Richard J. Murphy took the reigns as president and CEO at South Nassau Communities Hospital in Oceanside, N.Y., in January 2013. He joined SNCH from Richmond University Medical Center in Staten Island, N.Y., where he served as president and CEO. Throughout his career as a healthcare leader, Mr. Murphy has shown a knack for developing physician relations, gaining market share and expanding hospitals' capital reinvestments.
Though he's relatively new at SNCH, Mr. Murphy has big plans for the 435-bed teaching hospital. Here, he shares his physician alignment strategy and how healthcare and payment reform impact his strategies for SNCH.
Question: As a new CEO, what issue do you find yourself spending the most time on?
Richard Murphy: Developing a long-term strategy for network integration while recognizing that the value proposition inherent in the strategy will ultimately be a function of a successful tactical execution of the strategy, not necessarily the strategy itself. Being able to discern how effective a potential partner will be in executing strategies for capital formation, quality performance, organizational restructuring and physician integration is difficult, as past performance is no guarantee of future success.
Q: How much of your physician alignment strategy revolves around employment, practice acquisitions and joint ventures?
RM: Our goal is to create "a la carte" options for physicians as opposed to a one-size-fits-all strategy. Depending on the complexity of the physician's practice model and/or specialty, we will tailor the relationship, including potential joint ventures, to foster more efficient practice overhead, better [pay-for-performance] value metrics and higher productivity. We want to try and make the model flexible enough that it can evolve over time and respond to the larger trends in the marketplace. Right now, many different models are competing for physician loyalty, all trying to prepare for payor relationships that are largely speculative. We want to be attractive to varied physician interests while those payor models are developed and be in an attractive position to participate as they evolve.
Q: Given the national trend of consolidation in healthcare, how important is it for SNCH to be part of a larger system than it is currently?
RM: Given the direction of health reform and the reallocation of public subsidies for Medicaid and other governmental programs, scale matters. The problem is scale by itself does not address the delivery model per se, or the fact that government payors and many commercial insurers are going to look to off load medical losses to providers who may be unprepared to handle it. Whether providers can accept and effectively manage that risk will largely determine the success or failure of health reform. Scale by itself, without the requisite business structures — including aggressive case management, actuarial sophistication, population health management [and] vertically structured provider networks, all functioning within a complete economic realignment of payment incentives — will not be sufficient to succeed in the new marketplace.
Q: What is the most important metric you look at regarding operations at SNCH?
RM: Honestly, it's day's cash on hand. As odd an association as it appears, I know that simple measure determines how successful my organization will be in regard to other measures which might seem more important. Patient and physician satisfaction, quality performance, employee satisfaction, clinical technology deployment, building infrastructure and any number of other critical measures are a function of continued investment. Our access to capital, whether through efficient operations, borrowing or philanthropy, will ultimately determine whether we can fulfill our mission to our community in an era of limited resources and almost limitless demand for service.
Though he's relatively new at SNCH, Mr. Murphy has big plans for the 435-bed teaching hospital. Here, he shares his physician alignment strategy and how healthcare and payment reform impact his strategies for SNCH.
Question: As a new CEO, what issue do you find yourself spending the most time on?
Richard Murphy: Developing a long-term strategy for network integration while recognizing that the value proposition inherent in the strategy will ultimately be a function of a successful tactical execution of the strategy, not necessarily the strategy itself. Being able to discern how effective a potential partner will be in executing strategies for capital formation, quality performance, organizational restructuring and physician integration is difficult, as past performance is no guarantee of future success.
Q: How much of your physician alignment strategy revolves around employment, practice acquisitions and joint ventures?
RM: Our goal is to create "a la carte" options for physicians as opposed to a one-size-fits-all strategy. Depending on the complexity of the physician's practice model and/or specialty, we will tailor the relationship, including potential joint ventures, to foster more efficient practice overhead, better [pay-for-performance] value metrics and higher productivity. We want to try and make the model flexible enough that it can evolve over time and respond to the larger trends in the marketplace. Right now, many different models are competing for physician loyalty, all trying to prepare for payor relationships that are largely speculative. We want to be attractive to varied physician interests while those payor models are developed and be in an attractive position to participate as they evolve.
Q: Given the national trend of consolidation in healthcare, how important is it for SNCH to be part of a larger system than it is currently?
RM: Given the direction of health reform and the reallocation of public subsidies for Medicaid and other governmental programs, scale matters. The problem is scale by itself does not address the delivery model per se, or the fact that government payors and many commercial insurers are going to look to off load medical losses to providers who may be unprepared to handle it. Whether providers can accept and effectively manage that risk will largely determine the success or failure of health reform. Scale by itself, without the requisite business structures — including aggressive case management, actuarial sophistication, population health management [and] vertically structured provider networks, all functioning within a complete economic realignment of payment incentives — will not be sufficient to succeed in the new marketplace.
Q: What is the most important metric you look at regarding operations at SNCH?
RM: Honestly, it's day's cash on hand. As odd an association as it appears, I know that simple measure determines how successful my organization will be in regard to other measures which might seem more important. Patient and physician satisfaction, quality performance, employee satisfaction, clinical technology deployment, building infrastructure and any number of other critical measures are a function of continued investment. Our access to capital, whether through efficient operations, borrowing or philanthropy, will ultimately determine whether we can fulfill our mission to our community in an era of limited resources and almost limitless demand for service.