Five health system CEOs from across the country shared their priorities, strategies and advice yesterday during the Becker's Hospital Review webinar, "The State of the Industry; Clear Strategies for 2012."
Steven L. Goldstein, president and CEO of Strong Memorial Hospital in Rochester, N.Y.; Stephen L. Mansfield, CEO of Methodist Health System in Dallas; Joseph A. Quagliata, president and CEO of South Nassau Communities Hospital in Oceanside, N.Y.; Thomas J. Sadvary, president and CEO of Scottsdale (Ariz.) Healthcare; and Michael O. Ugwueke, CEO of Methodist Healthcare North and South Hospitals in Memphis, participated in the webinar. The panel was moderated by Chuck Lauer, former publisher of Modern Healthcare, and Scott Becker, JD, CPA, partner with McGuireWoods and publisher of Becker's Hospital Review.
The following content has been excerpted from the webinar and edited for clarity and conciseness.
Mr. Lauer: Steven [Goldstein], maybe you can answer initially to kick it off. As the CEO of a major healthcare system, with all that you're dealing with now and all you have to look forward to, what are your priorities as the chief executive officer of Strong Memorial Hospital?
Mr. Goldstein: Our focus with health reform is obviously to ensure our system is able to interdigitate with our medical staff and contract with different entities, whether it's federal government or state to take care of our populations. We've been a fee-for-service, paid by admissions facility, and we're really now in the process of transforming to an institution that is able to manage patients through chronic illnesses and through a population. We have about 1,700 medical staff to manage populations. Retaining that medical staff and providing outstanding care and affordable care to those populations is going to be, I think, the greatest challenge.
Mr. Lauer: Stephen Mansfield, are you going through the same things down in Dallas?
Mr. Mansfield: Yes. I think leading our organizations positively is certainly a huge focus. I would say that right now as I think about priorities for CEOs, I think there is no substitute for an over effort to communicate, or to over-communicate, about the why, what and when of healthcare reform for your organization. I think many times we are too wrapped up in our daily conversations with different folks around strategy that it's easy to assume everyone in your organization is where you are intellectually. But, the reality is that there are a lot of questions and a lot of those questions are with our key stakeholders who may not be dealing with this to the degree that we are as CEOs.
I would say the need to really be very thoughtful about the way you communicate this with your organization [is critical], and I think it's important to be enthusiastic and energetic and positive in your message. It helps the organization to see that in their leadership. I don't think you can delegate that completely away. I think it's a key role the CEO needs to play inside the organization, and also externally.
Mr. Lauer: Michael [Ugwueke], how about you? Are you going through the same things?
Mr. Ugwueke: Absolutely. I think they have it all laid out. The only other thing I'd add to what's been said is truly looking at where to completely redesign the clinical care services that we provide, and make sure that they're fully integrated with the healthcare system. That's the only way you can actually begin to improve performance as it relates to value-based purchasing and quality while at the same time improving access to patients in that population.
Mr. Lauer: Tom Sadvary, your comments, priorities?
Mr. Sadvary: We're trying to get to this value equation of being able to reduce cost per capita but increase quality. From what our studies show and national studies show, the extent to which we can get more to evidence-based practice and reduce clinical variation with our physicians and other clinical caregivers is a major tool. Working with our physicians and our board, which almost needs to have zero tolerance for any other practice besides evidence-based medicine, is a key area of our focus right now.
Mr. Lauer: Joseph Quagliata?
Mr. Quagliata: I kind of agree, obviously with everything that's been said. It appears to me we're all going to have to make significant investments in reorganizing the way we do business to meet the demands going forward. If that's true, I think maintaining a focus on continuing to evaluate what we're doing, how we're doing it and how we can do it for a whole lot less money is going to create the dollars necessary to make those investments. Ultimately, it is the continued emphasis on the strategy to reorganize ourselves in a way that is going to facilitate new models of payment and reform.
Mr. Lauer: One of the things that seems to be happening all over the country is a move into consolidation. Why is this going on? What's the purpose of this consolidation?
Mr. Goldstein: In Rochester, we started out with seven hospitals. We did have consolidation about a decade ago, and two fell out. So we have a situation now where those that remain are predominantly 100-percent occupied. We view ourselves as the upstate academic hospital, and as a consequence we have relationships with many different organizations as well as 120 different contracts for services within upstate New York. So in our case we have collaborations; we also have affiliations. Affiliations have a stronger management aspect to [them]. There's a whole multitude of relationships. Our goal is not to own many different organizations in rural parts of New York. In our case, it's about extending service lines and working within those institutions to take care of local populations.
Mr. Lauer: Michael Ugwueke? Is that going on in your area?
Mr. Ugwueke: Actually, we have not seen any consolidation in the Memphis market area. We have two predominant healthcare systems in Memphis, and we do have a Tenet for-profit hospital in the market area. But we haven't seen anything near the consolidation that's happened in the Chicago area. We can partner with a lot of community health organizations in the market area and work with them to deliver care at a community level.
Mr. Lauer: Joseph [Quagliata], do you see that around South Nassau Communities Hospital?
Mr. Quagliata: New York hospitals have been closing in the great metropolitan area with regularity, but that's principally as a result of fiscal failures. There is really an acute shortage of hospitals in certain underserved areas. New York is undergoing some significant [Medicare] reforms under our current governor, and everyone in the state is attempting to understand what they're anticipating doing in the next few years. That has enormous consequence, and many hospitals are largely dependent upon Medicare revenue stream to continue operations. We're all focused on our own communities and what will best serve them. NorthShore began accumulating hospitals years ago, and that kind of thing seems to be escalating now.
Mr. Lauer: Tom Sadvary, how do you view this?
Mr. Sadvary: Well, most of the mergers and consolidation activity in Phoenix's metropolitan market happened during merger mania of the '90s. Our market is fairly consolidated at this point. I think what we're watching is not so much the horizontal merger of hospital-to-hospital, but regional affiliations that are not in same geographic area. And then what's happening in Western Pennsylvania, with health plans acquiring a health system. I think nationally, it's likely we'll see more of that moving forward.
As we look at our strategy, we say there's obviously certain criteria any organization should look at relative to affiliations. [This] could range from access to capital to geographic coverage to growth or economies of scale. I think you can apply that concept to a broader range of organizations than you could 10 or 15 years ago.
Mr. Lauer: If you were giving advice to a CEO running a hospital, [what's] one thing you'd advise them to do?
Mr. Goldstein: We're the cheerleaders. We're the ones that have to explain what's going on, and how we're going to be successful in this transformation. I think we can't ever forget that's our responsibility as we lead these organizations. We're the ones that have to articulate success, visualize success and deliver it over time. And that can be incredibly rewarding and incredibly energizing.
Mr. Mansfield: It's certainly not original to me, but I think as Steve [Goldstein] said, we have to model the way, we have to inspire a shared vision in our organizations and we need to encourage the hearts of the folks involved in our enterprises.
Mr. Quagliata: I guess for me, the world has been coming to an end or predicted to come to an end forever. We're all still around, and the reality is that our country and the world is in an economic crisis. We need to do our share in helping to work through that problem. There will be organizations that succeed. If we keep our eye on the ball, do the right thing by the communities we serve, we probably will be amongst that group [of successful organizations].
Mr. Sadvary: I'll share a comment given to me by a mentor about four or five years ago when I was down in the dumps about future challenges. He looked at me and said, 'Hey, this is your time.' At some point in time someone will look back at you and say, 'Hey, what did you do on your watch to make it better?' There are a lot of needs that haven't been met, and this is our time to do what we can to fix it, and the next generation can do it even better.
Mr. Ugwueke: I think my first piece of advice would be to develop a great team. It's important to identify key players, because [a CEO] can't do this work alone. Be visible and maintain a strong relationship with physicians and the community. And constantly communicate. Make sure everyone understands what's going on at any given time. It will also take courage to make it work.
Listen to the full webinar or download it in mp3 form here.
5 Thoughts Keeping Hospital CEOs Up at Night
Improving Your Health System in 10 Minutes
Steven L. Goldstein, president and CEO of Strong Memorial Hospital in Rochester, N.Y.; Stephen L. Mansfield, CEO of Methodist Health System in Dallas; Joseph A. Quagliata, president and CEO of South Nassau Communities Hospital in Oceanside, N.Y.; Thomas J. Sadvary, president and CEO of Scottsdale (Ariz.) Healthcare; and Michael O. Ugwueke, CEO of Methodist Healthcare North and South Hospitals in Memphis, participated in the webinar. The panel was moderated by Chuck Lauer, former publisher of Modern Healthcare, and Scott Becker, JD, CPA, partner with McGuireWoods and publisher of Becker's Hospital Review.
The following content has been excerpted from the webinar and edited for clarity and conciseness.
Mr. Lauer: Steven [Goldstein], maybe you can answer initially to kick it off. As the CEO of a major healthcare system, with all that you're dealing with now and all you have to look forward to, what are your priorities as the chief executive officer of Strong Memorial Hospital?
Mr. Goldstein: Our focus with health reform is obviously to ensure our system is able to interdigitate with our medical staff and contract with different entities, whether it's federal government or state to take care of our populations. We've been a fee-for-service, paid by admissions facility, and we're really now in the process of transforming to an institution that is able to manage patients through chronic illnesses and through a population. We have about 1,700 medical staff to manage populations. Retaining that medical staff and providing outstanding care and affordable care to those populations is going to be, I think, the greatest challenge.
Mr. Lauer: Stephen Mansfield, are you going through the same things down in Dallas?
Mr. Mansfield: Yes. I think leading our organizations positively is certainly a huge focus. I would say that right now as I think about priorities for CEOs, I think there is no substitute for an over effort to communicate, or to over-communicate, about the why, what and when of healthcare reform for your organization. I think many times we are too wrapped up in our daily conversations with different folks around strategy that it's easy to assume everyone in your organization is where you are intellectually. But, the reality is that there are a lot of questions and a lot of those questions are with our key stakeholders who may not be dealing with this to the degree that we are as CEOs.
I would say the need to really be very thoughtful about the way you communicate this with your organization [is critical], and I think it's important to be enthusiastic and energetic and positive in your message. It helps the organization to see that in their leadership. I don't think you can delegate that completely away. I think it's a key role the CEO needs to play inside the organization, and also externally.
Mr. Lauer: Michael [Ugwueke], how about you? Are you going through the same things?
Mr. Ugwueke: Absolutely. I think they have it all laid out. The only other thing I'd add to what's been said is truly looking at where to completely redesign the clinical care services that we provide, and make sure that they're fully integrated with the healthcare system. That's the only way you can actually begin to improve performance as it relates to value-based purchasing and quality while at the same time improving access to patients in that population.
Mr. Lauer: Tom Sadvary, your comments, priorities?
Mr. Sadvary: We're trying to get to this value equation of being able to reduce cost per capita but increase quality. From what our studies show and national studies show, the extent to which we can get more to evidence-based practice and reduce clinical variation with our physicians and other clinical caregivers is a major tool. Working with our physicians and our board, which almost needs to have zero tolerance for any other practice besides evidence-based medicine, is a key area of our focus right now.
Mr. Lauer: Joseph Quagliata?
Mr. Quagliata: I kind of agree, obviously with everything that's been said. It appears to me we're all going to have to make significant investments in reorganizing the way we do business to meet the demands going forward. If that's true, I think maintaining a focus on continuing to evaluate what we're doing, how we're doing it and how we can do it for a whole lot less money is going to create the dollars necessary to make those investments. Ultimately, it is the continued emphasis on the strategy to reorganize ourselves in a way that is going to facilitate new models of payment and reform.
Mr. Lauer: One of the things that seems to be happening all over the country is a move into consolidation. Why is this going on? What's the purpose of this consolidation?
Mr. Goldstein: In Rochester, we started out with seven hospitals. We did have consolidation about a decade ago, and two fell out. So we have a situation now where those that remain are predominantly 100-percent occupied. We view ourselves as the upstate academic hospital, and as a consequence we have relationships with many different organizations as well as 120 different contracts for services within upstate New York. So in our case we have collaborations; we also have affiliations. Affiliations have a stronger management aspect to [them]. There's a whole multitude of relationships. Our goal is not to own many different organizations in rural parts of New York. In our case, it's about extending service lines and working within those institutions to take care of local populations.
Mr. Lauer: Michael Ugwueke? Is that going on in your area?
Mr. Ugwueke: Actually, we have not seen any consolidation in the Memphis market area. We have two predominant healthcare systems in Memphis, and we do have a Tenet for-profit hospital in the market area. But we haven't seen anything near the consolidation that's happened in the Chicago area. We can partner with a lot of community health organizations in the market area and work with them to deliver care at a community level.
Mr. Lauer: Joseph [Quagliata], do you see that around South Nassau Communities Hospital?
Mr. Quagliata: New York hospitals have been closing in the great metropolitan area with regularity, but that's principally as a result of fiscal failures. There is really an acute shortage of hospitals in certain underserved areas. New York is undergoing some significant [Medicare] reforms under our current governor, and everyone in the state is attempting to understand what they're anticipating doing in the next few years. That has enormous consequence, and many hospitals are largely dependent upon Medicare revenue stream to continue operations. We're all focused on our own communities and what will best serve them. NorthShore began accumulating hospitals years ago, and that kind of thing seems to be escalating now.
Mr. Lauer: Tom Sadvary, how do you view this?
Mr. Sadvary: Well, most of the mergers and consolidation activity in Phoenix's metropolitan market happened during merger mania of the '90s. Our market is fairly consolidated at this point. I think what we're watching is not so much the horizontal merger of hospital-to-hospital, but regional affiliations that are not in same geographic area. And then what's happening in Western Pennsylvania, with health plans acquiring a health system. I think nationally, it's likely we'll see more of that moving forward.
As we look at our strategy, we say there's obviously certain criteria any organization should look at relative to affiliations. [This] could range from access to capital to geographic coverage to growth or economies of scale. I think you can apply that concept to a broader range of organizations than you could 10 or 15 years ago.
Mr. Lauer: If you were giving advice to a CEO running a hospital, [what's] one thing you'd advise them to do?
Mr. Goldstein: We're the cheerleaders. We're the ones that have to explain what's going on, and how we're going to be successful in this transformation. I think we can't ever forget that's our responsibility as we lead these organizations. We're the ones that have to articulate success, visualize success and deliver it over time. And that can be incredibly rewarding and incredibly energizing.
Mr. Mansfield: It's certainly not original to me, but I think as Steve [Goldstein] said, we have to model the way, we have to inspire a shared vision in our organizations and we need to encourage the hearts of the folks involved in our enterprises.
Mr. Quagliata: I guess for me, the world has been coming to an end or predicted to come to an end forever. We're all still around, and the reality is that our country and the world is in an economic crisis. We need to do our share in helping to work through that problem. There will be organizations that succeed. If we keep our eye on the ball, do the right thing by the communities we serve, we probably will be amongst that group [of successful organizations].
Mr. Sadvary: I'll share a comment given to me by a mentor about four or five years ago when I was down in the dumps about future challenges. He looked at me and said, 'Hey, this is your time.' At some point in time someone will look back at you and say, 'Hey, what did you do on your watch to make it better?' There are a lot of needs that haven't been met, and this is our time to do what we can to fix it, and the next generation can do it even better.
Mr. Ugwueke: I think my first piece of advice would be to develop a great team. It's important to identify key players, because [a CEO] can't do this work alone. Be visible and maintain a strong relationship with physicians and the community. And constantly communicate. Make sure everyone understands what's going on at any given time. It will also take courage to make it work.
Listen to the full webinar or download it in mp3 form here.
Related Articles on Hospital Leadership:
3 Tips for Managing a Successful Small Hospital5 Thoughts Keeping Hospital CEOs Up at Night
Improving Your Health System in 10 Minutes