NEW YORK — During these uncertain times, leaders of the nation's top performing non-profit health systems are certain about one thing: they can't do it alone. To truly transform care delivery, they need to strike partnerships that not only stretch across the continuum, but also, at times, with competitors.
That's one of the themes emerging at the 14th Non-Profit Health Care Investor Conference. With the bright lights of Broadway just a couple of blocks away, executives from 30 leading health systems took to the stage to share their strategic and financial plans to rooms packed with analysts from rating agencies and the investment community. The meeting, which is sponsored by the AHA, HFMA and Citi, is a unique look into the interplay between bond issuers and the buy side.
In two rooms, simultaneous sessions take place where health system execs get 30 minutes to tell their stories. They are then ushered to breakout rooms for Q&A sessions with investors and rating agency officials. With 725 attendees, this year's meeting is the biggest yet.
During the handful of formal presentations I sat in on, nearly all of the CEOs discussed the importance of forging relationships with anyone and everyone in the care continuum. The word "partner" was uttered dozens of times. It's all about creating a stronger value proposition.
Part of those partnership strategies involves figuring out what not to do. Charles Francis, senior executive vice president and chief strategy officer at Dignity Health, says executives should ask three important questions: What business are you in, what are your core competencies and what differentiates you from the pack? In some cases, the answers may mean pulling back from offering a service and looking for, say, a home health agency or physician group to fill the gap.
That's something Ascension Health Alliance has done in various markets, including Michigan where it is actually working with competitors on population health initiatives, said Robert Henkel, president and CEO, Ascension Health and executive vice president, Ascension Health Alliance.
Another important theme — and one that is a constant at this meeting for the past few years — is physician alignment. Strategies continue to be varied, from straight employment to joint ventures to finding other unique ways of forging strong bonds.
Baptist Health Care's physician strategy actually has a dual purpose: create better alignment and expand market reach. In 2009, the health system, which is a first-time presenter, formed the Baptist Medical Group. The employment model was limited to primary care docs and service lines where the health system could strengthen market share, including cardiology and orthopedics, said Kerry Vermillion, executive vice president and CFO. The strategy has paid off in a competitive environment, pushing BHC to the market lead in some cardiology categories, for instance. Central to their approach was ensuring that physicians were out in the community, not at a central hub. "We put doctors where patients live, instead of making them drive to Pensacola," Vermillion said.
Even as health systems are charting a path towards new delivery models, they still have to focus on the fundamentals that keep the ship afloat, noted Robert Lux, vice president, treasurer and CFO of Temple University Health System. To that end, there was ample discussion yesterday about cost containment. Dignity, for instance, has identified $500 million is savings/efficiencies that it hopes to achieve this year. Those include $107 million - $170 million in labor, $24 million - $28 million in outsourcing and $25 million - $45 million in supply chain and utilization management.
I'll have a wrap up from the meeting in tomorrow's H&HN Daily.