Category Archives: Physician Leadership

The Value-based Care Agenda in Trump 2.0 Healthcare

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, ACA, Accountable Care Organization (ACO), Alternative Payment Model, Center for Medicare and Medicaid Services (CMS), Center for Medicare and Medicaid Innovation (CMMI), Pay for Performance, Physician Compensation, Physician Employment, Physician Leadership, Physician Practice Management, Risk-Based Compensation, Risk-Based Contracting, Shared Savings Rate, Value Based Care Model, Value Creation, Value-Based Care Functions, Value-Based Contracting, Value-Based Healthcare • Leave a comment
The Value-based Care Agenda in Trump 2.0 Healthcare

This week, the House Energy and Commerce and Ways and Means Committees begins work on the reconciliation bill they hope to complete by Memorial Day. Healthcare cuts are expected to figure prominently in the committee’s work.

And in San Diego, America’s Physician Groups (APG) will host its spring meeting “Kickstarting Accountable Care: Innovations for an Urgent Future” featuring Presidential historian Dorris Kearns Goodwin and new CMS Innovation Center Director Abe Sutton. Its focus will be the immediate future of value-based programs in Trump Healthcare 2.0, especially accountable care organizations (ACOs) and alternative payment models (APMs).

Central to both efforts is the administration’s mandate to reduce federal spending which it deems achievable, in part, by replacing fee for services with value-based payments to providers from the government’s Medicare and Medicaid programs. 

The CMS Center for Medicare and Medicaid Innovation (CMMI) is the government’s primary vehicle to test and implement alternative payment programs that reduce federal spending and improve the quality and effectiveness of services simultaneously.

Pledges to replace fee-for-service payments with value-based incentives are not new to Medicare.  Twenty-five years ago, they were called “pay for performance” programs and, in 2010, included in the Affordable Care as alternative payment models overseen by CMMI.

But the effectiveness of APMs has been modest at best: of 50+ models attempted, only 6 proved effective in reducing Medicare spending while spending $5.4 billion on the programs. Few were adopted in Medicaid and only a handful by commercial payers and large self-insured employers. Critics argue the APMs were poorly structured, more costly to implement than potential shared savings payments and sometimes more focused on equity and DEI aims than actual savings.

The question is how the Mehmet Oz-Abe Sutten version of CMMI will approach its version of value-based care, given modest APM results historically and the administration’s focus on cost-cutting.

Context is key:

Recent efforts by the Trump Healthcare 2.0 team and its leadership appointments in CMS and CMMI point to a value-agenda will change significantly. Alternative payment models will be fewer and participation by provider groups will be mandated for several. Measures of quality and savings will be fewer, more easily measured and and standardized across more episodes of care. Financial risks and shared savings will be higher and regulatory compliance will be simplified in tandem with restructuring in HHS, CMS and CMMI to improve responsiveness and consistency across federal agencies and programs.

Sutton’s experience as the point for CMMI is significant. Like Adam Boehler, Brad Smith and other top Trump Healthcare 2.0 leaders, he brings prior experience in federal health agencies and operating insight from private equity-backed ventures (Honest Health, Privia, Evergreen Nephrology funded through Nashville-based Rubicon Founders). Sutton’s deals have focused on physician-driven risk-bearing arrangements with Medicare with funding from private investors.

The Trump Healthcare 2.0 team share a view that the healthcare system is unnecessarily expensive and wasteful, overly-regulated and under-performing. They see big hospitals and drug companies as complicit—more concerned about self-protection than consumer engagement and affordability.

They see flawed incentives as a root cause, and believe previous efforts by CMS and CMMI veered inappropriately toward DEI and equity rather than reducing health costs.

And they think physicians organized into risk bearing structures with shared incentives, point of care technologies and dependable data will reduce unnecessary utilization (spending) and improve care for patients (including access and affordability).

There’s will be a more aggressive approach to spending reduction and value-creation with Medicare as the focus: stronger alternative payment models and expansion of Medicare Advantage will book-end their collective efforts as Trump Healthcare 2.0 seeks cost-reduction in Medicare.

What’s ahead?

Trump Healthcare 2.0 value-based care is a take-no prisoners strategy in which private insurers in Medicare Advantage have a seat at their table alongside hospitals that sponsor ACOs and distribute the majority of shared savings to the practicing physicians. But the agenda will be set, and re-set by the administration and link-minded physician organizations like America’s Physician Groups and others that welcome financial risk-sharing with Medicare and beyond.

The results of the Trump Healthcare 2.0 value agenda will be unknown to voters in the November 2026 mid-term but apparent by the Presidential campaign in 2028. In the interim, surrogate measures for performance—like physician participation and projected savings–will be used to show progress and the administration will claim success. It will also spark criticism especially from providers who believe access to needed specialty care will be restricted, public and rural health advocates whose funding is threatened, teaching and clinical research organizations who facing DOGE cuts and regulatory uncertainty, patient’s right advocacy groups fearing lack of attention and private payers lacking scalable experience in Medicare Advantage and risk-based relationships with physicians.

Last week, the American Medical Association named Dr. John Whyte its next President replacing widely-respected 12-year CEO/EVP Jim Madara. When he assumes this office in July, he’ll inherit an association that has historically steered clear of major policy issues but the administration’s value-based care agenda will quickly require his attention.

Physicians including AMA members are restless:

At last fall’s House of Delegates (HOD), members passed a resolution calling for constraints on not-for-profit hospital’ tax exemptions due to misleading community benefits reporting and more consistency in charity care reporting by all hospitals.

The majority of practicing physicians are burned-out due to loss of clinical autonomy and income pressures—especially the 75% who are employees of hospitals and private-equity backed groups. And last week, the American College of Physicians went on record favoring “collective action” to remedy physician grievances. All impact the execution of the administration’s value-based agenda.

Arguably, the most important key to success for the Trump Healthcare 2.0 is its value agenda and physician support—especially the primary care physicians on whom the consumer engagement and appropriate utilization is based. It’s a tall order.

The Trump Healthcare 2.0 value agenda is focused on near-term spending reductions in Medicare. Savings in federal spending for Medicaid will come thru reconciliation efforts in Congress that will likely include work-requirements for enrollees, elimination of subsidies for low-income adults and drug formulary restrictions among others. And, at least for the time being, attention to those with private insurance will be on the back burner, though the administration favors insurance reforms adding flexible options for individuals and small groups.

The Trump Healthcare 2.0 value-agenda is disruptive, aggressive and opportunistic for physician organizations and their partners who embrace performance risk as a permanent replacement for fee for service healthcare. It’s a threat to those that don’t.

The Value-based Care Agenda in Trump 2.0 Healthcare

Posted on by • Posted in 2028 Election Issues, Accountable Care Organization (ACO), Alternative Payment Model, Center for Medicare and Medicaid Services (CMS), Center for Medicare and Medicaid Innovation (CMMI), Fee for Service Reimbursement, Medicare, Medicare Advantage, Pay for Performance, Physician Burnout, Physician Incentives, Physician Leadership, Physician Practice Management, Risk-Based Compensation, Risk-Based Contracting, Value Based Care Model, Value-Based Care Functions, Value-Based Contracting, Value-Based Healthcare • Leave a comment
The Value-based Care Agenda in Trump 2.0 Healthcare

This week, the House Energy and Commerce and Ways and Means Committees begins work on the reconciliation bill they hope to complete by Memorial Day. Healthcare cuts are expected to figure prominently in the committee’s work.

And in San Diego, America’s Physician Groups (APG) will host its spring meeting “Kickstarting Accountable Care: Innovations for an Urgent Future” featuring Presidential historian Dorris Kearns Goodwin and new CMS Innovation Center Director Abe Sutton. Its focus will be the immediate future of value-based programs in Trump Healthcare 2.0, especially accountable care organizations (ACOs) and alternative payment models (APMs).

Central to both efforts is the administration’s mandate to reduce federal spending which it deems achievable, in part, by replacing fee for services with value-based payments to providers from the government’s Medicare and Medicaid programs. The CMS Center for Medicare and Medicaid Innovation (CMMI) is the government’s primary vehicle to test and implement alternative payment programs that reduce federal spending and improve the quality and effectiveness of services simultaneously.

Pledges to replace fee-for-service payments with value-based incentives are not new to Medicare.  Twenty-five years ago, they were called “pay for performance” programs and, in 2010, included in the Affordable Care as alternative payment models overseen by CMMI. But the effectiveness of APMs has been modest at best: of 50+ models attempted, only 6 proved effective in reducing Medicare spending while spending $5.4 billion on the programs. Few were adopted in Medicaid and only a handful by commercial payers and large self-insured employers. Critics argue the APMs were poorly structured, more costly to implement than potential shared savings payments and sometimes more focused on equity and DEI aims than actual savings.

The question is how the Mehmet Oz-Abe Sutten version of CMMI will approach its version of value-based care, given modest APM results historically and the administration’s focus on cost-cutting.

Context is key:

Recent efforts by the Trump Healthcare 2.0 team and its leadership appointments in CMS and CMMI point to a value-agenda will change significantly. Alternative payment models will be fewer and participation by provider groups will be mandated for several. Measures of quality and savings will be fewer, more easily measured and and standardized across more episodes of care. Financial risks and shared savings will be higher and regulatory compliance will be simplified in tandem with restructuring in HHS, CMS and CMMI to improve responsiveness and consistency across federal agencies and programs.

Sutton’s experience as the point for CMMI is significant. Like Adam Boehler, Brad Smith and other top Trump Healthcare 2.0 leaders, he brings prior experience in federal health agencies and operating insight from private equity-backed ventures (Honest Health, Privia, Evergreen Nephrology funded through Nashville-based Rubicon Founders). Sutton’s deals have focused on physician-driven risk-bearing arrangements with Medicare with funding from private investors.

The Trump Healthcare 2.0 team share a view that the healthcare system is unnecessarily expensive and wasteful, overly-regulated and under-performing. They see big hospitals and drug companies as complicit—more concerned about self-protection than consumer engagement and affordability. They see flawed incentives as a root cause, and believe previous efforts by CMS and CMMI veered inappropriately toward DEI and equity rather than reducing health costs. And they think physicians organized into risk bearing structures with shared incentives, point of care technologies and dependable data will reduce unnecessary utilization (spending) and improve care for patients (including access and affordability).

There’s will be a more aggressive approach to spending reduction and value-creation with Medicare as the focus: stronger alternative payment models and expansion of Medicare Advantage will book-end their collective efforts as Trump Healthcare 2.0 seeks cost-reduction in Medicare.

What’s ahead?

Trump Healthcare 2.0 value-based care is a take-no prisoners strategy in which private insurers in Medicare Advantage have a seat at their table alongside hospitals that sponsor ACOs and distribute the majority of shared savings to the practicing physicians. But the agenda will be set, and re-set by the administration and link-minded physician organizations like America’s Physician Groups and others that welcome financial risk-sharing with Medicare and beyond.

The results of the Trump Healthcare 2.0 value agenda will be unknown to voters in the November 2026 mid-term but apparent by the Presidential campaign in 2028. In the interim, surrogate measures for performance—like physician participation and projected savings–will be used to show progress and the administration will claim success. It will also spark criticism especially from providers who believe access to needed specialty care will be restricted, public and rural health advocates whose funding is threatened, teaching and clinical research organizations who facing DOGE cuts and regulatory uncertainty, patient’s right advocacy groups fearing lack of attention and private payers lacking scalable experience in Medicare Advantage and risk-based relationships with physicians.

Last week, the American Medical Association named Dr. John Whyte its next President replacing widely-respected 12-year CEO/EVP Jim Madara. When he assumes this office in July, he’ll inherit an association that has historically steered clear of major policy issues but the administration’s value-based care agenda will quickly require his attention.

Physicians including AMA members are restless: at last fall’s House of Delegates (HOD), members passed a resolution calling for constraints on not-for-profit hospital’ tax exemptions due to misleading community benefits reporting and more consistency in charity care reporting by all hospitals. The majority of practicing physicians are burned-out due to loss of clinical autonomy and income pressures—especially the 75% who are employees of hospitals and private-equity backed groups. And last week, the American College of Physicians went on record favoring “collective action” to remedy physician grievances. All impact the execution of the administration’s value-based agenda.

Arguably, the most important key to success for the Trump Healthcare 2.0 is its value agenda and physician support—especially the primary care physicians on whom the consumer engagement and appropriate utilization is based. It’s a tall order.

The Trump Healthcare 2.0 value agenda is focused on near-term spending reductions in Medicare. Savings in federal spending for Medicaid will come thru reconciliation efforts in Congress that will likely include work-requirements for enrollees, elimination of subsidies for low-income adults and drug formulary restrictions among others. And, at least for the time being, attention to those with private insurance will be on the back burner, though the administration favors insurance reforms adding flexible options for individuals and small groups.

The Trump Healthcare 2.0 value-agenda is disruptive, aggressive and opportunistic for physician organizations and their partners who embrace performance risk as a permanent replacement for fee for service healthcare. It’s a threat to those that don’t.

The Four Core Beliefs of Hospital-Employed Physicians

Posted on by • Posted in Employee Physicians, Health System, Hospital, Hospital Industry, Physician Compensation, Physician Leadership, Physician Reimbursement, Physician Workforce • Leave a comment
The Four Core Beliefs of Hospital-Employed Physicians

In my report June 10, I wrote: “The major sources of physician discontent are administrative hassles and unwelcome clinical oversight that create dissonance. They conflict with a false sense of autonomy that the majority of physicians imagined when choosing medicine. Cuts to reimbursement, participation in alternative payment models and medical inflation are manifestations of a system in which ‘suits’ are intruders who make rules, exact handsome salaries, generate corporate profits and distance physicians from patient care purposely… “

This assessment remains true today. Discontent among physicians is palpable and it’s magnified by a growing sense of financial despair among many clinicians. And it poses a unique challenge to hospitals that now employ more than half of America’s physician workforce.

In the “good ole days”, hospitals provided a place for physicians to ply their trade. They were credentialled to practice their chosen specialty, granted special parking, food and amenities and treated as the hospital’s most welcome customer. Made sense: physicians controlled most patient decisions about the hospital services they use. Physicians controlled the hospital’s revenue, sustainability and bonuses earned by administrators. Insurers brought privately-insured patients to doctors who charged them 1.6-2.5 times what Medicare paid and physician income was not threatened. That was then. This is now.

Today, insurers play a larger role. Consumer expectations have changed. Policymakers are paying more attention. And demand has shifted from inpatient services to outpatient, home and office settings for health and wellbeing services in addition to acute care. And the current forecast by CMS through 2032 predicts spending for hospitals will increase at a compound rate of 5.7% vs. 5.6% for physicians adding more hospital-physician financial tension to the system. Both well-above inflation and CDP growth prompting heightened pressure to spend less.

In anticipation, consolidation of hospitals into multi-hospital systems has been a staple in recent years: only 1 in 5 hospitals is independent these days, and most of these are small, rural or otherwise destined to independence for their uncertain future. Whether public, investor-owned or not-for-profit (or tax exempt as some prefer), the economic realities of running hospitals coupled with the regulatory constraints imposed by state and federal law forced all to re-think their future. And, for most, employing physicians directly was a means to an end of staying alive while the dust settles.

But the unintended consequence of physician employment is soured relationships between the employed physicians and their hospital:

their financial and emotional security has become tangled up by interactions with hospital leaders and former peers appointed to oversee their work.

And their views about their hospital have morphed to negativity based on four underlying beliefs:

  • Hospitals spend too much on overhead and executive salaries and not enough on direct patient care.
  • Hospitals are run poorly: we could run them better but they don’t listen to us.
  • Hospitals get rate increases from Medicare and physicians get screwed.
  • Hospitals need us more than we need them. But they don’t understand that.

On March 9, 2024, President Biden signed the Consolidated Appropriations Act, 2024, which included a 2.93% update to the CY 2024 Physician Fee Schedule (PFS) Conversion Factor (CF) for dates of service March 9 through December 31, 2024. But physicians saw that as not enough since their overhead increased even more. And for 2025, CMS is proposing to reduce average payment rates under the MPFS by 2.93% compared to the average amount reimbursed for these services in CY 2024 based on CY 2025 MPFS conversion factor decrease of $0.93 (or 2.8%) from the current CY 2024 conversion factor.

Understandably, physicians are upset. They’re not delusional that private insurers will make up the difference nor imagining hospitals will divert funds their way from brick, stick and tech priorities. But they’re speaking out expressing their views to anyone who’ll listen.

For hospitals that employ physicians, the issue of their financial anxiety requires urgent attention–not as one of many alongside 340B, site neutral payments and others but as the one at the top of the list. The issue is not whether physician income relative to other professions and average households is high. The issue is about managing physician expectations about their livelihood realistically and practically while improving their clinical acumen as professionals.

The core beliefs held by employed physicians about their hospitals may not be fair, objective or accurate, but they’re no less deeply felt and impactful. Hospital boards and C suite leaders would be well-served to refresh plans accordingly.

What’s going on at Steward Health Care?

Posted on by • Posted in Audit, Audited Financial Statements, Auditor External, Bankruptcy, Debt Capacity, Debt Structure, Financial Stewardship, Financial Transparency, Financial Viability, Financially Distressed, For-Profit, Health System, Leverage, Management, Management Company, Monetize, Physician Leadership, Private Equity • Leave a comment
https://www.healthcaredive.com/news/steward-health-care-distress/706940/?utm_source=Sailthru&utm_medium=email&utm_campaign=Newsletter%20Weekly%20Roundup:%20Healthcare%20Dive:%20Daily%20Dive%2002-17-2024&utm_term=Healthcare%20Dive%20Weekender

The physician-led healthcare network formed to save hospitals from financial distress. Now, hospitals in its own portfolio need bailing out after years of alleged mismanagement.

Steward Health Care formed over a decade ago when a private equity firm and a CEO looking to disrupt a regional healthcare environment teamed up to save six Boston-based hospitals from the brink of financial collapse. Since that time, Steward has expanded from a handful of facilities to become the largest physician-led for-profit healthcare network in the country, operating 33 community hospitals in eight states, according to its own corporate site.

However, Steward has also found itself once again on the precipice of failure. 

The health system has been emanating signs of distress since late last year. Its landlord says Steward owes over $50 million in unpaid debts. A federal lawsuit alleges Steward defrauded the Medicare program. Steward has closed hospitals in Massachusetts and Texas, and publicly contracted restructuring advisors in January, fueling speculation about a potential bankruptcy filing.

Steward’s ongoing issues in Massachusetts have played out in regional media outlets in recent weeks. Massachusetts Gov. Maura Healey warned there would be no bailout for Steward in an interview on WBUR’s Radio Boston.  

Worries about financial problems prompted Boston-based Mass General Brigham to pull doctors from Steward-owned Holy Family Hospital late last month. Steward has also been accused of mismanaging other facilities.

The Massachusetts Department of Public Health said it is investigating concerns raised about Steward facilities and began conducting daily site inspections at some Steward sites to ensure patient safety beginning Jan. 31.

However, the tide may have begun to change. Steward executives said on Feb. 2 they had secured a deal to stabilize operations and keep Massachusetts hospitals open — for now. Steward will receive bridge financing under the deal and consider transferring ownership of one or more hospitals to other companies, a Steward spokesperson confirmed to Healthcare Dive on Feb. 7.

While politicians welcomed the news, some say Steward’s long term outlook in the state is uncertain. Other politicians sought answers for how a prominent system could seemingly implode overnight. 

“I am cautiously optimistic at this point that [Steward] will be able to remain open, because it’s really critical they do,” said Brockton City Councilor Phil Griffin. “But they owe a lot of people a lot of money, so we’ll see.” 

Built on financial engineering

Steward Health Care was created in October 2010, when private equity firm Cerberus Capital Management purchased failing Caritas Christi Health Care for $895 million. Steward CEO Ralph de la Torre, who stayed on from his post as president of CCHC, wanted to revolutionize healthcare in the region. His strategy was to woo patients away from larger health systems by recruiting their physicians and offering routine, inpatient care for a fraction of the price.

However, the business model wasn’t immediately a financial success. Steward didn’t turn a profit between 2011 and 2014, according to a 2015 monitoring report from the Massachusetts attorney general. Instead, Steward’s debt increased from $326 million in 2011 to $413 million at the end of the 2014 fiscal year, while total liabilities ballooned to $1.4 billion in the same period as Steward engaged in real estate sale and leaseback plays. 

Under the 2010 deal, Steward agreed to assume Caritas’ debt and carry out $400 million in capital expenditures over four years to upgrade the hospitals’ infrastructure. However, that capital expenditure could come in part from financial engineering, such as monetizing Steward’s own assets, according to Zirui Song, associate professor of health care policy and medicine at the Harvard Medical School who has studied private equity’s impact on healthcare since 2019.

Cerberus did not contribute equity into Steward after making its initial investment of $245.9 million, according to the December 2015 monitoring report. Meanwhile, according to reporting at the time, de la Torre wanted to expand Steward. Steward was on its own to raise funds.

To generate cash, Steward engaged in another leaseback play, selling its properties to Alabama-based real estate investment trust Medical Properties Trust for $1.25 billion in 2016. Steward used the funds to pay back its remaining obligations to Cerberus and expand beyond Massachusetts, acquiring 18 hospitals from IASIS Healthcare in 2017.

Such deals are typically short-sighted, Song explained. When hospitals sell their property, they voluntarily forfeit their most valuable assets and tend to be saddled with high rent payments.

Cerberus exited its Steward play in 2020, $800 million richer. Steward lost more than $800 million between 2017 and 2020.

A pattern of poor performance

Healthcare Dive spoke with four workers across Steward’s portfolio who said Steward’s emphasis on the bottom line negatively impacted the company’s operations for years. 

Terra Ciurro worked in the emergency department at Steward Health Care-owned Odessa Regional Medical Center in January 2022 as a travel nurse. She recalled researching Steward and being attracted to the fact the company was physician owned.

“I remember thinking, ‘That’s all I need to know. Surely, doctors will have their heart in the right place,’” Ciurro said. “But yeah — that’s not the experience I had at all.”

The emergency department was “shabby, rundown and ill-equipped,” and management didn’t fix broken equipment that could have been hazardous, she said. Nine weeks into her 13-week contract and three hours before Ciurro was scheduled to work, Ciurro said her staffing agency called to cut her contract unceremoniously short. Steward hadn’t paid its bills in six months, and the agency was pulling its nurses, she said she was told. 

In Massachusetts, Katie Murphy, president of the Massachusetts Nurses Association, which represents more than 3,000 registered nurses and healthcare professionals who work in eight Steward hospitals, said there were “signals” that Steward facilities had been on the brink of collapse for “well over a year.”  

Steward hospitals are often “significantly” short staffed and lack supplies from the basics, like dressings, to advanced operating room equipment, said Murphy. While most hospitals in the region got a handle on staffing and supply shortages in the aftermath of the COVID pandemic, at Steward hospitals shortages “continued to accelerate,” Murphy said.

A review of Steward’s finances by BDO USA, a tax and advisory firm contracted last summer by the health system itself to demonstrate it was solvent enough to construct a new hospital in Massachusetts, showed Steward had a liquidity problem. The health system had few reserves on hand last year to pay down its debts owed to vendors, possibly contributing to the shortages. The operator carried only 10.2 days of cash on hand in 2023. In comparison, most healthy nonprofit hospital systems carried 150 days of cash on hand or more in 2022, according to KFF.

One former finance employee, who worked for Steward beginning around 2018, said that the books were routinely left unbalanced during her tenure. Each month, she made a list of outstanding bills to determine who must be paid and who “we can get away with holding off” and paying later. 

Food, pharmaceuticals and staff were always paid, while all other vendors were placed on an “escalation list,” she said. Her team prioritized paying vendors that had placed Steward on a credit hold.

The worker permanently soured on Steward when she said operating room staff had to “make do” without a piece of a crash cart — which is used in the event of a heart attack, stroke or trauma. 

She stopped referring friends to Steward facilities, telling them “Don’t go — if you can go anywhere else, don’t go [to Steward], because there’s no telling if they’ll have the supplies needed to treat you.” 

Away from regulatory review

Massachusetts officials maintain that it hasn’t been easy to see what was happening inside Steward.

Steward is legally required to submit financial data to the MA Center for Health Information and Analysis (CHIA) and to the Massachusetts Registration of Provider Organizations Program (MA-RPO Program), according to a spokesperson from the Health Policy Commission, which analyzes the reported data. Under the latter requirement, Steward is supposed to provide “a comprehensive financial statement, including information on parent entities and corporate affiliates as applicable.” 

However, Steward fought the requirements. During Stuart Altman’s tenure as the chair of the Commission from 2012 to 2022, Altman told Healthcare Dive that the for-profit never submitted documents, despite CHIA levying fines against Steward for non-compliance. Steward even sued CHIA and HPC for relief against the reporting obligations.

Steward is currently appealing a superior court decision and order from June 2023 that required it to comply with the financial reporting requirements and produce audited financial reports that cover the full health system, Mickey O’Neill, communications director for the HPC told Healthcare Dive. As of Feb. 6, Steward’s non-compliance remained ongoing, O’Neill said.

Without direct insight into Steward’s finances, the state was operating at a disadvantage, said John McDonough, professor of the practice of public health at The Harvard T.H. Chan School of Public Health. He added that some regulators saw a crisis coming generally, “but the timing was hard to predict.” 

Altman gives his team even more of a pass for not spotting the Steward problem.

“There was no indication while I was there that Steward was in deep trouble,” Altman said. Although Steward was the only hospital system that failed to report financial data to the HPC, that alone had not raised red flags for him. “[CEO] Ralph [de la Torre] was just a very contrarian guy. He didn’t do a lot of things.”

Song and his co-author, Sneha Kannan, a clinical research fellow at Harvard Medical School, are hopeful that in the future, regulatory agencies can make better use of the data they collect annually to track changes in healthcare performance over time. They can potentially identify problem operators before they become crises. 

“State legislators, even national legislators, are not in the habit of comparing hospitals’ performances on [quality] measures to themselves over time — they compare to hospitals’ regional partners,” Kannan said. “Legislators, Medicare, [and] CMS has access to that information.” 

However, although there’s interest from regulators in scrutinizing healthcare quality more closely — particularly when private equity gets involved — a streamlined approach to analyzing such data is still a “ways off,” according to the pair. For now, all parties interviewed for this piece agreed that the best way to avoid being caught off guard by a failing system was to know how such implosions could occur. 

“If there’s a lesson from [Steward],” McDonough ventured, “it is that the entire state health system and state government need to be much more wary of all for-profits.”

Searching for new hope in primary care

Posted on by • Posted in Consumer Centered Medical Home, Consumer Experience, Consumer Loyalty, Consumer-Centric, Consumerism, Physician, Physician Acquisition, Physician Burnout, Physician Coverage, Physician Leadership, Physician Network, Physician Practice Valuation, Physician Shortage, Physician Specialist, Physician Staffing, Primary Care, Primary Care Loyalty, Primary Care Strategy • Leave a comment

https://mailchi.mp/377fb3b9ea0c/the-weekly-gist-august-4-2023?e=d1e747d2d8

A physician who has led the primary care enterprise for a large health system for over twenty years told us he’s never seen physician morale as low as it is now:

“Burnout is bad across the board for all specialties, but I’m having a really hard time finding the bright spots for primary care”.

We recalled a recent survey of primary care physicians that confirmed his observations, with 61 percent of doctors stating that primary care is “crumbling”. But it struck us that we’ve been seeing these kinds of dire surveys about the state of primary care for the entire quarter-century we’ve been doing this work.

What’s different now?


He posited one critical change. Ten years ago, during the heyday of accountable care, primary care was central to health system strategy. Systems were devoting resources to converting practices to patient-centered medical homes. “We felt like primary care was at the heart of transforming health systems, and that we were finally getting resources to help patients,” he shared.

“Now it feels like the health system has moved away from ‘value’, the focus is all on specialists and growing procedure volume again, and we’re being treated as a cost center and told to cut staff and up our referral targets.”

We agree. Although large independent primary care groups continue to command record valuations, overall, the transition to value has slowed, and work burden has increased given staffing shortages.

Where could optimism come from now?

We both agreed that workflow innovations to ease documentation burden and help the transition to virtual care appear closer to reality than ever before.

And the increased focus on “consumerism” has many systems recognizing that primary care is the first—and principal—touchpoint for most patients and will be key to winning consumer loyalty.

Physicians lack trust in hospital leadership

Posted on by • Posted in Health System, Hospital, Hospital Industry, Leadership, Leadership Medical Staff, Leadership Physician, Leadership Physician Alignment, Leadership Transparency, Leadership Trust, Physician Employment, Physician Leadership, Transparency, Trust • Leave a comment

https://mailchi.mp/c02a553c7cf6/the-weekly-gist-july-28-2023?e=d1e747d2d8

A recent physician survey conducted by strategic healthcare communications firm Jarrard Inc. uncovered a startling finding: only 36 percent of physicians employed by or affiliated with not-for-profit health systems trust that their system’s leaders are honest and transparent. In contrast, a slight majority of physicians working with investor-owned health systems and practices answered that question in the opposite.

Overall, only around half of physicians trust their organization’s leaders when it comes to financial, operational, and patient care decision-making. Unsurprisingly, doctors put the most trust in peer physicians, by a wide margin.

The Gist: While the numbers, especially for nonprofit systems, are stark, this survey reflects an on-the-ground reality felt at health systems in recent years. Physician fatigue has spiked in the wake of the pandemic.

And health system-physician relationships are also being disrupted by cost pressures, payer and investor acquisitions, and the shift of care to ambulatory settings. We’ve heard from physicians that, compared to hospital owners, investor-backed systems provide greater transparency and clearer financial goals centered around the success of the business. 

That physicians trust their peers so highly suggests a path forward: provide physician leaders with greater transparency into system performance and agency over strategy, with clear goals and metrics.

Physician burnout as a symptom of our ailing healthcare system

Posted on by • Posted in Health Policy, Health System, Mission, Physician, Physician Burnout, Physician Leadership • Leave a comment

https://mailchi.mp/d62b14db92fb/the-weekly-gist-february-10-2023?e=d1e747d2d8

 In a guest essay for the New York Times this week, Dr. Eric Reinhart argues that physician burnout is not solely a product of physicians’ deteriorating working conditions, but is also driven by a loss of faith in the larger US healthcare system.

He notes that physicians have begun to lose hope in their ability to improve the system in which they work. As outpourings of appreciation for heroic healthcare workers have ended, physicians find themselves working in a system whose myriad structural flaws have been exacerbated by the pandemic. While the system might serve certain physician groups well (particularly specialists who are advantaged by the American Medical Association’s billing code structures), it often fails the patients who trust them for their care, and doctors “are now finding it difficult to quash the suspicion that our institutions, and much of [their] work inside them, primarily serve a moneymaking machine”.

The Gist: While elevating burnout to the level of culture, ideology, and faith in the US healthcare system may be met with skepticism by health system leaders interested in concrete solutions to their workforce problems, it’s important to acknowledge that material benefits and operational improvements may not fully solve engagement challenges.

Compared to peer nations, our healthcare system can be uniquely seen as unfair and unequal, whether because of medical debt, maternal mortality, or declining life expectancies—and many providers feel ill-equipped to address these concerns in their daily work.

This piece serves as a reminder of why most clinicians chose healthcare in the first place: to save lives and help people. The younger generation of physicians is rethinking what that mission means, and how it should include more than just care delivery—and they’re more open to aggressive policy solutions to address systemic inequalities. 

Be Ready for the Reorganized Healthcare Landscape

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Running a health system recently has proven to be a very hard job. Mounting losses in the face of higher operating expenses, softer than expected volumes, deferred capex, and strained C-suite succession planning are just a few of the immediate issues with which CEOs and boards must deal.


But frankly, none of those are the biggest strategic issue facing health systems. The biggest
strategic issue is the reorganization of the American healthcare landscape into an ambulatory care
business that emphasizes competing for covered lives at scale in lower cost and convenient settings
of care. This shift in business model has significant ramifications, if you own and operate acute care
hospitals.


Village MD and Optum are two of the organizations driving the business model shift. They are
owned by large publicly traded companies (Walgreens and UnitedHealth Group, respectively). Both
Optum and Village MD have had a string of announced major patient care acquisitions over the past
few years, none of which is in the acute care space.


The future of American healthcare will likely be dominated by large well-organized and well-run
multi-specialty physician groups with a very strong primary care component. These physician
service companies will be payer agnostic and focused on value-based care, though will still be
prepared to operate in markets where fee-for-service dominates. They will deliver highly
coordinated care in lower cost settings than hospital outpatient departments. And these companies
will be armed with tools and analytics that permit them to manage the care for populations of
patients, in order to deliver both better health outcomes and lower costs.


At the same time this is happening, we are experiencing steady growth in Medicare Advantage.
And along with it, a stream of primary care groups who operate purpose-built clinics to take full risk
on Medicare Advantage populations. These companies include ChenMed, Cano Health and Oak
Street, among others. These organizations use strong culture, training, and analytics to better
manage care, significantly reduce utilization, and produce better health outcomes and lower costs.


Public and private equity capital are pouring into the non-acute care sectors, fueling this growth. As
of the start of 2022, nearly three quarters of all physicians in the US were employed by either
corporate entities (such as private equity, insurance companies, and pharmacy companies), or
employed by health systems. And this employment trend has accelerated since the start of the
pandemic. The corporate entities, rather than health systems, are driving this increasing trend.
Corporate purchases of physician practices increased by 86% from 2019 to 2021.


What can health systems do? To succeed in the future, you must be the nexus of care for the
covered lives in your community. But that does not mean the health system must own all the
healthcare assets or employ all of the physicians. The health system can be the platform to convene these assets and services in the community. In some respects, it is similar to an Apple iPhone. They are the platform that convenes the apps. Some of those apps are developed and owned by Apple. But many more apps are developed by people outside of Apple, and the iPhone is simply the platform to provide access.


Creating this platform requires a change in mindset. And it requires capital. There are many opportunities for health systems to partner with outside capital providers, such as private equity, to position for the future – from both a capital and a mindset point of view.


The change in mindset, and the access to flexible capital, is necessary as the future becomes more and more about reorganizing into an ambulatory care business that emphasizes competing for covered lives at scale in lower cost and convenient settings of care.

What the “org chart” can reveal about physician culture 

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https://mailchi.mp/ce4d4e40f714/the-weekly-gist-june-10-2022?e=d1e747d2d8

A consultant colleague recently recounted a call from a health system looking for support in physician alignment. He mused, “It’s never a good sign when I hear that the medical group reports to the system CFO [chief financial officer].” We agree. It’s not that CFOs are necessarily bad managers of physician networks, or aren’t collaborative with doctors—as you’d expect from any group of leaders, there are CFOs who excel at these capabilities, and ones that don’t. 

The reporting relationship reveals less about the individual executive, and more about how the system views its medical group: less as a strategic partner, and more as “an asset to feed the [hospital] mothership.” Or worse, as a high-cost asset that is underperforming, with the CFO brought in as a “fixer”, taking over management of the physician group to “stop the bleed.”

Ideally the medical group would be led by a senior physician leader, often with the title of chief clinical officer or chief physician executive, who has oversight of all of the system’s physician network relationships, and can coordinate work across all these entities, sitting at the highest level of the executive team, reporting to the CEO. Of course, these kinds of physician leaders—with executive presence, management acumen, respected by physician and executive peers—can be difficult to find. 

Having a respected physician leader at the helm is even more important in a time of crisis, whether they lead alone or are paired with the CFO or another executive. Systems should have a plan to build the leadership talent needed to guide doctors through the coming clinical, generational, and strategic shifts in practice. 

Can we take the long view on physician strategy? 

Posted on by • Posted in Consumer Focus, Consumer-Centric, Leadership, Leadership Flexibility, Leadership Implementation, Leadership Physician Alignment, Leadership Vision, Leadership Will, Pandemic, Physician Leadership, Physician Strategy, Strategic Alignment, Strategy, Transformation • Leave a comment

https://mailchi.mp/d57e5f7ea9f1/the-weekly-gist-january-21-2022?e=d1e747d2d8

Editor's note: Taking the long view | Campaign US

It feels like a precarious moment in health systems’ relationships with their doctors. The pandemic has accelerated market forces already at play: mounting burnout, the retirement of Baby Boomer doctors, pressure to grow virtual care, and competition from well-funded insurers, investors and disruptors looking to build their own clinical workforces.

Many health systems have focused system strategy around deepening consumer relationships and loyalty, and quite often we’re told that physicians are roadblocks to consumer-centric offerings (problematic since doctors hold the deepest relationships with a health system’s patients).

When debriefing with a CEO after a health system board meeting, we pointed out the contrast between the strategic level of discussion of most of the meeting with the more granular dialogue around physicians, which focused on the response to a private equity overture to a local, nine-doctor orthopedics practice. It struck us that if this level of scrutiny was applied to other areas, the board would be weighing in on menu changes in food services or selecting throughput metrics for hospital operating rooms. 
 
The CEO acknowledged that while he and a small group of physician leaders have tried to focus on a long-term physician network strategy, “it has been impossible to move beyond putting out the ‘fire of the week’—when it comes to doctors, things that should be small decisions rise to crisis level, and that makes it impossible to play the long game.”

It’s obvious why this happens: decisions involving a small number of doctors can have big implications for short-term, fee-for-service profits, and for the personal incomes of the physicians involved. But if health systems are to achieve ambitious goals, they must find a way to play the long game with their doctors, enfranchising them as partners in creating strategy, and making (and following through on) tough decisions. If physician and system leaders don’t have the fortitude to do this, they’ll continue to find that doctors are a roadblock to transformation.