Becker's Hospital Review asked three leading hospital and health system CEOs to share their key priorities for the year ahead. Here's what we found out.
Question: What are your key priorities as a hospital CEO for 2014?
Lynn McVey, Acting President and CEO, Meadowlands Hospital Medical Center (Secaucus, N.J.): I was so happy to recently hear Chuck Lauer say (and I paraphrase): "Whoever connects the patient directly to the healthcare system will win." We seem to be good position because two years ago we developed, and are now selling, a population health plan directly to small employers and independent contractors. Our facility and physicians are the exclusive network for care, which is driven on the back end by a sophisticated EMR by clinicians who manage the population. It's exciting to ride this wave.
Mike Schatzlein, MD, President and CEO, Saint Thomas Health (Nashville, Tenn): Number one, is clinically integrated networks for population health. Number two is supportive of that, and it's integrated IT. I can remember coming up with the concept called "one patient, one chart," when I was with Quorum in 1995. A guy named David Joiner and I decided we were going to strive toward that. Well, we're not there at Ascension. We're close in some markets, we're close at St. Thomas, but getting there is challenging. Medicine is way to complex to be practiced without computers. Information needs to be available to every caregiver that needs to see that patient, in real time. The third priority is what were calling at St. Thomas "Quality, Safety & Performance." It's basically a Deming initiative.
If you're a process engineer and you walk into any hospital in the United States of America, you'll have a field day identifying sub-optimzied processes that are ripe with variation, waste and rework. I don't want to alarm the public about safety, because serious efforts are being made. But, the way we've looked at safety in the past is: "Let's put another layer of inspection on here…and maybe another layer, and maybe another" And the analogy there is Swiss cheese. We have all these layers of inspection that normally work, but every once in awhile all the holes line up, and something eventually falls through.
What we need to do as an industry is to rebuild our process to be simple, optimized, have low variation and designed to guide caregivers to doing the right thing as the default mechanism, rather than always having to remember to do "such and such." The major goal for me, and at Ascension, is to lean out our processes with the help of our doctors to guide and direct with us so that the variation goes down, the waste and rework is lower, the quality and safety go, and the cost goes down.
Warner Thomas, President and CEO, Ochsner Health System (New Orleans): Our one of our major priorities next year is just to continue to develop population management capabilities and managing the trend from fee-for-service to risk-based or global payments. We're continuing to build more capability [around these areas], and it's a key priority for us in 2014.
We are also continuing to reduce our cost structure. With the continued decline in inpatient utilization and pressure there, we are looking to remove costs so we can remain competitive and profitable. We're looking at everything we spend money on in our organization, from our labor standards — making sure we're in the top quartile — to supply costs to utilization of supplies to any contract we have externally. We're also looking at the utilization of many of our facilities. How do we consolidate services so we aren't running areas that are not utilized. We're also expanding hours to make sure we're offering convenient hours for patients. This reduces cost structure because you're seeing more people in the same facility.
The third thing is just managing the change in the organization, and making sure our physicians and employees understand the change and why it's occurring. There's so much going on, that it's important to make sure you keep your employees and physicians engaged.
Q: All three of you mentioned population health as a key priority for 2014. Why is your organization so focused on this capability?
LM: Our Board is a group of entrepreneurs who purchased a failing non-profit facility and transitioned it into a for-profit facility. They had an early vision of the future of healthcare and it was population health.
WT: It's been a priority for us for several years. We have several risk-based in contracts today. We have two very large [managed] Medicaid contracts and we're taking large capitated payments. We're just continuing to build the capability and data analytics and care models needed.
Q: Mike, some have called your efforts to take on risk for population health at St. Thomas the biggest risk of professional career. How do you feel about that?
MS: Other people have described it as a risk. One of the Nashville papers referred to it as a "hail mary" and "Risky Business". In truth, all I'm doing is what's right. In fact, it doesn't even seem like risk because it's the only hope to continue healthcare with physicians in charge, and with patients being held up as the customer rather than some supplicant to the government.
People will throw out we can solve all of this by having a free market at the consumer, and there does need to be a free market at the level of care delivery organizations, like Mission Point. But to have the consumer shop for individual things, like an MRI, or a CT scan, or a surgeon, is like sending someone to the NAPA store and saying, "build a car."
Let me expand for a moment on MRIs. Tennessee is a [certificate of need] state, but even in Tennessee, from my office, Berne Sherry, who is CEO of our inpatient operations, could hit with his driver, probably a dozen different MRIs, and each one is different. Some are 1.5 Tesla, some are 0.7 Tesla, there is even a 3 Tesla. Some of them are open; some of them are closed. Some of them use this company's software; some of them use that company's software. Some of them are read by this guy; some of them are read by that guy. Some of them have good technicians; some of them have less-so-good technicians. So now, you need an MRI, and you're going to be the consumer and pick one of those places to go to? It's too complicated. You need the continuity of a delivery platform.
Q: What trends or issues are most concerning to you as you look to the year ahead?
LM: I don't think anyone has yet created a successful business plan for "health." Remember that healthcare has actually been disease-care, which had a very profitable, assured-payment run for 25 years. Since the early 1990s, we've been trying to turn this giant cruise ship around with a canoe; not a lot of movement.
It's a lot of hard work, a lot of long hours and a lot of new learning to totally reverse any business. I've overheard this conversation more than once so I'm concerned about the senior leaders who will maintain the status quo while waiting for retirement which hurts all of us.
WT: We're seeing a pretty significant drop in inpatient utilization, and I think certainly everybody is seeing that across the country. We are continuing to ensure we can manage and deal with that appropriately. Another concern is, we have a lot of opportunities and a lot of options, so it's important to make sure we're focusing on the right things and managing our priorities appropriately.
Q: What are you most excited about and/or see as the greatest opportunity?
LM: I'm a big fan of change, so I'm jazzed about the future. I can't wait to meet "healthcare" someday! I think we can make a business model of keeping people healthy if we link premium cost to health compliance. There's no reason why we can’t easily measure and track biometrics, exercise, eating habits, etc. Data informatics is the future. It's all about data. It's only about data.
MS: I'm a population health evangelist. The world has come around to needing exactly what we are called to do. It's the only hope we have to control the cost side of healthcare, and it has the added benefit that it's the right thing to do. At this stage in my career, this is a once-in-a-lifetime thing in healthcare right now. We are against the wall. We will not recover like we did in the '90s. We're going to have to have major league reform, not so much like the Affordable Care Act, but in the way we deliver care. The system needs to change. And if we don't do it as providers in a way driven by our mission and values, we will have no choice but a single payer system and rationing. It's the only hope.
WT: I think the great opportunity for us is to continue to do a great job in quality and patient safety, and we have a lot of patients attracted to our facility, and we want to continue to provide great quality and great service to our patients. If you're doing a great job of taking care of patients, from the perspective of quality and patient service, they're going to keep coming back, and that's a great opportunity for us.