In a session at the Becker's Hospital Review 4th Annual Meeting in Chicago on May 9, five health system executives shared best practices for strategy development in a panel moderated by Scott Becker, JD, CPA, publisher of Becker's Hospital Review.
Mr. Becker kicked off the session by asking the panelists to share their strategy planning processes by expressing the core strategy of their systems in one or two sentences.
Javon Bea, president and CEO of Mercy Health System based in Janesville, Wis., explained that integration is his system's guiding force. "What has been the foundation of our strategy setting is vertical integration." Mr. Bea explained bundled payments, which he sees as the future of payment, will not be able to support separate cost structures. As a result, systems must focus on vertical integration and getting rid of siloed structures and care.
Barbara Martin, CEO of Vista Health in Waukegan, Ill., part of Community Health Systems, said her system creates a one- to three-year strategic plan on an annual basis. The core strategy of Vista is currently to "work with physicians...grow market share and grow volume," she explained. Even as business models shift away from volume, Ms. Martin says close relationships with physicians that "make them want to choose our hospital over competitors" will remain critical, as physicians ultimately control healthcare services.
Andrew Racine, MD, PhD, senior vice president and CMO of Montefiore Medical Center in the Bronx, said his system went through a strategic planning process a couple of years back that resulted in four core goals, or pillars, of strategy: co-branding with its academic partner, Albert Einstein College of Medicine; developing centers of excellence; taking on risk; and expanding its regional footprint. In regard to taking on risk, he explained that the system's patient base makes taking on risk necessary. Eighty percent of the hospital's patients are covered by Medicaid, Medicare or are dual eligible. "There is simply was no way to make a margin when all of your patients are either Medicaid or Medicare on fee-for-service," he said. "The only way to make money is to take on risk."
Linda Hoff, CFO of Meriter Health in Madison, Wis., said Meriter's strategy is guided by its mission. She explained that about eight years ago the system began to seriously examine its services in light of its mission, determining which services were core to the mission, and which were not. She explained that the board ultimately determined that its senior living services were not core and divested them. "Strategy comes through the board, not only [strategy setting], but also in the selection of members dedicated to maintaining this level of care," she said.
Nancy Vish, president and CNO of Baylor Health and Vascular Hospital in Dallas, explained that strategy setting at Baylor Health begins at the system board level. "The system board meets annually and does a five-year plan," she explained. From there, the non-profit and for-profit arms of the organization participate in separate strategy retreats. Once each's goals are set, the goals cascade down throughout the organization and are ultimately incorporated into each employee's performance review.
Mr. Becker kicked off the session by asking the panelists to share their strategy planning processes by expressing the core strategy of their systems in one or two sentences.
Javon Bea, president and CEO of Mercy Health System based in Janesville, Wis., explained that integration is his system's guiding force. "What has been the foundation of our strategy setting is vertical integration." Mr. Bea explained bundled payments, which he sees as the future of payment, will not be able to support separate cost structures. As a result, systems must focus on vertical integration and getting rid of siloed structures and care.
Barbara Martin, CEO of Vista Health in Waukegan, Ill., part of Community Health Systems, said her system creates a one- to three-year strategic plan on an annual basis. The core strategy of Vista is currently to "work with physicians...grow market share and grow volume," she explained. Even as business models shift away from volume, Ms. Martin says close relationships with physicians that "make them want to choose our hospital over competitors" will remain critical, as physicians ultimately control healthcare services.
Andrew Racine, MD, PhD, senior vice president and CMO of Montefiore Medical Center in the Bronx, said his system went through a strategic planning process a couple of years back that resulted in four core goals, or pillars, of strategy: co-branding with its academic partner, Albert Einstein College of Medicine; developing centers of excellence; taking on risk; and expanding its regional footprint. In regard to taking on risk, he explained that the system's patient base makes taking on risk necessary. Eighty percent of the hospital's patients are covered by Medicaid, Medicare or are dual eligible. "There is simply was no way to make a margin when all of your patients are either Medicaid or Medicare on fee-for-service," he said. "The only way to make money is to take on risk."
Linda Hoff, CFO of Meriter Health in Madison, Wis., said Meriter's strategy is guided by its mission. She explained that about eight years ago the system began to seriously examine its services in light of its mission, determining which services were core to the mission, and which were not. She explained that the board ultimately determined that its senior living services were not core and divested them. "Strategy comes through the board, not only [strategy setting], but also in the selection of members dedicated to maintaining this level of care," she said.
Nancy Vish, president and CNO of Baylor Health and Vascular Hospital in Dallas, explained that strategy setting at Baylor Health begins at the system board level. "The system board meets annually and does a five-year plan," she explained. From there, the non-profit and for-profit arms of the organization participate in separate strategy retreats. Once each's goals are set, the goals cascade down throughout the organization and are ultimately incorporated into each employee's performance review.