All hospitals and health systems feel the effects of regulatory and policy changes, but these challenges affect each region, market and organization in different ways.
Hospital, health system and hospital association CEOs have told Becker's Hospital Review about some of the biggest challenges they are facing today, and ones they anticipate down the road.
Question: What do you think are some of the most significant challenges hospitals and health systems will face in the next five years?
Lynn Nicholas, president and CEO, Massachusetts Hospital Association: The biggest challenge is what I call 'straddling the fence.' While [hospitals] are trying to make the transition away from fee-for-service and volume-driven healthcare to population health, the challenge is ensuring goals and incentives are aligned. When you're in one payment setting or the other, goals and incentives are usually the same, but when you're in the middle of the transition, it gets very confusing.
Our members — hospitals in Massachusetts — want to see the transition to global payments, whether it be bundles, full capitation models or some kind of risk-based incentive payment. They want that to happen yesterday. What compounds that transition phase is that Medicare and Medicaid are growing every year as an overall percentage of payment to hospitals, but the actual payments per patient encounter are shrinking due to the ACA and the 2013 BBA Sequestration cuts, which will be in place for another nine years. That's a real challenge because commercial payment increasingly cannot make up for that difference, when historically, it often did.
Hospitals need to integrate services and care delivery throughout the full continuum and not just focus on the inpatient portion of care. They need to do this through a full vertical integration, which may be an owned integration, or a virtual integration, in which they're dealing with providers that have contracts with aligned incentives.
Another important strategy is to somehow, as hard as it may be, make the investments in health IT so hospitals can have EHRs that work across the continuum of care. It's not just a matter of capital investments — though these are large — but also dealing with cultural pushback and accepting a temporary decrease in efficiency. What happens is when systems bite the bullet and install a new sophisticated system, they initially see a decrease in productivity and satisfaction, but the EHR will pay off in the long run.
Q: What do you see as the most pressing challenge for your health system in the next five years?
Imran Andrabi, MD, president, CEO and chief network integration officer of Mercy Health-Toledo (Ohio): I think the same thing that's probably on top of everyone's list: understanding where the healthcare future lies and making sure we are heading there as an organization. We are not necessarily at the bleeding edge of where things are going, but we're certainly at the cutting edge. Making smart investments in the future, particularly in an ambulatory-focused strategy, is very important to population health and managing the continuum of care.
Managing talent in the future is also extremely important. As the economy improves, talent will become scarce. Those who can manage it better will fare better. Lastly, we need to create a culture for the organization that is responsive to any changes in the environment and sets us up for success.
Q: What is one of the biggest challenges your hospital is currently facing?
Mary Lou Mastro, RN, president and CEO, Elmhurst (Ill.) Memorial Healthcare: We are all in some state of transition from a volume- to value-based payment system. It takes an enormous amount of resources to track and improve on hundreds of core measures and outcome metrics. Prioritizing and focusing the team on the most critical elements requires great discipline. We use rapid cycle improvement and lean methodologies to engage physicians and staff and demonstrate improved outcomes quickly. But, there is no doubt that keeping up is expensive and challenging.
Q: What are some of the main challenges your hospital is facing right now? What are some of the hospital's biggest sources of pressure?
José R. Sánchez, president and CEO, Norwegian American Hospital (Chicago): The challenges we face are the new expectations that are part of the transformation of healthcare in the country, such as reducing costs, improving quality and population health management. Population health management is one of our major issues because it addresses the social determinants of health — job opportunities, vocational skills, decent housing and safety in the community, to name a few. All of these quality-of-life issues or social issues affect the health of the people that reside here. If you take the population of the east side of the city and compare it to Humboldt Park, it's two different worlds. Population health is more of a challenge here in Humboldt Park than in the east part of the city.
Physician relationships continue to be a major challenge because many doctors are here voluntarily since we can't afford to hire them. We don't have the dollars to employ 10 physicians. This component of our business continues to be critical because we need to attract more physicians as part of our network.
Q: What's a new challenge you're facing?
William Kenley, CEO, Methodist Le Bonheur Germantown (Tenn.) Hospital: It's not so much a new challenge, but it's an evolved challenge. We've always been a high-volume facility and the hospital provider of choice in the area we serve. Recently we've seen our volume uptick more in every area of our business. That's been a surprise for us.
To face this challenge, we have immediate plans and longer-term plans.
People are always reticent to do more capital projects, so we're trying to get more turns out of the assets we have, particularly those related to patient flow. Without the increased turns we've had, we would not be able to handle the patient volume that currently wants to come to this facility. Going forward, we're looking at retasking some of the spaces in our facility more toward patient needs.
From a longer-term basis, we have plans to expand our square footage, primarily around some service package development. We're working with Le Bonheur Children's Hospital to bring a more focused, integrated pediatric service onto our campus. We're also adding more space for outpatients who may be in the hospital for extended periods of time.
Question: What is something that worries you?
Desiree Einsweiler, CEO, Palo Alto County Health System (Emmetsburg, Iowa): I worry about how we are going to make the shift from volume to value. Our number one priority is providing high-quality patient care. It always has and always will be. However, now we have to learn to do so in a new way and under a new model. This means we have to change our thoughts and actions. Anyone who has ever tried to break a bad habit knows how difficult that can be.