Altamonte Springs, Fla.-based AdventHealth works hard to maintain financial stability amid big changes in healthcare. The system has expanded and reorganized its leadership structure to find the right balance between corporate standardization without losing the unique connection to each community it serves.
Over the last 20 years, the health system maintained a solid 11% to 13% EBITDA margin to spend 75 cents of every EBITDA dollar on capital in the market, expanding services or providing better services for patients. But the strategic playbook for success must evolve as industry dynamics change.
"One of the big trends is healthcare over the next 15 years is a negative sum game," said Terry Shaw, president and CEO of AdventHealth, during a keynote at the Becker's CEO+CFO Roundtable Nov. 12. "You're going to trade Medicare for commercial insurance, whether you like it or not, and when that happens, it's a negative sum game."
The population of Medicare beneficiaries is only increasing, with around 10,000 Americans turning 65 years old every day and gaining Medicare benefits. By 2030, all Baby Boomers will be Medicare eligible and the shift is causing healthcare leaders to think differently about care models.
"What are you going to do to combat that with going deep and broad on endeavors of service in your marketplace for the 40 to 65 year old? Because if you're capturing that group in your market, even though you're going to be dealing with more Medicare, you're probably going to have the economics to make it work," said Mr. Shaw. "If you're not thinking through that, you're probably not going to have the economics to really make it work."
Compounding the challenge of a ballooning Medicare beneficiary population is the worsening clinician shortage. There aren't enough physicians and nurses entering the market to replace retiring clinicians and meet the patient population demands. AdventHealth has developed standards for clinical teams and is sticking to them. For example, every primary care physician in the network has two advanced practitioners.
"That's the only way we're going to survive in the future," said Mr. Shaw.
AdventHealth has also restructured over the last few years to ensure every region and hospital has a true CEO and leadership structure in place supporting the system concept. Mr. Shaw said he is focused on generating national relevance, regional scale and amazing local leadership to leverage the resources at the system level for better patient care.
The CEO at every level is focused on building a team to make "elegant operations." AdventHealth has a strategic plan dubbed "Vision 2030" where the organization is adopting the same feel, effect and ability to deliver great care in every market.
"We were a family of brands as opposed to a brand and it took us three years to pick a brand and then roll that brand out to our markets," said Mr. Shaw. "It's the best thing we've ever done. It wasn't just picking a brand, it was picking what we were going to lean into for our markets, together. The brand has to mean something: mission, vision, values, service, standards and then Vision 2030, where the organization was going, is maniacally adopted across our organization so that when the AdventHealth sign shows up, we want you to have the same feel, effect and ability to create great care no matter where that sign is in the marketplace."