Category Archives: Mission Critical

Achieving True Health Care Transformation Requires Rethinking Compensation Models and Executive Performance Metrics

Posted on by • Posted in Access & Quality of Healthcare, Accessible Care, Affordability, Board, Disruption, Disruptive Technology, Executive Compensation, Incentive, Incentive Pay, Key Performance Indicators, Leadership, Leadership Assessment, Mission, Mission Critical, Quality of Care, Stewardship, Transformational Change, Usability, Value-Based Transformation Metrics • Leave a comment

https://medcitynews.com/2023/01/

Healthcare leaders now need to strike a delicate balance that requires managing financial and growth metrics, increasing the speed of transformation, and building the health systems of tomorrow. So how do we redefine compensation models to reward all these behaviors?

Executive compensation might not spring to mind as a key driver of healthcare transformation, nor does it seem naturally connected to critical issues such as health equity, patient safety, or quality of care – just a few of the areas where significant changes can be made to transform healthcare. But, in fact, executives leading not-for-profit health systems today are tasked with delivering measurable results that improve the health status of their patients and their communities. And to ensure that these new performance metrics are met, we must change how we think about —and deliver—compensation.

Defining a new model

While executive compensation has always been tied to specific objectives, they have historically leaned heavily toward financial performance, volume and margins, with a modest portion of compensation aligned to quality of care and patient outcomes. But transformative approaches such as population health, value-based care, patient wellness and health outcomes are shifting the mark.

Healthcare leaders now need to strike a delicate balance that requires managing financial and growth metrics, increasing the speed of transformation, and building the health systems of tomorrow. So how do we redefine compensation models to reward all these behaviors?

Some might say that the answer lies in adjusting incentive plans. While incentive plans across health care have not changed significantly in the past decade, the sophistication of the plans has changed, reflecting greater attention to delivering a better patient experience. But delivering better experiences does not imply that health systems have transformed from the top down. In my mind, adjusting incentive plans only solves part of the problem.

If we want true health care transformation—and we should, in order to best serve patients and communities—health systems need to re-evaluate the outcomes for each stakeholder and create incentives to evolve leadership as a whole. We need to rethink executive compensation models to align with value-based care, patient experience, and the resulting outcomes, along with traditional performance measurements.

Leading through lingering disruption 

But rethinking executive compensation models won’t be an easy task, especially given the external challenges and changes thrust upon the health care system over the last few years.

As with nearly every other aspect of health care, pay for performance was disrupted during the pandemic. Demand for health services changed dramatically, labor and attrition issues intensified, and supply chain problems and operational costs increased. These new pressures required executives to manage through long periods of uncertainty where meeting operational pay-for-performance goals was nearly impossible. Fast-forward to today, the executive talent market remains extraordinarily competitive. Demand outpaces supply due to higher-than-typical retirements, effects of the great resignation, the need for new skill sets and overall burnout.

As a result, there has been upward pressure on compensation to address and fulfill unexpected but immediate needs such as rewarding executives for managing in a unique and challenging performance environment, increasing efforts to recruit and retain, and recognizing leaders for their hard-won accomplishments.

Considerations and changes

When considering adjusting models for 2023 and beyond, CEOs and compensation committees need to take these pressures and disruptions into account. They should look closely at their own compensation data from the past two years – not as a lighthouse for future compensation, but as data that may need to be set aside due to the volume of performance goals and achievements that were up-ended by the pandemic. When relying on external industry data, the same rules apply; smaller data sets or those that don’t account for the past two years may be misleading, so review carefully before using limited data sets to inform adjusted models.

Just as important, CEOs and compensation committees should consider new performance measurements tied to both financial and quality or value-based transformation metrics. We don’t need to eliminate traditional financial and operational goals because viability is still a business mandate. But how can we articulate compensation-driven KPIs for stewardship of patient and community health, improved outcomes and reduced cost of care? Too many measures are akin to having no measures at all.

The compensation mix should take into account a more focused approach to long-term measures. The old paradigm of 12-month incentive cycles is not enough to address the time required to truly transform health care. Another consideration should be performance-based funding of deferred compensation based on achieving transformation goals, and greater use of retention programs to support the maintenance of a stable executive team during the transformation period. Covid-19 proved how crisis can be an accelerator for change. True transformation should blend the skills gained from crisis management with planful, thoughtful and intentional change.

In addition, some metrics may need to incorporate a discretionary component, considering ongoing disruption within the workforce, supply chain limitations, and energy, equipment and labor cost increases. More organizations are also including health equity, DE&I, and ESG goals in incentive programs to tighten alignment with mission-critical board-mandated goals.

Transformative change 

There are four elements that are vital in the journey to transform health care from “heads in beds” to the public-service-oriented organizations that they were meant to be—and can be again. With mounting pressure from patients, communities, and payers to boards and employees, CEOs and compensation committees must become key drivers of change, setting the right goals and incentives from the top down.

  • Affordability: can patients afford the care they need?
  • Quality: is the care being delivered of the utmost quality?
  • Usability: how can we reduce hurdles to undertaking the care plan?
  • Access: are all community members able to access needed care?

Solving for each of these elements is one of the biggest challenges we face, and as we begin to emerge from the disruption of the pandemic, leaders will be watched closely to ensure that they deliver—and can clearly show the path to delivery.

Ideally, end achievements would include patients spending less to achieve better health; payers controlling costs and reducing risk; providers realizing efficiencies and greater patient satisfaction; and alignment of medical supplier pricing to patient outcomes. And when you zoom out to reveal the bigger picture, all of these pieces come together to achieve healthier populations and lower overall health care costs, while still meeting the financial goals of the organization.

We’re asking a lot of already-overburdened health care executives. Stakeholders must prove that we value leaders with the right mindset and skillset in order to attract executives who can shepherd organizations through the transformation journey. This requires a setting where there is supportive leadership, a compelling mission and opportunity for personal growth and development. It will not be easy, but without rethinking how we design compensation models from the top down, it will be unnecessarily challenging.

Michael Dowling: No one said it would be easy

Posted on by • Posted in Coronavirus, Culture, Decision Making, Health Equity, Health Inequity, Health System, Hospital, Hospital Industry, Leadership, Leadership Commitment, Leadership Culture, Leadership Intent, Leadership Messaging, Leadership Plan, Leadership Trust, Mission, Mission Critical, Pandemic, Priorities, Productivity, Public Health, Public Trust, Strategy, Vaccine, Vaccine Distribution, Vaccine Efficacy, Vaccine Hesitancy Rate, Virtual Care Strategy, Virtual Healthcare, Virtual Hospital, Virtual Workforce • Leave a comment
https://www.beckershospitalreview.com/hospital-management-administration/michael-dowling-no-one-said-it-would-be-easy.html?origin=DigitalE&utm_source=DigitalE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G
Five suggestions for technology companies, venture capitalists | Northwell Health

Hardly one month into 2021, the pressing priorities facing healthcare leaders are abundantly clear. 

First, we will be living in a world preoccupied by COVID-19 and vaccination for many months to come. Remember: this is a marathon, not a sprint. And the stark reality is that the vaccination rollout will continue well into the summer, if not longer, while at the same time we continue to care for hundreds of thousands of Americans sickened by the virus. Despite the challenges we face now and in the coming months in treating the disease and vaccinating a U.S. population of 330 million, none of us should doubt that we will prevail. Despite the federal government’s missteps over the past year in managing and responding to this unprecedented public health crisis, historians will recognize the critical role of the nation’s healthcare community in enabling us to conquer this once-in-a-generation pandemic.

While there has been an overwhelming public demand for the vaccine during the past couple of weeks, there remains some skepticism within the communities we serve, including some of the most-vulnerable populations, so healthcare leaders will find themselves spending time and energy communicating the safety and efficacy of vaccines to those who may be hesitant. This is a good thing. It is our responsibility to share facts, further public education and influence public policy. COVID-19 has enhanced public trust in healthcare professionals, and we can maintain that trust if we keep our focus on the right things — namely, how we improve the health of our communities.

And as healthcare leaders diligently balance this work, we also have a great opportunity to reimagine what our hospitals and health systems can be as we emerge from the most trying year of our professional lifetimes. How do you want your hospital or system organized? What kind of structural changes are needed to achieve the desired results? What do you really want to focus on? Amid the pressing priorities and urgent decision-making needed to survive, it is easy to overlook the great reimagination period in front of us. The key is to forget what we were like before COVID-19 and reflect upon what we want to be after.

These changes won’t occur overnight. We’ll need patience, but here are my thoughts on five key questions we need to answer to get the right results.

1. How do you enhance productivity and become more efficient? Throughout 2021, most systems will be in recovery mode from COVID’s financial bruises. Hospitals saw double-digit declines in inpatient and outpatient volumes in 2020, and total losses for hospitals and health systems nationwide were estimated to total at least $323 billion. While federal relief offset some of our losses, most of us still took a major financial hit. As we move forward, we must reorganize to operate as efficiently as possible. Does reorganization sound daunting? If so, remember the amount of reorganization we mustered to work effectively in the early days of the pandemic. When faced with no alternative, healthcare moved heaven and earth to fulfill its mission. Crises bring with them great clarity. It’s up to leaders to keep that clarity as this tragic, exhausting and frustrating crisis gradually fades.

2. How do you accelerate digital care? COVID-19 changed our relationship with technology, personally and professionally. Look at what we accomplished and how connected we remain. We were reminded of how high-quality healthcare can go unhindered by distance, commutes and travel constraints with the right technology and telehealth programs in place. Health system leaders must decide how much of their business can be accommodated through virtual care so their organizations can best offer convenience while increasing access. Oftentimes, these conversations don’t get far before confronting doubts about reimbursement. Remember, policy change must happen before reimbursement catches up. If you wait for reimbursement before implementing progressive telehealth initiatives, you’ll fall behind. 

3. How will your organization confront healthcare inequities? In 2020, I pledged that Northwell would redouble its efforts and remain a leader in diversity and inclusion. I am taking this commitment further this year and, with the strength of our diverse workforce, will address healthcare inequities in our surrounding communities head-on. This requires new partnerships, operational changes and renewed commitments from our workforce. We need to look upstream and strengthen our reach into communities that have disparate access to healthcare, education and resources. We must push harder to transcend language barriers, and we need our physicians and medical professionals of color reinforcing key healthcare messages to the diverse communities we serve. COVID-19’s devastating effect on communities of color laid bare long-standing healthcare inequalities. They are no longer an ugly backdrop of American healthcare, but the central plot point that we can change. If more equitable healthcare is not a top priority, you may want to reconsider your mission. We need leaders whose vision, commitment and courage match this moment and the unmistakable challenge in front of us. 

4. How will you accommodate the growing portion of your workforce that will be remote? Ten to 15 percent of Northwell’s workforce will continue to work remotely this year. In the past, some managers may have correlated remote work and teams with a decline in productivity. The past year defied that assumption. Leaders now face decisions about what groups can function remotely, what groups must return on-site, and how those who continue to work from afar are overseen and managed. These decisions will affect your organizations’ culture, communications, real estate strategy and more. 

5. How do you vigorously hold onto your cultural values amid all of this change? This will remain a test through 2021 and beyond. Culture is the personality of your organization. Like many health systems and hospitals, much of Northwell’s culture of connectedness, awareness, respect and empathy was built through face-to-face interaction and relationships where we continually reinforced the organization’s mission, vision and values. With so many employees now working remotely, how can we continue to bring out the best in all of our people? We will work to answer that question every day. The work you put in to restore, strengthen and revitalize your culture this year will go a long way toward cementing how your employees, patients and community come to see your organization for years to come. Don’t underestimate the power of these seemingly simple decisions.

While we’ve been through hell and back over the past year, I’m convinced that the healthcare community can continue to strengthen the public trust and admiration we’ve built during this pandemic. However, as we slowly round the corner on COVID-19, our future success will hinge on what we as healthcare organizations do now to confront the questions above and others head-on. It won’t be quick or easy and progress will be a jagged line. Let’s resist the temptation to return to what healthcare was and instead work toward building what healthcare can be. After the crisis of a lifetime, here’s our opportunity of a lifetime. We can all be part of it. 

The Fed’s independence helped it save the US economy in 2008 – the CDC needs the same authority today

Posted on by • Posted in 2020 Election Issues, Centers for Disease Control & Prevention (CDC), Clinical Testing, Communication, Confidence, Conflicts of Interest, Contact Tracing, Coronavirus, Credibility, Crisis, Crisis Management, Data, Data Analytics, Data Control, Data Integrity, Data Interpretation, Data Management, Data Ownership, Decision Making, Decision Making Authority, Evidence-based Leadership, Evidence-Based Plan, Evidence-Based Policy, Expert, Expert Opinion, Federal Reserve, Honesty, Infection Control, Infection Control Plan, Infectious Virus, Integrity, Judgement, Leadership Messaging, Leadership Political, Leadership Trust, Mission, Mission Critical, Mortality, National Strategy, Pandemic, Partisanship, Public Funding, Public Good, Public Health, Public Opinion, Public Perception, Public Safety, Public Trust, Public Welfare, Quarantine, School Reopening, Scientists, Social Distancing, Transparency, Trust, Truth • Leave a comment

https://theconversation.com/the-feds-independence-helped-it-save-the-us-economy-in-2008-the-cdc-needs-the-same-authority-today-142593

Centers for Disease Control and Prevention

The image of scientists standing beside governors, mayors or the president has become common during the pandemic. Even the most cynical politician knows this public health emergency cannot be properly addressed without relying on the scientific knowledge possessed by these experts.

Yet, ultimately, U.S. government health experts have limited power. They work at the discretion of the White House, leaving their guidance subject to the whims of politicians and them less able to take urgent action to contain the pandemic.

The Centers for Disease Control and Prevention has issued guidelines only to later revise them after the White House intervened. The administration has also undermined its top infectious disease expert, Dr. Anthony Fauci, over his blunt warnings that the pandemic is getting worse – a view that contradicts White House talking points.

And most recently, the White House stripped the CDC of control of coronavirus data, alarming health experts who fear it will be politicized or withheld.

In the realm of monetary policy, however, there is an agency with experts trusted to make decisions on their own in the best interests of the U.S. economy: the Federal Reserve. As I describe in my recent book, “Stewards of the Market,” the Fed’s independence allowed it to take politically risky actions that helped rescue the economy during the financial crisis of 2008.

That’s why I believe we should give the CDC the same type of authority as the Fed so that it can effectively guide the public through health emergencies without fear of running afoul of politicians.

 

The paradox of expertise

There is a paradox inherent in the relationship between political leaders and technical experts in government.

Experts have the training and skill to apply scientific knowledge in complex biological and economic systems, yet democratically elected political leaders may overrule or ignore their advice for ill or good.

This happened in May when the CDC, the federal agency charged with controlling the spread of disease, removed advice regarding the dangers of singing in church choirs from its website. It did not do so because of new evidence. Rather, it was because of political pressure from the White House to water down the guidance for religious groups.

Similarly, the White House undermined the CDC’s guidance on school reopenings and has pressured it to revise them. So far, it seems the CDC has rebuffed the request.

The ability of elected leaders to ignore scientists – or the scientists’ acquiescence to policies they believe are detrimental to public welfare – is facilitated by many politicians’ penchant for confident assertion of knowledge and the scientist’s trained reluctance to do so.

Compare Fauci’s repeated comment that “there is much we don’t know about the virus” with President Donald Trump’s confident assertion that “we have it totally under control.”

 

Experts with independence

Given these constraints on technical expertise, the performance of the Fed in the financial crisis of 2008 offers an informative example that may be usefully applied to the CDC today.

The Federal Reserve is not an executive agency under the president, though it is chartered and overseen by Congress. It was created in 1913 to provide economic stability, and its powers have expanded to guard against both depression and crippling inflation.

At its founding, the structure of the Fed was a political compromise designed make it independent within the government in order to de-politicize its economic policy decisions. Today its decisions are made by a seven-member board of governors and a 12-member Federal Open Market Committee. The members, almost all Ph.D. economists, have had careers in academia, business and government. They come together to analyze economic data, develop a common understanding of what they believe is happening and create policy that matches their shared analysis. This group policymaking is optimal when circumstances are highly uncertain, such as in 2008 when the global financial system was melting down.

The Fed was the lead actor in preventing the system’s collapse and spent several trillion dollars buying risky financial assets and lending to foreign central banks – decisions that were pivotal in calming financial markets but would have been much harder or may not have happened at all without its independent authority.

The Fed’s independence is sufficiently ingrained in our political culture that its chair can have a running disagreement with the president yet keep his job and authority.

 

Putting experts at the wheel

A health crisis needs trusted experts to guide decision-making no less than an economic one does. This suggests the CDC or some re-imagined version of it should be made into an independent agency.

Like the Fed, the CDC is run by technical experts who are often among the best minds in their fields. Like the Fed, the CDC is responsible for both analysis and crisis response. Like the Fed, the domain of the CDC is prone to politicization that may interfere with rational response. And like the Fed, the CDC is responsible for decisions that affect fundamental aspects of the quality of life in the United States.

Were the CDC independent right now, we would likely see a centralized crisis management effort that relies on the best science, as opposed to the current patchwork approach that has failed to contain the outbreak nationally. We would also likely see stronger and consistent recommendations on masks, social distancing and the safest way to reopen the economy and schools.

Independence will not eliminate the paradox of technical expertise in government. The Fed itself has at times succumbed to political pressure. And Trump would likely try to undermine an independent CDC’s legitimacy if its policies conflicted with his political agenda – as he has tried to do with the central bank.

But independence provides a strong shield that would make it much more likely that when political calculations are at odds with science, science wins.

 

 

 

 

Home of the Brave

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