Category Archives: Trust

“Doing Good to Build Trust”

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, ACA, Capitalism, Common Good, Common Sense, Concentration of Wealth, Decency, Economy, Inequality, Moral Obligation, New Deal, Politics, Poverty, Public Good, Public Opinion, Public Trust, Reregulation, Retrogression, Safety Net, Social Security, Tariff Fallout, Tariffs, Trust, Trust Building • Leave a comment
https://rooseveltinstitute.org/blog/doing-good-to-build-trust/?utm_source=Roosevelt+Institute&utm_campaign=1891326de5-Krugman_2025_04_15&utm_medium=email&utm_term=0_-1891326de5-529667778

Elizabeth Wilkins: 

Hi, everybody. I’m Elizabeth Wilkins, president and CEO of the Roosevelt Institute, and I am delighted to be here today with some big news and a very special guest. I am thrilled to announce that Nobel Prize–winning economist Paul Krugman will be joining the Roosevelt Institute as a senior fellow. Paul is one of the world’s most cited economists and widely read commentators, and for good reason. His longtime New York Times column and his Substack now prove that he is not just a bold thinker, he is one of the clearest and most dynamic communicators in the field—skills that come in handy when you want to break through the noise of this moment and get people thinking about what the future of our economy and democracy might look like. And, of course, this is what Roosevelt is all about: understanding where we are in the moment and where we need to go. 

So, Paul, I’m so excited to talk with you today. I started at Roosevelt in February, so we’re both new kids on the block here, and I will start with a question that I am getting a lot recently: Why your interest in affiliating with Roosevelt, and why now?

Paul Krugman: 

Well, now I think because partly having retired from the New York Times, I’m free to pursue other affiliations. The Times is kind of a jealous organization. But now that I’m no longer there, I can do this. Roosevelt has been a tremendous reservoir of progressive thinking and progressive economics. I was heavily reliant on Roosevelt research particularly during the aftermath of the 2008 financial crisis—I’ve been around for a while here. [There’s] still novel stuff going on, and this seemed like a good affiliation to have in these times, to join the ranks of people with Roosevelt affiliations who have been providing really urgent commentary. 

Elizabeth: 

Thank you for the kind words. We appreciate it. One of the things that made your Times column such a hit for decades was the unique voice that you bring to economics: your ability to break down orthodoxy and cut to the core of what’s happening in plain terms. It almost goes without saying that there is a lot to cut through right now. We’ve seen attacks on government programs and on whole government agencies. And as you have noted and I have noted, the fate of Social Security and our social compact hangs in the balance right now. So, can you talk—with a little bit of your perspective on economic history—about what you think makes this moment unique? And through all this noise, what people should be paying attention to, and why? 

Paul: 

We are in a moment where we’ve lived, really since the New Deal in—whatever you want to call it—the Keynesian consensus. We’ve lived in a world where, we by no means went to socialism, but we had capitalism with some of the rough edges sanded off. Not as many of the rough edges that I would like, but we have Social Security, we’ve had Medicare since the 60s. We have Medicaid. We have the Affordable Care Act. We have a whole bunch of social insurance programs. We have government efforts to at least somewhat regulate the excesses and harms of markets. And now we are at a moment where there’s a real possibility that we may really lose that. We’re talking about possible retrogression, and the possibility of moving forward after this current moment has passed. But we really are at a point where the certainties of the underlying continuity of a fairly decent social compact is at risk. And so this is really new. 

Elizabeth:

I really like that phrase, this “capitalism with the rough edges sanded off.” And what I’m hearing you say is basically the idea of the social compact is that, yes, we have capitalism, but we also have a commitment to providing a measure of security for people, and that’s the deal we have struck. You write a ton about the New Deal and FDR [Franklin D. Roosevelt]. Can you just expand a little bit about how to think about that trade-off, how long that consensus has held, and if there are any other moments in our economic history where there have been similar threats to that compact that we can learn from? 

Paul: 

I like to think about—it’s 1933, and the world economy has collapsed. There are a lot of reasonable people [who] have concluded that capitalism is irredeemable and can’t be saved, and that on the other hand, you have a lot of forces of repression out there. And along comes several countries—with the US in some ways leading the New Deal order, which says, no, we’re not actually going to go socialist. We’re not going to seize the commanding heights of production, but we are going to try to make sure that extreme hardship is vanished, as far as we can manage. We’re going to try to make sure that workers feel that they are a part of, and that they have rights and claims to, the system. There was very much this moment when we reached a kind of—I don’t know if it’s a compromise or a synthesis—but the idea of a basic standard of decency, the Four Freedoms. While at the same time saying that it’s not evil to make profits. It’s not evil to be personally ambitious. But we are going to try to make it so that everyone shares in the gains from economic activity. 

And that really held. I mean, there was the moment when the Reagan administration came in, which represented, in many ways, a turn away from that New Deal consensus. But not to the extent that we have now. In moments of economic stress, people tend to say, well, maybe this thing doesn’t work anymore. The 1970s with stagflation, the aftermath of the 2008 financial crisis. That has basically been the case during attempts to turn away from the basic structure (which in the US context have always been a turn to the right, but in principle, you could imagine a turn to the left, but that hasn’t ever really happened in this country). And until right now, it has always seemed that the public wouldn’t stand for it. When push came to shove, when George W. Bush tried to privatize Social Security, it was a sort of resounding, “no, you don’t. We love Social Security.” But the possibility that we will have either explicitly or de facto undermining of those institutions seems much higher right now just because we live in such—well, we’re not gonna talk about the politics particularly, but there’s a possibility that we’ll lose it, that it will go away. And the one thing that I would say is that there’s this political action by itself, but there’s also the importance of getting the facts clear, getting the way the world works clear. No, there are not 10 million dead people receiving Social Security benefits. No, tax cuts and deregulation are not the only way to achieve economic growth. These are really critical things. Facts matter, analysis matters. 

Elizabeth: 

I’m just gonna pick up on that last thing you said about facts matter, analysis matters, and maybe go a little bit toward your true economist side. It’s not just Social Security we’re talking about. As you know and just mentioned, we’re in the middle of a tax and budget fight where we are very much looking at a situation where tax cuts for the wealthy might be traded for cuts to the programs that are specifically for our most vulnerable, like Medicaid and SNAP. This obviously has both political economy and democratic implications. It also has economic implications. Can you talk a little bit about this idea of what it means—this kind of wealth transfer, frankly, from the poorest to the richest, both in terms of hard facts, economics, and growth? And in terms of the social compacts that we’ve been talking about. 

Paul: 

It’s become increasingly clear that taking care of the most vulnerable members of society—it’s something you should do. It’s a moral obligation. But it’s also good economics, especially by the way of children. If you ask, a dollar spent on ensuring adequate health care and nutrition for children clearly pays off with multiple dollars of economic performance, because those children grow up to be more productive adults. 

One way to say this is that conservative economic doctrine is all about punishing, it’s all about incentives: Poverty should be painful and wealth should be glorious. And what that all misses is the importance of just plain resources. That if low-income families cannot devote the resources to their children that you need to make those children fully productive adults—some will manage despite that, but just plain making sure that everybody in the country has the resources to make the most of themselves and their children is an enormously practical thing. It’s not just soft-hearted liberal talk, though I am a soft-hearted liberal, but it’s also just what you need to do if you want to make the most of your country’s potential. 

Elizabeth: 

I’m going to take another policy area, one actually that you know a lot about. It’s the area of focus that won you your Nobel Prize. You, in recent months, have been saying that one of the biggest risks of the Trump administration’s economic agenda is their chaotic tariff policy. We are currently recording the day after Liberation Day. And last year you predicted that the cronyism of those tariffs might be the biggest story in the long run, in addition to the chaos. So can you walk us through those risks, the chaos and the cronyism, and to what degree you’re seeing that play out for American workers and consumers? And, you know, why—I mean, there’s a lot of reasons why—but why are these tariffs different than the years that we’ve seen them in the past? 

Paul: 

There’s a standard economics case against tariffs, which is that it basically leads your economy to turn away from the things it’s really good at and start doing the things that it’s not especially good at. So for example, in New York, there’s lots of memories of the garment industry, but we really don’t wanna bring the garment industry back. Those were pretty bad jobs, and it happens to be stuff that can be done—where they can do it reasonably well—in Bangladesh, which desperately needs that industry, and we should be doing the things that we’re really good at instead. So that’s the classic case. What we’re discovering is that the rise of this hostility toward trade has additional costs. And the most immediate one is just plain that we don’t know what it’s gonna be. 

As you said, we’re recording this the day after Liberation Day, which—nobody knows. I have to say that the actual tariff announcement shocked a lot of people, because it was both much bigger and much more arbitrary than people expected. I wouldn’t have been really shocked if there was a 15 percent across-the-board tariff, because that had been foreshadowed. But instead, there’s different tariffs for every country and this wasn’t really on anybody’s playbook. And nobody knows whether it [will] persist. 

Think of yourself as being a business person trying to make decisions. You’re going to make an investment in your business—or are you? I mean, should you be spending money and making commitments on the basis that, okay, we’re gonna have 20 percent tariffs on all goods from Europe, or should you make it on the proposition that, “look, that’s crazy, those won’t last”? And both of those are defensible propositions. Anything you do, if you invest on the assumption that the tariffs are here to stay, then you’ll have made a terrible decision if they don’t. And so there’s a lot of paralysis that comes from the chaos. I’ve always been skeptical of people who invoke uncertainty as a reason that policy is holding the economy back, but because it’s often used as an argument against progressive policies: Oh, you know, your universal health care goals, that creates uncertainty. But in this case, this really is a major harmful issue. 

We have not yet seen the cronyism, but it’s clearly potential. The whole root of—the reason why trade is where the dramatic stuff is happening [is because] US law creates a lot of discretion for the executive branch in tariff setting. Tariffs were only supposed to be applied as remedies for specific kinds of shocks or specific kinds of threats, but the decision about whether those conditions apply lies with the executive branch. So a president who wants to can do whatever they want on trade. And in the past, that’s always been held back by concern about: How will other countries react? What about the system? We built this global trading system. So it’s always been assumed that the president would have a wider view. 

But if you take that away, then it’s not just arbitrary in terms of what are the overall levels of tariffs, it’s who gets a tariff break. And in fact, every time we do impose tariffs, there tend to be some exemptions. There are good reasons why sometimes you might want to exempt somebody from a tariff. But if it’s all arbitrary, the exemption might come because you go golfing with the president. And so that creates a lot of problematic incentives. We actually saw that in 2017, 2018, when the US was putting on tariffs—which looked trivial compared to what’s now on the plate—but it was very clear that industries and companies that were politically tied to the administration in power were much more likely to get exemptions than those that weren’t. So we actually saw this. We live in amazing times, and I mean that in the worst way. But everything that happened in the first go-around of what we called the trade war, it was really nothing—it was a skirmish compared with what’s happening now. But now, the possibilities are huge. 

There’s a whole field of economic research on what the field calls rent-seeking. Economies where the way to succeed in business is not to be good at business, but to be good at cultivating political connections. And much of that actually was about tariffs and import quotas, but typically in developing countries. So there was a large concern that in places like Brazil or India, they were actually sacrificing a lot of potential gainful economic activity because businesses were focused instead on currying political favor. Well, could that happen here? Yes, it could. Very much down the road. I mean, I have to say that the speed and scale of the stuff that’s going on makes me think that we may have a global trade war and massive disruption before we even get around to the cronyism. But it’s down there, it’s in there. It’s in the mix. 

Elizabeth: 

We have seen, before yesterday, a real stop-start, put-on put-off, someone complains and we delay for a month. So I think we’ll really have to see, post-yesterday, where this goes. And this is a helpful roadmap for what to look for. 

Paul: 

And we should bear in mind also that the rest of the world has agency too. And part of the issue here is that the chaotic nature of the rollout is—again, the rest of the world has agency. And if you want to avoid getting into a lot of tit-for-tat, you probably want to at least explain what you’re doing and not be offending other countries unnecessarily. But, of course, we are doing that. I mean, to make Canada turn anti-American really takes—I didn’t think that—that wasn’t on my dance card for my career. 

Elizabeth: 

Roosevelt has argued for a long time for the strategic and targeted use of tariffs alongside industrial policy. And also, of course, alongside a strong sense of what rules and regulations you have to use to control unproductive uses of corporate and market power in that context, to make sure that the incentive structure that you’re creating actually targets the gains that you’re trying to make. But we’ve also argued for a way to transition into those things that takes account of some of the concerns that you’ve raised in terms of creating a stable business environment for investment, creating predictability, explaining things to mitigate the risk of fallout. And we’ve heard members of the administration say, “hey, yes.” [They] admit that this is going to be a little bit painful for a while, but it’ll be beneficial in the end. 

You started to say this, but can you just pick apart for us when we hear someone say, “there might be a little bit of turmoil for a while,” what are the real costs of what that kind of turmoil might be for businesses, workers, consumers? 

Paul: 

I actually don’t buy—I mean, yes, there’s short-term pain, but it’s not short-term pain in exchange for a long-run gain, by any economic model I can think of applying. It’s actually short-term pain in return for probably even bigger long-term pain. The story about how this gets better is really not there. 

I’m not a purist free trader. I’m not a laissez-faire guy. I mean, there’s a kind of idealized version of the post–New Deal consensus, which is, leave economic activity up to the markets, and then we’ll have a social safety net. But that has never been enough. We always need some additional stuff. We always need some industrial policy. And I think we need it more than we have actually had. But the reality is that you still want to have a lot of [trade]. International trade has, for the most part, been a plus for the US economy. There were distributional issues, but even there, it’s probably been a net-plus for the great majority of workers. And you’d want to mitigate the parts that aren’t. So the idea that shutting it down is going to produce a better outcome 5, 10 years down the pike, there’s really no clear argument to that effect. What is true is that we have this additional overlay, which is that nobody knows what the world is gonna look like next year. And so this is a tremendous inhibiting force. 

Normally, when people say that, well, protectionism causes recessions, my answer has been no. There are lots of reasons not to like protectionism, but there’s no story about how it causes recessions. But protectionism where nobody knows what it’s gonna be, where nobody knows what the tariff rates are gonna be next year, that could cause a recession. So we may have the first real tariff-induced recession that I’m aware of in history, like, now. 

Elizabeth: 

That will give us something to keep an eye on over the next year and more. 

I’m gonna change topics a little bit. We started, a little bit, to talk about power in the economy. Who has it? Who doesn’t? It’s something that you’ve explored. In your book Conscience of a Liberal, you wrote something that I really like: “The New Deal did more than create a middle-class society. It also brought America closer to its democratic ideals by giving working Americans real political power and ending the dominant position of the wealthy elite.”

Particularly in the environment we’re in today, what do you think policymakers should be thinking about in terms of what we can do to bring that New Deal power lens both to this moment and to a moment where we would have the ability to set the rules to put our country on a better course? 

Paul: 

There are two ends to that. One is just giving ordinary working- or middle-class people effective vehicles to exert political influence. And of course, we have the vote. (There may be that there’s no “of course” about that, but in principle, at least we have votes.) But I don’t think we really realized how much a strong union movement contributed toward making democracy work better. You can say, well, why isn’t the individual right to vote enough? And the answer is, look, there’s collective action problems. Politics is completely pervasive of things that would be good if everybody did them, but maybe [there’s] no individual incentives. So organizing politically is always hard, and unions are a big force in that—or were. And to some extent, still are, but much less than they used to be. And that’s really important. We are a less democratic country in practice because we don’t have workers organized. That’s one end of it, and there may be other ways, although I have to admit that I’m not all that creative. I think the success of unions in really making America more American in the postwar generation is something that we have never managed to find other routes to do. 

Then on the other hand, there’s the question of the influence of malefactors of great wealth. The influence of vast wealth. And you don’t have to get too much into current events to say, well, we can really see that. I have to say, going back now, it looks like the plutocrats of the Gilded Age, by contemporary standards, were remarkable in their restraint and discretion. They didn’t try to buy influence as openly as the plutocrats today do. So now there are things you can do. It’s funny that our great grandfathers were much more open than we are in saying that one of the purposes of progressive taxation is to actually limit extreme wealth. And not simply because it’s more money to serve the common people, but because extreme wealth distorts democracy. Woodrow Wilson was much more willing to say things that would be regarded as extremely radical leftism now. 

So really to reclaim who we are as a nation, [who we] are supposed to be, we need to work on both those ends. We need to try to empower basically working Americans, ordinary workers to have a role. And maybe there are other things besides unions, but that’s the obvious route.

And then you also need to try both with rules about money and politics, but also perhaps, if we can eventually, [through] constraining policy that limits the accumulation of enormous fortunes. That also limits that distortion because we really are in a situation now where it’s—all of the warnings about, as FDR would have said, the powers of organized money seem far more acute now than they ever did in the past. 

Elizabeth: 

You mentioned ideas that once were acceptable to say in polite company that seem more radical now. This is sort of the business of Roosevelt, to think big about how we can solve these questions of the maldistribution of power in the economy and do them at a structural level. And how to make ideas about that part of the common sense. You’ve talked about how that is part of what happened with the New Deal—that New Deal institutions that were at first considered novel and radical, by the Eisenhower presidency had become [a] normal part of American life. How did that happen in your view, that change in the common sense? And what made them so enduring and what lessons can we find for today about how to reorient what seems impossible and what seems a normal part of life? 

Paul: 

One of the things that strikes me when I look at history, both of economic institutions and of economic ideas, is that lots of things seem radical and scary until people have had a chance to experience them. So there’s the famous Nancy Pelosi quote—often out of context—where she said that for people to really understand the Affordable Care Act, we have to pass it. And it wasn’t like we were going to pull one over on people. It was that, as long as it was merely a theoretical thing, as long as it was something in prospect, it was possible to tell scare stories about death panels and just say, what will this do? But then after a few years, it becomes part of the fabric of life. And then, by the time we actually came fairly close to losing it, people were outraged because even imperfect as it is, Obamacare is a terrifically important safety net for many people. 

You see that on a much larger scale [with] the New Deal changes. So if you go back to when FDR did his really stem-winding address in 1936 about the “I welcome their hatred” thing. The thing that was really the flash point—[that] was widely portrayed on one side of the political spectrum as an outrageous step that would destroy the market economy—was actually not Social Security, but unemployment insurance. It was like, “oh my god. You’re gonna actually pay people when they don’t have jobs.” And it turned out that hey, that’s okay. In fact—unemployment insurance was the most important thing that got us through COVID with minimal hardship. And now there are people, there’s always people who want to do away with these safety net programs. But things that can be made to sound ominous and radical when no one has actually experienced them can, after a few years, become part of the landscape. 

The New Deal first got us through the Great Depression, then got us through the war. And by the time the war was over, we had become a very different country—and I would say a much better country—in which people accepted that, yeah, we have a kind of public responsibility to limit extreme inequality, to limit extreme hardship. 

Elizabeth:  

I want to close this out with a note that you struck in your final New York Times column last December. It was a tough one. You wrote, “optimism has been replaced by anger and resentment,” and that “the public no longer has faith that the people running things know what they’re doing, or that we can assume that they’re being honest.”

I think that applies to government. It also applies to a lot of institutions across the board. So here is my question for you: What do you think it will take to rebuild trust in public institutions? And also, on a more personal level, how do you find the hope that we can make it there from here? 

Paul: 

Well, there’s nothing like actually doing good to build trust. If we can find our way past the current turmoil, I think that there’s an underlying reservoir of optimism still in America. And if we can get our way past this, all of these things that led us to this rather scary moment, then a few years of good governance can actually do wonders. I mean, I’m older than you are, and certainly older than a lot of the people I deal with, but I remember the 1990s. And although there are many imperfections and lots of things, it’s hard to remember just how positive people were feeling about America by the end of that decade. And that was thrown away through a variety of bad decisions. But still, it’s not that distant. It’s not that inconceivable. 

And so I would think that the way forward is to get people in power who really do try to use it for good, get good programs, get good policy, get decent people. And there’s a lot of strengths in America. And this atmosphere of distrust and feeling that everyone is out to get you is self-serving. That will go away fairly quickly if it’s demonstrably not true. 

Now personally, I’m terrified. I’m not giving up, but you can see a lot of the things that we read about in the history books about how societies go wrong are no longer abstract. We can see those emotions, we can see those forces out there. But the truth is that a better environment is actually—people become more generous, more positive when things are going okay. And we really don’t want to have a situation where [this] zero-sum, “I’ve got mine, I don’t want anybody else to get it” thinking is validated by experience. So, try to make things work is how we go from here. 

Elizabeth: 

I can tell you one of the things that gives me hope, Paul, is that in a moment where we are watching some institutions capitulate and fold in a way that is really disheartening, we also have some voices that are getting louder, not softer, and I think one of them is yours. So I wanna say how appreciative I know I am personally and how excited I know the [Roosevelt] Institute is generally to have you on as a senior fellow, in part because I really do think you are a voice out there that’s making sense of what’s happening. That’s helping us put into a context that we can understand the flood of news that we are experiencing. And, again, to demonstrate what it looks like to be a consistent voice with good analysis and moral clarity about what’s happening now, and also who we have been in the past and who we could be again. So we really appreciate your work, and we really appreciate you taking the time to chat today. 

Paul: 

Well, thank you, and I’m glad to be on board. 

Quote of the Day – On Election Debate

Posted on by • Posted in 2024 Election Issues, Honesty, Integrity, Leadership Character, Leadership Culture, Leadership Ethics, Leadership Integrity, Leadership Intent, Leadership Transparency, Leadership Trust, Quotation, Thought Leaders, Thought of the Day, Trust, Truth • Leave a comment

“I would support a debate where when they lie, they get an electric shock.”

Paula Poundstone

The Emotional IQ of Leadership

Posted on by • Posted in Board Engagement, Complex, Emotional IQ, Emotional Maturity, Empathy, Humility, Leadership Culture, Leadership Integrity, Leadership Trust, Leadership Values, Organizational Trust, Servant Leadership, Trust, Trust Building, Vulnerable • Leave a comment
https://www.kaufmanhall.com/insights/thoughts-ken-kaufman/emotional-iq-healthcare-leadership?utm_source=mkto&utm_campaign=ken-weekly-blog&utm_medium=em&utm_term=240110&mkt_tok=NjU0LUNOWS0yMjQAAAGQktz3EE-Icwp4lCmbbyhi-Nv9eBv6evN_iorx5bE-GNn6I5EYM8gZppQEmCeunBoe2kXyngKHhT_aYdOUDowg6v21S3P0_MIadT4rgMCWDDtD

I recently had dinner with my good friend and colleague, Dave Blom. For many years, Dave was the President and CEO of Ohio Health. During his tenure, Ohio Health was one of America’s most successful health systems by any measure. Dave Blom was known nationally as a calm, steady, and thoughtful hospital leader.

Dave and I were talking about the difficulties of leading and managing complex healthcare organizations in the post-Covid era. The hospital problems of finance, staffing, access, and inflation have been well itemized and documented. While the day-to-day operating problems are undeniably significant and persistent, Dave and I agreed that the hospital leadership issues that really matter right now center around the ability of hospital executives to possess and demonstrate an authentic emotional IQ to lead a diverse workforce in such difficult circumstances.

Such a realization is supported by the recognition that no matter how technically excellent they are, hospitals are just not like other organizations in other industries. Taking care of patients—in fact, taking care of communities—is not only managerially complicated but emotionally testing. Leadership gets much more complicated in the current environment.

Having moved the conversation to this point Dave and I then took on the definition of a workable and effective leadership emotional IQ. That emotional IQ is characterized by the following:

  1. Empathy. During Covid, when leadership was challenged at every level and at every American organization, the value of personal empathy moved to the forefront. Empathy is defined as “the ability to understand and share the feelings of another.” More directly, a hospital CEO needs to understand and share the feelings of his or her entire organization. Great hospital leaders understand the difference between sympathy and empathy. Sympathy is a passive emotion, an emotion that notes and cares about a problem but doesn’t necessarily act on that problem. Empathy is an active emotion. A leader with empathy not only notes the problem but immediately moves to be of help either at the personal or organizational level, whichever is required.
  2. Vulnerability. Vulnerability is defined as “the willingness to show emotion or to allow one’s weakness to be seen or known.” Historically, executive leadership—especially in corporate situations—has been trained and encouraged not to show emotion or weakness. But organizations are changing, and the composition of the hospital workforce is different. The patient care process is emotional in and of itself and the daily operational interaction demands a different kind of leadership—a leadership that is comfortable with both emotion and weakness.
  3. Humility. Executives who show humility “are willing to ask for help and don’t insist on everything done their way; they are quick to forgive and are known for their patience.” Humility also reflects changing organizational ecosystems. Humility is not generally indicative or compatible with the “military command” model of leadership. It is more supportive of a collaborative and cooperative leadership model, which has at its core a heavy dose of decentralization and delegation.

As our dinner was coming to a close, we took note of two other leadership observations.

First, when you create a leadership team that fully embraces the principles of empathy, vulnerability, and humility, then that emotional IQ combination creates the highest order goal of organizational trust. All of this is exceptionally meaningful since organizational trust is more important than ever, given that it is in such short supply at all levels of American society. Dave Blom then advanced the discussion to one further point. When you gain the full value of empathy, vulnerability, and humility and you add to that the organizational trust you have established, all the principled prerequisites for establishing corporate and managerial integrity are in place. Empathy plus vulnerability plus humility equals organizational trust. And then empathy plus vulnerability plus humility plus trust equals organizational integrity.

The emotional IQ of leadership is not created by accident. It requires a hyper-aware organization at both the management and Board level. It requires governance and executive leaders who understand that hospital success cannot be achieved by technical and clinical excellence alone. That success must be built on a platform of an emotional IQ that is supported, valued, and shared by the entire hospital community.

How ‘quiet management’ cuts through the noise of healthcare

Posted on by • Posted in Authentic, Employee Centric, Management, Quiet Management, Trust, Trust Building, Visibility • Leave a comment
https://www.beckershospitalreview.com/hospital-management-administration/how-quiet-management-cuts-through-the-noise-of-healthcare.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

There is no one-size-fits-all when it comes to managing teams, and managers may take different approaches based on team size, organization size, organizational needs and other factors. However, one approach has risen to the surface recently: “quiet management.” 

Career coach Adam Broda posted about the topic on LinkedIn last year. He said quiet managers stop checking employee start and stop times, let people choose to work where they want, encourage guilt-free time off, remove unnecessary meetings and distractions, listen to team feedback about how the manager manages, and give workers what they need to be successful, then step away and trust them to deliver.

“Quiet managers operate with a high level of trust in their employers and don’t micromanage,” Mr. Broda wrote. “This way, the job becomes more of a support role and gives managers the time to get out in front and lead by example instead of leading by structure and administration.”

To gain insight into what quiet management may look like in healthcare, Becker’s discussed the topic with three leaders: Kevin Mahoney, CEO of the University of Pennsylvania Health System, part of Philadelphia-based Penn Medicine, which also includes the Perelman School of Medicine; Karen Frenier, BSN, RN, senior vice president of human resources and chief nurse executive at Orlando (Fla.) Health; and Mitch Cloward, president of Salt Lake City-based Intermountain Health’s Desert Region.

Mr. Mahoney leads health system operations, spanning six hospitals, 11 multispecialty centers and hundreds of outpatient facilities in Pennsylvania, Delaware and New Jersey. He said he demonstrates quiet management by emphasizing the “why” behind Penn Medicine’s business, rather than the “how.” 

“At Penn Medicine, we believe we were founded to create and disseminate knowledge, and that’s what we try to do,” he said. 

The organization has found success with this approach; the breakthrough messenger ribonucleic acid technology that enabled the COVID-19 vaccines from Moderna and Pfizer-BioNTech came from the organization.

“So when you’re doing your job, you’re not just doing your revenue cycle job,” Mr. Mahoney said. “You’re also creating a hospital margin that allows us to fund research.”

He said he also works to be visible and assumes positive intent.

“I think everybody comes to work to do their very best,” Mr. Mahoney added. “We give them guidelines, we set priorities, but we need to let them get the job done.” 

Ms. Frenier described her management style as authentic and transparent. This means clearly and frequently communicating with team members.

“With quiet management, I think, communicate once and get out of the way,” she said. “And my conflict a little bit [with that] is you can do quiet management and have visibility at the same time. And I think that is so important. What is important for us, Orlando Health, our culture, my leadership style is very clear expectations, what our goals are, what our priorities are.”

Ms. Frenier also subscribes to the lean management philosophy of leaders “going to the gemba” — a Japanese term for “actual place” — a principle that involves direct observation to improve work processes. 

“It doesn’t make any sense for me to say, ‘Here’s how to fix the problem.’ The problem needs to be answered by the team members who do the work,” she said. “Our role [as managers] is to remove obstacles, move things along sometimes. So to me, that’s part of quiet management. However, my conflict is that there’s nothing quiet about it.”

The approach is one Mr. Cloward said is woven throughout the healthcare workforce.

“Quiet leadership and quiet managers are frequently observed in healthcare,” he said. “This may be associated with our primary purpose and our mission of selflessly devoting ourselves to caring for our patients and the communities we serve. I also believe that most caregivers and leaders that choose a career in healthcare do so because they want to help others.”

Refining meeting strategy

Meetings are an important part of a manager’s responsibilities, but too many meetings could leave some employees overwhelmed and less clear on the task at hand. A 2022 report from Otter.ai and the University of North Carolina at Charlotte found nearly one-third of meetings are unnecessary and that organizations waste millions of dollars on them.  

From Mr. Mahoney’s perspective, the productivity of meetings can get lost in the virtual world and in Zoom meetings, so his focus is on getting back to productive meetings.

“You wouldn’t go into a conference room and put a brown bag on your head,” he said. “But people get on a Zoom meeting and they’ll turn the camera off, and we’re losing the engagement.”

To maximize engagement, his overall philosophy is that daily huddles on units are better than meetings to solve a problem, interact and move forward with a solution. He said video and online tools have also been helpful to disseminate his words to 50,000 employees.

Ms. Frenier also expressed support for huddles over formal sit-down meetings. She said 259 nurse leaders across the company attended a huddle Jan. 11. 

“That excites me,” she said. “That number is as good as when we started it a little over a year ago. And, when I start with my updates, if Hospital Consumer Assessment of Healthcare Providers and Systems, our customer experience and emergency department throughput is our top work, then I’m very consistent in giving us an update on how that work is. [Managers must] be clear with your expectations. You can’t talk about a new one every day. But you’ve got a follow-up [via huddles]. The best way for us to connect is to be visible, develop relationships.”

To help with that connection, Orlando Health recently rolled out new behavioral expectations for workers across all teams. The expectations center around communication, connection, commitment and curiosity. 

“We have written out what that means,” Ms. Frenier said. “The next step for that is to make our coaching plans easier for leaders to have that conversation [about those expectations].”

Facing conflict head-on

No matter the leadership style, managers at one time or another likely will have to handle challenging conversations or conflicts within their team. Mr. Mahoney’s approach: “Handle them straightforward first thing in the morning, get it resolved, get it behind us, and then don’t let it linger and carry forward.”

He said it is especially important to address the obstacle or problem rather than the individual.

“I do that with a lot of data, not just Penn data, but industry trends,” Mr. Mahoney said. “We all think we’re an island unto ourselves. [But no matter the organization], the issues are very similar. 

“We can’t control our external environment; we can just control our response to it. So a lot of the confrontational meetings that we have are because we have to change the way we’re doing business. Not because we’re doing it wrong, but because of the macroeconomic headwinds that we’re facing.”

Approaching challenging situations as a quiet manager often reflects the style of “servant leadership,” Mr. Cloward said. 

“I strive to understand what they hope to accomplish in their current job and what they hope to achieve over time with career goals and aspirations,” Mr. Cloward said. “I dedicate time to helping them remove barriers to reduce frustration and increase satisfaction as we serve. I establish clear direction so that expectations are fully understood and in doing so, I strive to inspire rather than force, coerce or incite fear.”

Being effective — quietly

There are other practices or habits that quiet managers use outside of handling challenging conversations or conflicts within their team. Mr. Mahoney, for example, stands at a connecting hallway between two buildings that is frequented by workers and answers people’s questions in between shifts. 

He is also in favor of asking workers more open-ended questions such as, “What can I do to make your job easier?” and “What obstacles did you face today that I could work to eliminate?” instead of a question like, “How many bills did we collect today?” 

“Because, again, people know their jobs,” Mr. Mahoney said. “They don’t need me to do their jobs.”

Ms. Frenier agreed.

“It is our role [as managers] to allow the team members to be the best they can be and get out of the way,” she said. “… Supporting them with the right tools and documentation that’s not so burdensome, and, if there’s technology that helps us do our job better, that’s the work we should be doing.”

However, being effective as a quiet manager does not begin only once someone is hired and part of a team. Rather, it can start as early as the hiring process, Mr. Cloward said, and approaching the process from this angle can improve workplace culture. 

“Quiet leaders are leaders who have been disciplined in the hiring process,” he said. “They hire the very best caregivers who not only have technical/clinical skills, but also human skills — caregivers who are altruistic, who devote themselves to serving our patients and our communities.” 

Misinformation About Health Is Nothing New

Posted on by • Posted in Disinformation, False, False Information, False Narrative, Lying, Misinformation, Mislead, Misleading, Trust, Truth • Leave a comment
Misinformation About Health Is Nothing New

Misinformation. A recent and major problem facing us all, and one that is pervasive in many realms including medicine and healthcare, which are, of course, favorite realms around here. But is all this stuff recent? Is misinformation a new phenomenon in the world of medicine and health, or does it have a history?

The answer to that, thanks in part to funding from the National Institute for Healthcare Management, is the topic of this week’s Healthcare Triage.

Healthcare Finance Trends for 2023: Multiple Intersecting Challenges

Posted on by • Posted in Buy Now Pay Later (BNPL), Capacity Constraint, Commitment, Consumer Experience, Consumer Preferences, Consumerism, Cost Management, Cost Reduction, Cybersecurity, Digital Front Door, Earned Wage Access (EWA), Growth Strategies, Healthcare Finance Trends, Hospital at Home (HaH), Investment, Investments, Mobile Payments, Outpatient Care, Outpatient Surgery, Patient Financial Experience, Patient Financing, Price Transparency, Real-time Payments (RTP), Recruiting, Reimbursement Gaps, Retention, Rising Acuity Levels, Service Line Rationalization, Telemedicine, Trust, Trust Building, Virtual Care Strategy, Workforce Challenges • Leave a comment

https://www.commercehealthcare.com/trends-insights/2023/healthcare-finance-trends-for-2023

This annual look at high-impact trends affecting healthcare in the coming year is based on evaluation of current industry research data. Healthcare Finance Trends for 2023 (Trends) explores eight themes identified by CommerceHealthcare® ranging across four areas:

  • Financial. Providers enter the year contending with multiple financial stress points. They will also seek growth in technology-enabled remote care.
  • Patient financial experience. The need to drive not only improvement but also personalization of the financial experience is paramount. A central role will be played by patient financing programs which will see growing demand in 2023.
  • Trust. Building trust with all constituencies is explored as a linchpin for long-term provider success. The latest findings on cybersecurity show that this contributor to trust will continue to consume leadership attention.
  • Digital transformation. Pursuit of digital-first operations is accelerating, with the finance area an important focus. Emerging payment modes are finding a home in healthcare’s digital finance landscape.

This report’s consistent message is that these trends intersect in ways that compound both the challenges and the upside potential of strategies that address them.

1. Multiple Financial Stress Points Will Constrain Options

Healthcare’s financial predicament for the next 12–18 months is being described in strong terms. Citing $450 billion of EBITDA that could be in jeopardy, more than half of the industry’s project profit pool by 2027, one analyst suggests “a gathering storm.” Another perceives “broad and serious threats” as “elevated expenses” erode margins and exact “a profound financial toll.” Fitch Ratings issued a “deteriorating” outlook for nonprofit health systems.

These financial headwinds are upending healthcare’s traditional status as “recession-proof.” It is helpful to probe the multiple forces in play, the urgent workforce management challenge, and the varied solution set.

Multiple stress factors at work

Observing that margins will be down 37% in 2022 relative to pre-pandemic, a recent stark assessment concluded, “U.S. hospitals are likely to face billions of dollars in losses — which would result in the most difficult year for hospitals and health systems since the beginning of the pandemic.”

A confluence of factors is exacerbating the stress for 2023:

  • Rising acuity levels. Over two-thirds of surveyed C-suite executives said patient health has worsened from pandemic-induced delayed care. The upshot, stated by 27% of CFOs, is rising expenses due to higher acuity. Inpatient days are projected to increase at an 8% rate over the coming decade.
  • Reimbursement gaps and inflation. Commercial and government reimbursement rates are not keeping pace with rising costs. Surging inflation is widening this gap. Hospitals are also reporting substantial insurer payment delays and denials.
  • Investment declines. Stock and bond market declines have removed a cushion for operating weakness. Market uncertainty will complicate 2023 portfolio management.

Persistent workforce concerns remain center stage

Burnout and shortages have disrupted the clinical workforce. Nearly 60% of physician, advanced practice provider and nurse survey respondents said their teams are not adequately staffed, and 40% lack resources to operate at full potential. Many providers face extreme to moderate shortages of allied health professionals.

The problem extends beyond the clinical. A survey saw 48% of respondents experiencing severe labor deficiencies in revenue cycle management (RCM) and billing, and one in four finance leaders must fill over 20 positions to be fully staffed.

An executive outlook highlighted demonstrable impact on financial performance and growth from these workforce problems, citing reductions in profitability, capacity and service (Figure 1).1

What impact will staffing challenges have on your hospital?

View PDF of Figure 1 chart[PDF]

Several studies detail negative outcomes:

  • Expenses. Hospital employee expense is expected to increase $57 billion from 2021 to 2022, with contract labor ballooning another $29 billion. Average weekly earnings are up 21.1% since early 2022. Half of medical practices budgeted higher staff cost-of-living increases in 2022. Shortages plague post-acute facilities as well. Their reduced capability to accept discharged patients is lengthening many hospitals’ patient stays.
  • Capacity constraint. Two-thirds of healthcare leaders identify “ability to meet demand” as their top workforce concern, suggesting a “looming capacity gap between future demand and labor supply.”

Range of measures being deployed

Health systems, hospitals and practices will vigorously pursue at least four direct actions to overcome the financial and staffing hurdles:

  • Cost cutting. Expense control will be paramount and “hospitals will be forced to take aggressive cost-cutting measures.” McKinsey estimates total industry administrative savings of $1 trillion through multiple aggressive changes.
  • Service line rationalization. Providers are rethinking how they deliver services to optimize efficiency. One path is utilizing “lower level” healthcare professionals in ways that free RNs and LPAs for more complex work suited to their top skills. Integrating remote care into the mix is another core element of the strategy.
  • Recruitment and retention programs. Attracting and retaining talent is crucial. Compensation is one avenue. Over two-thirds of organizations are offering signing bonuses for allied health professionals. Some are instituting value-based payments for physicians, offering salary floors to protect from drops in patient volume. CFOs and CNOs are joining forces to invest in nurse retention strategies. 
  • Staffing management. An increasingly popular tool to reduce labor cost and optimize staff resources is outsourcing. Figure 2 shows that RCM is leading the way among those using the solution.
Outsourcing solutions being pursued

View PDF of Figure 2 chart[PDF]

2. Growth Strategies Favor Outpatient, Virtual, Acute Home Care

Pursuing top line growth in tandem with reining in expenses is essential. Inpatient volume growth has been tepid for several years ─ essentially flat in the 2016–20 period (Figure 3).

Inpatient visit volumes 2016-2020

View PDF of Figure 3 chart[PDF]

Leaders have been pivoting to outpatient and virtual care to diversify revenue streams. Two high-potential 2023 growth tracks in this sector merit deeper assessment.

Telehealth

Considerable evidence attests to strong commitment to telehealth and remote care. Sixty-three percent of physicians worldwide expect most consultations to be performed remotely within 10 years. Approximately 40% of health centers are using remote patient monitoring today. Consumers are also positive: 94% definitely or probably will use telehealth again, 57% prefer it for regular mental health visits and 61% use it for convenient care.

Telehealth is still in early stages of maturity. Only 4% of surveyed top executives consider their organization proficient at implementing remote care. Healthcare is also recognizing that a full telehealth ecosystem must be constructed. A physician leader explained that the industry’s early telehealth incarnations failed to build “virtual-only environments or really drive e-consults as a way of doing things.” A vital ecosystem demands alterations to current contracts, coding, collections, patient financing, staff training and other business practices.

Hospital-at-Home (HaH)

Health systems see particularly promising growth in the provision of acute care in patients’ home settings, including post-surgical and cancer treatment. The federal government has already allowed waivers to 114 systems and 256 hospitals to obtain inpatient-level reimbursement for acute care at home. However, these waivers were prompted by the pandemic and are slated to end in early 2023. The renewal uncertainty has stymied some activity and represents an overhang on the opportunity. However, enthusiasm appears strong, and 33% of hospitals in a recent poll said they would be prone to continue HaH even without renewal.

The forecasts are encouraging. Over half of hospitals believe it likely they will utilize HaH for at least half of their chronically ill patients over the next several years (Figure 4).

Hospital-at-home expansion

View PDF of Figure 4 chart[PDF]

HaH exists within a broader matrix of home care, and solid growth is anticipated across the range of home procedures (Figure 5).

Home procedure 5-year forecast

View PDF of Figure 5 chart[PDF]

Harvesting the HaH potential will require implementation of current and emerging enabling technologies in remote monitoring, high-speed networks and artificial intelligence that generates algorithmic guidance for caregivers and patients alike.

3. Strong Drive to Improve and Personalize the Patient Financial Experience

Today’s healthcare market dynamics place a premium on positive patient experiences. The goal is to deliver “an empathetic relationship between customers and brands built on what the customer wants and how they want to be treated.” It is a complex undertaking, with numerous touchpoints as captured in HFMA’s Consumerism Maturity Model (Figure 6).

Consumerism maturity model

View PDF of Figure 6 chart[PDF]

An array of studies underscores the value proposition for intense provider focus on patient financial experience:

  • Sixty-one percent of consumers said that ease of making payments is very or somewhat important in decisions to continue seeing a doctor. Over half of patients also said text message reminders make them very or somewhat more likely to pay a bill faster than usual.
  • Thirty-five percent of respondents “have changed or would change healthcare providers to get a better digital patient administrative experience.”
  • A quality financial experience encompasses “simplified explanations, consolidated bills that match one’s health plan benefits, clear language displaying patient liability and payment options.”35

Significantly improving the financial experience requires a unified strategy, not just a collection of individual initiatives. Three threads to such a strategy will be prominent in 2023.

Using a Digital Front Door

Organizations have been moving swiftly to channel many patient financial transactions through an integrated Digital Front Door (DFD). This approach offers patients a singular online point of access and intelligent navigation to needed services.
Growth is accelerating. A DFD is their patients’ first contact point for 55% of responding organizations, according to one technology survey.  A leading forecaster sees 65% of patients engaging services via digital front doors by 2023.

Expanding price transparency

Mandates for full price transparency and “no surprises” billing are in effect, but estimates of compliance are mixed. An analysis of 2,000 hospitals determined that only 16% met the requirement to post an online “machine readable” file displaying clear charges for 300 “shoppable services.” Another assessment showed a more substantial 76% of hospitals had posted files, and 55% were deemed “complete.” One provision of interest to practices is the “good faith estimate” of expected charges required to be given to uninsured and self-pay individuals when they schedule visits.
CommerceHealthcare® has worked with clients to enhance the patient financial experience by complementing their website pricing data with clear information on patient financing options and enrollment access. Bill pay information can also be added for one-stop guidance.

Personalizing the experience

Beyond choice and convenience, the deeper objective is truly personalized experiences throughout the care journey. The words of leading analysts best define the drive to personalize:

  • “Tomorrow’s healthcare experience will be built by patients tailoring their own experience.”
  • “By 2024, 30% of chronic care patients will truly own and openly leverage their personal health information to advocate for, secure, and realize better personalized care.”

Opportunities abound to personalize the patient financial experience. Automating manual processes establishes a foundation. Patient financing with no- or low-interest credit lines and flexible terms can produce monthly payment schedules tailored to each patient’s needs. Refunds can be made through multiple payment modes to meet varying patient preferences.

4. Evidence Underscores Growing Demand for Patient Financing

Emphasizing patient financing as part of the overall experience is powerful. Patients continue to struggle paying for care. Recent granular data details three related forces at work.

Meeting care costs difficult for many patients

Commonwealth Fund found that 42% of individuals had problems paying medical bills or were paying off medical debt during the past year, while 49% were unable to pay an unexpected
$1,000 medical bill.42 Health costs trigger reduction in a range of personal expenditures, led by deferring or avoiding care and drugs (Figure 7).

Cutting back on household spending due to rising healthcare prices

View PDF of Figure 7 chart[PDF]

Twenty-eight percent of Americans now describe themselves as less prepared than last year to pay for routine or unanticipated care.

Patient obligation for care costs still rising

Patient obligation continues its upward march. Insurance premiums have climbed steadily for both the insured and their employers, and employees now pay over $6,000 annually on average for family coverage (Figure 8).45

Average annual worker and employer premium contributions for family coverage

View PDF of Figure 8 chart[PDF]

High deductible health plans (HDHP) also place substantial burden on the patient. Through 2021, 28% of workers were enrolled in an HDHP with an average family deductible of $4,705. Employer satisfaction with these plans is high, auguring further expansion.

Providers feeling the financial effects

Patient payment difficulties are clearly impacting provider financials. A recent in-depth analysis uncovered substantial self-pay issues:

  • Self-pay accounts represented 60% of 2021 patient bad debt, up from 11% in 2018.
  • Nearly 18% of patient balances were over $7,500 and 17% over $14,000. Collections were noticeably lower at these balances.

Multiple chronic conditions add to the problem. A recent extensive analysis concluded: “Among individuals with medical debt in collections, the estimated amount increased with the number of chronic conditions ($784 for individuals with no conditions to $1,252 for individuals with 7–13).”

For their part, providers will be encouraged to broaden patient financing programs. Patients are certainly interested. When asked, 62% of consumers indicated they would use financing options or creative payment plans if available for large bill amounts. Many health systems, hospitals and practices will turn to outside help to satisfy the demand. A recent analysis recommended that health systems “consider keeping shorter-term payment plans in-house and extended term plans through external partnerships.”

Organizations will also need to step up their communications. A survey revealed that 64% of patients were unaware that their doctors and hospitals offered payment plans or financial help.

5. Building Trust Becoming a Critical Success Factor

Trust has emerged as a paramount issue today for most organizations as they encounter an “imperative to build trust and transparency among different stakeholder groups — employees, customers, suppliers, regulators and the communities in which they operate.” Healthcare is no exception, and the trust issue is growing in both complexity and urgency.

Healthcare’s trust gap

Trust in healthcare took a hit from the COVID-19 experience. A spring 2022 HFMA survey recorded 44% of finance leaders saying they perceived decreased patient trust. Between April 2020 and December 2021, the percentage of Americans who trusted information from doctors “a great deal” declined by 23%, from hospitals 21%, and from nurses 16%. The patient financial experience also faces “drivers of mistrust,” according to surveyed leaders who cited general payment confusion (58%), surprise billing (39%), high prices of commodity items (28%) and lack of price transparency (26%). Building trust reaps dividends. People who trust their providers are five times more likely to stay with them than those who are neutral or distrustful.

Strategies for building trust

Industry experts promote several approaches to galvanize trust among all constituencies:

  • Commitment. Embedding trust deeply in the organization requires full support from senior leadership.
  • Data transparency and governance. IDC predicts that “by end of 2023, 20% of expenses on care integration solutions will be centered around ‘trust’ to protect data, workflows and transactions.” 
  • Reliance on fewer business partners. Many health systems, hospitals and practices are reducing their number of vendors in order to focus on a set of trusted long-term partners. For example, almost two-thirds of surveyed providers said they were seeking to streamline the number of software solutions over the next year. 

The bank partner advantage

A provider’s banking relationship can yield valuable collaboration in the trust-building endeavor. Banks enjoy solid trust among consumers. As an example, 53.4% of consumers rated banks as most trusted to provide payment “super apps” and financial digital front doors ─ exceeding the next closest source by 10 points.

6. Cybersecurity in 2023: No Rest for the Weary

Cybersecurity is part of the trust calculus and has become an evergreen topic in healthcare. Compromised data and ransomware attacks are ongoing and leaders must continually refine their understanding in at least three areas: the overall security landscape, particular financially related considerations and contemporary security defenses.

The current landscape

The latest statistics quantify the cyber assault on healthcare:

  • Incidence. 89% of organizations suffered at least one attack in the past 12 months with the average number at 43.
  • Cost. A provider’s most serious attack costs an average of $4.4 million. IBM calculated healthcare’s average total cost of a breach at $10.1 million, up 42% since 2020.
  • Attack Characteristics. Healthcare data types most commonly compromised are personal (58%), medical (46%), and credentials (29%). Organizations have an exposure to an average of over 26,000 network-connected devices. A disturbing finding is that those healthcare institutions that paid ransom got back only 65% of their data in 2021.

Specific financial considerations

Finance leaders will also need awareness of the following:

  • Cyberattacks could affect credit ratings and are often a component of Environmental, Social and Governance assessments.
  • Financial outsourcing requires monitoring. A recent news story chronicled an accounts receivable firm’s breach that exposed individual information, account balances and payments.
  • Cyber insurance premiums are likely to increase substantially.

Responses/tools

Beyond a host of management and monitoring tools being deployed, a strategic philosophy is rapidly gaining ground. The “zero trust” model sounds counter to the trust-building mindset described earlier, but it has become essential. It “denies access to applications and data by default,” and 58% of hospitals and health systems have a zero trust initiative in place. Another 37% intend to implement one within 12–18 months.

Cybersecurity investment will challenge CFOs in 2023, especially in areas such as talent. Cybersecurity worker availability is estimated to satisfy only 68% of open positions. Banking partners will also be expected to play an important role. Over the years, major banks have become “leaders in enhancing cyber strategy and investing in cyber defenses, processes and talent.”

7. Digital Transformation of Finance In Focus

Digital transformation is fundamental to healthcare’s business and care delivery model changes. IBM’s website succinctly captures the goal, “Digital transformation means adopting digital-first customer, business partner, and employee experiences.” A leading forecaster believes 70% of healthcare organizations will rely on digital-first strategies by 2027.

Transformation efforts need to accelerate. One study showed that “digital, technology and analytics strategies exist for nearly all organizations, yet only 30% have begun to execute on those plans.”

One functional segment ramping up digital transformation is finance. According to a recent survey, 94% of CFOs and senior leaders stated that such efforts will be at the forefront of financial operations and strategy for 2023–2024, and 79% described it as an “absolute need” for “commercial stabilization and long-term survival of their healthcare organization.”

Advanced technology is gaining traction. Many see optimization in combining robotic process automation (RPA), artificial intelligence and machine learning to create “intelligent automation.” Together, these technologies create algorithms to automate decisions that guide “robotic” software to perform financial actions and thereby reduce manual labor.

Getting to digital-first in finance and across the enterprise has several critical success factors. These include sustained commitment, a platform-centric mindset and effective governance.

Commitment

Some assert that few healthcare executives have “created digital strategies that look far enough into the future.” Speed of change is also important. Health systems, hospitals and practices exhibit varying risk appetites and change rates. When asked to self-identify “transformation personas,” a little over half regarded themselves as being on the innovative “early mover” end of the spectrum, while the remainder will adapt as technologies prove themselves (Figure 9). Slower organizations will likely need to increase the pace.

Organizational transformation personas

View PDF of Figure 9 chart[PDF]

Platforms, not point solutions

Implementing enterprise platforms rather than proliferating “point solutions” is obligatory. Organizations must be “prepared to compete in the platform economy as platform-based business models have changed the way we live, work and receive care.”

There are still too many tools and applications. A survey of top decision-makers at health systems found that 60% use over 50 software solutions just in operations (24% have over 150). System integration is one answer. Use of application programming interfaces (API) helps this effort substantially. API-first is fast becoming the norm among solution providers, with global API investment expected to nearly triple by 2030 (Figure 10)

Healthcare API market size

View PDF of Figure 10 chart[PDF]

Governance

Effective governance is vital to constructing a platform-based transformative model and to ensuring wide user adoption. Healthcare has seen the rise of new senior roles such as Chief Digital Officer and Chief Transformation Officer, positions focusing on initiatives like ownership of technology success at the department level and devising user incentives.

8. Digital Payments on the Horizon for Healthcare

A variety of emerging digital payment modes will further the transformation of finance. These payments are expected to grow almost 23% annually in healthcare. ACH payments have been on a strong upward trajectory in healthcare for several years, especially for business transactions. In 2021, ACH tallied a yearly increase of 18% in volume and 5% in dollars.

Notable technologies and payment rails to watch for expected crossover from consumer markets to healthcare include:

  • Mobile payments. The market for mobile payment technologies has been growing at a 16% compound annual clip and should reach $90 billion in 2023, powered by wide smartphone use, 5G networks and convenience. This category encompasses technologies such as e-wallets, forecasted to grow 23% annually worldwide through 2030.
  • Real-time payments (RTP). These digital transactions are settled nearly instantaneously through platforms such as The Clearing House. One forecast sees 30.4% compound RTP growth in the U.S. from 2022 to 2030.
  • Buy Now Pay Later (BNPL). This growing mode offers consumers short-term financing to stretch payments over several installments. A recent survey established that 23% of American adult respondents have used a BNPL service. BNPL is just entering healthcare and is currently regarded as an option for certain elective or cosmetic procedures or for specific individual credit scenarios.  
  • Earned Wage Access (EWA). Using an RTP approach, employers are beginning to offer on-demand pay which enables “instant access to earned wages right after the work is performed, at the end of the shift, or upon completion of a project.” It is not a loan or advance pay. A 2021 poll conducted by Harris found that 83% of U.S. workers feel they should be able to access earned wages at the end of each day. Millennials were particularly interested: 80% would like daily automatic pay streaming to their bank accounts, and 78% said free EWA would boost loyalty to their employer. Given its pressing workforce concerns, healthcare is likely to find EWA a tool to promote retention.

Seeking the right use cases for these payment technologies offers many potential provider benefits.

Conclusion

The connected forces discussed and quantified here create major challenges to address in 2023. The strategic agenda calls for balancing tight cost control with investment in growth opportunities, significantly enhancing patient financial experience by meeting growing patient financial need, shoring up trusted relationships and cybersecurity, and accelerating the digital transformation of finance.

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.

Thought of the Day: On Truth and Courage

Posted on by • Posted in Conscience, Courage, Leadership, Leadership Culture, Leadership Listens, Leadership Trust, Quotation, Thought Leaders, Thought of the Day, Trust, Truth Unvarnished, Values • Leave a comment

Today marks the 63rd anniversary of Harper Lee‘s “To Kill a Mockingbird” (1960) — a novel containing truths so universal that they bear repeating in 2023.

“You never really understand a person until you consider things from his point of view … Until you climb inside of his skin and walk around in it.”

“I wanted you to see what real courage is … It’s when you know you’re licked before you begin but you begin anyway and you see it through no matter what. You rarely win, but sometimes you do.”

“People generally see what they look for, and hear what they listen for.”

“The one thing that doesn’t abide by majority rule is a person’s conscience.”

“Sometimes the Bible in the hand of one man is worse than a whisky bottle in the hand of another … There are just some kind of men who — who’re so busy worrying about the next world they’ve never learned to live in this one, and you can look down the street and see the results.”