Some of the most inspiring stories in the history of American medicine involve the founding of the country’s faith-based hospitals and health systems. The tales often involve 19th-century immigrant nuns and other religious figures setting up centers for the underserved on the American frontier with little more than a few beds and an iron will. In today’s healthcare environment, leaders of faith-based organizations are calling on that pioneering spirit once again. They’re often providing vital care for the most vulnerable populations in their communities while working to secure the financial future of their organizations and positioning themselves to be the provider of choice in their market — all at a time of profound change in the industry.
In my conversations with executives at faith-based organizations, I have identified five issues that these talented men and women are addressing — and some of the tactics that help them sustain their crucial mission.
1. Stay committed to founding principles despite change. Faith-based health systems and hospitals vary in their level of religiosity, but all share a commitment to helping the most vulnerable in society; many have stayed in geographical areas that other hospitals have abandoned in recent years. This commitment to “toughing it out” can cause friction when financial imperatives require administrators to change or even transform the organization. Strategic decisions such as closing facilities in certain areas can be particularly difficult, as can decisions that impact employment.
Executives having to undertake such painful change should communicate to stakeholders the reality that in order to best fulfill a social mission, it’s critical to identify areas in which an organization can be hard-nosed and practical about resources. After all, an executive’s obligation is first and foremost to the sustainability of the enterprise, which can only be upheld through operational prioritization and execution. As the old axiom goes: “no margin, no mission.”
2. Define and communicate the value and relevance of faith-based care. Faith-based hospitals face a challenge: how can they position themselves as both a social safety net and a provider of choice? How can they serve the underserved while demonstrating that they are high-quality and worth choosing over other providers?
Everyone claims high quality; proving it requires mature analytics to make the claim meaningful. Some faith-based institutions should try get out in front of this issue and improve (and prove) their clinical outcomes. At CHE Trinity Health, a Livonia, Mich.-based chain of 86 hospitals, physician leaders have set systemwide goals for tackling some of the toughest problems hospitals face: hospital-acquired infections, acute-care readmissions, Medicare lengths of stay and payment denials. St. Louis-based Ascension Health Alliance, the largest Catholic hospital system in the nation, is in the second year of a three-year contract with CMS to reduce hospital-acquired conditions by 40 percent and readmissions by 20 percent.[1] Providence Health and Services regularly uses Kaizen (a Japanese management tool that emphasizes continuous improvement) to enhance patient care; they are now able to break even on Medicare patients, even though their regional payer for Medicare pays $1,000 less per enrollee than the national average.[2]
3. Build on strong community ties to succeed at population health management. When it comes to delivering community benefit, most faith-based hospitals go above and beyond the requirements of their tax status by providing free care, offering education and prevention activities, organizing and supporting large circles of volunteers and church members and so on. Now all hospitals, both non- and for-profit, are contemplating how to penetrate more deeply into communities in order to deliver on risk contracts that are tied to better population health management. This suggests that faith-based organizations are well-suited to succeed in population health if they can build on their already existing commitment to, and ties within, the communities they serve.
Working with the community to improve population health has a long history among faith-based organizations. As early as 1981, for example, Montefiore Medical Center in New York City became involved in community redevelopment, rehabilitating housing stock and promoting economic development in the northwest Bronx.[3] Today, many faith-based hospitals may find that population health remains a natural fit for their internal culture.
4. Prepare for the impact of healthcare reform — and other megaforces. Many faith-based organizations lobbied hard for healthcare reform and are thrilled to have won access for the underserved — a particularly important task at a time when health disparities continue to be a major issue in America. In theory, the Patient Protection and Affordable Care Act should provide an immediate financial uplift for most faith-based organizations as treatment for previously uninsured patients can now be reimbursed at Medicaid rates. But increasing access is a huge undertaking. And while hospitals will see the benefit of expanded coverage, they also face strong countervailing forces. Exchanges will likely drive down commercial reimbursement, the growing aging population will make up an increasing proportion of the patient mix and Medicare will also face cuts. Faith-based organizations face a vital question, “Will disproportionate share payments go away too soon?”
Often, faith-based institutions have deferred maintenance and forgone capital improvements in recent years. Those institutions will have to think strategically about how to invest in critical areas like technology or outpatient centers to be ready to deliver care in a fee-for-value model, without undermining their lower-cost base. Many are also looking for entry points of care, as witnessed by the recently announced partnership between CHE-Trinity and Walgreens, which enables Trinity to collaborate on outpatient services in the Walgreens retail clinic setting and thus position themselves as the provider of choice when patients seek inpatient care.[4]
5. Carefully approach partnering and merger opportunities. The temptation to merge is enormous for hospitals at the moment. Faith-based hospitals will be forced to consider some unlikely bedfellows by the time the current consolidation cycle is complete. Other religious-backed systems, non-profit systems, for-profit systems, even private equity firms are all in play for mergers and strategic partnerships. But there are cultural differences to consider, and even more concretely, there are thorny governance and management issues. Unique ownership structures with religious institutions can affect any affiliation with external entities, in terms of who is going to approve an affiliation agreements or a memorandum of understanding. Board and organizational structures can also prevent the necessary divestiture of certain assets. Past joint ventures have left legacy reserve authorities. In some cases, institutions need to consolidate and have one governing board over the entity. Others, such as Catholic Health West, have severed ties with their religious parents in order to free themselves from complicated governance issues during mergers. All faith-based institutions need to assess how to make their governance cleaner so that they have more transparency and a more agile decisionmaking process in partnerships. As consolidation continues and multistate systems become the norm, aligning physicians with the goals of the entire system — and not just the goals of specific hospitals — will become increasingly important.
Faith-based hospitals have long been at the front line of some of the central challenges to delivering healthcare in America. They will play an essential role in meeting the country’s new commitment to extending access to the previously uninsured. If the U.S. is ever to achieve the excellent healthcare system it deserves, faith-based organizations will play a crucial role. Now more than ever, we need their pioneering spirit.
Stephen Kahane, MD, MS, has served as president of athenahealth's enterprise services group since February 2011. Dr. Kahane’s career spans more than 30 years across companies that have delivered healthcare IT and automation solutions for physician practices, hospitals and integrated delivery networks. Prior to joining athenahealth, Dr. Kahane was CEO of AMICAS, an image and information management solutions company. Dr. Kahane holds an MS in Computer Science from Johns Hopkins and an MD from Emory University.
[1] Ascension Health Alliance Annual Report, FY2012, pg. 18
[2] Leah Page, “52 Not-for-Profit Hospital Systems to Know,” Becker’s Hospital Review, March 1, 2010 (available at: https://www.beckershospitalreview.com/lists-and-statistics/50-not-for-profit-hospital-systems-to-know.html)
[3] “U.S. Health Care Is Moving Upstream,” Health Progress, Jan/Feb 2013
[4] Lena Kauffman, “CHE Trinity partners with Walgreens in latest strategic step,” Health CXO, May 23,2014. (Available at: http://www.healthcxo.com/topics/finance/che-trinity-partners-walgreens-latest-strategic-step)