Teri Fontenot, chair of the American Hospital Association and president and CEO of Woman's Hospital in Baton Rouge, La., discusses how hospitals can prepare for growing financial pressure, uncertainty around the future of the Affordable Care Act and dramatic changes to the health care delivery system. Executives and staff need to tell eloquent and poignant stories, she says.

Interviewed by Matthew Weinstock

What can the AHA and hospitals do to minimize the impact of the budget cuts being talked about in D.C.?

Fontenot: Hospitals have for years been trying to figure out ways to improve care and simultaneously reduce waste and, thereby, reduce costs. This is really nothing new for us. It gets a little tiring when year after year, session after session, we are the target of additional cuts and, at the same time, we are expected to provide more services — medical and nonmedical — to patients. We will continue to do what we need to in order to give patients the absolute best care, but we need to be vigilant and engage the entire field in helping us explain to our congressional delegations and other policymakers how important it is that health care be funded at an adequate level.

So, is there going to be a heightened need for advocacy and grassroots efforts?

Fontenot: There is no question about it. We have to be unified as a field and speak with one voice. We're hopeful that this will be the year that we can be on offense rather than defense. The "enough is enough" slogan we had last year served us very well, but we need to be eloquent and explain to the people who are making those decisions that we are already doing a lot of things and looking at ways to be more efficient.

State Medicaid budgets are in real trouble. What impact is that having on hospital operations?

Fontenot: Every year our costs increase and every year at Woman's Hospital, Medicaid, which is our largest payer, reduces our payments. Our patient population has so many needs, some medical, some not medical. They are very vulnerable. They often have complex medical conditions and we find ourselves having to try to do more with less.

Our legislative delegation recently visited Woman's Hospital to tour the neonatal intensive care unit so that they can understand exactly what it means to have a premature baby with complex medical conditions, because our state is looking at reducing payments for NICU care.

Last year, 43 states cut Medicaid payments to providers and this year, there are 46 states planning to do the same. In Louisiana, we're looking at 1 to 3 percent in additional cuts while costs are going up. So, I think education at the hospital level and having our employees, our nurses and our physicians telling the story and making it very personal and very poignant really resonates with our legislative delegation.

Hospitals are looking to trim 20 percent or more out of their budgets to maintain current operations. How does that impact staff morale?

Fontenot: It certainly is a concern. Staff are expected to do so many things these days compared with 10 years ago. They are expected to be computer literate and to care for patients who are much sicker than they were several years ago. The technology that goes along with providing care is complex. We have really put a lot on our employees, but I've also found that they are very resilient.

In our organization, we try to be as transparent as possible. We ask our employees for ideas and suggestions. We don't feel that we should have any secrets about what is going on, either financially or otherwise, at Woman's Hospital. I have found that when employees are included and feel valued, and when you hire people who are really focused on the patient, then they understand that change is just part of our field and something that we have to learn to embrace and use to our advantage. They have to be change agents. It shouldn't just be at the executive level; it should be throughout the organization.

For-profit entities are making a lot of inroads in health care. How will that impact the field overall?

Fontenot: The [attention from] for-profits and venture capitalist firms is encouraging to me. It's a pretty strong signal that health care is alive and well and it is a growth industry.

What role will the independent hospital play in the movement toward accountable care?

Fontenot: In our instance, we obviously don't provide all aspects of care. We focus on women's and infant's care. We see ourselves as contracting or being a part of a larger organization that will be able to provide case management services. We currently provide some case management for preventive and wellness care, but it is specific to prenatal patients, NICU graduates and breast cancer patients.

Is that what you recommend to other independent hospitals, to look for ways to partner with a larger system?

Fontenot: Yes, but partnering can take many forms. It can be a loose affiliation or a complete merger or consolidation. The main thing is to look at what your unique market offers you and where the opportunities are and figure out what works best for you.
You need to see what makes sense for your particular situation and your opportunity.

When we get to the end of 2012, what will be the hallmark of your AHA chairmanship?

Fontenot: I hope that it will be that we moved quickly down the path in our efforts to focus on performance improvement, accountability and transparency. I'm excited about the movement that is under way. It plays very well as the next phase to our efforts several years ago with Health for Life to set up a framework for what needs to happen in our sector regardless of what happens with the Affordable Care Act or the Supreme Court decision. We know that we can all do better. I hope that this time next year we will feel as though we accelerated the pace, that we were able to embrace some of those opportunities and activities.

The second thing would be that every member of the AHA has become involved in what we need to do. There are many different roles all the way from governance to participating in councils, regional policy boards and task forces, to participating in webinars, asking questions, giving us suggestions, and, then on the advocacy side, getting involved to make sure that their constituencies know what they are about and how important they are to the community.