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.”

 

 

Rise of the Permanent Interim Executive

https://www.linkedin.com/pulse/rise-permanent-interim-executive-zachary-n-besheer-mha-fache/

ZACHARY N. BESHEER, MANAGING DIRECTOR  - Integrated Healthcare Strategies

You have a dilemma: your big, mission-critical project needs full-time, executive-level leadership for the next year. You cannot spare anyone from your current executive team, and no one in the leadership pipeline has the proven skills needed for the job. You don’t want to hire someone new, because you don’t expect to have an opening for the new hire a year from now.

Situations like this occur every day throughout the healthcare industry, and increasingly, hospitals and health systems are turning to interim executives to fill this need. With market demand growing, more and more experienced executives are opting to become permanent interims.

Isn’t permanent interim an oxymoron?

Permanent interim executives are highly-skilled leaders who have a burning desire to make sustainable change, produce quantifiable financial gains, and improve clinical outcomes – all on a temporary, full-time basis.

Executive positions are stressful jobs that demand an exceptional commitment of time and energy. People who hold these positions often dream of finding careers that are equally rewarding, but allow for a different work-life balance. Today, some executives are finding that life as a permanent interim gives them an opportunity to use the skills gained over a career, while exercising more control over when and where they work.

Permanent interims are often retired, or approaching retirement, but not ready to quit working altogether. They are typically over-qualified for the temporary jobs they fill, so they are able to step into a role and make an impact from day one. They are usually self-employed, providing for their own health insurance and pension benefits. Most all reputable interim executives work through firms such as Integrated Healthcare Strategies (Gallagher Integrated), a division of Gallagher Benefit Services, Inc.

In Peter Drucker’s book, Managing in the Next Society, he wrote, “One prediction I’ve heard is that in a few years the people who are not employees of the organization for which they work will greatly exceed the number who are.” Hospitals subcontract for housekeeping services with outside firms who pay the cleaning staff. They contract with physician groups to staff the emergency department. They occasionally hire clerical employees through temp agencies to reduce a billing backlog. These are examples of the phenomenon Drucker was talking about, but they are hardly the only ones.

MBO Partners, a firm offering operating infrastructure for independent workers, reports that in 2015, 2.9 million American workers earned $100,000 or more as full-time interims. Drucker called contract work at the upper level “intellectual capital on demand.” Gallagher Integrated fields many requests for people with executive experience to fill jobs that are not expected to be permanent. These projects are most often related to a key leadership vacancy or a major project that needs additional attention. One frequent request we receive is for an interim chief financial officer. We also field calls for an interim chief nursing officer or nursing director. We place interim chief human resources officers and CEOs in interim positions as well.

Why not consider hiring a recently retired CFO with merger experience as an interim executive to manage the financial side of your next major acquisition? Why not hire a seasoned HR officer as an interim executive to assist your hospital with a major reorganization? Why not look for the best available leader for your project, instead of assigning it to someone who is merely adequate to the task? Doesn’t the availability of well-qualified executives willing work on an interim basis open up the possibility of obtaining better leadership for your organization?

Increasingly, we are living in an “on-demand” world, and our workplaces are reflecting the changes happening in society. Healthcare, with its breathtaking pace of change and exceptional pressures on costs, is an industry where interim executives can make a meaningful impact. Fortunately, there is a ready pool of highly qualified and experienced healthcare executives who have chosen careers as permanent interims.

 

10 ways compensation committees can best guide executive pay and performance

https://www.beckershospitalreview.com/compensation-issues/10-ways-compensation-committees-can-best-guide-executive-pay-and-performance.html

Image result for executive compensation

 

As CEO incentive pay packages bring attention to transparency issues in executive compensation, a group of directors and chief risk officers from The Directors and Chief Risk Officers Group published a set of guiding principles for compensation committees around the governance of risk related to pay and performance.

The report aims to give a company’s board of directors and board-level compensation committees guidelines for the governance of risks linked to an organization’s compensation culture.

Here are 10 guidelines for compensation committees to best guide executive pay and performance, according to the report.

1. Compensation committees must fulfill both direct and indirect pay governance responsibilities to define the best compensation culture for the company. Under direct governance responsibilities, CEOs must establish and continually review company-wide compensation philosophy. To fulfill indirect pay governance responsibilities, a company’s executives must ensure adequate resources and processes are in place for the organization’s incentive plans.

2. Committees should emphasize incentive pay for corporate performance when designing and communicating the company’s compensation philosophy. Incentive pay for an individual’s performance must be carefully applied when it is appropriate to fulfilling the individual’s role.

3. A CEO’s total compensation should be driven by how they impact the long-term interests of the company, which includes how effectively the organization takes risk.

4. A company should minimize use of external benchmarking, or the comparison of its statistical data with other organizations in the same industry, for executive pay. Instead, companies should work to incorporate internally-focused pay evaluation for executive pay.

5. Incentive-based compensation should always be considered to be “at risk,” subject to deferral periods and influenced by the company’s long-term performance.

6. Compensation committees must continually use discretion in determining an executive’s final incentive pay package. In this way, committees must make rules for determining these pay packages subject to discretionary override when the compensation culture of the organization appears to be violated.

7. When considering performance reviews and compensation design for an organization’s CEO and individuals in the succession plan, the compensation committee must provide complete transparency to the entire board. This includes the board’s approval of full details of the CEO’s performance and any final awards given to the executive.

8. Compensation committees should obtain public certification that ensures their processes of governing pay risk and compensation philosophy are “fit for purpose,” which entails executing a statement that verifies a company has performed due diligence on its pay governance processes.

9. The members of a company’s compensation committee should have diverse backgrounds and experience, expertise in risk, finance, and management and should cross-populate the company’s risk and audit committees.

10. To ensure proper compensation risk governance, companies must incorporate collaboration, feedback and review among board committee’s and the firm’s social network to maintain a properly established compensation culture.

12 takeaways from the 2018 JP Morgan Healthcare Conference

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.

Hospital CEOs could face new taxes 

The Republican tax overhaul bill also includes a small section that would levy a 20% excise tax on any wages of more $1 million for executives who work at tax-exempt organizations. Guess who’s not thrilled about that? Hospitals.

What they’re saying: The American Hospital Association said it was “concerned” about that provision because “there is already a rigorous process prescribed by the Internal Revenue Service for setting up executive compensation.”

Go deeper: As Axios’ Bob Herman has reported, hospital and health system CEOs command some of the highest salaries in the not-for-profit world.