Health system executives find themselves in a unique position, balancing the need for growth with the tough financial realities of today.
The COVID-19 pandemic required health system executives to deploy strong leadership and nimble strategies, reacting to unprecedented situations and preparing for the unknown. In the last year, continued inflation, tight margins and workforce shortages required immediate action including layoffs, service closures and more to continue operations. Hospital consolidation ramped up, and margins have begun to slowly recover.
Are executives in a place where they can think again about long term growth?
The executive team at Froedtert & the Medical College of Wisconsin's health network is prioritizing building upon financial improvement initiatives and identifying efficient growth strategies for the remainder of the year to prepare for the future.
"We are not in a position where we can cut our way to profitability, so we must find ways to grow top-line revenue, even in times of economic downturn," Mark Behl, executive vice president and COO of Froedtert & the Medical College of Wisconsin in Milwaukee. "We have to execute on the short-term strategies that helped us change course when faced with financial headwinds. We must prepare for the inevitable pivot to growth."
Continued pursuit of innovation is an important aspect of health system growth and evolution. During the pandemic, health systems quickly stood up virtual care models and solutions for supply shortages. Team members learned new roles or transitioned to remote work as needed, and innovated in infection control. While innovation has slowed, systems don't want to go back to the pre-pandemic snail's pace of change.
"As the healthcare industry evolves, it's imperative to align growth strategies with the changing demands and trends," said Quanna Batiste-Brown, DNP, RN, CNO of ambulatory care at UCLA Health. "Developing sustainable growth plans that accommodate the increasing healthcare needs and expanding clinic network will require a combination of careful market analysis, technological advancement and efficient resource allocation."
Some health systems are revitalizing the C-suite to meet short term needs and planning for the future. The chief transformation officer is becoming more common for health systems as they aim to add revenue streams, embrace digital transformation and overhaul the workforce.
Central Health in Centennial, Colo., brought on a chief transformation officer last year to help "strike the right balance between short-term improvement and long-term value, taking responsibility for change and ensuring results are delivered ambitiously and quickly," according to President and CEO Peter Banko.
The CTOs are often an extension of the CEOs with responsibility for making day-to-day decisions and meeting goals, freeing up top executive leadership to focus on the future.
"It is easy to become so narrowly focused on the day–to-day operations during a global pandemic, followed by a severe financial downturn, but we cannot lose sight of the long-term view," said Mr. Behl. "We will use the second half of 2023 to balance both."