OhioHealth President and CEO David Blom stood before a room filled with a couple hundred health system executives and Wall Street analysts and flashed a slide on a screen that laid out a well-known recipe for success: market share growth, quality, profitability, customer experience, physician relations, cost control, access and balance sheet strength.
Flanking those goals, though, were two seemingly incompatible paths: fee for service and value.
"The success factors are the same today as they were in the past," Blom said during his presentation in May at the Non-Profit Health Care Investor Conference. "But the metrics are changing."
For instance, market share can't be defined by volume anymore, but rather by attributed lives. Process measures for quality? Hardly; try clinical integration. Profitability will be defined by managing risk, not by high volumes. Physician relations? How about economic integration. And, importantly, the focus on access has shifted from inpatient to ambulatory.
"For many of us, these are still aspirational, but we are moving along the path," Blom said with confidence.
Still, these new metrics are a bit challenging to figure out, at least in the short term. At the meeting, I had a chance to sit down with Martin Arrick, managing director of public finance at Standard & Poor's, and he suggested that the shift to value makes it harder for analysts to know which metrics to monitor.
Take inpatient admissions, which are typically used to measure utilization.
"Well, is an admission good or not good?" Arrick asked. "Are you getting paid for that admission or not? Is that a capitated admission, or is it a fee-for-service admission? The reality is we have to have a larger conversation with folks essentially about their business mix and their payer mix."
Interestingly, executives from the 30 health systems that presented at the New York City meeting seemed to a be a bit ahead of rating agency officials and investors in terms of understanding how their organizations must pivot in order to thrive in the future.
Many of these organizations — which have the fortune of healthy margins and solid revenue numbers — are pursuing strategies to partner with physicians and other organizations, expand their ambulatory footprints, tap into the true power of information technology, and engage with patients as consumers. In fact, I think "consumers" was uttered far more than "patients" during the two-day meeting.
"We aren't afraid of the word," said Providence Health & Services CEO Rod Hochman, M.D., pointing out that the Renton, Wash.-based system recently hired a senior vice president for strategy who was one of the key developers of Amazon's Kindle. If patient portals are going to be viable, why not hire someone who is supremely experienced in building a successful consumer-facing technology?
OhioHealth's stated goal "to be chosen as the 'system of care' and excel in a value-based market," could well be the slogan for all of these hospitals.
"We believe system of care is the appropriate term," said Executive Vice President Michael Louge. "We'll do that through a clinically integrated network across a broad geography."
— You can reach me at mweinstock@healthforum.com.
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