Multibillion health systems have traditionally weathered the ebbs and flows of the healthcare system well, but that does not mean they do not struggle with handling challenges.
At the Becker's Hospital Review 5th Annual Meeting in Chicago on May 16, acclaimed journalist Forrest Sawyer led a panel discussion with three health system leaders — Dean Harrison, president and CEO of Northwestern Memorial HealthCare in Chicago; Sharon O'Keefe, president of University of Chicago Medical Center; and Rich Rothberger, executive vice president and CFO of Scripps Health in San Diego — who talked about some of these evolving financial and strategic issues.
Mr. Sawyer began the discussion with Ms. O'Keefe, who leads one of the most renowned academic medical centers and research institutions in the country. For her, she has had to deal with several challenges, including low reimbursements from Illinois Medicaid and finding ways to successfully partner with physicians. But the evolution of healthcare mergers has become of the most pressing issues of the day.
"We're dealing with a market that has largely been fragmented and is beginning to consolidate," Ms. O'Keefe said. "How do you respond to that? And how do you position an academic medical center in a consolidating marketplace?"
Mr. Harrison and Northwestern have been directly involved with the consolidation movement. The system recently finalized a deal to merge with Cadence Health in Winfield, Ill. Consolidation is one of the three C's Mr. Harrison emphasized; the other two were costs and culture.
"In the culture area, when you run a very large organization, we are 900 beds, one of the things we find is patients don't see institutions whether they are 100 beds or 900 beds," Mr. Harrison said. "They have an expectation of care at a high level. Like airlines, just one person makes all the difference in the world."
Similar to Northwestern, Scripps has been diverted much of its attention to cost reduction and cost management. Scripps, a multihospital system, loses about 20 percent on Medicare cases, but executives have a goal of eventually breaking even on Medicare, Mr. Rothberger said. They know that the days of cost-shifting, or relying on commercial patients to cover losses from Medicare, will not be a viable strategy in the future.
"We have been blessed with a great demographic, but we can't rely on that," Mr. Rothberger said. "Being the Nordstroms isn't going to pay off in the long run."
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