In a post-reform era, healthcare organizations are tasked with not only sustaining excellence in care delivery, but also with refining strategies to safeguard their relevancy in an increasingly competitive, consumerist healthcare landscape.
"One of the most challenging jobs is being an executive in healthcare," Shawn McKenzie, president and CEO of Ascendian Healthcare Consulting, said during a panel during the Becker's Hospital Review 4th Annual CEO/CFO+CIO Roundtable in Chicago. "We have really smart people in the industry, and given the time and breadth to focus on what needs to be done, we can do it. Then they come up with something new in Washington, D.C., and suddenly the strategy has to change tomorrow."
How does a 105-hospital system "get relevant" in every market?
Large, multistate health systems need a competitive strategy that accounts for nuances between different markets and regions. Michael Rowan, president of health system delivery and COO of Englewood, Colo.-based Catholic Health Initiatives, said the biggest priority is "getting relevant" in each of its 105 hospitals' 12 markets. Each is vastly different.
"There is such difference from market to market," said Mr. Rowan. "We try to find as much commonality as possible, but our strategy is very much focused on the individual market level."
Variance in employment, different rates of reimbursement and distinct community health needs means a single, systemwide strategy won't work for CHI. For instance, in some markets, commercial insurers' reimbursement rates are 220 percent of Medicare, while in other markets they are closer to 115 percent.
Mr. Rowan says certain markets are highly organized, with almost all providers employed by health systems and steady risk-based contracting activity. "And then there are some cities in the country where you'd be hard-pressed to find more than 10 individual providers in a group, still trying to understand the shift from volume to value," he said.
There is some level of standardization, however. CHI uses its intellectual capacity to share best practices that can be replicated in other markets. Mr. Rowan said the system first used this approach in its cardiovascular service line. CHI identified a hospital where outcomes were better and costs lower than others. System executives talked with the physicians at that hospital to outline best practices that could help other hospitals improve their own outcomes and lower costs. This approach has been repeated in three other service lines.
For AMCs, the tightrope act of balancing relevancy with financial stability
AMCs are designed to deliver complex, specialized care. At the same time, they are responsible for the costs of supporting medical education and research. Because many are located in urban areas, AMCs often end up treating a disproportionate share of Medicaid or under-insured and uninsured patients for emergency and psychiatric crises. About 60 percent of AMCs' business comes from Medicaid, Medicare and other government programs, according to the Center for Health Information and Analysis.
Consumerism poses another challenge to AMCs because there is more scrutiny on quality while consumers are being more mindful about where they spend their money, and how much. "If you're an AMC and you're treating very complex patients, quality scores may not actually be very good," Igor Belokrinitsky, partner at PwC Strategy&, told Becker's Hospital Review.
To stay relevant and financially viable, AMCs must modernize their traditional network of care delivery. By seeking multi-tiered partnerships and building a network of community hospitals, family health centers, medical homes and urgent care centers in addition to its main campus, AMCs could exert greater cost control and steer people to relatively inexpensive clinics and keep the main campus primed for more acute and expensive cases.
Both AMC panelists agreed that partnerships under consideration today aren't those that their predecessors would have encountered. "We are seeing more and more segmentation in the marketplace," said Daniel Morissette, CFO of Stanford (Calif.) Hospital and Clinics. "There are relationships that we didn't need five years ago, but now we do."
Stephanie Reel, CIO and vice provost of information technology at Baltimore, Md.-based JohnsHopkinsUniversity and vice president for information services for Johns Hopkins Medicine, agrees. New relationships and expanding internationally for Johns Hopkins are keys to staying fiscally afloat. "You're not going to make enough money as an AMC alone," she said.
Johns Hopkins Medicine International is collaborating with healthcare providers in more than a dozen countries. These agreements vary in intensity and purpose. In Guangzhou, China, Johns Hopkins experts visited SunYat-senUniversity and its affiliated hospitals to lead courses to strengthen research, and Johns Hopkins will then host promising researchers in a competitive fellowship program in Baltimore. For ClemenceauMedicalCenter in Lebanon, Johns Hopkins faculty serve as clinical liaisons for several specialties and also lead infection control training.
In addition to creating new relationships, it's imperative for AMCs to continue serving as pinnacles for exceptional complex care. In 2016, Mr. Morissette believes Stanford should focus on developing personalized medicine, particularly relating to genomics. "We're doing things differently than we did even three or four years ago," he said. "It will make a difference for why it's important to come to an AMC."
According to Mr. Morissette, all healthcare leaders' strategies can be guided by the question, "What can we do differently and better than what we believe others can do?"