WHAT’S YOUR LEADERSHIP TILT?

https://www.leadingwithhonor.com/whats-your-leadership-tilt-find-your-balance-inside/

 

 

We’ve surveyed hundreds of leaders about their greatest leader, the most important natural behaviors beyond character and hard worker were Results and Relationships.

Where do you tilt on the results and relationships scale?

Check out this free infographic, and please tell others about it!

 

 

MARKET SHARE STILL MATTERS: 3 WAYS TO WIN

https://www.healthleadersmedia.com/strategy/market-share-still-matters-3-ways-win

Related image

 

For CEOs, market share is critical. But measurement of it, and tactics to grow it, are getting more complicated as patients connect with providers in more sophisticated ways.

Health system CEOs have always worked to meet their mission of caring for the poor and underserved and improving the health of their community. They often cite that mission as their top priority. But in truth, they are evaluated by how well they grow revenue and margin, both of which come through expanding market share.

Market share used to be easy to define. CEOs counted on a reliably increasing reimbursement model that exceeded inflation and an aging population that meant more hospital days every year. No longer. But even though market share growth is much more complex now, failing to achieve that growth could mean termination.

To win the market share battle, healthcare organizations must first redefine what it is (see the sidebar on new market share proxies) and then build strategies that take advantage of the shifts in healthcare delivery. Here’s how three healthcare leaders are doing it.

NORTHWELL: ‘THE CONSUMER IS THE DETERMINANT OF SUCCESS’

Michael Dowling, president and CEO of Northwell Health in Great Neck, New York, acknowledges the need to provide access, value, and convenience for consumers who are increasingly looking for a wide-ranging array of services offered by a single health system. The key to this strategy is the consumer as the focal point of healthcare decision-making.

Northwell is currently investing heavily in home health and digital care access, including a major initiative in telemedicine, but tying it all together into a seamless consumer experience is critical.

“You need hospitals as anchors, but the strategy is very consumer-focused in providing access and convenience,” Dowling says. “We’ve been doing this for 10 years, and it’s one of the reasons we’ve grown to being one of the biggest players in the New York City market. It’s the interconnection of all these pieces that makes all the difference.”

Although it’s not a perfect analogy, Dowling says Northwell wants to emulate Starbucks’ approach to market coverage. It’s not a location on every street corner, but it’s close.

“The traditional way of looking at market share isn’t valid anymore.”

—Chris Van Gorder

Also, getting critical market share mass in a variety of modalities is necessary to becoming the viable narrow network that employers and insurers are looking for. Smart health systems are spending more on smaller facilities, like micro-hospitals, or on freestanding ERs, homecare, urgent care centers, and telehealth capabilities. Such investment aims to meet the everyday health needs of consumers, not just provide for their increasingly rare inpatient stays.

This means focusing on organic growth that complements or even stands alone from the inpatient realm rather than buying hospitals, for example. Specialized areas of investment in both inpatient and outpatient care are the usual profitable service lines, such as orthopedics, neurology, and cardiac care, says Dowling.

He says he seeks two kinds of market share when it comes to reimbursement: Medicare and Medicaid, and commercial. Both kinds are needed to serve the community comprehensively, he says, but only one of the two makes a margin. Patients don’t see that distinction, though, and Northwell must serve them all.

“[Commercial] is what everyone’s going after,” he says. “So, you try to be the preferred provider. You take market share from competitors by developing the physician relationship and by the expansion of ambulatory. We’ve built a massive ambulatory network with over 650 locations. It’s a marketing and consumer experience strategy. If patients are not happy with experience, they will go somewhere else, so it’s multifaceted.”

Hospital-centric organizations used to measure market share in terms of inpatient volume or discharges, but as more services have moved outside the hospital environment, those have become less reliable measures of success.

“We’re all moving toward understanding that the consumer is the determinant of success, rather than just the patient care business,” says Dowling. “The consumer is going to be determining how they want care and where, and since more of it is not needed in the hospital, you have to create locations for cancer care and imaging and surgery where it can be done on an ambulatory basis.”

SCRIPPS: ACCENTUATE YOUR STRENGTHS

Chris Van Gorder, the longtime president and CEO of Scripps Health in San Diego, is content with a level of uncertainty around market share, and says that growing it depends partially on instinct in a time of upheaval.

“Market share’s an odd thing. Everyone still wants to gain commercial market share, of course,” he says. “But today we’re not so focused on the inpatient side. We’re doing total hips on the ambulatory side. So, the traditional way of looking at market share isn’t valid anymore.”

Even though the discharge-based methodology isn’t as relevant as it used to be, it’s still important. Rating agencies still use discharges as an important tool to measure financial health, and with the relative lack of precise alternatives, discharges can be an important factor in how they determine borrowing capacity and interest rate terms for healthcare organizations.

“As an industry, we have to figure that out,” Van Gorder says. “Rating agencies use discharges, but you could be reducing that number and getting stronger as an organization.”

Scripps went through its rating agency sessions about three months ago and has seen a small decline in those traditional market share measures, but Van Gorder says those measures don’t tell the full story anymore. Scripps’ market is dominated by three major players: itself, Kaiser Permanente, and Sharp HealthCare, so fluctuations in discharges are often small and at the edges.

Rating agencies are smart enough to recognize that healthcare is changing, Van Gorder says. For example, they know it’s the right strategy to move to ambulatory, and Scripps experienced growth in covered lives in its health plan, which is part of Scripps’ strategy to build its own narrow network. But even rating agencies are frustrated that there’s no metric to enable consistent comparisons, he says.

“We still talk about market share because I still need to make sure the hospitals are occupied enough. Half-full hospitals are the fastest way to go bankrupt,” he says.

Scripps is strong in cardiovascular services, particularly interventional cardiology. “So, we focus on maintaining our strength in that area and in ortho, which is becoming much more ambulatory than it used to be,” says Van Gorder.

One area where it’s not as strong is cancer, he says, even though Scripps is a major oncology provider in San Diego. To maintain and even buttress that market share, the health system has partnered with Houston’s MD Anderson Cancer Center to build a new comprehensive cancer program that started treating patients this summer.

“[MD Anderson] is building a network strategy, and they have 23,000 people just working on cancer, so we are taking advantage of their knowledge to make us stronger,” he says. “It was a market share play, but it’s much more than just that, with increased access to research and clinical trials.”

Facing fierce competition in ambulatory, Van Gorder says the health system is focusing on areas where it’s strongest and trying to grow there.

In all areas, he says Scripps must aggressively focus on cutting costs, because he sees cost as a proxy for quality. In fact, he notes, cost may be the major limitation for most health systems in growing market share for the foreseeable future.

“People are paying more out of pocket to come in, and insurance companies have gotten so good at narrow networks,” he says. “People tell me you can’t lead with cost, and I say no. Cost is a quality indicator.”

GRADY: INVESTING IN SPECIALTY SERVICES

Safety-net hospitals, such as Grady Health System in Atlanta, have historically been overrun by mission patients—that is, patients who do not bring margin, such as Medicaid patients. But its leadership has recognized that the health system needs to be more competitive in commercial patients.

For Grady, that hasn’t meant investment in traditional service lines, but instead investment in highly complex tertiary and quaternary services that can’t easily be found elsewhere in its market, says John Haupert, its president and CEO. With seed funding from philanthropic sources, Grady has made multimillion-dollar investments in stroke and neurological surgery, interventional cardiology, and surgical subspecialties.

“In our case, it was a matter of survival. If all your patients are Medicaid or unfunded, you’re not going to be in business. Part of Grady coming back to life 10 years ago involved developing strategies to grow in funding the mission,” says Haupert.

The complex cases that have come from Grady’s recent investments weren’t previously present in the market. Unlike many organizations, Grady needed to create additional inpatient capacity to maximize those investments in capital and talent. It will soon be operating around 700 occupied beds; 10 years ago, it was barely operating 400. It’s building new outpatient facilities as well, expanding ambulatory surgical and oncology capacity across the street to free up space in the main facility where its cancer center is now.

“In the next three years, we’ll have 750 beds in operation,” Haupert says. “We’ve gone from 9% to 20% commercial. That helps with sustainability.”

 

Independence Is Not a Strategy for Health Systems

http://www.healthleadersmedia.com/leadership/independence-not-strategy-health-systems?spMailingID=11725844&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1221639238&spReportId=MTIyMTYzOTIzOAS2#

Image result for john gribbin centrastate

There are ways to keep going it alone in the face of massive consolidation, says one health system’s CEO. It’s not a strategy, but a means to end, he says.

Afraid your hospital or health system can’t compete because you lack size and scale?

A merger might help, but it’s not the only possible answer to your problems. Freehold, NJ-based CentraState Healthcare System’s top leader is certain it’s not the best solution for his organization.

Consolidation continues to upend the acute and post-acute healthcare industry. In fact, in a recent HealthLeaders Media survey, some 87% of respondents said that their organization is exploring potential deals, completing deals already under way, or both.

But CentraState isn’t among them, says John Gribbin, its president and CEO.

On a continuum basis, CentraState is already diversified. That’s one of the potential selling points of an M&A deal.

Anchored by the 248-bed CentraState Medical Center in Freehold, NJ, the 2,300-employee organization also contains three senior care facilities—one assisted living, one skilled-nursing facility, and a continuing care retirement community.

It can be argued that CentraState may not possess the scale to compete with multifacility, multistate large health systems that can take advantage of a hub-and-spoke strategy for referrals. Nor may it be able to afford expensive interconnected IT systems.

But there ways other than mergers to achieve scale and collaboration, says Gribbin.

Means to an End

Gribbin insists that he and CentraState’s board, which supports and encourages independence, are not dogmatic about it.

“Independence is not a strategy,” he says. “It’s a means to an end. The moment that ceases to be worthwhile is the moment we’ll consider another way to achieve our mission.”

Change is part of that strategy, he says, adding that healthcare in 2017 needs to be far more collaborative, not only with patients and family, but with other healthcare organizations. That’s a big difference from previous generations.

“Our real strategy is scale and relevancy,” he says.

And there are ways to create scale short of taking on all the legacy costs and “baggage,” as Gribbin calls it, inherent in any merger.

“There’s a lot of costs involved in merging… and while mergers work in some instances, they don’t work in all, and in many communities, they are increasing costs to the consumer,” he says.

In addition to the commonly stated goals of improving the community’s health and wellness, patient costs are extremely important in fulfilling CentraState’s mission, Gribbin argues.

Many mergers involve replacing hospitals and adding patient towers and high-cost equipment. That adds to their cost structure means they have to extract higher pricing, says Gribben.

“That’s the vicious circle you find yourself in. I prefer to create scale in a different manner.”

Focus on the Mission

Gribbin, who has led CentraState for 17 years, prefers to solve that challenge in part through a strong network of physicians unburdened by excessive administrative overhead.

He says the health system has to increasingly take on value-based contracting and financial risk. To be successful under such value-based reimbursement, partnerships with physicians are increasingly important, as is a redefinition of the relationship with the patient.

“We used to look at our relationship with the patient as a typical hospital stay,” says Gribbin. “What we’re preaching now is that hospital stay is a temporary interruption in our relationship. What happens before or after defines the relationship’s success.”

With its physician alliance and clinically integrated network in place, CentraState, unlike many hospitals, has been able to avoid, in large part, expensive physician practice acquisitions that can be a financial challenge.

“I’ve done it in the past, and may do it again, but we’ve tried to avoid it,” he says. Instead, contracts define the relationships and incentives.

As an example of those relationships, CentraState partners with a major patient-centered medical home primary care practice on four performance and three utilization measures.

As a result of the shared savings generated in the first year, which came largely from hospital-based savings, the physicians in that group referred 59% of their patients to CentraState.

This year they’ve referred 71% of their patients to CentraState because of its low costs, which help drive financial reward for both parties under the contract.

“On one hand, we’re keeping people appropriately out of acute care, but on the other hand, they’re sending [more] people here. So we’re experiencing higher but more appropriate volume. In this scenario, everyone wins,” Gribbin says.

A New Deal with Physicians

In order to avoid the need to acquire physician practices, Gribbin says it helps to have a suite of services to offer them as a starting point.

“Most don’t want to sell their practice, but they feel like they have to, he says. “If you give them the opportunity to stay independent, they’ll take it.”

Helping them with access to better revenue cycle management, malpractice insurance, and risk management, and helping them create the ability to enter into risk-based contracts is another big help with defining a new relationship based on shared goals with physicians that ultimately benefit the patient, he says.

Physicians can establish a relationship with CentraState through its independent practice association, or a physician hospital association, and avoid surrendering their autonomy, he says.

“The physicians got paid better, the payer saved money even including the bonus, the hospital won because it’s high value care, and the patient’s winning too,” he says. “It’s a microcosm of what we’re trying to accomplish.”

As a small organization, both Gribbin and the board worry about being frozen out of narrow networks. Much of the energy they’ve expended in being a low-cost organization is wasted, he says, if they can’t get the big payers to include them in contracting.

“As long as the market isn’t rigged against us, we’re OK, because we’re a high-value organization.”

The Soul of a Corporation

We know from an infamous Supreme Court ruling that corporations are people. They may be heartless, like the pharmaceutical company that jacks up the price of a lifesaving drug. Or clueless, like Pepsi with its latest ad solving racism by having a fashion model give a can of colored sugar water to a cop.

But can a corporation also have a soul? If the answer is yes, that soul passed on to higher ground a few days ago, when Mary Anderson, a co-founder of the outdoor retailer REI, died at the age of 107.

The wonder is not that she lived to triple digits. She loved clean air, a good fight and a well-told joke. The wonder is that someone born in 1909, when many veterans of the Civil War were still arguing over slavery, could live to see her common-sensical values flourish in an otherwise unrecognizable brave new world.