As­cen­sion re­vamps to en­ter new era

Modern Healthcare - - News - By Alex Kacik

As­cen­sion’s fu­ture will not in­volve pri­or­i­tiz­ing its hos­pi­tal op­er­a­tions, a trend through­out health­care and one that’s lauded by in­dus­try ex­perts.

As the largest Catholic health sys­tem in the coun­try aims to re­duce its hos­pi­tal foot­print and trim its lead­er­ship struc­ture, it will look for part­ners that pro­vide care in other set­tings, such as ur­gent care, skilled nurs­ing, home health and telemedicine.

It will also fo­cus on grow­ing its an­cil­lary busi­nesses, in­clud­ing its rev­enue-cy­cle man­age­ment, group pur­chas­ing and in­vest­ment arms.

Many health sys­tems are tak­ing sim­i­lar ap­proaches as they cope with a vor­tex of fi­nan­cial head­winds. Con­sumers are cir­cum­vent­ing hos­pi­tals to find cheaper out­pa­tient care and have trou­ble pay­ing on time or at all when they end up in the hos­pi­tal. Drugs and la­bor are in­creas­ingly more ex­pen­sive for health sys­tems that are fac­ing lower re­im­burse­ment from govern­ment pay­ers.

As­cen­sion CEO Anthony Ter­signi shared th­ese de­vel­op­ments and the com­pany’s new “strate­gic di­rec­tion” via video with his 165,000 em­ploy­ees on March 23, out­lin­ing changes in­clud­ing reshuf­fling man­age­ment and im­ple­ment­ing new staffing mod­els as well as pay cuts, which do not spare Ter­signi and ex­ec­u­tives who re­port to him.

As­cen­sion is of­fload­ing hos­pi­tals in mar­kets where it does not lead, ev­i­denced by its lat­est sale of St. Vin­cent Med­i­cal Cen­ter in Bridge­port, Conn., to Hart­ford Health­Care.

“There has al­ways been a need for hos­pi­tals in our coun­try but not as many as we have to­day,” Ter­signi said in an in­ter­view. “We don’t need to con­trol ev­ery­thing. What we need to do is col­lec­tively con­trol the pa­tient ex­pe­ri­ence along the con­tin­uum.”

While he did not spec­ify if more lay­offs are com­ing,

“There has al­ways been a need for hos­pi­tals in our coun­try but not as many as we have to­day. We don’t need to con­trol ev­ery­thing. What we need to do is col­lec­tively con­trol the pa­tient ex­pe­ri­ence along the con­tin­uum.” Anthony Ter­signi CEO As­cen­sion

th­ese types of an­nounce­ments are typ­i­cally fol­lowed by staffing re­duc­tions, said Juan Mo­rado Jr., of coun­sel at law firm Be­nesch. But this shift to out­pa­tient care and a stream­lined man­age­ment model is con­sis­tent with the grad­ual tran­si­tion tak­ing place across the in­dus­try, he said.

“The first step is tak­ing a hard look and an­a­lyz­ing what is work­ing in terms of size of fa­cil­i­ties,” Mo­rado said. “A hos­pi­tal with 100-plus beds is hard to keep fully staffed and get the ap­pro­pri­ate level of care out of them.”

It is part of an emerg­ing dig­i­tal wave, he said. “When you look at pa­tients who are im­mo­bile, that’s where telemedicine will pro­vide a big ben­e­fit,” Mo­rado said. “It is also a way for As­cen­sion to serve the baby boomers and pos­si­bly part­ner with a long-term care chain.”

The trend some­times means by­pass­ing in­pa­tient care. “Some of the in­no­va­tions we see in care de­liv­ery go around the hos­pi­tal en­tirely,” Chapin White, a se­nior pol­icy re­searcher at RAND Corp., said dur­ing a re­cent we­bi­nar on health­care con­sol­i­da­tion. “Maybe that is the ideal out­come.”

As­cen­sion is im­ple­ment­ing a sys­temwide dig­i­tal strat­egy, led by a new chief dig­i­tal of­fi­cer who will start later this year. (See re­lated story, p. 11) The ex­ec­u­tive, who is join­ing As­cen­sion from a ma­jor tech­nol­ogy com­pany, is tasked with har­mo­niz­ing clin­i­cal prac­tices, uni­fy­ing the billing sys­tem and im­prov­ing price trans­parency—some­thing Ter­signi ad­mits is not a strength for the sys­tem.

Dis­rup­tion will come from out­side the in­dus­try, so As­cen­sion needs to un­der­stand how they think, Ter­signi said.

“With a sys­tem that big, the dig­i­tal side and back of­fice are where you can add a lot of value,” said Tom Scully, part­ner at the in­vest­ment firm Welsh, Car­son, An­der­son & Stowe. “Noth­ing they are do­ing is sur­pris­ing—they are try­ing to stay ahead of the curve.”

Part of the new di­rec­tion in­volves in­vest­ing more in an­cil­lary busi­nesses that raked in $150 mil­lion in rev­enue last year. Some of its “so­lu­tions” arm in­cludes its group pur­chas­ing or­ga­ni­za­tion, the Re­source Group; its rev­enue-cy­cle man­age­ment busi­ness, R1 RCM; its con­sult­ing group, As­cen­sion Care Man­age­ment; its ven­ture cap­i­tal group, As­cen­sion Ven­tures; and As­cen­sion Hold­ings In­ter­na­tional, which fo­cuses on in­ter­na­tional in­vest­ment.

As­cen­sion’s non-op­er­at­ing gains and in­vest­ment in­come have been a bright spot amid in­dus­try­wide de­clines in op­er­at­ing in­come and in­pa­tient vol­ume. Through the first half of As­cen­sion’s fis­cal 2018, which be­gan June 1, 2017, the sys­tem’s op­er­at­ing in­come fell to $84.7 mil­lion on rev­enue of $11.3 bil­lion, a 78% de­cline from $379.6 mil­lion of op­er­at­ing in­come on rev­enue of $11.4 bil­lion. Its net non-op­er­at­ing gains more than dou­bled to $923.2 mil­lion over that time.

“This move is def­i­nitely go­ing to be one to watch as we con­tinue to look at new rev­enue streams, ef­fi­cien­cies within the health­care sys­tem and how we con­tinue to em­brace a more in­ter­con­nected way of prac­tic­ing medicine,” Mo­rado said. ●

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.