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Top 10 challenges for healthcare executives in 2018

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12 takeaways from the 2018 JP Morgan Healthcare Conference

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https://www.beckershospitalreview.com/hospital-management-administration/12-things-you-need-to-know-from-the-2018-jp-morgan-healthcare-conference-while-the-destination-is-uncertain-the-direction-is-clear.html

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The recent breathtaking flurry of mega-mergers coupled with increasingly challenging market forces and an ever shifting political landscape has cast a cloud of confusion regarding where the U.S. healthcare delivery system is heading.

So, where do you go to find the map?

Every year, the JP Morgan Healthcare Conference provides an incredibly efficient snapshot of the strategies for large healthcare delivery systems, the hub for healthcare in the U.S. Most of these organizations are also the largest employers in their respective states. The conference took place this week in San Francisco with over 20 healthcare systems presenting, including Advocate Health Care, Aurora Health Care, Baylor Scott & White Health, Catholic Health Initiatives, Cleveland Clinic, Geisinger Health System, Hospital for Special Surgery, Intermountain Healthcare, Mercy Health in Ohio, Northwell Health, Northwestern Medicine, Partners HealthCare System, WakeMed Health & Hospitals and many of the other big name brands in the market. Each provided their strategic roadmap in a series of 25-minute presentations from their “C” suite. If you’re looking for the GPS on strategy and a gauge on the health of healthcare, this is it.

How do their strategies differ? What direction are they heading in? There is a great line from Alice in Wonderland that goes, “If you don’t know where you’re going, any road will take you there.” You would think that line applies perfectly to the U.S healthcare system, but the good news is it actually doesn’t.

While the exact destination for everyone is TBD, the direction they are heading in is actually pretty clear and consistent. It turns out that they are all using a very similar compass, which is sending them down a similar path.

So, what are the roadside stops health systems consider absolutely necessary to be part of their journey to creating a more viable and sustainable value-based business model?

Based on the travel plans for over 20 of the largest and most prestigious healthcare delivery systems in the country, here’s your GPS and list of 12 things you “must do” on your journey.

1. You Must Scale

Clearly the headline at #JPM18 was the flurry of major announcements regarding major mergers. With that said, two of the mergers were front and center: teams were there to present from Downers Grove, Ill.-based Advocate and Milwaukee-based Aurora, which will be a $10 billion organization with 70,000 employees, as well as San Francisco-based Dignity Health and Englewood, Colo.-based Catholic Health Initiatives, which will be a $28 billion organization with 160,000 employees. The size and scale of these mergers is pretty stunning. While the announcement of these and the other recent mega-mergers has forced many into their board room to determine what the deals mean to them, the consensus at the conference was this: There are a number of different paths forward to achieve scale. Some, like Baylor Scott & White in Texas, have aggressive regional expansion plans. Others are betting on partnerships to provide the same or even more value. Taking a pulse of the room, two things were clear. The first is there is no definition of scale any more in this market. The second is that, despite this flurry of mergers, “getting really big” is not the only destination.

2. You Must Pursue “Smart Growth” and Find New Revenue Streams

Running counter to the merger narrative in the market, Salt Lake City-based Intermountain provided a good overview of the movement to what is called an “asset light” strategy of “smart growth.” This is a radically contrarian approach to the industry norm, which is the capital intensive bricks and mortar playbook of buying and building. As part of their strategy, Intermountain will open a “virtual hospital” delivering provider consultations and remote patient monitoring via telehealth. The system will also launch a number of healthcare companies every year, leveraging their considerable resources in a manner they believe will produce a higher yield. Other health systems outlined a similar stream of initiatives they have in motion to diversify their revenue streams and expand their business model into higher margin, higher growth businesses. One example is Cincinnati-based Mercy Health, which achieved strong growth and leverage via their investment in a revenue cycle management company. Advocate in Illinois formed a partnership with Walgreens. Together, they now operating 56 retail clinics and Advocate has made a significant impact on driving new patients and downstream revenue to their system. The bottom line is all now recognize that they must think and act differently to be able to continue to fund their clinical mission and serve their community.

3. You Must Measure and Manage Cost and Margins

While some are moving aggressively to get scale, everyone is looking to more effectively use the resources they have and get more operating leverage. Margin compression was a consistent theme, with many systems now moving into consistent, stable operating models around managing margins versus launching reactionary initiatives when they find a budget gap. What is emerging is a new discipline and continuous process around managing cost and margins that is starting to look similar to the level of sophistication we have seen in the past for revenue cycle management. To that end, there has been major movement in the market to implement advanced cost accounting systems, often referred to as financial decision support, which provide accurate and actionable information on cost and help organizations understand their true margins as they take on risk-based, capitated contracts. Some during the conference referred to it as the “killer app” for the financial side of driving value. Regardless of what you call it, all are moving aggressively to understand the denominator of their value equation.

4. You Must Become a Brand

Investing in and better leveraging their brand has become a strategic must for health systems. The level of sophistication is growing here as providers shift their mental model to viewing patients as “consumers.” Aurorain Wisconsin cited their dedicated Consumer Insights Group and outlined their “best people, best brand, best value” approach that has been incredibly effective both internally and externally. At the same time, the bigger investments for many health systems relative to brand are more on brand experience than brand image, with a focus on understanding and radically rethinking the consumer experience. As an example, at Danville, Pa.-based Geisinger, close to 50 percent of ambulatory appointments are scheduled and seen on the same day. And every health system is making meaningful investments in their “digital handshake” with consumer, creating and leveraging it via telehealth as well as mobile applications to enhance the customer experience.

5. You Must Operate as a System, Not Just Call Yourself One

One clear theme at #JPM18 is different organizations were at different points along the continuum of truly operating as a system vs. merely sharing a name and a logo. There are a number of reasons for this, but you are increasingly seeing tough decisions actually being made vs. just kicking the can down the road. There has been a great deal of acquisitions over the last few years coupled with a new wave of thinking relative to integration that is more aggressive and more forward-looking. This mental shift is actually a very big deal and perhaps the most important new trend. Many health systems are heavily investing in leadership development deep into their organization to drive changes much faster.

6. You Must Act Small

The word “agile” is quickly becoming part of everyone’s narrative with health systems looking to adopt the principles and processes leveraged in high tech. Chicago-based Northwestern Medicine is an example of an organization that has grown dramatically in the last five years, now approaching $5 billion in revenue. At the same time, they have still found a way to operate small, leveraging daily huddles across the organization to drive their results. The team at Raleigh, N.C.-based WakeMed has achieved a dramatic financial turnaround over the last few years, applying a similar level of rigor yielding major operational improvements in surgical, pharmacy and emergency services that have translated into better bottom line results.

7. You Must Engage Your Physicians

Employee engagement was a major theme in many of the presentations. With the level of change required both now and in the future, a true focus on culture is now clearly top of mind and a strategic must for high-performing health systems. That said, only a handful articulated a focus on monitoring and measuring physician engagement. This appears to be a major miss, given that physicians make roughly 80 percent of the decisions on care that take place and, therefore, control 80 percent of the spend. One data point that stood out was a 117 percent improvement in physician engagement at Northwestern. Major improvements will require clinical leadership and a true partnership with physicians.

8. You Must Leverage Analytics

Many have reached their initial destination of deploying a single clinical record, only to find that their journey isn’t over. While health systems have made major investments big data, machine learning and artificial intelligence, there was a consistent theme regarding the need to bring clinical and financial data together to truly understand value. Part of this path is the consolidation of systems that is now needed on the financial side of the house with a focus on deploying a single platform for financial planning, analytics and performance. The primary focus is to translate analytics not just into insights, but action.

9. You Must Protect Yourself

As organizations move deeper into data, there is increased recognition that cybersecurity is a major risk. Over 40 percent of all data breaches that occur happen in healthcare. During the keynote, JP Morgan Chase CEO Jamie Dimon shared that his organization will spend $700 million protecting itself and their customers this year. Investments in cybersecurity will continue to ramp up due to both the operational and reputational risk involved. Cybersecurity has become a board room issue and a top-of-mind initiative for executive teams at every health delivery system.

10. You Must Manage Social Determinants of Health in the Communities You Serve

Perhaps the most encouraging theme for healthcare provider organizations was the need to engage the community they serve and focus on social determinants of health. As Intermountain shared: “Zip code is more important than genetic code.” To that end, Geisinger refers to their focus on “ZNA.” They have deployed community health assistants, non-licensed workers who work on social determinants of health and have implemented a “Fresh Food Farmacy,” yielding a 20 percent decrease in hemoglobin A1c levels along with a 78 percent decrease in cost. Organizations like ProMedica Health System in Ohio have seen similar results with their focus on hunger in Toledo. WakeMed has an initiative focused on vulnerable populations in underserved communities that has resulted in a significant decrease in ER visits and admissions and over $6 million in savings.

11. You Must Help Solve the Opioid Epidemic

The opioid issue is one that healthcare professionals take very personally and feel responsible for solving. It came up in virtually in every presentation, and it’s an emotional issue for the leaders of each organization. This is good news, but the better news is that they are taking action. As an example, Geisinger invested in a CleanState Medicaid member pilot that resulted in a 23 percent decrease in ER visits and 35 percent decrease in medical spending, breaking even on their investment in less than 10 months. While many would rightly argue that the economic rationalization isn’t needed for something this important, the fact that it’s there should eliminate any excuse for anyone not taking action.

12. You Must Deliver Value

The Hospital for Special Surgery in New York is the largest orthopedics shop in the U.S. and a great example of how value-based care delivery is taking shape. Perhaps the most revealing stat they shared is that 36 percent of the time, patients receive a non-surgical recommendation when they are referred to one of their providers for a second opinion. This is exactly the type of value-based counseling and decision-making that will help flip the model of healthcare. Some systems are farther along than others. Northwestern currently has 25 percent of its patients in value-based agreements, but other systems have less. As the team from Intermountain re-stated to this audience this year, “You can’t time the market on value, you should always do the right thing, right now.” Well said.

It’s time to get started or get moving even faster.

As the saying goes, “It’s the journey, not the destination.”

Happy trails.

‘If you are sick, you need to stay home:’ Flu bug biting with a vengeance

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To avoid spreading germs, Justin Karubas opted to phone in his comments and votes during Monday’s Indian Prairie District 204 meeting — a courtesy his fellow board members likely appreciated.

Karubas, of Naperville, is among the many who are experiencing the misery of one of the worst flu seasons in years, now widespread across 46 states, including Illinois, according to the Centers for Disease Control and Prevention.

When over-the-counter remedies no longer help, folks are flocking to the doctor to seek relief.

Mary Anderson, manager of Infection Control at Edward Hospital in Naperville, said the health system is seeing high volumes of patients arriving in the emergency room, walk-in clinics and doctors’ offices with flu-like symptoms.

The time of year and the recent spate of cold weather both play into the increase in influenza cases. “Over the holidays, there are lots of opportunities for transmission,” Anderson said.

While a rise in the flu cases might not be out of the ordinary, what is different is the severity of the symptoms.

“A higher number (of patients) than usual are requiring hospital admission,” Anderson said. “Over the last two weeks, 80 people were admitted with confirmed cases of influenza.”

Even at the height of a typical flu season, Anderson said the hospital might admit 35 people in a given week.

The influenza A strain known as H3N2 is the behind many of the cases. “It hits particularly hard the very old and the very young,” Anderson said.

According to DuPage County weekly influenza surveillance reports, 17 people were admitted to the intensive care units of county hospitals during the last two weeks of December, bringing the total number of admissions to 28 since Oct. 1.

That’s more than four times higher compared to the same period last year, when there had been only had six ICU admissions as of Dec. 31, 2016.

Kane County also experienced an explosion in flu numbers during the last two weeks of December.

Of the 916 confirmed cases of influenza reported in Kane County from Oct. 1 to Dec. 30, 70 percent, or 634 cases, were diagnosed between Dec. 17 and 30.

Last year, 162 incidents of the flu were reported in Kane County during the last three months of 2016.

Kane County Health Department spokesman Tom Schlueter said the last time nearly 10 percent of Kane hospital visits were for flu-like symptoms was during an outbreak in the 2014-15 influenza season.

If the trend continues, the area could experience a few more weeks of severe flu cases before the numbers begin to drop off.

So far this flu season, 86 percent of the Kane diagnoses involve influenza A. Schlueter said that’s not surprising since influenza A generally peaks before other strains, such as influenza B and influenza AB.

He warned the number flu cases could climb again in late January and February, when influenza B generally hits and after students — from preschool through college — are back in school.

Alpesh Patel, an epidemiologist with the Will County Health Department, said most adults can infect other people beginning one day before symptoms develop and up to five to seven days after becoming sick; children may pass the virus for longer than seven days.

“This means that you may be able to pass on the flu to someone else before you are sick, as well as while you are sick. In addition, some people can be infected with the flu virus, have no symptoms and still spread the virus to others,” Patel said in a statement.

Will County figures show hospital emergency rooms treated 860 patients with flu-like symptoms from Dec. 25 to 31, compared to 391 during the same week the previous year. Of those 860, nearly half — 384 — tested positive for influenza.

“There is a lot of illness out there. We need to increase our prevention efforts and minimize human interaction where we can,” Patel said in the statement.

“If you are sick, you need to stay home and not be around other people, loved ones or co-workers. Hand hygiene has to be extremely important, along with covering when we cough and sneeze.”

Health professionals also advise it’s not too late to get vaccinated.

“A flu shot anytime during flu season is appropriate, but remember it takes two weeks to be effective,” Anderson said.

Last season’s shot, which contains the same mix as this year, was 43 percent effective against the H3N2 virus and 48 percent effective overall, according to the CDC. In Australia, the vaccine was found to be only 10 percent effective against the H3N2 flu strain.

While it might not prevent a person from getting the flu, the CDC reports the risk of hospitalization decreases with people who are vaccinated, Anderson said.

http://www.latimes.com/local/california/la-me-ln-flu-peak-20180109-story.html

https://www.dallasnews.com/news/dallas-county/2018/01/09/dallas-county-flu-fatalities-jump-11-18-four-days

 

 

 

ObamaCare repeal fades from GOP priorities list in new year

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ObamaCare repeal fades from GOP priorities list in new year

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The chances of repealing ObamaCare this year are fading further, with top Republicans saying they hardly discussed repeal of the law during a Camp David retreat last weekend focused on their 2018 agenda.

Meanwhile, Republicans say talk of welfare or entitlement reform this year is also narrowing down to an emphasis on things like job training, not the broad overhaul of Medicare, Medicaid and other entitlements that Democrats have warned against.

While some conservative groups and select lawmakers are pushing for ObamaCare repeal in 2018, President Trump and GOP leaders have signaled a desire to move on, at least for now, after unsuccessful repeal efforts sucked up months of the legislative calendar in 2017. Trump also declared after signing the GOP tax overhaul in December, which did away with the mandate that most people buy health insurance or face a tax penalty, that Republicans had “essentially repealed ObamaCare.”“There’s some work we need to do on the health-care front, but I would hope we’re in a position to do things on a bipartisan basis,” said Sen. John Cornyn (R-Texas), one of the GOP leaders who huddled with Trump at Camp David to discuss the 2018 agenda.

Asked if ObamaCare repeal was discussed in the meetings over the weekend, Cornyn — the Senate’s No. 2 Republican — replied flatly, “No.”

A source familiar with the conversations at Camp David confirmed that ObamaCare repeal was hardly discussed, except for Senate Majority Leader Mitch McConnell (R-Ky.) saying that he did not want to do a partisan bill like ObamaCare repeal or entitlement reform through the fast-track process of reconciliation this year.

ObamaCare repeal has largely fallen off the GOP agenda for 2018, in part due to the realities of a narrower Senate majority than one that already failed to pass a repeal bill. Reopening the divisive issue in an election year would also be tough.

McConnell’s office pointed to his comments at a press conference at the end of December. The GOP leader said then that he wanted to focus on areas of bipartisan agreement in 2018.

When asked about trying to repeal ObamaCare again, McConnell responded that 51-49 is a “pretty tight majority” and noted that “the sensitivity of entitlements is such that you almost have to have a bipartisan agreement in order to achieve a result.”

Democrats have also pointed to comments Speaker Paul Ryan (R-Wis.) made late last year about reining in entitlement spending to warn that Republicans could try to cut Medicare and Medicaid in 2018.

But the source familiar with the Camp David meetings said any welfare or entitlement push this year would likely not be through the fast-track reconciliation process aimed at preventing a Democratic filibuster in the Senate.

Instead, the push would be narrower and focus on areas like job training that could potentially get bipartisan support, not Medicare or Medicaid changes.

“It was a little different than what I anticipated,” Cornyn said of the Camp David discussions on welfare reform. “In other words, it’s not Medicare, Social Security, entitlement reform; it is more, workforce training.”

Ryan outlined this emphasis in a press conference on Tuesday, where he made no mention of ObamaCare, Medicare or Medicaid in talking about an agenda for 2018.

Instead, Ryan said, “We’ve got more work to do to work on people, getting them the skills they need so they can get the careers that they want so they can get the lives that they deserve.”

Trump likewise pushed aside the idea of partisan welfare reform in a press conference at Camp David, which was dominated by the president lashing out at a new, critical book about his young administration.

“We’ll try and do something in a bipartisan way, otherwise we’ll be holding it for a little bit later,” Trump said when asked about welfare reform.

It is still possible, though, that some Republican lawmakers could push to bring back ObamaCare repeal this year. Sen. Lindsey Graham (R-S.C.), for example, pushed back against McConnell last month when McConnell suggested moving on from repealing the law.

“To those who believe — including Senate Republican leadership — that in 2018 there will not be another effort to Repeal and Replace Obamacare — you are sadly mistaken,” Graham said on Twitter last month.

Kevin Bishop, a spokesman for Graham, said on Tuesday that those comments still stand.

Conservative groups are also pressuring Republicans to try again on ObamaCare repeal this year. A range of leading groups, including Heritage Action, Club for Growth and Americans for Tax Reform, wrote to Trump last week urging him to push for ObamaCare repeal this year.

The groups want the fast-track reconciliation process, which is needed to avoid Democrats blocking a bill with a filibuster, to be used for ObamaCare repeal. That is essentially the only way to give repeal a chance of passing.

However, it is in doubt whether the reconciliation process can even be used for anything this year. Using the process requires first adopting a budget, which would be hard for Republicans to agree on, especially in an election year.

With ObamaCare repeal out of focus for 2018, most of the law, including its Medicaid expansion and subsidies to help people buy coverage, remains in place.

Republicans have hailed their victory in repealing ObamaCare’s individual mandate as part of the tax bill, which takes out a central feature of the law and one of the most unpopular parts. Still, some experts have warned that removing the mandate will destabilize markets and cause premium increases.

It is possible that Congress could pass measures aimed at stabilizing ObamaCare in the coming weeks, though House conservatives are opposed to those bills.

Trump Likes Drug Price Negotiations; His Nominee for Health Secretary Doesn’t

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 Alex M. Azar II, President Trump’s nominee for secretary of health and human services, said Tuesday that he was wary of proposals for the government to negotiate drug prices for Medicare beneficiaries, an idea endorsed by Mr. Trump in the 2016 campaign.

But Mr. Azar said that in some situations, he was willing to look at proposals to negotiate prices for a limited number of medicines.

He made the comments at a Senate confirmation hearing on Tuesday, where he tried to allay the concerns of some Democrats who asserted that he would be biased in favor of pharmaceutical companies because he had worked for a decade as a top executive at Eli Lilly, the company in Indiana that sells drugs for diabetes, erectile dysfunction and schizophrenia, among other conditions.

Mr. Azar’s remarks on drug price negotiations were carefully circumscribed and somewhat ambiguous — an approach that allowed him to get through the hearing largely unscathed.

If Medicare negotiates drug prices, he said, patients might have less access to some medicines because the government would probably establish a list of preferred products.

“For the government to negotiate there, we would have to have a single national formulary that restricted access to all seniors for medicines,” Mr. Azar told the Senate Finance Committee. “I don’t believe we want to go there in restricting patient access.”

At the same time, Mr. Azar said, “it’s worth looking at” proposals to allow price negotiations for drugs in Part B of Medicare. Under this part of the program, patients receive cancer drugs and other medications, often by infusion or injection, in doctor’s offices and hospital outpatient clinics.

Mr. Azar, who worked for six years in the administration of President George W. Bush, is expected to win confirmation, with support from Republicans and perhaps a few Democrats, who view him as a pragmatic problem solver rather than an ideologue. He would take charge of a cabinet department that spends more than a trillion dollars a year providing health insurance to more than 130 million Americans.

Senator Bill Nelson, Democrat of Florida, asked Mr. Azar whether he would support cuts in Medicare, Medicaid or Social Security to offset increases in the federal budget deficit that would be caused by the recently passed tax legislation.

“The president has stated his opposition to cuts to Medicare, Medicaid or Social Security,” Mr. Azar replied. “He said that in the campaign, and I believe he remains steadfast in his views on that. He’s made that commitment. I will live up to that if I’m confirmed.”

But like many Republicans, Mr. Azar said that cuts in the growth of federal benefit programs were not really cuts if federal spending on the programs continued to increase.

Democrats kept returning to the question of drug prices. Mr. Azar said that the expertise he acquired in the pharmaceutical industry would help him rein in drug costs as a federal official.

“Across the board,” he said, “drug prices are too high. Insulin prices are too high. All drug prices are too high in this country.”

Democrats were generally skeptical, based on Lilly’s record during Mr. Azar’s time at the company.

“The price of Lilly’s bone-growth drug Forteo, used to treat osteoporosis, more than doubled on Mr. Azar’s watch,” said Senator Ron Wyden of Oregon, the senior Democrat on the Finance Committee. In the same period, Mr. Wyden said, the company more than doubled prices for other drugs including Humalog, used to treat diabetes, and Strattera, for attention deficit hyperactivity disorder.

Mr. Wyden asked Mr. Azar if, as head of Lilly’s operations in the United States, he had ever approved a reduction in the price of a Lilly drug.

Mr. Azar avoided a direct answer and blamed “the system.”

“I don’t know that there is any drug price of a branded product that has ever gone down from any company on any drug in the United States because every incentive in this system is toward higher prices,” Mr. Azar said, adding: “No one company is going to fix that system. That’s why I want to be here working with you.”

Mr. Azar said he saw no need for the government to negotiate prices for drugs covered by Part D of Medicare, which pays for pills and other products that patients can give themselves and purchase from neighborhood drugstores and mail-order pharmacies.

Medicare’s Part D drug benefit is delivered entirely by private companies under contract with the government. These companies and their agents, known as pharmacy benefit managers, negotiate with drug manufacturers, and Mr. Azar said he did not believe the government could get lower prices by negotiating directly with drug companies.

A 2003 law prohibits the Department of Health and Human Services from interfering in negotiations between drug manufacturers and insurers that provide drug coverage under Part D of Medicare. “You would not get better pricing by removing” that prohibition, Mr. Azar said.

In the 2016 campaign and since taking office, Mr. Trump has said that Medicare could save large sums by negotiating directly with drug companies. But drug companies adamantly oppose that idea, and Mr. Trump has not taken steps to translate that into practice.

Asked specifically if Medicare should negotiate drug prices, Mr. Azar said: “In Part D, we do significant negotiation through pharmacy benefit managers that get the best rates of any commercial payers. We don’t do that in Part B, which is where we have physician-administered drugs. We basically pay sales price plus 6 percent or some other number.”

As an alternative, Mr. Azar said he supported proposals to link the pricing of prescription drugs to an assessment of how well they work for patients. Under such arrangements, known as value-based pricing, insurers would pay more for medicines that were highly effective and less for those that did not work well.

Mr. Azar also said he supported an agency created by the Affordable Care Act to test novel ways of delivering and paying for health care. And he said that some of the experiments could require doctors and hospitals to participate. Republicans in Congress have generally opposed mandatory participation.