The hospital leader's mindset has come a long way in just a few short years, from anxious and even fearful, to cool and confident.
For the past four years, consulting firm Huron Healthcare has been bringing a couple of dozen hospital and health system chief executives together in the same room to chew over the issues. Last week, they released their fourth annual CEO Forum report. Overall, leaders seemed much more confident of the industry's direction, compared with the first get-together held in 2010, when hospitals were still stinging from the recession, and unsure whether the Affordable Care Act would hold up in court.
"Everybody acknowledged there are tremendous challenges, but at the same time, the level of excitement to be part of such dramatic health care change was really palpable," Andy Ziskind, M.D., managing director and clinical solutions leader for Huron, told me by phone last week. "In the past, it was probably more anxiety and fear, or at least uncertainty, but I think the road map is becoming clearer and the commitment to move in that direction is clearer. There was definite excitement about being part of a real transformation in health care."
That's not to say that everything is hunky-dory in the C-suite. Even those at the largest and most prestigious health systems are being forced to reduce costs by 20 to 40 percent to cope with the drying up of past revenue sources, according to Huron. To help get where their organizations need to be, CEOs are focusing on three key areas in 2014, Huron found: transitioning revenue streams toward the new fee-for-value model, achieving clinical integration across their enterprise, and developing talent that's equipped for the uncertain future.
David Feinberg, M.D., CEO of the UCLA Hospital System, said during the forum that he's not sure what the health care industry will look like in a few years, but he knows the required traits of employees to help navigate the murkiness.
"You can't hire leaders who have everything you need for tomorrow because you don't know what tomorrow looks like," he said. "You can hire people who are both talented and incredibly passionate — and who will come to work every day with integrity, humility and passion. People with those traits are the people I want interacting with my staff and with my patients. Those values are really important to me and to our current team, and we frequently talk about how those are expressed."
Clinical integration, or aligning clinicians across the entire enterprise from admission to post-discharge, is key to surviving in the coming years, CEOs said. It goes beyond just orthopedics talking to primary care, according to one CEO, and must incorporate behavioral health and social services into the care continuum. You might not be getting paid for some of those touch points, but it's key to start thinking in this fashion. Physician involvement in leadership and governance is key, too.
"The current cost of health care penalizes our businesses and takes resources that could make our communities healthier in other ways. So we have an obligation to deliver value, and appropriate care. Those of us who are clinically integrated have a better chance of achieving that," said Gary Kaplan, M.D., chairman and CEO of Virginia Mason Health System.
As different markets move at their own pace toward a new model that pays for the overall value of care, rather than the number of visits, hospital leaders are seeking new revenues to aid in the transition. Those vary from telemedicine to retail clinics, employer-based care sites, or hospital-owned health plans. Inpatient visits are already drying up in some places, and strategic diversification could be key to the future.
"The big question is how you cover the full continuum of care and make it seamless, without losing revenue. For example, Memorial Hermann is the largest home health provider in Texas, but we're losing money on reimbursement," said Dan Wolterman, CEO of the Houston-based health system. "So we're looking at the new model of home health, using smart technology and trying to partner with others in that space. The industry has to figure out how to make new models work."
What is your organization's outlook for the future? Do you feel as if the path to a value-based payment is clearer than years past? Are leaders in your market finally making the transition away from fee-for-service? Share your thoughts in the comment section below, or feel free to reach out to me via Twitter or email.