Hospitals are facing plenty of pressure to expand externally, whether through consolidation or taking on more risk through insurance offerings. But Paul Levy, former president and CEO of Beth Israel Deaconess Medical Center in Boston and author of the blog Not Running a Hospital, wrote a post saying hospital CEOs and boards shouldn't forget to look internally, too.
"CEOs and [boards] of trustees are understandably ill at ease with all of the changes occurring in the healthcare world, but it feels like the management consultants have been hard at work persuading this audience that the solution to the changing healthcare environment is to look outward rather than inward," wrote Mr. Levy.
This becomes problematic when an organization's leaders do not have the skills or background to best execute these external strategies. Mr. Levy said the current generation of hospital CEOs and C-suite leaders do not have experience starting insurance plans or merging with other integrated systems to create large scalable networks. "Even if these plans and activities appear to be attractive in the consultants' pro forma presentations, executing them is distracting and demanding," wrote Mr. Levy.
Instead, he said leaders are better off doing a few things internally first. Leaders should address the operational problems within their facilities (the vast majority of "barely begun" to do so, according to the Mr. Levy). Leaders should reinforce patient-centeredness within their hospitals and strengthen engagement with frontline staff. They are also well-served to create "trusting and reciprocal clinical relationships" with other organizations throughout the continuum of care.
And instead of starting up their own insurance arm and taking on more risk — unchartered territory for most leaders — Mr. Levy recommended hospitals revisit their relationships with insurers. "[Hospital CEOs] would be better off learning how to negotiate with insurers in the new environment by helping to develop commercial relationships that are mutually advantageous," he wrote.
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