8 healthcare leaders share their No. 1 piece of advice

https://www.beckershospitalreview.com/hospital-management-administration/8-healthcare-leaders-share-their-no-1-piece-of-advice.html

Good leadership advice is meant to be shared. Here eight healthcare leaders — including CEOs, CFOs and chief strategy officers — offer the No. 1 piece of advice they would give other leaders in their field.

1. Rob Bloom, CFO of Carthage (N.Y.) Area Hospital. “The best advice I have is to find the courage to change what must be changed and accept those things that cannot be changed in the short term. Regardless of whether a hospital is profitable or struggling, there will be challenges. The difficult task is to determine where to focus resources while accepting criticism for problems that will not change the short-term viability of the organization. You have to learn to trust your judgment and resist pressures from others that might tempt you to alter your course based on their lack of understanding. It is very much a triage process: Stop the bleeding first, then worry about infection later.”

2. Mona Chadha, chief strategy officer of San Francisco-based Dignity Health’s Bay Area. “One of the key strengths of being a good leader is really listening and leading people by example. That to me is one of the successes. Then, do some thinking outside of the box. That’s been my mantra of success in the past.”

3. JoAnn Kunkel, CFO of Sioux Falls, S.D.-based Sanford Health. “The very first CFO I worked for in 1990 always said, ‘you’re only as good as your team. … I’d never be able to be successful without having you and the team working with me.’ [That CFO] was a very thoughtful and inclusive leader. He gave me opportunities to be part of the team and think strategically and develop into a leader. So since then, it’s always been my belief that we have a very strong team that should always participate. If we have someone that needs help, we have multiple individuals ready to step up. And working together makes us all better. My advice would be: It’s important to remember you are only as good as your team. Sometimes I think when you get into these leadership roles you can forget that. You always want to be inclusive, give credit to the work and the team and the efforts that help make you successful in your role.”

4. Michael McAnder, CFO of Atlanta-based Piedmont Healthcare. “I think what I’d say is try and look for the long-term play. You can’t manage this business on a day-to-day basis. You have to have a clear direction and stick with it. I think that’s probably the thing our CEO Kevin Brown has done really well. I have never worked at an organization with a one-page strategic plan before. Every meeting starts with it, and we use it at every presentation. That consistency has brought clarity. It’s also why we’ve gone from five hospitals to 11 in the three years I’ve been here. That resonates with other organizations when we talk about our plan. It’s really important. In addition, obviously, you have to act with integrity and character. If you’re in a position where you can’t do that, you have to make a different decision about whether you can keep working for someone.”

5. Alan B. Miller, CEO of King of Prussia, Pa.-based Universal Health Services. “I often give a few pieces of advice to other CEOs and leaders, including:

  • Character is destiny — a person with good character will always be better off in life. Choose your friends carefully because you are known by the friends you keep.
  • Hard work is critical. If you are going to do something, do it well.
  • Hire the best team possible. Build trust, and rally the team to focus on a common goal.”

6. David Parsons, MD, CMO of Portland-based Northwest Permanente. “Listen to the people you lead and be honest about which problems you can solve and which ones you can’t. People usually don’t mind being told no as long as you are direct and honest about the reasons why. People detest ambivalence.”

7. Mike Pykosz, CEO and founder of Chicago-based Oak Street Health. “Be persistent and be motivated by your mission. One thing we found really early was everything is a lot harder and takes a lot longer than you think it will. Things that make a lot of sense to you and are super logical will always take a little longer. [Success] requires breaking down a lot of little barriers, including a lot of inefficiencies, a lot of complexities and mindshare. But whatever it is, be persistent and have faith that if you’re trying to do the right thing, and if you stay at it, you’ll be able to break down those barriers and accomplish these things.”

8. Michael Wallace, president and CEO of Fort Atkinson, Wis.-based Fort HealthCare. “I’d say visualize the outcome you want and then go get it. I also like the phrase ‘try hard, fail fast, move on, start over.’ You’re one step closer to a solution if the last one didn’t work. But don’t let perfect get in the way of good. I like to be 8 for 10 rather than 3 for 3. Failure is the byproduct of trying to move an organization forward. If I get 8 of 10 things right, I am going to end up further along, closer to my vision than if I wait to be sure about everything to get that perfect 3 for 3.”

 

 

More than a quarter of major health systems plan Medicare Advantage launch, though many lack confidence

http://www.healthcarefinancenews.com/news/more-quarter-major-health-systems-plan-medicare-advantage-launch-though-many-lack-confidence?mkt_tok=eyJpIjoiWkdSaE9UZzRPV0poTW1FeCIsInQiOiJTK1lnZEdEakdOVlZNYWRBSzF5M3o1d3BRWmpQXC8ydVBYN2lFY01mUEQwbnhTVjBIU2NScmdIMWtXcjN3NGpXb1NoSG53clwvXC90TzJ1QWFPRWpoeGFtXC9jSHl4TFwvbDgwMEZYaU1kVmxRa1NCNHloRk9lK0VUZFBkVEVuV1hHTytIIn0%3D

 

Executives say the top reason for launching a Medicare Advantage plan is the opportunity to capture more value.

A new survey from Lumeris found that 27 percent of major U.S. health system executives intend to launch a Medicare Advantage plan in the next four years. Despite that, confidence among these same execs is lacking, with only 29 percent reporting they felt confident in their organization’s ability to make the launch successfully.

“These survey findings are consistent with our conversations with healthcare executives across the country who are feeling a sense of urgency around Medicare Advantage strategies, but also realize that this type of work is vastly different than traditional health system operations,” said Jeff Carroll, executive director of health plans at Lumeris, by statement.

In April, The Centers for Medicare and Medicaid Services announced it was releasing Medicare Advantage encounter data for the first time by request from the CMS Research Data Assistance Center. The MA encounter data, starting from 2015, provides detailed information about services to beneficiaries enrolled in a Medicare Advantage managed plan. It will give researchers insight into the care delivered under MA plans and will help them improve the Medicare program, CMS said. Annual updates are planned.

According to the 90 executives Lumeris surveyed from major health systems, the top reason for launching a Medicare Advantage plan is the opportunity to capture more value by controlling a greater portion of the premium dollar as compared to fee-for-service Medicare.

Other key drivers cited include market and regulatory trends supporting Medicare Advantage. In particular, shrinking Medicare margins could threaten the viability of hospitals and health systems as the senior population continues to grow and becomes a larger proportion of providers’ patient panels.

The respondents also recognized that launching a Medicare Advantage plan will be challenging due to the complexities of operating an insurance plan, which are far different than the capabilities required to successfully operate a health system.

They also shared concerns about the significant financial investment required and an overall lack of expertise in the health plan space. The majority of respondents, 59 percent, indicated they were likely to use outside resources to launch their plans — and that those resources are very likely to include a vendor partner that can mitigate operational risk.

“Launching and managing a Medicare Advantage plan requires skills beyond the core competencies of most health systems, which is one reason many provider-sponsored plans fail in the first few years,” Carroll said. “Through those failures, it has become clear that providers who select the right partners increase the likelihood for greater success in a shorter period of time.”

 

Do Most Hospitals Benefit from Directly Employing Physicians?

https://hbr.org/2018/05/do-most-hospitals-benefit-from-directly-employing-physicians

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How can hospitals and health systems generate a return on their investment in their physician enterprises? According to the most recent figures, from the American Medical Association, over 25% of U.S. physicians practiced in groups wholly or partly owned by hospitals in 2016 and another 7% were direct hospital employees. Yet, according to the Medical Group Management Association, hospitals’ multi-specialty physician groups lost almost $196,000 per employed physician.

As a result, some larger health systems’ physician operations are generating nine-figure operating losses, which are major contributors to the deterioration in hospital earnings.  It is time for hospitals or health systems to rethink their strategy for their physician enterprises.

Let’s first revisit why independent physicians were receptive to becoming employees and why hospitals and health systems felt the need to hire them.

The surge in hospital employment of physicians predated Obamacare by at least six years, and had two key drivers. The first was independent baby-boomer physicians — particularly those in primary care — found themselves unable to recruit new partners. Newer physicians, heavily burdened by student debt, were not inclined either to take on entrepreneurial risk or the 60-hour work weeks independent practice entailed.

The second was cuts in Medicare payments for office-based imaging. Thanks to the Deficit Reduction Act of 2005, specialties such as cardiology, orthopedics, and medical oncology that relied on the revenue that imaging generated were hit hard. As a result, many found it advantageous to be employed by hospitals. Under Medicare rules, in addition to professional fees, hospitals can charge a Part B technical fee for their services and therefore can pay practitioners more than they could earn in private practice.

Then, beginning in 2009, the Obama administration’s policies increased the exodus of physicians from private practices to health systems. The “meaningful use” provisions of the HITECH Act of 2009 provided both incentives and penalties for physicians to adopt electronic records, but hospitals and very corporate enterprises had more resources to comply with meaningful-use requirements.

The value-based-payment schemes created by the Affordable Care Act also markedly increased documentation requirements and, as a result, the overhead of practices, driving more physicians into hospital employment models.

There have been a number of reasons hospitals have been hiring physicians. Some, particularly those in rural areas, had no choice but to turn physicians into employees. Retiring independent physicians were leaving large gaps in care in their economically challenged communities. Consequently, hospitals that did not step in to fill the gaps were in danger of closing.

Separately, some hospitals or systems sought to grab business from their competitors by acquiring physicians who hospitalized their patients at competing facilities. These physicians’ inpatient and, particularly, outpatient imaging and laboratory volume generated additional revenues for the acquiring hospital or system.

A third apparent motivation was to corner the local physician market in order to obtain more favorable rates from health insurers. This seemed to have been a major rationale for St. Luke’s Health Systems acquisition of Seltzer Medical Group, Idaho’s largest independent, multi-specialty physician practice group, which led to an anti-trust action.

Yet another reason for making physicians employees was to position the organization for capitated, or value-based, payment. Hospitals believed that “salarying” physicians would help control clinical volumes and thus make it easier to perform in capitated contracts.

Finally, some hospital and system CEOs were tired of negotiating with local independent physician groups or national physician-staffing firms like MedNax and TeamHealth over incomes and coverage of the hospitals’ 24/7 services such as the emergency department, the intensive care unit (ICU), and diagnostic services like radiology and pathology. Building an in-house staff of physicians seemed like an attractive alternative.

Many health systems have gotten into trouble because their strategic rationale for hiring physicians became a moving target.  A hospital system we followed morphed from a ““grab market share” strategy to a “respond to competitive acquisitions” strategy to a “bailout” strategy for loyal independent physicians to a “increase bargaining power with payers” strategy to a “position for value-based care” strategy over a period of eight years. By the time it was done, it was the proud owner of a 700-plus physician group and losses of more than $100 million per year.

Hospitals lose money on their employed physicians because physicians’ compensation plus practice expenses and corporate overhead significantly exceed the collections of practices. These direct losses are, to a degree, an artifact of accounting, because hospitals frequently do not attribute any bonus for meeting “value-based’ contract targets, or incremental hospital surgical, imaging, and lab revenues to physician practice income.

However, even factoring in the accounting issues, much of the losses are attributable to “hosting,” rather than managing, practices effectively.  Many systems employing physicians have done so without developing a cohesive physician organization and lack standardized staffing and operational support functions, such as effective purchasing and supply chain operations, effective scheduling systems, and centralized office locations.

Managing up the return, rather than managing down the loss, is the key to a successful physician strategy. Here’s how to do that.

Establish a clear strategic goal and a target return on investment. Physicians reside at the core of any successful health system. Yet as the Cheshire Cat said in Alice in Wonderland, “If you don’t care where you are going, then it doesn’t matter which way you go!” If you establish strategic goals for the physician enterprise, then the physician organization can be sized and located appropriately. As a result, the physician group may end up either a lot smaller or with a more defensible specialty and/or geographic distribution. Management should then quantify and budget the expected return on the practice’s operational loss.

Strengthen operations. Effective management of the physician group then becomes the essential challenge. For example, revenue-cycle issues such as inconsistent coding or missing data often damage the profitability of the medical group. Are systems in place to assure that medical bills are defensible and correct, and that patients understand what they owe and agree to pay? Seeing that encounters are adequately documented and translated into a fair and timely bill that patients are willing to pay is not rocket science. The return on investment for getting the revenue cycle right is often 3X to 5X.

Revamp compensation and incentives. Medicare’s policy for paying employed physicians will likely come under fresh scrutiny during the Trump administration. It is possible that Medicare’s relatively favorable payment for hospital-employed physicians will be reined in. If that happens, it might require a painful revisiting of employment contracts when they come up for renewal.

Performance incentives in those contracts should also match the strategic goals established above. For example, compensating physicians through a production-based model that encourages them to increase visits, procedures, or hospital admissions, while value-based insurance contracts (like those for accountable care organizations) demand reducing them could damage the overall performance of the health system.

Pursue reality-based contracts with insurers. The Affordable Care Act ushered in a profusion of narrow network, performance-based contracts with private insurers, with significant front-end rate concessions by hospitals. These discounts often far exceeded the potential rewards from the “value based” incentives in the contracts! Larger health systems also rushed to assemble “clinically integrated networks” (CINs), comprising their employed and contracted physicians as well as private practitioners in their markets, to participate in these new contracts. Treating physician group losses and CIN expenses as loss leaders for value-based contracts and then losing yet more money on those contracts, as is happening in many places, doesn’t make sense.

Both enrollment and financial performance under these contracts have been disappointing in most markets. Reviewing and pruning back these contracts, or renegotiating them to provide more adequate rates or to compensate hospitals for patient non-payment is an essential element of an effective physician-enterprise strategy. Hospitals and health systems also should ask: “Is the CIN functioning as intended? Is it adding value that patients notice or is it just an additional layer of administrative expense without compensating benefits for clinicians or patients?

Motivate employed and independent physicians. Finally, hospitals and systems must understand the value they are creating not only for their employed clinical workforce but also for the two-thirds of their physicians who are not full-time employees — those who are contracted, independent participants in CIN’s or in part-time administrative roles. What would motivate all these physicians to want to work with the organization over the long term?

Hospital and systems need a unified physician strategy and operating model that encompasses all these diverse arrangements. Beyond that, they must  engage their physicians in planning and organizing care. Physician are complex, highly trained professionals. They cannot be mere employees; they must be owners of the organization’s goals and strategies.

 

 

 

UnitedHealth’s Evolution From Traditional Insurer Into Multifaceted Business Pays Off

http://www.startribune.com/unitedhealth-group-sees-profit-jumps-boosts-outlook/479981613/

The UnitedHealth Group Inc.'s campus in Minnetonka, Minn.

UnitedHealth Group hikes outlook after quarterly profit easily beats estimates

Strong first quarter, new growth opportunity have the health insurer hiking its yearly outlook.

After chalking up another quarter of better-than-expected profits, UnitedHealth Group officials on Tuesday described the potential for growth through a new venture fund the company is using to invest in innovative health care startups.

Minnetonka-based UnitedHealth first described the venture fund to investors in November and announced in March that Larry Renfro, the chief executive of the company’s Optum division, would lead the effort.

What value-based care really needs: change management

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The transition is one careers will be built on, if health executives align their delivery systems properly, deploy analytics, and maintain focus.

Hospital executives have a tough balancing act regarding the transition to value-based payment models. While the industry is steadily moving toward this new framework, many providers and services still operate on the old fee-for-service model, which is becoming more and more obsolete. That means C-suite leadership has to make the switch to value a high priority for their organizations.

They’re under tremendous pressure these days. There’s been a significant market shift. Providers and their associated patient panels — a list of patients assigned to each care team in the practice — are shifting toward government business, and government business has a more pronounced focus on value-based care.

According to Jeff Smith, senior vice president of U.S. markets at Lumeris, the move to value has been accelerated by a shift in payer mix away from commercial and more toward Medicare, which yields lower margins. And the commercial rates providers have been receiving are on the downswing.

“Underlying their business model today, health systems have to profitably manage their fee-for-service business while making this transition to value,” Smith said. “It’s like having one foot on the dock and one in the canoe. They often don’t have the understanding or expertise to make that strategic shift and successfully move toward value. It’s a new frontier for many of these providers.”

What providers need, said Smith, is more robust alignment with their delivery system around the new model. It’s about having an engaged, aligned network that focuses not just on the patient in front of them, but on an entire population.

“It really is an enterprise-wide change management initiative. This the kind of transition that careers are built on,” Smith said. “Some of the things they need to avoid are embarking on this journey with a lack of, I would say, panel density, and aligned incentives with their physician network. It’s problematic if this is nothing more than a nuisance. It really has to be a strategic focus.”

An organization also has to have the right governance and leadership in place, he said. Even though something worked under the old model, it’s a mistake to assume that it will naturally evolve and adapt to the new. A successful transition requires significant practice transformation.

All that, and an organization still has to maintain a high standard of care. That’s where advanced analytics come in.

“It really requires an understanding of where the opportunities are,” Smith said, “and that’s driven by advanced analytics and practical insights, and where to apply their investments to get the maximum return. They also need to have a really strong plan in governance, and this really requires support from the C-suite. It has to start with the CEO.”

Because every hospital, health system and physician practice is different, a good place to begin is with a market assessment of provider and business opportunity, which can show how to align strategies around a blueprint for successful profitability. Alignment truly is a key component of success, as everyone needs to be on the same page, from the CEO down to the physicians delivering care.

And time is of the essence. Smith expects the journey to value to be near-complete within about three years.

“The transition has been remarkable to me,” he said. “The amount of change we’re seeing year over year is remarkable. It was primarily led by these government programs, but the private payers have really adopted a lot of these changes. There are significant changes in the payer community in general, and more to come.”

 

Two key areas hospitals are planning major tech investments in the immediate future

http://www.healthcarefinancenews.com/news/two-key-areas-hospitals-are-planning-major-tech-investments-immediate-future?mkt_tok=eyJpIjoiTkRsaU5HTTJNVEV5WldaaSIsInQiOiJFSTVVaHdzRmdQTGVCSXZORmhReEkrbVVWNjZOdzhlOWRuRUwxeUVXNktOa2FyNVpQWkc1dXk5SGNTQjc0YndcL3BuUTkrV2xkWEVLd01qWnd2UGNrWTBFTFFzRWxWaGM3bVFOclwvYjNlbXBPSjA2d1prU0tyMmNpQ0Qwdlg4TGhUIn0%3D

 

Providers are ramping up to focus on urgent care centers and population health initiatives.

Hospitals are gearing up to spend more on population health and urgent care centers in the coming years, according to new research from two different firms.

The market for population health technologies is expected to reach $69 billion by 2025 while the urgent care center space is forecasted to grow by roughly $8 billion in 2018 to $25.93 billion by 2023.

The global population health management market was worth $118.5 million in 2016 and is slated to grow at a CAGR of roughly 16 percent from 2017 to 2025, with the rise in demand for innovative technologies and adoption of healthcare IT tools fueling the growth, Transparency Market Research said in a new report.

In terms of end-users, it’s the healthcare provider segment of the market that is expected to account for the largest share of the global market thanks to rising use of PHM tools. Insurers, pharma and “others” follow in terms of segments.

The benefits of PHM tools like data integration, data analysis, care coordination, and lowering care costs have driven an increase in their adoption, especially in the case of chronic diseases like diabetes and cardiovascular diseases which require identifying high-risk patients and disease management measures.

“This is one of the factors projected to drive the global population health management market during the forecast period,” the report authors wrote. “Developed healthcare IT infrastructure and increase in healthcare IT spending are the other factors anticipated to propel the global market during the forecast period.”

Geographically, North America and Europe are expected to dominate the market thanks to the Affordable Care Act and a rise in healthcare IT spending, owing largely to providers.

“Well-established healthcare infrastructure and strong support from public and private sectors in terms of reimbursement are attributed to the largest market share of North America,” the firm said. “A rise in awareness about population health and government initiatives such as the Affordable Care Act are anticipated to drive the market during the forecast period.”

Urgent Care Centers, meanwhile, will represent a $26 billion market by 2023, and in this year will reach just over $20 billion, ReportsnReports projected. Health systems and corporations with a stake in the healthcare industry know the model is flourishing thanks to affordable pricing, shorter wait times, an increasing elderly population, and the market is seeing more investment activity as well as strategic development partnerships between urgent care providers and hospitals. Corporate-owned urgent care centers, however, are expected to occupy the largest share of this market in 2018.

Concentra, MedExpress, American Family Care, NextCare Holdings, and FastMed Urgent Care are already major market players with CareNow Urgent Care, GoHealth Urgent Care starting to gain more of a presence as well in the United States.

Health systems looking to diversify their portfolios might do well to look at both urgent care centers and population health programs when considering how to expand their footprints. With a reputation for faster service and better pricing, both things that the rising millennial population smile at, they could be a beacon for both primary and specialty care for younger consumers as opposed to traditional practices. Additionally, with the high-deductible health plans, reasonably priced care will be especially attractive to patients who will bear a greater portion of the financial responsibility related to their care.

As these facilities grow in popularity, including them could boost not only your reputation but also your bottom line.

 

Ascension could shift away from hospital focus, Modern Healthcare finds

https://www.healthcaredive.com/news/ascension-restructuring-modern/519850/

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Dive Brief:

  • Ascension is restructuring to adapt a new strategic direction. President and CEO Anthony Tersigni hinted that direction would put a larger emphasis on outpatient access points and telemedicine, according to a video obtained by Modern Healthcare. The effort could move Ascension away from being a hospital-focused business.
  • The board of directors has endorsed the new direction and the company expects to save $57 million a year by streamlining its pay practices, Tersigni reportedly said in the video.
  • The 151-hospital system has realigned leadership and organizational efforts, including limiting business travel and holding virtual meetings as Tersigni and his direct reports take pay cuts. Such efforts are expected to save $61 million in fiscal 2019, Modern Healthcare’s Alex Kacik reported.

Dive Insight:

The news comes as the industry is questioning whether the days of large hospital-based health systems are numbered.

Tenet Healthcare and Community Health Systems are both shedding hospitals as they seek to reduce debt loads that were $15 billion at their peaks. Tenet, also in restructuring mode, raised its number of layoffs to 2,000 to help reduce its debt.

Ascension recently laid off 500 workers in Michigan and more could be on the way. It’s restructuring shouldn’t be a surprise. The company’s operating income dropped 93% in Q1 2018 to $11.5 million, compared to $172.6 million the previous year. The operating revenue dropped $122.1 million over the last half of 2017.

Admissions for many health systems have been trending downward as expenses have risen. In efforts to make numbers work, health systems are exploring outpatient access points while focusing on geographic areas they believe they can become market leaders in and where higher-revenue-yield services are more in demand.

This has led to large systems questioning whether they want to still be large.

However, no one is waving the white flag just yet and pivoting away from a “strength by numbers” system approach. The restructuring news comes as Ascension and Presence Health signed a definitive agreement for Presence to join Ascension and become part of AMITA Health, a joint venture between Ascension’s Alexian Brothers Health System and Adventist Midwest Health.

The system is also rumored to be in merger talks with Providence St. Joseph Health that surfaced in December.

HCA, which is bullish on inpatient facilities and saw rising admissions last year, is exploring a possible acquisition of Mission Health.

The industry is in a state of change, and it’s yet to be seen how the multiple restructurings shake out. But smaller, regional-focused systems look to be one option as the large systems sell parts of themselves off.

http://www.modernhealthcare.com/article/20180322/NEWS/180329953/ascension-amid-major-restructuring-hinting-at-smaller-hospital