Modern Healthcare

2018 CEO FORUM

Improving the Health of Communitie­s Amid a Volatile Landscape

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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.

PAYER-PROVIDER PARTNERSHI­PS AT RISK?

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.”

EHRS, PRESENT AND FUTURE

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.”

WEIGHING IN ON SCALE

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.”

TARGETING WASTE, UNNECESSAR­Y VARIATION

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
Joseph Swedish
 ??  ?? Barclay Berdan
Barclay Berdan
 ??  ?? Brent James
Brent James
 ??  ?? Rulon Stacey
Rulon Stacey
 ??  ?? Jack Lynch
Jack Lynch
 ??  ?? Carrie Owen Plietz
Carrie Owen Plietz
 ??  ?? Jeff Goldsmith
Jeff Goldsmith
 ??  ?? Gail Donovan
Gail Donovan
 ??  ?? David Burik
David Burik

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