’t be one big thing. On the revenue side, we’re working very hard to increase our neurosurgery, cardiac, cancer and orthopedic businesses. Over the next couple of months, all of those things will be taken into consideration. The bottom line is we are going to come out of this winning.

Q: Looking three or four years down the line, where do you see the biggest growth opportunities for Northwell?

MD: Our biggest growth is in outpatient care. A lot of surgeries are moving outpatient, so we have to get ahead of that. Some think we are only a hospital system, but only about 46 percent of our business is from our hospital sector today. Home care is going to grow phenomenally, especially given the new technology that’s available. Digital health will also dramatically expand. 

We’re also looking at expanding into new geographic areas and markets. It’s about positioning your offerings in places close to where people live, so you reduce the inconvenience of people having to travel long distances for care when it should be available to them closer to home. When you do that, you increase market share. We’re constantly increasing our market share by being very aggressive about going to where the customer is and providing the highest quality care that we can. Part of that is also being able to recruit top-line, quality physicians. When you do that, you attract new business because you have competencies that you didn’t have before. It’s a combination of all of these things, but there’s certainly no limit to the opportunities in front of us. We’re not in a world of challenges; we’re in a world of opportunity. The question is are we aggressive enough and do we have enough tolerance for some risk? We need to be as aggressive as we possibly can to take advantage of some of those opportunities. 

Q: What is the biggest challenge on the horizon for Northwell?

MD: The biggest challenge is the huge growth in government payer business — Medicare and Medicaid. The problem with Medicaid — especially in a union environment — is it doesn’t cover your costs. The government is a big part of a potential future issue there. By increasing Medicaid, the more of your business becomes Medicaid and the worse you end up doing, unless you can increase your commercial payer business to continue to cross-subsidize. We also have a lot of union negotiations over the next couple of months, which will put a strain on our 2023 budget, but we will resolve it.

Q: How do you see hospitals and health systems evolving as CMS, commercial payers and patients continue to push more services to outpatient settings, where they can arguably be performed at a higher quality and lower cost?

MD: I think it’s going to continue to grow. For example, Northwell has 23 hospitals — 21 of which it owns — yet it has 890 outpatient facilities. We’ve been ahead of this curve a long time. Our primary expansion is in ambulatory care, not in-hospital care. Like I said, only 46 percent of Northwell’s total business is its hospital business. If you’re relying on the hospital to be the core provider of the future, you’re going to lose. You’ve got to take a little bit of a hit by going out and expanding your ambulatory presence. But the more you expand ambulatory and grow in the right locations, the more you increase market share, which brings more of the necessary inpatient care back to your hospitals. Our hospitals are growing and getting busier in addition to our outpatient centers because we are growing market share. If we enter a new community and see 100 people, five of them will need to be hospitalized. That’s a new market. Ambulatory cannot be disassociated from its connection to the inpatient market. 

Q: Many financial experts are projecting a recession this year. How might that affect hospitals and health systems, and how can they best prepare? 

MD: Even if we do have a recession, it doesn’t mean that people don’t get sick. In fact, people’s problems increase. Our business does not slow down if we have a recession; our business will probably increase. On the revenue side, it won’t necessarily affect our government reimbursement, which we don’t do well on anyway. The things you worry about during a recession is if employers give up the coverage of their staff. Then those employees with no insurance may go on a state Medicaid program, and that might affect hospitals. 

In the healthcare sector, even in a recession, the need for hospital services actually increases. No recession could be as bad as what we experienced during COVID, yet we managed it. We had a problem that we didn’t even understand, and we worked through it. I think healthcare deserves an extraordinary credit for what was done during COVID. If there is a recession, we will deal with it. It’s just one of those things that happens, and we will respond to it in as comprehensive a way as we can. I can’t control it, but I can control our response. Leadership to me is about having a positive disposition; basically saying that whatever happens to you, you’re going to win. 

The shrinking book of “profitable” health system business 

Posted on by • Posted in Board, Business Case, Business Model, Business Transformations, Health System, Hospital, Hospital Industry, Leadership, Leadership Vision, Operating Margin, Operating Metrics, Operating Model, Operating Performance, Service Line Profitability, Service Line Rationalization, Strategic Change, Strategic Imperative, Strategic Issue, Strategic Leadership, Strategy • Leave a comment

https://mailchi.mp/89b749fe24b8/the-weekly-gist-february-17-2023?e=d1e747d2d8

This week, a health system CFO referenced the thoughts we shared last week about many hospitals rethinking physician employment models, and looking to pull back on employing more doctors, given current financial challenges. He said, “We’ve employed more and more doctors in the hope that we’re building a group that will allow us to pivot to total cost management.

But we can’t get risk, so we’ve justified the ‘losses’ on physician practices by thinking we’re making it up with the downstream volume the medical group delivers.

But the reality now is that we’re losing money on most of that downstream business. If we just keep adding doctors that refer us services that don’t make a margin, it’s not helping us.” 


While his comment has myriad implications for the physician organization, it also highlights a broader challenge we’ve heard from many health system executives: a smaller and smaller portion of the business is responsible for the overall system margin.

While the services that comprise the still-profitable book vary by organization (NICU, cardiac procedures, some cancer management, complex orthopedics, and neurosurgery are often noted), executives have been surprised how quickly some highly profitable service lines have shifted. One executive shared, “Orthopedics used to be our most profitable service line. But with rising labor costs and most of the commercial surgeries shifting outpatient, we’re losing money on at least half of it.”

These conversations highlight the flaws in the current cross-subsidy based business model. Rising costs, new competitors, and a challenging contracting environment have accelerated the need to find new and sustainable models to deliver care, plan for growth and footprint—and find a way to get paid that aligns with that future vision.

Where CEOs need to focus in 2023—and beyond

Posted on by • Posted in Affordability, Aging Population, Behavioral Health Infrastructure, Business Model, Business Transformations, CEO, Challenge, Change Management, Change Mindset, Chaos, Competition, Costly Specialty Therapeutics, Existential Opportunity, First Mover Advantage, Focus, Growing Senior Population, High Cost Therapies, Leadership Vision, Opportunity, Outcomes, Outcomes Appropriate, Restructure, Strategic Attention, Strategic Change, Strategic Leadership, Strategy, Unmanaged Behavioral Needs • Leave a comment
https://www.advisory.com/daily-briefing/2023/02/02/radio-advisory-146?utm_source=member_db&utm_medium=email&utm_campaign=2023feb02&utm_content=member_headline_finalb_infogram_x_x_x&elq_cid=4838956&

Radio Advisory’s Rachel Woods sat down with Advisory Board‘s Aaron Mauck and Natalie Trebes to talk about where leaders need to focus their attention on longer-term industry challenges—like growing competition, behavioral health infrastructure, and finding success in value-based care.

Read a lightly edited excerpt from the interview below and download the episode for the full conversation.https://player.fireside.fm/v2/HO0EUJAe+VhuSvHlL?theme=dark

Rachel Woods: So I’ve been thinking about the last conversation that we had about what executives need to know to be prepared to be successful in 2023, and I feel like my big takeaway is that the present feels aggressively urgent. The business climate today is extraordinarily tough, there are all these disruptive forces that are changing the competitive landscape, right? That’s where we focused most of our last conversation.

But we also agreed that those were still kind of near-term problems. My question is why, if things feel like they are in such a crisis, do we need to also focus our attention on longer term challenges?

Aaron Mauck: It’s pretty clear that the business environment really isn’t sustainable as it currently stands, and there’s a tendency, of course, for all businesses to focus on the urgent and important items at the expense of the non-urgent and important items. And we have a lot of non-urgent important things that are coming on the horizon that we have to address.

Obviously, you think about the aging population. We have the baby boom reaching an age where they’re going to have multiple care needs that have to be addressed that constitute pretty significant challenges. That aging population is a central concern for all of us.

Costly specialty therapeutics that are coming down the pipeline that are going to yield great results for certain patient segments, but are going to be very expensive. Unmanaged behavioral needs, disagreements around appropriate spending. So we have lots of challenges, myriad of challenges we’re going to have to address simultaneously.

Natalie Trebes: Yeah, that’s right. And I would add that all of those things are at threshold moments where they are pivoting into becoming our real big problems that are very soon going to be the near term problems. And the environment that we talked about last time, it’s competitive chaos that’s happening right now, is actually the perfect time to be making some changes because all the challenges we’re going to talk about require really significant restructuring of how we do business. That’s hard to do when things are stable.

Woods: Yes. But I still think you’re going to get some people who disagree. And let me tell you why. I think there’s two reasons why people are going to disagree. The first reason is, again, they are dealing with not just one massive fire in front of them, but what feels like countless massive fires in front of them that’s just demanding all of their strategic attention. That was the first thing you said every executive needs to know going into this year, and maybe not know, but accept, if I’m thinking about the stages of grief.

But the second reason why I think people are going to push back is the laundry list of things that Aaron just spoke of are areas where, I’m not saying the healthcare industry shouldn’t be focused on them, but we haven’t actually made meaningful progress so far.

Is 2023 actually the year where we should start chipping away at some of those huge industry challenges? That’s where I think you’re going to get disagreement. What do you say to that?

Trebes: I think that’s fair. I think it’s partly that we have to start transforming today and organizations are going to diverge from here in terms of how they are affected. So far, we’ve been really kind of sharing the pain of a lot of these challenges, it’s bits and pieces here. We’re all having to eat a little slice of this.

I think different organizations right now, if they are careful about understanding their vulnerabilities and thinking about where they’re exposed, are going to be setting themselves up to pass along some of that to other organizations. And so this is the moment to really understand how do we collectively want to address these challenges rather than continue to try to touch as little of it as we possibly can and scrape by?

Woods: That’s interesting because it’s also probably not just preparing for where you have vulnerabilities that are going to be exposed sooner rather than later, but also where might you have a first mover advantage? That gets back to what you were talking about when it comes to the kind of competitive landscape, and there’s probably people who can use these as an opportunity for the future.

Mauck: Crises are always opportunities and even for those players across the healthcare system who have really felt like they’re boxers in the later rounds covering up under a lot of blows, there’s opportunities for them to come back and devise strategies for the long term that really yield growth.

We shouldn’t treat this as a time just of contraction. There are major opportunities even for some of the traditional incumbents if they’re approaching these challenges in the right fashion. When we think about that in terms of things like labor or care delivery models, there’s huge opportunities and when I talk with C-suites from across the sector, they recognize those opportunities. They’re thinking in the long term, they need to think in the long term if they’re going to sustain themselves. It is a time of existential crisis, but also a time for existential opportunity.

Trebes: Yeah, let’s be real, there is a big risk of being a first mover, but there is a really big opportunity in being on the forefront of designing the infrastructure and setting the table of where we want to go and designing this to work for you. Because changes have to happen, you really want to be involved in that kind of decision making.

Woods: And in the vein of acceptance, we should all accept that this isn’t going to be easy. The challenges that I think we want to focus on for the rest of this conversation are challenges that up to this point have seemed unsolvable. What are the specific areas that you think should really demand executive attention in 2023?

Trebes: Well, I think they break into a few different categories. We are having real debates about how do we decide what are appropriate outcomes in healthcare? And so the concept of measuring value and paying for value. We have to make some decisions about what trade-offs we want to make there, and how do we build in health equity into our business model and do we want to make that a reality for everyone?

Another category is all of the expensive care that we have to figure out how to deliver and finance over the coming years. So we’re talking about the already inadequate behavioral health infrastructure that’s seen a huge influx in demand.

We’re talking about what Aaron mentioned, the growing senior population, especially with boomers getting older and requiring a lot more care, and the pipeline of high-cost therapies. All of this is not what we are ready as the healthcare system as it exists today to manage appropriately in a financially sustainable way. And that’s going to be really hard for purchasers who are financing all of this.

Debating the best way to Chase Commercial Market Share

Posted on by • Posted in Health System, Hospital, Hospital Industry, Leadership, Leadership Alignment, Leadership Vision, Market Share, Market Trends, Marketing, Strategy, Value Creation, Value Proposition, Value-Based Contracting, Value-Based Healthcare • Leave a comment

https://mailchi.mp/e60a8f8b8fee/the-weekly-gist-september-23-2022?e=d1e747d2d8

Cross-subsidy economics are increasingly challenged for America’s hospitals. Aging Baby Boomers are moving from commercial insurance to Medicare, decreasing the share of patients with lucrative private coverage, and insurers are increasingly reticent to provide the rate increases providers need to make up for the worsening mix.

At a recent executive retreat, one health system debated the best strategies to increase their capture of commercial volume. Most of the conversation focused on traditional market-based tactics to increase access and awareness in fast-growing, higher income areas of their service region.

For instance, the system’s chief marketing officer was pushing to increase advertising in the rapidly expanding suburbs, and advocated building ambulatory surgery centers in a wealthy area of town with a boom of new home construction. 
 
The chief strategy officer shared a different perspective, supporting an employer-focused strategy. His logic: “In most businesses, the CEO and the janitor have the same benefit plans. If we only focus on the wealthy parts of town, we’re missing a big portion of the workers with good insurance.” He advocated for a new round of direct-to-employer contracting outreach, hoping to steer workers to high-value primary and specialty care solutions.

In reality, any system looking to move commercial share will need to do both—but even the best playbook for building commercial volume is unlikely to close the growing cross-subsidy gap. To maintain profitability in the long term, health systems must reduce costs for managing Medicare patients by delivering lower-cost care in lower-cost settings, with lower-cost staff.    

9 best health systems to work for: Fortune

Posted on by • Posted in Employee Appreciation, Employee Engagement, Employee Expectations, Employee Experience, Employee Morale, Health System, Hospital, Hospital Industry, Leadership, Leadership Cares, Leadership Culture, Leadership Integrity, Leadership Listens, Leadership Respect, Leadership Trust, Leadership Values, Leadership Vision, Recruiting, Talent, Talent Management • Leave a comment
https://www.beckershospitalreview.com/rankings-and-ratings/9-best-health-systems-to-work-for-fortune.html?utm_medium=email&utm_content=newsletter

Fortune and Great Place to Work released their list of the “Best Workplaces in Health Care” on Sept. 7. 

Survey responses from more than 161,000 employees were analyzed to determine the best workplaces in the healthcare industry. To be considered for the list, organizations were required to be Great Place to Work-Certified and be in the healthcare industry. Learn more about the methodology here. 

Below are the nine best large health systems to work for, ordered by their corresponding number in the overall list of 30 organizations. Health systems with 1,000 or more employees were considered for the large category. 

1. Texas Health Resources (Arlington) 

3. Southern Ohio Medical Center (Portsmouth) 

5. Northwell Health (New Hyde Park, N.Y.) 

6. Baptist Health South Florida (Coral Gables) 

7. OhioHealth (Columbus) 

8. Scripps Health (San Diego) 

9. WellStar Health System (Marietta, Ga.) 

10. Atlantic Health System (Morristown, N.J.) 

21. BayCare Health System (Clearwater, Fla.) 

Fortune and Great Place to Work also released a list of the best small and medium healthcare organizations to work for. Organizations with up to 999 employees were considered for the small and medium category. No hospitals or health systems were listed in that category.