Im­prov­ing the Health of Com­mu­ni­ties Amid a Volatile Land­scape

Modern Healthcare - - News -

In Oc­to­ber 2018, hospi­tal and health sys­tems CEOs and ex­perts gath­ered at Texas Health Re­sources in Ar­ling­ton, Texas, for Nav­i­gant’s 2018 CEO Fo­rum. The group dis­cussed the press­ing is­sues fac­ing providers, pay­ers, and pa­tients na­tion­wide. Fol­low­ing is a sum­mary of their in­sights, lessons learned, and best prac­tices on over­com­ing cur­rent and fu­ture health­care pres­sures.

For Fo­rum video in­ter­views and to ac­cess the full white pa­per, visit nav.gt/CEOFo­rum.


For close to a decade, health­care lead­ers have ex­pected fee-for-ser­vice pay­ment to be re­placed by a value-based move­ment cen­tered on shar­ing risk with pri­vate and pub­lic insurers. While it’s clear that a value-based care ap­proach has gained in pop­u­lar­ity, whether a broad-based tran­si­tion to value-based re­im­burse­ment mod­els is oc­cur­ring de­pends on whether you ask providers or pay­ers.

CEO Fo­rum at­ten­dees dis­cussed this di­vide in the con­text of the im­bal­ance be­tween the sup­ply of and the de­mand for risk ar­range­ments in lo­cal mar­kets na­tion­wide.

Mul­ti­ple provider CEOs noted that the ac­cel­er­a­tion of pub­lic pay­ers mov­ing to value mod­els has not been matched by pri­vate pay­ers, leav­ing them un­able to find pri­vate pay­ers to part­ner with on value-based mod­els. As one ex­ec­u­tive sug­gested, “com­mer­cial par­tic­i­pa­tion is al­most at a stand­still in some mar­kets, leav­ing or­ga­ni­za­tions stuck be­tween volume and value.”

Like­wise, at­ten­dees un­der­stood that pay­ers have been met with vary­ing lev­els of en­gage­ment on risk ar­range­ments from the provider com­mu­nity.

Ex­ec­u­tives agreed that de­cid­ing on the right pace and tra­jec­tory to move from volume to value lies much more in lo­cal mar­ket trends than na­tional ones.

“Payer-provider col­lab­o­ra­tion is very ge­o­graphic and or­ga­ni­za­tion-de­pen­dent,” said Jack Lynch, FACHE, pres­i­dent and CEO of Main Line Health. “Some pay­ers are more pre­pared and in­ter­ested in shar­ing risk with providers than oth­ers, and vice versa.”

Ul­ti­mately, clos­ing the payer-provider di­vide re­quires a bet­ter un­der­stand­ing of why it is oc­cur­ring, Nav­i­gant Manag­ing Di­rec­tor and for­mer health sys­tem CEO Rulon Stacey, PhD, FACHE, be­lieves.

“I don’t think hos­pi­tals un­der­stand how hard it is to be a payer, and I don’t think pay­ers un­der­stand how hard it is for providers to part­ner with them,” he said. “We need to iden­tify those ar­eas where pay­ers and providers can walk across that bridge and make col­lab­o­ra­tion hap­pen, be­cause op­por­tu­ni­ties clearly ex­ist.”

Shar­ing risk must be a col­lab­o­ra­tive pur­suit, where pay­ers and providers are prop­erly equipped to take up­side and down­side risk to­gether, sug­gested Joseph Swedish, for­mer chair­man, pres­i­dent, and CEO of An­them, Inc. Hav­ing the proper tech­nol­ogy un­der­pin­ning is es­sen­tial, he said.

“Pay­ers and providers need to de­velop a sup­port sys­tem that builds both con­fi­dence and trust,” said Swedish. “Ac­cel­er­at­ing and scal­ing the shar­ing of data is go­ing to be crit­i­cal to that and over­all suc­cess for all in­volved, most im­por­tantly the pa­tient.”


Whether it’s an im­ple­men­ta­tion, con­ver­sion, or up­grade, health sys­tems na­tion­wide are en­dur­ing clin­i­cal and op­er­a­tional frus­tra­tions with elec­tronic health records (EHRs). Those frus­tra­tions — along with the mas­sive fi­nan­cial in­vest­ments providers have al­ready made — are likely to mount as the tech­nol­ogy con­tin­ues to evolve to bet­ter meet the needs of providers and pa­tients.

“The EHRs that we have to­day aren’t the ones that we’ll have in 10 to 15 years,” said Brent James, MD, a clin­i­cal pro­fes­sor at Stan­ford Univer­sity School of Medicine. “They aren’t prop­erly con­structed for the core task of ac­tu­ally manag­ing the de­liv­ery of clin­i­cal care.”

Main Line Health re­cently un­der­took a “big-bang” EHR sys­tem con­ver­sion, one that Lynch said posed some unexpected chal­lenges. “I don’t know that we re­ally un­der­stood the amount of train­ing that would be re­quired, the amount of change man­age­ment it would take to get us through the process,” said Lynch.

As Main Line looks to up­grade its EHR, Lynch wor­ries the process is go­ing to be an­other big-bang launch. “Maybe this is some­thing we’re just go­ing to have to get used to over time with these new releases,” he said.

But Lynch was quick to suggest there’s no plan to go back­ward. “We be­lieve we’ve got a bet­ter tool that will help us be safer, help us in­crease qual­ity, help us iden­tify and elim­i­nate dis­par­i­ties, and help us make care more af­ford­able,” he said.

Bar­clay Berdan, FACHE, CEO at Texas Health Re­sources, also high­lighted EHR ben­e­fits from the physi­cian side. “Our physi­cians tell me they couldn’t live with­out the EHR, that they con­cen­trate on what it does to help them and their pa­tients as op­posed to some of the bur­den­some parts,” he said.

Lynch also pointed out that providers shoulder some blame for not lever­ag­ing EHR ben­e­fits. “If we all use our smart­phones the way we used a flip phone, we wasted a lot of money,” he said. “I think the real chal­lenge for us is to take the EHR and op­ti­mize it to its fullest ca­pa­bil­i­ties.”

Lynch be­lieves col­lab­o­ra­tion among providers and EHR ven­dors is re­quired to im­prove the sit­u­a­tion. “How do you take this very strong tool and uti­lize it to in­crease qual­ity, iden­tify and elim­i­nate dis­par­i­ties of care, and make care more af­ford­able?” said Lynch. “That’s the chal­lenge that we’ve got in front of us, and I think we should look to the ven­dors that are putting these prod­ucts out on the street to help us do that.”


Health­care con­tin­ues to see record-high hospi­tal merg­ers and ac­qui­si­tions in­tended to achieve such ben­e­fits as gain­ing economies of scale. Yet, mul­ti­ple stud­ies ques­tion whether economies of scale truly ex­ist in hospi­tal oper­a­tions. Even credit rat­ing groups have be­gun to openly state that they’re deem­pha­siz­ing size and scale in their analy­ses of who’s healthy and who’s not.

The ben­e­fits of scale were on the minds of CEO Fo­rum ex­ec­u­tives as well.

“Hear­ing from in­di­vid­u­als that have been there and done that and re­flect­ing back after re­view­ing the data, ques­tions re­main about whether scale re­ally mat­ters for most hos­pi­tals and health sys­tems,” said Car­rie

Owen Plietz, ex­ec­u­tive vice pres­i­dent and chief op­er­at­ing of­fi­cer at Wel­lS­tar Health Sys­tem. “Does scale truly im­prove qual­ity of care and re­duce the cost of care?”

Still, con­ver­sa­tions about gen­er­at­ing scale through con­sol­i­da­tion con­tinue in ev­ery mar­ket. And there are or­ga­ni­za­tions with im­mense scale equipped for short- and long-term sus­tain­abil­ity, Nav­i­gant Manag­ing Di­rec­tor David Burik pointed out.

Burik re­ferred to Kaiser Per­ma­nente, HCA Health­care, and Unit­edHealth­care, three dis­tinct op­er­at­ing mod­els that clearly lever­age their vast scale in their suc­cess. But these or­ga­ni­za­tions ben­e­fit from an­other es­sen­tial fac­tor be­yond size: dis­ci­pline.

“The ben­e­fits of scale won’t sim­ply be there un­less you’re or­ga­nized and have the dis­ci­pline to take ad­van­tage of it,” Burik said. “It all starts with dis­ci­pline.”

Glanc­ing in­side these com­pa­nies of­fers a view of how dis­ci­plined they are in us­ing in­for­ma­tion to stan­dard­ize, au­to­mate, and op­ti­mize oper­a­tions and care de­liv­ery, Burik sug­gested.

Ar­eas providers should tar­get in­clude ex­ec­u­tive com­pen­sa­tion, un­nec­es­sary lay­ers of man­age­ment, and in­for­ma­tion tech­nol­ogy out­lays lead­ing to higher, rather than lower, op­er­at­ing ex­pense.

Plietz sum­ma­rized the sit­u­a­tion well, stat­ing, “We need to be more thought­ful when con­sid­er­ing scale and M&A ac­tiv­ity, and en­sure that it’s truly be­ing done to ben­e­fit the pa­tients and com­mu­ni­ties that our health sys­tems serve.”


EHRs, payer-provider part­ner­ships, and greater scale were all sup­posed to ad­dress one of health­care’s long­stand­ing chal­lenges — re­duc­ing un­nec­es­sary vari­a­tion and waste.

“Our abil­ity to stay fo­cused and dis­ci­plined around waste and clin­i­cal vari­a­tion is some­thing we can con­trol, re­gard­less of pol­icy changes,” said Gail Dono­van, pres­i­dent of Health Ser­vices and chief op­er­at­ing of­fi­cer at TriHealth. “Hos­pi­tals still have a long way to go, but we need to own it.”

Stan­ford’s James em­pha­sized the sig­nif­i­cantly higher fi­nan­cial lever­age from waste elim­i­na­tion com­pared to rev­enue growth.

“The op­er­at­ing mar­gin im­pact from re­duc­ing waste is much greater than the im­pact of in­creas­ing rev­enues,” James said. “From the stand­point of pure value, both the qual­ity and fi­nan­cial up­side is stun­ningly mas­sive.”

Ac­cord­ing to Texas Health’s Berdan, “Re­duc­ing vari­a­tion is not a pro­gram but an on­go­ing part of an or­ga­ni­za­tion’s over­all cul­ture and pro­cesses. We have to re­lent­lessly pur­sue tak­ing vari­a­tion out of health­care for fi­nan­cial rea­sons, and more im­por­tantly to pro­vide a safer en­vi­ron­ment for our pa­tients and our em­ploy­ees.”

Col­lab­o­ra­tion is an es­sen­tial in­gre­di­ent to re­duc­ing waste, said Wel­lS­tar’s Plietz. “We need close part­ner­ships across clin­i­cal en­ter­prises which can help take costs out of the sys­tem while mov­ing the en­tire or­ga­ni­za­tion for­ward in their qual­ity plat­form.”

Nav­i­gant Na­tional Ad­vi­sor and CEO Fo­rum speaker Jeff Gold­smith, PhD, points to the need for greater fo­cus, say­ing hos­pi­tals need a “Seren­ity Prayer” mo­ment. “I think what’s re­ally hurt this in­dus­try is a loss of fo­cus. In­stead of try­ing to im­i­tate oth­ers and do 12 things poorly, let’s fo­cus on two things that are spe­cific to your mar­ket and do them re­ally, re­ally well.”

Joseph Swedish

Bar­clay Berdan

Brent James

Rulon Stacey

Jack Lynch

Car­rie Owen Plietz

Jeff Gold­smith

Gail Dono­van

David Burik

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