With healthcare developing and changing under reform, it can be difficult for hospital and health system executives to pin down what to focus on strategically to achieve success this year. There are many strategic initiatives hospital and health system C-suiters can focus on right now, but Phil Dalton, president and CEO of MDS Consulting, narrowed the list down to his top 10 strategic initiatives for hospitals and systems to focus on in 2013.
1. Improve patient experience. Patient experience is becoming an important factor for hospitals and health systems to consider. Increasingly, patients have the opportunity to share their hospital experience through surveys and social media. "There's an emphasis on consumer choice," says Mr. Dalton, and patients are using the information from their peers and their experiences to make those decisions. Also, hospitals benefit when patients tell others about a great experience and encourage them to receive care there as well. Therefore, patient experience is important for both patient care and business purposes.
2. Measure and report quality performance. The availability of information also makes quality ratings an important strategic focus this year. Quality ratings are continually appearing online as healthcare becomes a more transparent industry. "With so much information available, people will be using that…to shape their perspective of the marketplace," Mr. Dalton says.
Mr. Dalton advises hospital and health systems to understand the quality measurement and rating systems and focus on doing well in the areas they will be measured on. Then, hospitals and systems should promote their positive results prominently to current and potential patients and payors.
3. Adapt to new payment models. Even though not all hospitals and health systems have made the switch from fee-for-service to a pay-for-value model, the time is ripe for organizations to begin experimenting with performance incentives or bundled payments. "The direction is clear, that's where we're headed, and the question is, 'what is your plan to participate?'" says Mr. Dalton. The speed of payment transformation will vary market to market, but changes in payment models are here to stay, according to Mr. Dalton, and it will most likely pay off to get started now.
4. Address the possible impact of health insurance exchanges. Health insurance exchanges go live January 2014, but enrollment for the exchange health plans opens in October. That leaves just a few months for hospitals and health systems to prepare for their impact. "It's a complicated issue, and there will be winners and losers," Mr. Dalton says. Not participating in the exchanges, he warns, could mean being locked out of a financial opportunity and being left behind in the market. "Most markets will be impacted, and it makes sense to figure out as much as you can now," he says.
5. Work on an approach to population health management. Healthcare is shifting its focus from episodic care to looking at the health of a population as a whole. In order to manage the health of a population, hospitals and systems need to coordinate care across the continuum and "get everyone on the same page," according to Mr. Dalton. To do so, physicians across the hospital or health system need to have financial incentives to work together, and they need a health information exchange system in place to succeed.
6. Focus on clinical integration. Clinical integration is a necessary part of population health management and succeeding in healthcare today. "Without information and a complete database, [population health management] is hard to do," says Mr. Dalton. So, hospitals and health systems need a data system that captures as much patient information as possible to make the journey to population health management easier.
7. Explore new physician alignment strategies. Again, this initiative ties in with the move to population health management. Trying out new physician relationship strategies, such as physician-hospital organizations, clinical co-management, ACOs, employment or joint ventures can join hospitals and physicians together on the same platform and can be used to support the population health strategy as well as capture market share. "There are multiple vehicles for alignment. All of them are important and many play a role in the same marketplace," Mr. Dalton says. Now is the time for hospitals and health systems to experiment with different alignment strategies to see what works best moving forward under reform.
8. Respond to an aging population. The average age of the United States is slowly crawling upwards as baby boomers reach retirement age, and that has an effect on healthcare. "So much of healthcare has to do with the elderly and that's where the money is spent," Mr. Dalton explains. The elderly consume healthcare at much higher rates than their younger counterparts. Therefore, it makes financial sense for hospitals and health systems to provide special access and programs for the elderly. "Recognize that's where healthcare is being delivered; and target the special needs of the population," he urges.
9. Assess long-term sustainability. Hospital and health system executives need to candidly discuss their organization's long-term sustainability in terms of market position, payor mix and financial situation. In many cases, organizations may need to consolidate to survive.
Many hospitals are struggling financially in today's competitive healthcare market, and a negative financial performance makes it difficult for organizations to experiment and move forward with new programs and technology. "Most independent hospitals are finding they can't [do it alone] so they're looking for partners," says Mr. Dalton.
However, even financially competitive hospitals and systems need to step back and look at their position long-term. It is important for all organizations to advance new initiatives and continue moving forward, and creating new partnerships is one way to do so. "Every hospital and system ought to be looking at a long-term plan for strategic partnerships," Mr. Dalton says.
10. Assess current and future need for capital. As part of examining an organization's long-term situation, healthcare executives need to discuss their current and future need for loans and capital. "Access to capital for upgrades will be tough for a huge proportion of hospitals that don't have financial strength to support borrowing," warns Mr. Dalton. For those hospitals, he says, considering a partner with better credit worthiness can help reduce overhead, share costs and improve balance sheets.
Of course, these are just a few of the many strategic areas healthcare executives need to keep their eye on in 2013. However, the 10 initiatives are the areas that have great potential to position hospitals and health systems for clinical and financial success this year and beyond.
1. Improve patient experience. Patient experience is becoming an important factor for hospitals and health systems to consider. Increasingly, patients have the opportunity to share their hospital experience through surveys and social media. "There's an emphasis on consumer choice," says Mr. Dalton, and patients are using the information from their peers and their experiences to make those decisions. Also, hospitals benefit when patients tell others about a great experience and encourage them to receive care there as well. Therefore, patient experience is important for both patient care and business purposes.
2. Measure and report quality performance. The availability of information also makes quality ratings an important strategic focus this year. Quality ratings are continually appearing online as healthcare becomes a more transparent industry. "With so much information available, people will be using that…to shape their perspective of the marketplace," Mr. Dalton says.
Mr. Dalton advises hospital and health systems to understand the quality measurement and rating systems and focus on doing well in the areas they will be measured on. Then, hospitals and systems should promote their positive results prominently to current and potential patients and payors.
3. Adapt to new payment models. Even though not all hospitals and health systems have made the switch from fee-for-service to a pay-for-value model, the time is ripe for organizations to begin experimenting with performance incentives or bundled payments. "The direction is clear, that's where we're headed, and the question is, 'what is your plan to participate?'" says Mr. Dalton. The speed of payment transformation will vary market to market, but changes in payment models are here to stay, according to Mr. Dalton, and it will most likely pay off to get started now.
4. Address the possible impact of health insurance exchanges. Health insurance exchanges go live January 2014, but enrollment for the exchange health plans opens in October. That leaves just a few months for hospitals and health systems to prepare for their impact. "It's a complicated issue, and there will be winners and losers," Mr. Dalton says. Not participating in the exchanges, he warns, could mean being locked out of a financial opportunity and being left behind in the market. "Most markets will be impacted, and it makes sense to figure out as much as you can now," he says.
5. Work on an approach to population health management. Healthcare is shifting its focus from episodic care to looking at the health of a population as a whole. In order to manage the health of a population, hospitals and systems need to coordinate care across the continuum and "get everyone on the same page," according to Mr. Dalton. To do so, physicians across the hospital or health system need to have financial incentives to work together, and they need a health information exchange system in place to succeed.
6. Focus on clinical integration. Clinical integration is a necessary part of population health management and succeeding in healthcare today. "Without information and a complete database, [population health management] is hard to do," says Mr. Dalton. So, hospitals and health systems need a data system that captures as much patient information as possible to make the journey to population health management easier.
7. Explore new physician alignment strategies. Again, this initiative ties in with the move to population health management. Trying out new physician relationship strategies, such as physician-hospital organizations, clinical co-management, ACOs, employment or joint ventures can join hospitals and physicians together on the same platform and can be used to support the population health strategy as well as capture market share. "There are multiple vehicles for alignment. All of them are important and many play a role in the same marketplace," Mr. Dalton says. Now is the time for hospitals and health systems to experiment with different alignment strategies to see what works best moving forward under reform.
8. Respond to an aging population. The average age of the United States is slowly crawling upwards as baby boomers reach retirement age, and that has an effect on healthcare. "So much of healthcare has to do with the elderly and that's where the money is spent," Mr. Dalton explains. The elderly consume healthcare at much higher rates than their younger counterparts. Therefore, it makes financial sense for hospitals and health systems to provide special access and programs for the elderly. "Recognize that's where healthcare is being delivered; and target the special needs of the population," he urges.
9. Assess long-term sustainability. Hospital and health system executives need to candidly discuss their organization's long-term sustainability in terms of market position, payor mix and financial situation. In many cases, organizations may need to consolidate to survive.
Many hospitals are struggling financially in today's competitive healthcare market, and a negative financial performance makes it difficult for organizations to experiment and move forward with new programs and technology. "Most independent hospitals are finding they can't [do it alone] so they're looking for partners," says Mr. Dalton.
However, even financially competitive hospitals and systems need to step back and look at their position long-term. It is important for all organizations to advance new initiatives and continue moving forward, and creating new partnerships is one way to do so. "Every hospital and system ought to be looking at a long-term plan for strategic partnerships," Mr. Dalton says.
10. Assess current and future need for capital. As part of examining an organization's long-term situation, healthcare executives need to discuss their current and future need for loans and capital. "Access to capital for upgrades will be tough for a huge proportion of hospitals that don't have financial strength to support borrowing," warns Mr. Dalton. For those hospitals, he says, considering a partner with better credit worthiness can help reduce overhead, share costs and improve balance sheets.
Of course, these are just a few of the many strategic areas healthcare executives need to keep their eye on in 2013. However, the 10 initiatives are the areas that have great potential to position hospitals and health systems for clinical and financial success this year and beyond.
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