Scale: blessing or burden for statewide ACOs?

https://www.healthcaredive.com/news/scale-blessing-or-burden-for-statewide-acos/551206/

Image result for Caravan Health

Scale can smooth out quality variation and assuage providers’ fears of taking on risk. But it’s not a catch-all solution.

A handful of accountable care organizations are moving to cover an entire state, but not everyone thinks bigger is better when it comes to population health management.

Caravan Health, a company that works with ACOs, last week announced the launch of its second statewide program, this time in Florida. In the model, any of the 200-some Florida Hospital Association facilities that want to participate can join together to provide coordinated care.

The bid is meant to bolster care quality for Medicare beneficiaries while lowering costs and risk for participating facilities. But some experts say the larger scale, like rampant consolidation, could be more like an anchor weighing down an ACO instead of a beam propping it up.

“At the end of the day, success or failure is based on success in managing the quality of care,” Michael Abrams, partner at Numerof & Associates told Healthcare Dive. “While there may be some bigger numbers involved, I think the safety angle that they’re selling may not be all it’s cracked up to be.”

Caravan has no plans to back down on the model, however, and plans to roll out two more statewide ACOs in the next couple of weeks.

ACOs existed before the Affordable Care Act, but in 2011 HHS released new rules under the landmark law aimed at helping providers coordinate care through the population health management programs. Since then, the number of ACOs have grown dramatically, from an estimated 32 to more than 1,000 in 2018, according to Leavitt Partners.

A statewide all-payer ACO in Vermont has seen some success, but Caravan’s model and its efforts are some of the first to leverage the programs over a much larger population.

The business model

The Florida ACO, created in partnership with the FHA, is the second from Kansas City-based Caravan. The first, in Mississippi, was launched in January. Under the program, hospitals have access to Caravan’s population health management model to build primary care capacity and monitor quality results.

Mississippi currently has 29 providers participating in the program, managing care for roughly 130,000 Medicare patients in 22 locations. Its operations include hiring and training population health nurses throughout the state, annual wellness visits, chronic care management and more.

It’s potentially a good business playbook for both parties. The hospital association captures a revenue stream that’s not dependent on their membership — increasingly important in these days of sharp provider headwinds — and Caravan is granted access to the Medicare lives of a couple hundred hospitals in the state.

The need for population health management is especially acute in Mississippi, which ranks last or close to last in every leading health outcome, according to the state Department of Health. Florida and Mississippi couldn’t be farther apart when it comes to their primary care infrastructure, a factor linked to ACO success. According to the NCQA database, Florida has 894 patient-centered medical homes. Mississippi has 74.

“With population health, we improve the health of our state so it’s a win-win all the way around,” Paul Gardner, the director of rural health at the Mississippi Hospital Association told Healthcare Dive.

And Caravan, which currently works with more than 225 health systems and 14,000 providers, touts its track record with its programs. In 2017, its ACOs beat nationwide ACO performance with savings of $54 million and quality scores of 94%, a spokesperson said.

By comparison, studies have yielded mixed results when it comes to ACO success elsewhere.

An April report from Avalere found the Medicare Shared Savings Program, a CMS model to foster ACOs in Medicare, missed federal cost-savings projections from 2010 by a wide margin and raised federal spend by $384 million.

But a National Association of ACOs analysis retorted that MSSP ACOs saved $849 million in 2016 alone, and a whopping $2.66 billion since 2013 (higher than CMS’ $1.6 billion estimate). And an early 2017 JAMA Internal Medicine analysis found ACO savings only increase with time.

Scale: protection or illusion?

The threat of financial loss is a leading obstacle to participation in ACOs. Smaller ACOs are more likely to experience widely variable savings and losses simply due to change, Caravan representatives say, while larger ACOs deliver more predictable and sustainable results.

“The only way we can create certainty around our income is to have processes and accountability and the infrastructure, but you’ve also got to have to scale,” Caravan CEO Lynn Barr told Healthcare Dive. Barr said that since Caravan’s 2014 inception, the company has found having 100,000 Medicare lives or more in an ACO yields larger savings than the roughly 80-85% of ACOs with only 20,000 lives or fewer.

As the owner of the ACOs, Caravan assumes 75% of the financial risk for providers. Barr said that evens out to a maximum risk of $100 per patient.

By comparison, in the basic track of the Medicare Shared Savings Program, the maximum risk for providers is $400 per patient. In the enhanced model it’s $1,500. “With our model, if people follow it and have 100,000 lives, there’s no reason they would ever write a check,” Barr said.

That is one of the selling features of the statewide ACO: It can be a mitigating factor for hospitals that might feel too exposed on their own, Abrams said.

But the threat of risk could still prove too much. CMS finalized new rules for shared savings ACOs in December, shaving down the amount of time they had before they were forced to assume downside risk from six year to two years for new ACO participants or three years for new, low-revenue ACOs.

And some critics say it’s a safe bet that the losses incurred by any one organization are not going to be spread across the other parties in the ACO, especially given the shortened timeline. As the deadline for assuming more risk approaches, Caravan could see attrition among providers who don’t feel ready.

“I think this is very, very, very challenging,” nonprofit primary care advocacy Patient-Centered Primary Care Collaborative Director Ann Greiner told Healthcare Dive. “Most of the hospital leadership has not been working under these kinds of conditions.”

And ACOs are all about a connection to the community, which might prove difficult to foster across an entire state.

“You’ve got to leverage people at the community level and have those relationships with the patient and, in the ideal world, know where to refer,” Greiner said. “At the state level, that’s pretty far removed.”

Unified governance, heterogeneity pose problems

The scale of large ACOs makes them much more difficult to manage, experts say. ACOs have a single set of policies that, in an organization involving more parties, needs to be adopted in one form or another that’s acceptable to all participating providers.

That’s done by majority, Barr said. Each participating provider has a single vote and the overall vote binds the ACO board’s decision on waiver approval, discharge standards, shared savings distribution plans and more.

But in an ACO with a lot of differently cultured and structured providers — academic hospitals, teaching hospitals, acute care, research, small, medium, large etc. — it can get a lot more complicated, Abrams said. For example, if 100 FHA hospitals opt into the new Caravan Health model, that’s 100 variations in acute care policy, physician compensation and all else involved in managing cost and quality operations, and 100 different voices strongly advocating to keep doing things the way they’ve always done them.

“Some issues are just working through the details,” Gardner from the Mississippi Hospital Association said. “In some of your larger systems, that’s getting the medical staff all pulled together and singing off the same sheet of music.”

The more homogeneous the ACO organizations are, the easier it will be to get them to buy in to the various policies and procedures that need to be put in place for operations to flow smoothly. “You can’t outsource that,” Abrams said. “The most you can do is get guidance from someone who’s perhaps been around this block about how to handle it.”

Barr maintains Caravan standardizes the most important factors.

“Nurses are critical to this model,” Barr said. “That’s what everyone’s doing the same.” Caravan has found that after nurses are trained in population health management over three to six months, each dollar the company spends on that provider produces two dollars in savings.

And, after Caravan puts the population health management infrastructure in place, the providers themselves helm the ship with a steering committee, leveraging data to see what differentiates them from the next community and making slight adjustments to course-correct.

Challenges for hospitals

Hospitals will face two challenges: taking in the coordinated framework given to them by Caravan and translating it into behavioral change, Abrams said. The success of the overall ACO will depend on the latter as “those who can’t do that successfully will probably self-select out when it comes time to take on risk.”

The question is whether Caravan can really deliver on some of the promises it’s explicitly making.

“The truth is that hospitals who haven’t had the infrastructure to manage their cost and quality are not better off in terms of consolidation and a position in a larger ACO,” Abrams said. “So an ACO comprised of multiple small hospitals and independent hospitals can’t expect savings proportionate to their aggregate size.”

With more statewide ACOs on the way, it’s important Caravan (and partnering providers) work out any kinks in the model sooner rather than later.

“This is not like bringing in a plumber to fix your faucet,” Abrams said. “At the end of the day, an organization stands on its own.”

 

 

The noble aim of being a great subcontractor

https://gisthealthcare.com/weekly-gist/

Image result for subcontractor

Earlier this month I was at a health system board meeting in which we were discussing the transition from volume to value, and the shift to a population health model. One board member had the courage to ask a tough question: “What if we never get there?” Covering just a small slice of a large metropolitan area, this system has consistently ranked third in market share behind two larger competitors—and now they feel they are lagging those systems in moving toward risk. The most recent challenge: a large—and until recently, loyal—independent primary care group had just been acquired by one of their competitors. Yet the system prides itself, justifiably, on delivering low-cost hospital care and outstanding quality.

I raised a heretical notion: suppose the system pursued a strategy focused solely on being the highest-performing inpatient and specialty care provider in the market, and abandoned the goal of bearing population risk? Could the system shift their focus to simply being the best “subcontractor” to other risk-bearing networks in the market?

The ensuing conversation was uncomfortable, to say the least. The notion challenged the system’s assumptions of the role they wanted to play in the market, and whether they could be a leader in population health. I encouraged them to think of being a “subcontractor” to other risk-bearing organizations not as a defeat, but as fulfillment of a vital role—healthcare in their community would be better if more hospital care were delivered at their level of cost and quality.

Our view: for many smaller systems who are driven by a desire to remain independent, becoming a high-performing care subcontractor may be the best path forward, and the most realistic. (It will be interesting to watch the successful investor-owned chains on this front—organizations whose strategic advantage lies in running highly-efficient, low-cost hospitals.) It’s not as sexy as “population health”, but as any builder will tell you, there’s no substitute for a great subcontractor.

I am not a salesman

https://interimcfo.wordpress.com/2019/02/13/i-am-not-a-salesman/

Abstract: This article looks into the importance of selling in business and the relevance of the development of selling skills to career success regardless of your role in an organization.

Really?  You’re not a salesman or saleswoman or salesperson?  What are you then?  Zig Ziglar and others argue that everyone is in selling whether he or she recognize or acknowledge it or not.  I have come across people that say that they consciously and intentionally do not know anything about selling or that selling is below their station in life.  Some of them have no idea that some of the best-compensated people in society achieve the success they enjoy from being successful in sales.

What is selling anyway?   I would define selling as bringing someone else around to your way of thinking.  The hoped result of the selling process is that the other party will decide to act upon your suggestions and recommendations (closing questions).  Sometimes this results in a sale for value in which goods or services are exchanged. In other cases, you are selling a concept or ideas like a strategy or recommended course of action to a decision maker that must put their reputation and possibly their job on the line by committing to your proposed course of action.

When some people hear the term ‘salesman’ the image that pops up in their mind is the high-pressure wielding scoundrel at the ‘buy here, pay here, Se Habla Español’ used car dealership with the moussed hair, polyester leisure suit, braided leather suspenders, and patent leather platform shoes.   The sales weasel is the offensive stereotype that ‘professionals’ avoid at all costs. However, the argument can be made that the scoundrel has a much easier way of making a living than those of us that make our living by selling ideas, concepts, and strategies into sophisticated organizations.  He is not up against counterparties that in many cases are considerably more experienced, educated, credentialed or intelligent than he is.  More often than not, the reverse is true.

If you would just as soon not be bothered with selling, my suggestion is that you dispense with aspirations of obtaining or staying in a C-Suite role.  What is a C-Suite?  One definition is that it is a marketplace of ideas.  The environment is characterized by continuous, ongoing debate of concepts and strategies to move the organization forward or respond to problems and threats.  If you are not effective in getting your ideas heard, debated and accepted, you might want to start thinking about finding another way to make a living.  If you cannot successfully sell your fair share of ideas in what is usually a very intimidating, competitive and sometimes hostile environment, your perceived value will fall along with the probability of achieving your career ambitions.

What types of selling occur?  Direct selling involves interactions with the intended purpose of an agreement to exchange goods or services for money.  What I will refer to as professional selling is focused on winning in the marketplace of ideas.  In other words, getting decision-makers to take your advice, respond to your counsel or choose a course of action based primarily upon your input. Professional selling is infinitely more difficult because it has a variable that is usually not present in direct selling – politics.  The politics are carried out generally behind the scenes by competitors of yours that could be trusted co-workers that advocate for their ideas behind the scenes or behind your back, without giving you the courtesy or respect of a face-to-face argument.  They use whatever leverage is available to them behind the scenes, under the table, and behind your back to advance their causes, frequently resulting in decisions that do not make rational sense.  Suboptimal results occur because, in the presence of politics, decision making is usually irrational.

For example, I experienced a situation where some physicians were not happy with some of the decisions coming out of the boardroom and the front office.  Do you know how many visits I had from any of the doctors?  The answer is zero!  Instead, they took their grievances directly to members of the board or county commission that humored and engaged them possibly in utter and absolute ignorance of the degree to which this amounted to the active undermining of the leadership team of the organization.  I learned that one board member was accosted in the church vestibule and never made it into the sanctuary to join their family for the service.  Others are caught at their places of work or during unrelated social events.  As we are seeing in our society right now, people that are sufficiently strident about their position will resort to extreme means including violence to have their ideology imposed upon the rest of us.  If you are in a board meeting and something entirely unexpected comes out of left field and derails something that you have put a lot of time and energy into, there is a good chance you are a victim of cowardly, destructive politics.

The stakes of success in a political environment are exponentially higher.  If you are to be successful when you are up against political resistance, your arguments or the effectiveness of your selling must be sufficiently compelling to not only overcome the logical burden of your case but the political forces that may be working against you behind the scenes or maybe more accurately stated, behind your back.  If this is not selling, I don’t know what is.  Most of the time, to one degree or another, your career is potentially on the line when you are selling to your leader or a board of trustees.  Must close selling puts you in an Apollo 13 situation where failure is not an option.  I sold vacuum cleaners in college.  I learned these concepts early on.  In-home vacuum selling can be very intense, high-pressure selling.  That said, selling vacuum cleaners is infinitely more comfortable than surviving in the shark tank that is the C-Suite of most organizations I have experienced.  I guess that’s why good vacuum cleaner salesmen make around $50K and C-Suite roles pay into seven figures.

So, the obvious question is what you should be doing?  My recommendation is that you start dedicating significant time and energy to learning as much as you can about selling.  The quintessential sales trainer is Zig Ziglar. He is one of the best but not the only one.  I would also recommend Harvey Mackay. Both of these guys are retired, but their work is as relevant as ever. Effective selling requires a healthy positive attitude.  There are many excellent motivational speakers. Some of my favorites are Les Brown, Earl Nightingale, Dr. Angela Duckworth, Zig Ziglar, and Ed Foreman.  Don’t overlook some of the incredible ministers that deliver messages of hope and inspiration.  For starters, I recommend Charles Stanley, Johnny Hunt, Robert Schuller, and Joel Osteen.  I have found that the more time I spend listening to these inspiring people, the luckier I become in the marketplace of ideas in a consulting firm, among my compadres, in a hospital C-Suite or down at the local watering hole.

Contact me to discuss any questions or observations you might have about these articles, leadership, transitions or interim services.  I might have an idea or two that might be valuable to you. An observation from my experience is that we need better leadership at every level in organizations. Some of my feedback is coming from people that are demonstrating an interest in advancing their careers, and I am writing content to address those inquiries.

The easiest way to keep abreast of this blog is to become a follower.  You will be notified of all updates as they occur.  To become a follower, click the “Following” bubble that usually appears near the bottom of each web page.

I encourage you to use the comment section at the bottom of each article to provide feedback and stimulate discussion.  I welcome input and feedback that will help me to improve the quality and relevance of this work.

This blog is original work.  I claim copyright of this material with reproduction prohibited without attribution. I note and provide links to supporting documentation for non-original material.  If you choose to link any of my articles, I’d appreciate notification.

 

 

 

Top Six Healthcare Executive Challenges in 2019

http://www.managedhealthcareexecutive.com/executive-express/top-six-healthcare-executive-challenges-2019

The pace of change in healthcare is not slowing down; in fact, it is accelerating. Healthcare organizations that are most successful in 2019 will know what challenges and changes are coming down the pipeline, and they will prepare accordingly.

To help ensure you don’t get left behind, we’ve assembled the top six challenges the industry will face in 2019.

1. Shifting the focus from payment reform to delivery reform. For the past few years, C-suite leaders at healthcare organizations have been focused on navigating healthcare payment reform—attempting to preserve, improve, and maintain revenue. Amidst those efforts, delivery reform has sometimes taken a back seat.

That will need to change in 2019. Organizations that are the most successful will focus more on patient care than revenue, and they will see improved outcomes and reduced costs as a result.

Many organizations are already exploring delivery reform with initiatives that focus on:

  • Remote health monitoring and telemedicine;
  • Population health management;
  • Patient engagement;
  • Social determinants of health; and
  • Primary care.

In 2019, however, they will need to bring all of these initiatives together to implement sustainable improvements in how healthcare is delivered.

An added bonus? Organizations that accomplish this will see enhanced revenue streams as value-based reimbursement accelerates.

2. Wrestling with the evolving healthcare consumer. Healthcare consumers are demanding more convenient and more affordable care options. They expect the same level of customer service they receive from other retailers—from cost-estimation tools and online appointment booking to personalized interactions and fast and easy communication options such as text messaging and live chats.

Organizations that don’t deliver on these expectations will have a difficult time retaining patients and attracting new ones.

That’s not the only consumer-related challenge healthcare organizations will face. In 2019, millennials (between the ages of 23 and 38), will make up nearly a quarter of the U.S. population.

This generation doesn’t value physician-patient relationships as highly as previous generations. In fact, nearly half of them  do not have a personal relationship with their physician, according to a 2015 report by Salesforce.

Finding ways to maintain or increase the level of humanity and interaction with millennials will be a key challenge in 2019. Patient navigator solutions and other engagement tools will be critical to an organization’s success.

3. Clinician shortages. Physician and nurse shortages will continue to intensify in 2019, creating significant operational and financial challenges for healthcare organizations.

The most recent numbers from the Association of American Medical Colleges predict a shortage of up to 120,000 physicians by 2030. On the nursing side, the Bureau of Labor Statistics projects a need for 649,100 replacement nurses by 2024.

The implications of the shortages, combined with the fact that healthcare organizations face a number of new challenges in the coming years, are many. Fewer clinicians can lead to burnout, medical errors, poorer quality, and lower patient satisfaction.

Healthcare organizations that thrive amidst the shortages will find new ways to scale and leverage technology to streamline work flows and improve efficiencies.

4. Living with EHR choices. Despite the hype and hopes surrounding EHRs, many organizations have found that they are failing to deliver on their expectations.

recent Sage Growth Partners survey found that 64 percent of healthcare executives say EHRs have failed to deliver better population health management tools, and a large majority of providers are seeking third-party solutions outside their EHR for value-based care.

The survey of 100 executives also found that less than 25% believe their EHRs can deliver on core KLAS criteria for value.

As we recently told Managed Healthcare Executive, that statistic is striking, considering how important value-based care is and will continue to be to the industry.

Despite the dissatisfaction surrounding EHRs, switching EHRs may be a big mistake for healthcare organizations. A recent Black Book survey found 47% of all health systems who replaced their EHRs are in the red over their replacements. A whopping 95% said they regret the decision to change systems.

Hospitals and physician may not be entirely happy with their EHR choices, but the best course may be to stick with their system. Highly successful hospitals and health systems will find ways to optimize workflow and patient care which may involve additional IT investments and best of breed investment approaches, rather than keeping all of the proverbial eggs in the EHR basket.

5. Dealing with nontraditional entrants and disruptors. In 2018, several new entrants entered and/or broadened their reach into healthcare.

Amazon acquired online pharmacy retailer PillPack, and partnered with JPMorgan Chase and Berkshire Hathaway to create a new healthcare partnership for their employees. Early in 2018, Apple announced it was integrating EHRs onto the iPhone and Apple watch, and recently, Google hired Geisinger Health CEO David Feinberg for a newly created role, head of the company’s many healthcare initiatives.

New partnerships have also arisen between traditional healthcare entities that could result in significant healthcare delivery changes. Cigna and Express Scripts received the go-ahead from the DOJ for their merger in September, and CVS and Aetna formally announced the completion of their $70 billion merger November 28.

Read more about the top two ways the CVS-Aetna merger could change healthcare.

All of these new industry disruptors and mergers will impact healthcare organizations, likely creating new competition, disrupting traditional healthcare delivery mechanisms, creating price transparency and pressures, and fostering higher expectations from consumers in 2019. Keeping an eye on these potential disrupters will be important to ensuring sustained success in the long term.

6. Turning innovation into an opportunity. From new diagnostic tests and machines to new devices and drug therapies—the past few years in healthcare have seen exciting and lifesaving developments for many patients. But these new devices and treatment approaches come with a cost.

One of biggest 2018 developments that best exemplifies the challenge between innovation and cost is CAR T-cell therapy. This new cancer treatment is already saving lives, but it racks up to between $373,000 and $475,000 per treatment. When potential side effects and adverse events are accounted for, costs can reach more than $1 million per patient.

Finding the best way to incorporate new treatments like this one, while balancing outcomes, cost, and healthcare consumer demands, will be a top challenge for healthcare organizations in 2019.

 

 

 

Being explicit about decision-making

https://mailchi.mp/900e9e419717/the-weekly-gist-january-25-2019?e=d1e747d2d8

Image result for responsible accountable consulted and informed (raci) chart

Recently we facilitated a day-long meeting for one of our clients who is looking to build a new governance model for their regional clinical enterprise. It’s a complex undertaking, requiring them to bring together a broad spectrum of stakeholders—their own employed medical group, a handful of independent groups with whom they’ve built partnerships over the years, a joint venture partner, the leaders of the system’s hospitals, and their academic affiliate. All of these relationships—each with its own decision-making structure and incentive model—have accreted over time but have not operated as a cohesive whole. Now, faced with an increasingly competitive marketplace, the system wants to build an overarching structure to coordinate the activities of the disparate constituents, and to allow them to go to market with a unified platform capable of delivering better value to consumers and purchasers.

In preparing for the meeting, we quickly realized that the crux of the problem is decision rights. Every initiative or major decision that the system wants to make is getting bogged down in an endless process of discussion, second-guessing, and turf battles between the constituent groups. In our session with the group, we shared our perspective that the most important part of designing any organizational structure is being very explicit about how decisions are going to get made. To that end, we provided with them a decision-making framework that we’ve seen implemented in other organizations, a variation on the RACI responsibility assignment matrix that’s been a mainstay in organizational science for decades.

At its heart, it’s a role-based decision process, in which different stakeholders are assigned discrete parts to play in coming to a decision. RACI is an acronym for four of the pivotal roles: Responsible, Accountable, Consulted, and Informed. There’s no magic to the specific framework—indeed, there’s a multitude of different flavors of RACI.

(We like the Bain & Company notion of asking “Who has the ‘D’”, or—to paraphrase George W. Bush—who’s the Decider?) Across the day, we introduced the framework, role-played making a specific decision using it, and then began to evaluate a strawman model for the unified clinical enterprise using the framework.

We’ll keep you posted as the model moves from evaluation to implementation, but we were struck by the power of having an explicit, concrete discussion around decision rights. Given the complexity and organizational inertia that characterize many healthcare organizations, taking the time to clarify who gets to make which decisions, and how, seems like a worthwhile endeavor.

 

 

We can’t afford to hire you

https://interimcfo.wordpress.com/2018/11/29/we-cant-afford-to-hire-you/

Abstract:  This article looks further into the value proposition of a sophisticated Interim Executive.

I have become accustomed to being ruled out of a beauty pageant for an Interim Executive consulting position based on rate alone.  In most cases, I am told by the decision maker about this problem after the fact.  It is common for the decision to be made without consulting me or giving me a chance to negotiate.  While I could have been flexible, my flexibility is limited by the opportunity cost of existing or potential competitive opportunities.  When I talked with the decision makers, they were frequently operating from the assumption that the gap was too big to close.  Instead, they lost an opportunity to get a resource with my background and experience while settling for an alternative solely based on cost.  It is clear that these decision makers severely discounted the potential value of engaging a more experienced resource.  Or, I could have simply been beat on price by an equally or better-qualified competitor but I doubt it.  I have seen too many cases of decision makers making what could be a critical decision based on the hourly rate alone.  Lest this come across as bitter, I have not failed to end up with a desirable engagement and I am generally happy with the outcome.  I have learned that as Mick Jagger said, “You can’t always get what you want.  But if you try sometime (sic), you find you get what you need.”  I cannot help but wonder how things are going in the organizations that passed me by.

What would some of the common excuses for a supposedly otherwise intelligent decision maker making a choice solely on rate?

We are in financial distress.  Interim Executive Services typically price on the experience and relevance of a proposed interim to a specific situation.  This is analogous to hiring a lawyer.  One of my friends liked to say that one of the worst things that can happen to you is to end up with the second best attorney in a critical situation.  To gain access to the best and most experienced talent in a law firm, you must be willing to pay the firm’s highest rates.  The reason that older, more experienced law firm partners’ rates are higher is that the market will bear their rates whatever they are because their time and expertise are in very high demand.  For those of us that make a living selling time, you are limited as to how much you can sell.  A firm in financial distress can end up in bankruptcy.  Another bad outcome for a firm in distress is to default on debt obligations that can result in the Board and leadership team losing control of the organization.  Banks and bondholders can and will accelerate the debt and take other actions to preserve their interests.  The pertinent question for the decision maker to make in this situation is what is the best resource available to avoid the undesired outcome regardless of cost because the cost of failure is infinitely higher.  If you think an Interim Executive is expensive, check the rates of bankruptcy attorneys and debtor in possession consultants.

I can get someone else for less money.  Inexperienced or ignorant people do not understand the differences between physicians.  They assume a doctor is a doctor is a doctor.  They do not understand the difference between a pathologist and a proctologist.  This is the kind of logic used by a decision maker that assumes that there is no difference in interim executives and places the first and/or cheapest resource they can find in an effort to get someone, anyone with a heartbeat into a position.  The pertinent question in this situation is what is the cost of failure and how small is this cost as a percentage of the cost of the cheapest resource available vs. a competent, experienced advisor.  I followed an interim CFO in a hospital that had somehow managed to miss a growing over-valuation of accounts receivable that ultimately led to a write-down of A/R in excess of $50 million and a number of executives including the CEO of the place losing their jobs.  Maybe the CEO should have looked at my article on how to avoid getting whacked.  In my experience, hiring decision makers rarely account for the personal career risk they may be taking by thier involvement in bringing an interim aboard.

We can absorb the workload.  This is one of my favorites.  Really?  Are you telling me that the departed executive did so little that a potentially prolonged vacancy of their position will not be missed and there is no risk in not having the role filled?  If this is the case, the decision maker should eliminate the position.  Just because the departed executive may have not been meeting the organization’s needs does not translate to their role not being worth filling with someone that knows what they are doing.  As a matter of fact, putting an experienced interim into a key role say CEO or CFO, might go a long way towards demonstrating to the organization how the role should be filled and carried out.  If you engage a sophisticated interim, there is a very good chance that the permanent executive you hire to ultimately fill the position will not come close to the value-adding potential of an experienced interim executive.  On this point, it is not a good idea nor is it fair to candidates to benchmark them against an experienced interim.  This makes it hard on everyone by unnecessarily delaying the recruiting process in some cases and potentially creating unreasonable expectations for a permanent candidate when there is a successful recruitment.

These are but a few of the excuses I have heard as reasons to rule me out of an Interim gig.  I am sure my readers can contribute others possibly spawning a series of articles on this topic.  One of the key things to remember if you are an interim executive as I said in my article about the value proposition of interim executives is what Zig Ziglar said, ‘You cannot control what someone else is going to do.  All you can control is how you respond.”  Don’t take rejection personally.  Remember, in baseball, a hitting failure rate of 70% or more is considered to be an excellent performance.  Another thing to think about is you never know what you may be saved from.  I can say from experience that I have been fortunate on more than one occasion to not get something I desperately wanted at the time.  You may never know the degree to which fate or divine intervention may be bearing on the outcome of one of your proposals.  If you are a decision maker, you owe it to yourself and those around you whose fate may be tied to yours to undertake the most objective, evidence-based decision-making process you are capable of whether the decision has to do with engaging an interim or any other key decision for that matter.

Contact me to discuss any questions or observations you might have about these articles, leadership, transitions or interim services.  I might have an idea or two that might be valuable to you.  An observation from my experience is that we need better leadership at every level in organizations.  Some of my feedback is coming from people that are demonstrating an interest in advancing their careers, and I am writing content to address those inquiries.

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If you would like to discuss any of this content, provide private feedback or ask questions, I may be reached at ras2@me.com.

 

 

 

Hospital executives believe Amazon can deliver on its hype as a healthcare disrupter

https://www.fiercehealthcare.com/tech/provider-executives-survey-amazon-ceos-reaction-data-apple-google-telemedicine-mergers?mkt_tok=eyJpIjoiTjJRMlpERTBObU0yWldOaiIsInQiOiJPMDVjRGNQVzcxMjIzOGt1ZTZva0R2YU1PXC9mYkczVEtYVHNHWmZzSHc1TjU1RGRZZ1o4VVprZStEV3R3VWdXWFwvQlRoYVg4cGpzakZIOFFkMkthRnVPbVwvNEUwQ3ptOVozRGQ0U3IyVDFENENmZTErMjc3TDhRYlwvaUlrT1oxSWgifQ%3D%3D&mrkid=959610

Out of all the technology giants with ambitions in healthcare, hospital executives have overwhelmingly put their faith in Amazon, according to a new survey.

A full 59% of executives say Amazon will have the biggest impact, according to the survey by Reaction Data. Respondents cited resources available to the retail and technology behemoth, the company’s current influence and name recognition.

Comparatively, 14% said Apple, with its foray into EHRs, would be the most influential, followed by Google at 8% and Microsoft at 7%

Among healthcare CEOs—which accounted for 26 of the survey’s 97 respondents—75% said Amazon would make the biggest impact.

About 80% of survey respondents were from the C-suite, including chief nursing officers, chief financial officers and chief information officers. 

While Amazon alone may be generating significant excitement in boardrooms, a previous survey by HealthEdge shows consumers are largely skeptical about Amazon’s partnership with JPMorgan and Berkshire Hathaway.

Amazon’s push into healthcare “has been a shot across the bow for the entire industry,” Rita Numerof, Ph.D., president of Numerof & Associates told FierceHealthcare. The company’s consistent and deliberate investments indicate they are serious about making substantial changes within the industry.

“Amazon is known for its relentless focus on the consumer and its ability to use data systematically to identify and meet unmet needs in an accessible manner,” she said. “Unfortunately, access, consumer engagement, and segmentation haven’t been the hallmark of healthcare delivery.”

Executives were also bullish on telemedicine, with 29% saying the technology would have the biggest impact on healthcare, followed by artificial intelligence at 20%. That’s less surprising given that nearly 75% of respondents were already using telehealth in some way.However, 51% of respondents said telemedicine is revenue neutral, and key focus areas were split equally around rural patients, follow-up care and managing specific populations.

 

 

 

Building the bench: Hospitals and health systems prepare for boomer retirement wave

http://www.modernhealthcare.com/article/20180505/NEWS/180509944

 

TriHealth asked its vice president of finance to shadow executives at an affiliated health system.

Sending a senior executive off-site to expand his perspective was part of the Cincinnati-based health system’s leadership institute, which aims to develop the skills of some 1,000 administrative and physician executives and prepare them for new roles.

While many executives move around within their organization’s network, the approach aimed to expose the employee—who had spent much of his career at TriHealth—to another corporate culture and operations.

“We obsess about spending $2 million on a CT scanner, but we can’t find a way to spend $10,000 on investing in our leaders,” said TriHealth CEO Mark Clement, who launched the system’s leadership institute about ½ years ago. “I would argue that investments on improving talent within our organization produce dividends far greater than a piece of equipment.”

For many providers, it’s the end of an era. Hospital, health system and physician group executives are seeking new leaders. They are prompted by an exodus of top healthcare executives, a generational transfer of power highlighted by the departures of senior managers like Dr. Toby Cosgrove, former Cleveland Clinic CEO; Michael Murphy, CEO of Sharp HealthCare who is retiring in 2019; and outgoing Mayo Clinic CEO Dr. John Noseworthy.

Millennials have claimed the largest share of the U.S. workforce, with 35% of workers in 2017, according to the Pew Research Center. As more boomers eye retirement, providers will look to fill a void of institutional knowledge.

Organizations are actively searching for what’s next and who will take them there. Industry consolidation is accelerating that conversation. But there is wide variation on their approach and level of preparation.

There’s a lot at stake, both from a cultural and financial perspective, said Mark Armstrong, vice president of consulting operations at Quorum Health Resources. Good managers translate to engaged employees, he said.

But only about 33% of U.S. workers are actively engaged in their jobs, and a mere 15% of employees strongly agree the leadership of their organization makes them enthusiastic about the future, according to a 2016 poll by Gallup. The firm estimates that disengaged employees cost the U.S. $483 billion to $605 billion each year in lost productivity.

“Even when systems know someone is retiring, it is interesting how few of them still don’t have an assertive plan in place,” Armstrong said. “Any kind of turnover can be disruptive, especially if there has been a trend of declining performance. It’s not unusual for a ratings agency to have heightened concerned when a CEO leaves.”

Almost every system grapples with a huge retention problem, which can make it difficult to plan ahead, said Alan Rolnick, CEO of Employee Engagement and Retention Advisors. The most costly departures are often experienced nurses, he said.

“It’s not just the cost of replacement but the loss of institutional knowledge,” Rolnick said.

TriHealth’s leadership program highlights potential candidates within the system who could fill upcoming vacancies. It puts executives on a multiyear track that assesses potential areas for improvement and exposes them to systemwide quarterly leadership training sessions and other development opportunities. The company’s vice president of finance, Brian Krause, spent a week at BJC HealthCare in St. Louis, relying on connections TriHealth had with the organization. Krause is also planning on spending some time at the University of Pennsylvania Health System, as well as a few other systems.

Since launching the institute—which is conducted with the help of the consultancy Studer Group—TriHealth’s employee engagement improved from the 26th to the 74th percentile, which has helped the organization generate a 3.5% operating margin—one of its highest margins in recent history, Clement said. Its patient experience scores are also up from the 50th percentile to the 75th, helping to drive an increase in admissions, bucking the national trend.

Ideally, promoting from within will ensure cultural and operational continuity and motivate executives, Clement said. “When you bring new senior executives in from other organizations, it can be a threat to the culture,” he said. “For an organization like ours that has invested a lot of money in building a culture based on value, engaging team members and flattening the organization, it’s often best to promote from within.”

Outside perspectives

Ascension has development programs similar to TriHealth, including quarterly leadership meetings and a series of classes. The St. Louis-based health system pairs its administrators with clinician executives in each of its markets. It shuffles executives within its vast hospital network to provide new perspectives and fill roles in regions where it can be hard to recruit qualified employees.

Ascension also recently launched a diversity inclusion campaign that seeks to cultivate minority leaders.

“The types of leaders are changing,” Ascension CEO Anthony Tersigni said at the American College of Healthcare Executives’ 2018 Congress on Healthcare Leadership in March. “The time for guys like me who started as a hospital operator is passing.”

The CEO of a Fortune 100 company told Tersigni several years ago that he spends about 30% of his time on leadership development. Tersigni, who at the time only spent a fraction of that on cultivating executives, said that interaction completely changed his perspective. Ascension has since partnered with a number of universities to build a better leadership curriculum and management pipeline.

“Disruption in the healthcare industry is not going to come from the hospital across the street, it has been coming from outside the industry,” Tersigni said. “We need to understand how they think, how they act, how they make decisions, because it is a lot faster than healthcare can dream of.”

Renton, Wash.-based Providence St. Joseph in 2017 partnered with the University of Great Falls in Montana, in part, to create a stable pipeline of managers to feed into the integrated health system. The university, which was renamed University of Providence, will include professional and certificate programs for Providence St. Joseph’s more than 111,000 employees.

The health system has also implemented mentoring and leadership development programs that have increased its women executive cohort by 50% over a three-year period.

“Diversity begets diversity,” said Dr. Rod Hochman, CEO of Providence St. Joseph, adding that women and minority leaders will help the system better understand its most vulnerable populations. “We are looking for folks with different perspectives who can help lead us through this time of change.”

Whether the successors are internal or external, establishing a strong executive pipeline requires a proactive and standardized approach, and the board should take the lead, industry analysts said.

A health system should identify the competencies it needs to lead the team going forward and where the gaps are, said Craig Deao, a senior leader at Studer Group. “The three keys leaders of tomorrow need to have are getting people to do things better—performance improvement; getting them to do new things—innovation; and helping people do those things—engagement,” he said.

Managing the process rather than the people will translate to more innovative and engaged employees, according to Rolnick. It starts with communication, he said.

“Today, the average employee of a hospital has no idea of the strategic direction of their organization and what their role is,” Rolnick said. “You have to tell them as much as you can, and be open and honest.”

Beyond employee engagement, executives need to understand how to interact with patients. As the industry adapts to thinking of patients as consumers, that requires a different lens, Deao said.

“People need to understand how to shape behavior and apply concepts of psychology to running the business,” he said.

Help from outsiders

While many systems have traditionally preferred to promote from within, that dynamic is changing as providers place more value on the skills industry outsiders offer. Notably, an executive from a major technology company will join Ascension later this year as its new chief digital officer.

Healthcare is becoming more consumer- and technology-oriented. Health systems are also focusing more on nutrition, transportation, education, fitness and other social factors that influence an individual’s health.

Novant Health, for instance, is launching a new leadership program that looks to train untapped community leaders in Charlotte-Mecklenburg, N.C. The program involves a combination of teaching sessions and mentoring that aims to reach individuals who otherwise wouldn’t have access to programs that hone their leadership skills, said Tanya Blackmon, executive vice president and chief diversity and inclusion officer at Novant.

While there is a significant learning curve, experience in consumer insight, marketing or technology can better equip individuals to tackle healthcare’s current challenges, said David Schmahl, executive vice president of consultancy SmithBucklin and chief executive of its healthcare and scientific industry practice.

“The experience people are obtaining in leadership roles outside the healthcare field is critical,” he said.

The role of healthcare leadership has evolved into a platform used to convey a moral foundation, spanning conversations from racism to gun control. They have to balance their role as an influencer while dealing with budgets, managing their boardrooms, implementing both long-term visions and short-term goals, and maintaining an engaged workforce.

The average tenure of healthcare executives and managers is also decreasing, particularly among CEOs, nurses and physicians, which exacerbates labor shortages. A C-suite executive’s pay is still tied to financial metrics, but quality, safety and patient satisfaction are becoming a more prominent determinant.

While Novant’s initiative isn’t necessarily geared to develop successors, it signifies how the definition of a leader is evolving.

“We are looking at trying to tap talent across all spectrums,” Blackmon said. “We’re not leaving any area untapped.”

 

Top 6 Books Health Execs Should Read in 2018

http://managedhealthcareexecutive.modernmedicine.com/managed-healthcare-executive/news/top-6-books-health-execs-should-read-2018?cfcache=true&rememberme=1&elq_mid=394&elq_cid=876742&GUID=A13E56ED-9529-4BD1-98E9-318F5373C18F

 

 

 

 

 

 

Hospitals look inward, add C-suite officer to boost staff wellness

https://www.healthcaredive.com/news/hospitals-look-inward-add-c-suite-officer-to-boost-staff-wellness/516451/

Chief wellness officers are becoming more mainstream.

As healthcare organizations look for ways to reduce physician burnout, some are placing their bets on a new C-suite role: chief wellness officer.

Hospitals that appoint an executive to oversee wellness anticipate not only happier employees but also improved patient experience and outcomes.

Physician burnout is at an all-time high. In a recent Medscape survey, nearly two-thirds of doctors reported feeling burned out, depressed or both. Worse, 33% of respondents said those feelings impacted their patient interactions. Burnout rates were highest among family physicians, intensivists, internists, neurologists and OB-GYNs, and were higher among women than men.

This epidemic, if you will, comes as the nation faces a growing shortage of doctors. The Association of American Medical Colleges projects the physician shortage could reach 105,000 by 2030.

Among factors fueling burnout are long hours, increasing regulatory and recordkeeping requirements and administrative and computer tasks. An Annals of Family Medicine report in September found that primary care physicians spend more than half their workday on EHR tasks. But the implications go beyond the looming shortage; physician burnout has been linked to lower productivity and absenteeism, medical errors, poorer outcomes and lack of engagement with patients.

Enter the chief wellness officer, or chief physician wellness officer as the title is sometimes called. The idea is not new, says Linda Komnick, a senior partner and co-leader of the physician integration and leadership practice at Witt/Kieffer. Companies and large organizations have employed them for more than a decade. However, it’s only in the past couple of years that they’ve started cropping up in healthcare.

“I would not call it a ‘trend’ yet,” she told Healthcare Dive. “What is a definite trend is that healthcare organizations are trying to be more holistic in supporting employees.”

The idea of CWOs aligns with the shift toward value-based, patient-centric care. Hospitals are trying to differentiate themselves culturally while they manage cost and risk. And there’s growth in self-insured plans and the overall societal thrust toward wellness.

Last summer, Stanford Medicine became the first academic medical center in the U.S. to designate a CWO, naming Dr. Tait Shanafelt, a hematologist who spearheaded an anti-burnout initiative at the Mayo Clinic.

Creating incentives for wellness

Concerns about chronic disease and rising healthcare costs led the Cleveland Clinic to appoint the C-suite role a decade ago. The question was “could we change the culture and environment of the organization by figuring out incentives to help people stay well and then reward them for staying well?” explains CWO Dr. Michael Roizen. “And what would that do to absenteeism and productivity?”

To do that, the clinic asked employees to achieve six “normal” vital signs — blood pressure, fasting blood sugar, body mass index, LDL cholesterol, healthy urine, learn to manage stress and see a primary care physician once a year. Those who meet those targets or are on a clear path to achieving them get the insurance rates and benefits in effect in 2008, when the CWO program took off. Everybody else gets rates in line with the current economy.

Preventing burnout is a big part of Roizen’s role. He says stress levels for healthcare workers were five deviations above the mean in 1983 when the Perceived Stress Scale was developed. To address the problem, the clinic offers an online stress management program. Those who take it see their stress and burnout levels fall by about 75% and 44%, respectively, he says.

The clinic also designated two physicians to work solely on reducing EHR clicks for physicians and uses scribes to assist its primary care practices.

There have been environmental changes as well, such as removing sugary products from vending machines, eliminating fried foods and trans fats in its eateries and making on-campus fitness centers free to employees.

The effort has paid off. In 2008, about 6% of clinic employees had six normal vital signs. Today, 63.8% of employees are in chronic care management programs and 40% have the six normal numbers. “That’s saved us, compared with competitors, $254 million for 101,000 employees in the past three years,” Roizen tells Healthcare Dive.

In addition, absentee rates have dropped from 1.07% to 0.70%. That change alone, if all the clinic did was replace the nurses, saves about $7 million a year, he adds.

It’s a win for employees, too, Roizen notes. The lower insurance rates translate to about $200,000 more in retirement funds, and employees live about eight years younger, meaning their risk of getting a chronic disease is that of someone younger.

A holistic approach

Dr. Edward Ellison, executive medical director and chairman of Southern California Permanente Medical Group, hired a CWO six years ago after physicians ranked the organization “very low” on wellness support in an internal survey. The response stood in contrast to that of managers and other staff.

The survey was trigger of sorts, Ellison says. “I had been a practicing physician and I knew the stresses. I knew the challenges of the electronic health record and how it had made many positive gains for systems of care and caring for patients, but created an added burden for physicians.” The survey was a “data point for me and what really prompted me to appoint a chief physician wellness officer,” he adds.

To increase physician satisfaction, the group now offers flexible and alternate work schedules, reduced hours, mental health resources and peer-to-peer support. Specified teams help physicians prioritize administrative tasks so that others can handle the clerical work. There is also a physician concierge to help with non-work life planning, social events aimed at reducing the isolation physicians can feel in their job. Doctors are taught to practice personal preventive care and provided access to workout equipment.

“You have to take a very holistic approach,” Ellison tells Healthcare Dive. “It starts with culture, but it’s also about the practical, tactical time in your day. It’s about reducing the hassle factor and some of the bureaucracy of systems, and it’s about personal care and resilience and connecting people so that they don’t feel isolated.”

SCPMG has repeated the survey that showed physicians did not feel the organization supported their wellness. The response today: double-digit improvements on culture and wellness, Ellison says.

An evolving role

So what qualities does a CWO need? Healthcare organizations are still figuring that out, says Komnick. Some are tacking physician and employee wellness onto medical director, chief human resource officer or chief experience officer roles. For those focused on physician wellness, it helps to have someone with a medical degree or research credentials. Other assets include the ability to lay out a vision for long-term wellness and supportive programs and exceptional collaborative and communication skills to get people on board with new ways of working in organizations that are traditionally resistant to change, she says.

The challenges for CWOs are huge and call for a wide continuum of solutions. “It’s not one size fits all, and we have to do this in the face of enormous change in healthcare, a lot of ongoing changes in reimbursement strategies and systems of care,” says Ellison, noting CWOs have to navigate all of that while focusing on wellness and resilience.

Meanwhile, the problem of burnout is only getting worse. Ellison sees a parallel in airline passengers being told to don their own oxygen mask before helping others. “We need to make sure that our physicians are as healthy as they can be because they are then going to be able to be their for their patients and support them,” he says. “It is in line with taking care of our patients.”