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EXECUTIVE COMPENSATION: Aligning Clinical and Financial Strategy for Value-Based Care

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Click to access executive-compensation.pdf

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As our industry continues to wrestle with the impacts of the Patient Protection and Affordable Care Act and value-based purchasing, it appears that a number of organizations are questioning whether their executive compensation models are appropriate to the times. Besides the more obvious issues surrounding a shift from volume- to value-based financial models, hospital trustees and directors also must respond to consumer and labor advocacy groups, which question the value of the executive team. Indeed, there have been several efforts of late to legally limit the total compensation allowable to CEOs.

This environment can create a bit of a dilemma for governing boards, as they try to balance the need for executive horsepower with a compensation package that is defensible to their constituents. And while base pay and benefits loom large in this equation, there are certainly reasons to evaluate how bonuses are structured if, in fact, bonuses should be paid at all.

In an effort to get at the core of these compensation issues, HealthLeaders Media recently surveyed more than 300 industry leaders of varying stripes to gain insight into their approach to executive compensation and to determine whether these leaders thought that compensation models were aligned with organizational goals. The results were telling.

When organizations were asked what best describes their executive compensation strategy for both the financial and patient care objectives of healthcare now, 17% of the respondents for each objective reported that no change was needed. More than 50% of the respondents indicated that group or team incentives have been or are expected to be modified for executive compensation packages to address the perceived shift from volume to value, and 38% of respondents reported that executive compensation incentives were either slightly or seriously misaligned with organizational strategies.

While a significant number of respondents (61%) reported that their executive compensation programs are currently perfectly or pretty well aligned, the survey results could be an indication that fundamental changes are taking place. These changes not only affect how leaders are paid, but also impact what is expected of them, as the survey attempts to explore this issue as well.

At the end of the day, each organization will have to determine how to use executive compensation to achieve its mission. Obviously, that could lead to a number of acceptable and effective options provided they are carefully considered in light of the complexity of our environment and the culture we wish to create.

Future hospital leaders: Prepare millennials to take the reins

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http://www.trusteemag.com/articles/1170-hospitals-start-preparing-millennial-leaders?eid=333956129&bid=1582128

Handshake

http://www.fiercehealthcare.com/healthcare/hospitals-grooming-millennials-to-lead-industry?mkt_tok=eyJpIjoiWVRRd016UTRNRGRoTlRoaCIsInQiOiJIQXpOMU5UWmFUeUNUckNBRDZLYTMxemRZWU5yUzR0UW1sMXdzN1JDU3paN3F6MCtSb25sT3NIcERnN2J5SitRaTliV2RlMjlXckJJOXZITldQK1wvaWc1NGRiY1lkblJqWUlQTHY2dTZ3a289In0%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Trustee takeaways

“The good news in terms of identifying successful millennial leaders is that they are not significantly different from successful leaders in other generations,” says Cindy Roark, M.D., president and CEO of Synergy Population Health. Members of this group, though, do come with some of their own quirks. They often look to others — and their own leaders — to:

  1. Communicate the “why” for any decision or project.
  2. Make an attempt to make everyone feel part of the process.
  3. Facilitate collaboration on projects that would have been autonomous in the past.
  4. Allow for and be a part of team building and camaraderie.
  5. Allow for flexibility to address work-life balance.
  6. Provide continual feedback.
  7. Provide praise.
  8. Develop and support a social responsibility strategy in the organization.

CMO on the journey to ‘One Ascension’ and a national brand

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http://www.fiercehealthcare.com/healthcare/cmo-journey-to-one-ascension-and-a-new-national-brand?utm_medium=nl&utm_source=internal&mrkid=959610&mkt_tok=eyJpIjoiWVRRd016UTRNRGRoTlRoaCIsInQiOiJIQXpOMU5UWmFUeUNUckNBRDZLYTMxemRZWU5yUzR0UW1sMXdzN1JDU3paN3F6MCtSb25sT3NIcERnN2J5SitRaTliV2RlMjlXckJJOXZITldQK1wvaWc1NGRiY1lkblJqWUlQTHY2dTZ3a289In0%3D

St. John Providence Hospital

Ascension’s ambitious strategy to rebrand and rename all its hospitals across 24 states and the District of Columbia is just in the beginning stages. But the goal–to make the Ascension name nationally known–will be worth it no matter how long it takes, says the system’s chief marketing officer.

The rebranding strategy rolled out in September beginning with the non-profit health system’s two largest markets, Michigan and Wisconsin. The marketing campaign features television ads, direct mail and online marketing.

Although the health system is one of the largest in the nation–and the world’s largest Catholic health system––most of its hospitals operated independently from one another. Until now, Nick Ragone, senior vice president and chief marketing and communication officer tells Medical Marketing & Media

Will Consumerism Rein in Healthcare Costs? Why the Answer Is No

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Click to access Healthcare-Consumerism_Rising-Costs_LEK-Executive-Insights_1806.pdf

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In the first of our multipart Executive Insights series on consumerism in healthcare, L.E.K. Consulting examines why a more engaged consumer — despite the increasing optimism — will not be nearly enough to bend the healthcare cost curve or even stop the rising rates substantially.

Big Changes and Big Risks Are Ahead for Health Policy

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http://www.realclearhealth.com/articles/2016/11/09/big_changes_and_big_risks_are_ahead_for_health_policy__110237.html?utm_campaign=KHN%3A+Daily+Health+Policy+Report&utm_source=hs_email&utm_medium=email&utm_content=37390717&_hsenc=p2ANqtz-_CzB7SB8_jTflW9iZbujhPgbEgYoEGH0CmjnZCWfYQ6OhRFxv03I_g24L5CSEuvETzsbKwqacigRbc9C9fAU0zdkkgyw&_hsmi=37390717

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The election outcome itself could create more problems for the ACA. The insurance plans sold on the law’s exchanges have already experienced substantial losses due to adverse selection, leading many insurance companies to pull back on their participation. The prospect of a Trump administration steering ACA implementation may be enough to convince some of the insurers still offering products on the exchanges in 2017 to rethink their plans. If more insurance companies head for the exits, the exchanges could become even less stable than they already are.

The “replace” part of “repeal and replace” has always been the tricky part for ACA opponents, and that will also be true for the incoming Trump administration. During the campaign, Trump offered only the vaguest outline of a plan that wouldn’t come close to serving as a starting point for a workable proposal. The ACA, for all of its problems, brought many low-income households into insurance coverage, through an expansion of the Medicaid program and through heavy subsidization of the insurance plans offered on the exchanges. Unless Trump wants to preside over a massive increase in the number of Americans without health insurance during his presidency, he will have to offer a plan that ensures households with low incomes can secure health insurance in some new way.

Repeal Would Be Even Worse Than Obamacare

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https://www.bloomberg.com/view/articles/2016-11-09/trump-s-repeal-of-obamacare-would-make-health-care-even-worse?_hsenc=p2ANqtz–YThbb5bpWZsv2RkIpmzMfJQVehsyht_urAaJaQ5SnNPcxHVC6wCEdCEdPdr4egAghSWH7nSB4oSMsFzceJ7fcw1WYUg&_hsmi=37390717&utm_campaign=KHN%3A+Daily+Health+Policy+Report&utm_content=37390717&utm_medium=email&utm_source=hs_email

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I wouldn’t say the mood among Republicans is exactly giddy. Even Fox News seemed a little bit stunned by the news that Donald Trump had been elected president of the United States. But these past 12 hours, one priority has joined #NeverTrumpers and those who want to Make America Great Again: time to repeal Obamacare.

I’ll believe it when I see it.

Can Republicans pass a bill repealing Obamacare lock, stock and barrel? Technically, yes. They have control of the House and the Senate. Democrats in the Senate could filibuster, but I doubt the filibuster survives Trump’s term in any event, so I don’t see this as a permanent obstacle.

There’s still a wee bit of a problem, however, which is that they have to get Republicans to vote for a repeal.

I have no doubt that Republicans would like to vote for something they can call “repealing Obamacare.” The problem is that repealing Obamacare will involve getting rid of two provisions that are really, really popular: “guaranteed issue” (insurers can’t refuse to sell insurance to someone because of their health status) and “community rating” (insurers can’t agree to sell a policy to some undesirable customer for a million dollars a year; the company has to sell to everyone in a given age group at the same price).

These two provisions are consistently popular with voters across the spectrum. Unfortunately, they tend to send health insurance markets into what’s known as a “death spiral”: People know they can always buy insurance if they get sick, so a lot of them don’t buy insurance until they get sick. Because the sick people are really expensive to cover, insurers have to raise the price of the insurance, which means that the healthiest people left in the pool drop their insurance, which means the price of the insurance goes up. … After a few rounds of this, everyone has a guaranteed right to buy insurance — but the sticker price is astronomical.

Obamacare is built to counter this problem — with subsidies to bring down the price for many Americans, with a mandate for individuals to buy insurance or face tax penalties, with rules on enrollment timing to complicate “gaming the system.” These are the unpopular parts of Obamacare.

Repeal will involve getting rid of the unpopular bits. But it will also involve getting rid of the popular bits. Republicans will be under enormous pressure to repeal just the unpopular parts, which would, of course, make the individual market even more dysfunctional than it is now. I wish good luck to President Trump or to any member of Congress who explains to voters that if they want the popular parts, they need the unpopular parts too. Believe me, I’ve tried.

So I suspect that “Repeal Obamacare” will meet the same fate as Social Security reform. Legislators were gung ho. Even the base was sort of theoretically in favor of it. President George W. Bush made it his signature initiative for his second term. But the more that Bush talked about what Social Security reform would actually involve, the more he spooked voters.  Even though his party had control of both the House and the Senate, Bush eventually had to admit he couldn’t get it done. His own party would not back him in the face of voter resistance.

Analysis: Time for GOP to prove it has a better plan for healthcare reform

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http://www.fiercehealthcare.com/payer/analysis-time-for-gop-to-prove-it-has-a-better-plan-for-healthcare-reform?utm_medium=nl&utm_source=internal&mrkid=959610&mkt_tok=eyJpIjoiTnpkaFpqRm1ZVEZpWkdZMiIsInQiOiJxY1NBT1ZDbGdDQWsxVzRQQ21iOVwvcEVkOFdDVTBIUG9hZWllQ0tiYmFuM2lUVU52Y2JGWkxnNW9BWDJhTWNZSTVTR2QwVmdTYWdIQkFPWGdxZ3FRWlwvRXVuSFFvZ2pKa3NaTUlwU0M1YmVJPSJ9

With Donald Trump headed to the White House and his party firmly in control of Congress, Republicans will finally have a chance to prove what they’ve been saying all along: that they can produce a better version of healthcare reform than the Affordable Care Act.

It’s clear that the ACA is as imperiled as it has ever been. Trump has fervently vowed to repeal it–and with Republican control of both chambers of Congress, he may well get his wish. After all, the law’s most visible component, the exchanges, are on shaky ground as it is, with premiums rising and some health insurers retreating from the marketplaces.

Plus, President Barack Obama’s last attempt at convincing Republicans to work on fixing the ACA–not repealing it–fell on deaf ears even before the party’s resounding victory Tuesday.

What gets lost in all the talk about the ACA’s uncertain future, though, is the fact that while some insurers have struggled to make a profit in the individual marketplaces, there are other aspects of the law to which they have become quite attached.

Take Medicaid expansion, an idea championed by Democrats (and even once embraced by Vice President-Elect Mike Pence) that has been a boon to insurance companies in the form of lucrative managed care contracts. Some companies that specialize in slimmed-down Medicaid plans have also thrived on the exchanges where others have floundered.

Then there’s the ACA’s provisions that encourage the transition to value-based payments, which insurers have embraced and largely retooled their business models to reflect. Accountable care organizations, for example, have sprung up like wildfire, producing promising results for some companies.

A wholesale repeal of the ACA would also erase the law’s historic gains in reducing the uninsured rate. Though many of the newly insured have turned out to be costlier to cover than expected, such a move would still rob insurers of millions of new customers.

The question, then, becomes what will replace the law–and that’s where it gets interesting.

Trump has a plan, but it is short on details. Perhaps most visibly, he has advocated for selling insurance across state lines–a timeworn GOP talking point that many experts agree is not feasible. He would also repeal Medicaid expansion and convert Medicaid federal matching funds into a block grant, the latter of which would drastically cut Medicaid funding and coverage.

One analysis from The Commonwealth Fund says that his plan could add nearly 20 million peopleto the ranks of the uninsured, and even more if his Medicaid proposals come to fruition.