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A committee report to Georgia governor Nathan Deal was published this week (link below) and it proposes a plan to revitalize rural hospitals by making them part of a “holistic system” via an integrated “hub and spoke” model.

This plan to help rural hospitals in Georgia provides a reference point for other states and small hospitals in similar situations. Almost two-thirds of the 61 rural hospitals in Georgia are losing money, and almost one-third have been operating with a budget deficit for at least the previous five years. Only seven of the hospitals have been profitable in each of the previous five years.

In the committee report, four hospitals have been proposed as the “Hub” systems that will provide primary hospital care as well as nursing home, home health and rural health clinic components. The “Spokes” will include the following:

● Smaller Critical Access Hospitals
● Federally Qualified Health Centers (FQHCs)
● School Clinics Equipped for Telemedicine
● Public Health Departments

“Spoke” resources also include local physicians as well as ambulances equipped with Wi-Fi and telemedicine capabilities. In this model, the larger regional hospitals would direct patients to facilities that provide the most appropriate specialized services. As a result, smaller facilities will not be burdened with the costs associated with providing a wide range of specialized services. Additionally, a key goal is to minimize use of Emergency Departments as an access point for primary care.

The committee’s recommended pilot project designates four Hub facilities: Union General, Appling Health System, Crisp Regional and Emanuel Regional Medical Center. The State of Georgia is providing $3 million in funding for the pilot project and associated infrastructure.

To learn more about the initiative you can access the final published report and a related news article at the links below.

Rural Hospital Stabilization Committee – Final Report to the Governor: https://gov.georgia.gov/sites/gov.georgia.gov/files/related_files/document/Rural%20Hospital%20Stabilization%20Committee%20Report%20022315%20FINAL.pdf

Atlanta Journal-Constitution Article:
http://politics.blog.ajc.com/2015/02/23/nathan-deals-plan-to-save-struggling-rural-hospitals/
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This is the fourth in the series that explores the inner working relationship between a hospital foundation and its parent during a sale. The author, John Gilchrist, FAHP, CFRE, has lived through one nonprofit sale and is experiencing a second sale. His insights into this process can prove to be excellent counsel to an organization going through a merger or acquisition.

Nothing in this post should be taken or construed as professional advice nor is it intended as such. For your particular situation, you should always seek the advice of a competent professional attorney. I simply seek to share my insights and experiences as this is my second nonprofit sale in the capacity of a Foundation executive in the past seven years.

In general, when one non-profit acquires another, the Foundation being acquired has a corporate member substitution, changes it fundraising focus to the new member, and continues to raise funds and friends, albeit for a different mission. The acquiring organization must work through the important work of integrating two corporate and philanthropic cultures, adapting and combining databases and records, and determining future staffing, for example.

In the event of a for-profit acquisition, the Foundation may be re-purposed, dissolved with any remaining assets going to another foundation with a similar mission, or a conversion foundation may arise. A conversion foundation is typically used to create the strongest degree of separation from the former non-profit enterprise. The conversion foundation is created with the excess of sale proceeds, after the former non-profit’s liabilities and debts have been discharged.

The conversion foundation may be saddled with pension liabilities or other debt, as was the case with the Empire Health Foundation (Spokane, Washington), which arose from the sale of non-profit Empire Health Services to Community Health Systems. In that transaction, pension and workers’ compensation liabilities of approximately $35-40 million were transferred to the Empire Health Foundation (EHF). The move enabled the new for-profit owner to start with a clean slate and may be a requirement of the Asset Purchase Agreement (APA). While the EHF had the extensive level of liabilities, it also had the assets to cover them. And it possessed an unrestricted corpus of approximately $50 million.

The former Foundation is usually dissolved, with remaining assets going to the conversion foundation. In most cases, the former Foundation will have disbursed all its available funds, both unrestricted and temporarily restricted funds prior to the close of the sale. If any temporarily restricted funds remain, state law governs the final dispensation. For example, should the donor be deceased, those funds might revert to the attorney general’s to attain the closest attainment of the restriction – perhaps with the conversion foundation or a community foundation. If the donor is living and does not elect to re-restrict his/her gift, said gift may be returned.

The board of the former Foundation is normally disbanded; though some members may be asked to join the conversion foundation’s new board. The structure of the conversion foundation is much different than your former Foundation. The primary difference is the conversion foundation is likely to be formed as a private foundation, with limited or no fundraising responsibilities. Instead of a major gifts officer, planned giving officer, annual giving officer, the staff complement may likely be program officers, grant management, and a chief investment officer, for example. The conversion foundation may hold an opportunity for the former Foundation executive to remain affiliated with a semblance of the former enterprise. Do not discount or disregard the potential employment opportunity here, but it may not be the right fit for every Foundation executive.

In the next installment, I will discuss questions around fundraising activities post-sale announcement…and as always, your feedback, questions and comments are welcomed.
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A focus group involving eight CMOs was held last week in Miami by Navigant, a healthcare research organization. Navigant partnered with the American Association for Physician Leadership to interview the CMOs about how their role is changing within different venues: hospitals, medical groups, health insurers, and post-acute facilities.

Within the C-suite, CMOs see their roles expanding significantly. Conclusions drawn from the focus group include four key themes that are putting increased pressure on the role of CMOs:

Clinical transformation: Particularly in hospitals and medical groups, CMOs must work as an integral part of a team that is focused on reducing errors, increasing compliance with evidence-based medicine, reducing unnecessary care, and encouraging patients to take a more active role in their healthcare.

Physician engagement: While “rank and file physicians believe they should be left alone,” CMOs are increasingly required to engage doctors in areas such as team-based care, clinical integration, and clinical performance.

Provider-sponsored risk: With financial risks increasingly being shifted to providers, clinical decisions must be approached in a collaborative manner within “care teams” and with patients in order to reduce costs.

Super systems: CMOs must quickly adapt to the new environment where large health systems offer comprehensive services, health plans and even alternative health services.

To learn more about these trends and how they are impacting hospitals and other healthcare organizations, visit: http://www.naviganthrp.com/cmos-mvps/
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This is the third in the series that explores the inner working relationship between a hospital foundation and its parent during a sale. The author, John Gilchrist, FAHP, CFRE, has lived through one nonprofit sale and is experiencing a second sale. His insights into this process can prove to be excellent counsel to an organization going through a merger or acquisition.

With the January 13 announcement, I took advantage of using the year end summary of giving to present the facts around the sale. As usual, every donor, regardless of amount, in the prior year received his/her summary of giving, along with the general stewardship report. In addition, a 2-page Frequently Asked Questions (FAQ) supplement was provided. If you would like a copy, please e-mail me at This email address is being protected from spambots. You need JavaScript enabled to view it. .

Patience is needed in preparation of these materials – the corporate communications team must approve any external communications after the announcement. One lesson for the reader to take: Use the January 31 deadline the Foundation normally notifies each donor who has made a gift of single gift $250 the breakdown of charitable gifts vs. the Fair Market Value (FMV) Foundation provided goods and services, i.e. how much of the event ticket is eligible for a federal charitable tax deduction, and use it as a prime communications vehicle.

I salute our corporate communications professionals for their assistance in preparation of the FAQ with the many pressures tugging at their schedules. Another lesson: the Foundation executive must lead in the process, but cannot do it alone.

With the communication priorities of employee, physician, and bondholder relations (and creditor committee in a bankruptcy filing) looming in a nonprofit hospital sale, every public communication must be vetted through the filter of the system’s public relations team, or in the case of a single hospital sale through its public relations.

Compiling the FAQ was no simple task, as the system could not provide any indication as to type of buyer: non-profit, for-profit, or governmental.

In the next installment, I will discuss what happens in a for-profit acquisition of a non-profit enterprise…and as always, your feedback, questions, and comments are welcomed.
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This is the second in a series that explores the inner working relationship between a hospital foundation and its parent during a sale. The author, John Gilchrist, FAHP, CFRE, has lived through one nonprofit sale and is experiencing a second sale. His insights into this process can prove to be excellent counsel to an organization going through a merger or acquisition.

The system had prepared the announcement communications (i.e. media releases, notices to physicians, associates, volunteer leaders – including those on the Foundation board) for a 10 a.m. distribution. My role was to call the board members of the Saint Louise Foundation with the news; as the O’Connor Foundation board met at noon on announcement day, I would contact those who were not in attendance. With each call, the deeper the news impacted me – my world had just been fundamentally shifted. During each call, the Foundation board member wanted to know how and when the decision was made. Why did the system only announce its intent to sell and not wait until a buyer had signed an agreement? That actually turned into a positive as it allowed me to discuss the values of the sponsoring order and the importance they placed on respect and transparency, to name but two. Several times I was asked what impact this would have on me personally, as I had started only five months ago and had not yet moved my family. I appreciated and thanked those persons for the concern for my personal welfare; I politely answered that matter would resolve itself over time. Our primary tasks are to disseminate information about the sale to our donors and other stakeholders and to find avenues for continued fundraising, if possible.

Frankly, I received some pushback on future fundraising. Some board members felt it best to cease the existing events already in the pipeline. Always listen to their concerns – they do set strategy and have deep connections into the community. Some felt they would not be as successful as in the past – and they made a valid point. Fortunately, the board chair, who in his profession provided advice and counsel on many mergers and acquisitions, joined me and advised everyone to take a pause, not make any hasty decisions, and to focus on where the enterprise was positively engaged in outreach activities the Foundation could support.

Every development officer has that list of activities ready to describe to a prospect – make sure you have your list ready and updated. Fortunately, our Foundation had supported a pediatric clinic that traditionally saw patients with no resources, were undocumented, or for any number of reasons, had no medical home.
While most board members could understand the economics and the rationale for the sale, the understanding did not mitigate the emotional effects brought on by the announcement. In some ways, board members took it almost as the announcement that a loved one just received a terminal diagnosis. The Daughters of Charity had served San Jose for 125 years. Some of these volunteers had served this faith-based mission of the hospital for over 10 years – I observed some of these board members viewed the Sisters v almost as family members. They were understandably concerned, perhaps even worried, for their future. The Sisters responded with the dignity, class, and grace they had shown every member of the San Jose community. They relied on God for their daily sustenance, and were not about to change their thinking with one announcement!

Their attitude of acceptance of the decision to sell, prayerful discernment for a new owner who would share their passion for service to the less fortunate, and commitment to all associates was evident throughout this initial board meeting. Our CEO excelled in casting the perspective toward the future. Our situation was unfortunate, yet he painted the picture of the San Jose hospitals’ work toward sustainability that had been accomplished to date – a new owner could provide significant resources the Daughters just did not have.

One lesson for the Foundation executive is to always present the positives for the organization: a new owner saves the enterprise, preserves thousands of jobs, recapitalizes the facility, brings economies of scale for purchasing, etc. As the Foundation executive, you cannot show any negative feelings or impressions about your professional future. Take the high road, always. I found 40-50 minutes on an elliptical rider at the gym every day, or every other day, would literally “work the negatives out”. So you have another reason to exercise.

In the next installment, I will discuss the donor communication and the possible futures for the Foundation…and as always, your feedback, questions, and comments are welcomed.
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The increase in hospital merger and acquisition (M&A) activity creates many consequences, both known and unknown. Generating greater economies of scale for purchasing, payor contracting, and physician recruitment are just a few of the known ramifications. One large unknown is what happens to a hospital’s fundraising foundation. With over 4,500 US nonprofit hospitals and many of those with a fundraising function, both the acquiring and acquired organizations need to understand these consequences, beyond the legal transactional considerations.

The foundation of the acquired hospital may have hundreds, perhaps thousands, of loyal and dedicated donors. The combined gifts of these friends of the organization may range in the seven to nine figures. Many of these foundations have built deep, meaningful and productive relationships with community members. What happens to these relationships in a M&A situation? Perhaps the foundation’s fund corpus is not significant relative to the dollar value of the combined organization. A 2013 Advisory Board report indicated philanthropic revenue accounted for approximately 42% of available hospital capital. Too often, the foundation is a back-burner issue, if it is even at the strategy table. The relationships within a community can be a powerful ally to a hospital seeking approval in its merger efforts – if the benefits are communicated early in the process to these donors.

This series explores the inner working relationship between a hospital foundation and its parent during a sale. The author, John Gilchrist, FAHP, CFRE, has lived through one nonprofit sale and is experiencing a second sale. His insights into this process can prove to be excellent counsel to an organization going through a merger or acquisition.

M&A Activity Likely to Continue in the Non-Profit and For-Profit Hospital Sector

Hospital mergers and acquisitions (M&A) are occurring at a rapid pace and many more active discussions are happening in hospital boardrooms across the nation. The PWC 2nd quarter 2014 Health Services Deals Insights report states M&A activity is likely to continue in two largest components (non-profit and for-profit) of the US hospital sector. 87% of US hospitals are at least considering some form of alignment with other hospitals or hospital systems (DHG Healthcare Winter 2013 – What Hospital Executives Should Be Considering in Hospital Mergers & Acquisitions).

This series of reflections is not meant to be offered nor construed as any professional advice. I seek to share the experience of going through a non-profit hospital sale as it pertains to its related fundraising foundation. My hope for the reader is to increase awareness of the possible ramifications of this scenario in the accountable care organization (ACO) era.

One can imagine the feeling of a 6:50 a.m. call on January 13 for a mandatory senior management meeting at 8 a.m. The CEO informed us the hospital system would announce later that day of its intention to sell the system, in whole or in parts, to any qualified buyer. The reasons were many, but they centered on size, scope and essentiality. Size relates to a system’s ability to secure low cost capital and to extract best pricing from suppliers, among other factors. Scope focuses on care integration to reduce costs and improve quality – hardly an impossible task with sufficient resources in clinical documentation and utilization management tools, for example. Essentiality addresses market share vis-à-vis the competitive market. In order to negotiate appropriate reimbursement from managed care networks (MCN), the healthcare enterprise must have sufficient patient and provider market share in the community. If your enterprise can not reach an agreement with a MCN, the MCN must feel as much (perhaps more) economic pain as the enterprise in the absence of a contract. At that threshold real negotiations and genuine compromise can occur and lead to a livable agreement.

The announcement signified the beginning of extreme change for the hospital Foundation, its donors, board members, and especially you, the Foundation leader. Your professional life has just been turned upside down. One finds oneself asking questions like:

• What happens during the sale process?
• What if no qualified buyer is found? Is a Chapter 11 bankruptcy filing possible? Hospital closure?
• What economic signs were missed?
• What do you tell donors? What about the donor who just 13 days ago made his largest gift – a significant six-figure gift – ever?
• Will the hospital, and foundation, have to conduct layoffs?

More questions will follow in the ensuring days and weeks. Two suggestions: 1) Make sure you have a voice in the development of the post-announcement communications materials. 2) Address the implications for existing Foundation funds.

Consider this statement as your source of strength in these meetings: Donors embody a group of highly passionate supporters of your enterprise – you might be the sole representative of their interests.
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An article published this week by “D Healthcare” presents key statistics on the most profitable hospitals in North Texas. The data is useful to analyze and compare to hospitals in other parts of the country. Data on profit margins, net income, net patient revenues and occupancy percentages provide good benchmarks for comparison purposes.

Despite relatively flat inpatient occupancy rates, the cumulative profit margins for hospitals in North Texas have been above 12% in three of the last four years. One strategy that successful hospitals are using involves increasing their presence in neighborhoods to deliver primary care services, which includes partnering with retail outlets such as Walgreens, CVS and Wal-Mart.

The article notes that 740,000 people in Texas gained health coverage through the Affordable Care Act, however, that increase probably will not increase inpatient rates at hospitals; therefore, hospitals have begun to team up with retailers to expand their reach within communities to deliver primary care.

Those retail activities are in addition to hospital expansion plans that include the construction of new facilities. The article contains a link to a snapshot of the “healthcare building boom” going on in North Texas. The construction activity reflects several trends, including the aging baby boomer population and an increase in the number of people moving to Texas. The two fastest growing metro areas in the country in recent years have been Dallas-Fort Worth-Arlington and Houston-The Woodlands-Sugarland.

To review the data points on revenue, profitability, net income and inpatient percentages, see the article and its accompanying chart at: http://healthcare.dmagazine.com/2015/01/21/here-are-the-most-profitable-hospitals-in-north-texas-and-why/
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Keeping political opinions discreet is common sense, but hospital executives are facing added scrutiny from employers and board members. A recent article in Becker’s Hospital Review provides a helpful refresher course on the potential pitfalls of party politics: “CEOs considering a career move might see their political agenda come into question. It’s naive to think board members aren’t cognizant of politics when searching for a new chief, especially if the CEO candidate and hospital are from a red state and blue state.”

Executives may be faced with questions regarding their opinions on healthcare legislation. Additionally, the Federal Election Commission’s (FEC) contribution database provides a public record of contributions not only to political candidates but also to industry organizations. Avoiding endorsements of candidates as well as campaign contributions can be beneficial with regard to maintaining an air of neutrality, regardless of your personal stance on issues.

On the other hand, many executives are not reluctant to share their opinions. “Comb through the FEC database and you'll find many hospital and health system CEOs — including those at some of the most recognizable and largest nonprofit systems in the country — who aren't shy about their Democratic or Republican leanings.”

The bottom line is that it’s helpful to keep in mind the potential ramifications involved whenever you express your political leanings, particularly when those preferences have the potential to become part of the public record.

To learn more, visit Becker’s Hospital Review at: http://www.beckershospitalreview.com/healthcare-blog/when-it-comes-to-party-politics-some-ceos-put-on-more-of-a-poker-face-than-others.html
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Becker’s Hospital Review recently published an article on five common management mistakes within health systems that lead to failure and business erosion. The first among those listed was inadequate development of the next generation of leaders. When organizations neglect to develop second-tier leaders who can replace outgoing executives, the organization can struggle. According to the article, “many great health systems with wonderful CEOs do not have the depth to steer and drive the organization for the next generation. In fact, this lack of depth in leadership often causes systems to look for strategic partners.”

According to a survey administered by the Society for Human Resource Management, employees indicated that the most important factor in their job satisfaction involved opportunities to use their skills and abilities. The article states that many health systems have been guilty of not allowing great leaders to thrive, and that “a core job of leadership is to constantly be grooming and working closely with great people so there are always opportunities available for those people to thrive.”

Another common error in leadership involves inadequate planning for rapid changes in health IT systems, including revenue collection systems. As a case in point, one successful hospital fell into bankruptcy due to “uncollectibility over a sustained period of time.” CMO of McKesson Enterprise Information Solutions, Michael Blackman, MD, recommends that providers anticipate and plan for their IT needs well into the future.

Failure to develop a strong marketing brand in conjunction with a business strategy is another common oversight. Many community hospitals have seen their businesses decline because they neglected to define and differentiate their services from competitors.

The article also notes the potential pitfalls of expansion plans. One hospital deemed “hyper-successful” added a second facility, but ended up splitting cases with the first facility. The initial facility, which was highly profitable, was in essence replaced by two facilities that were both significantly less profitable.

You can view the article at Becker’s Hospital Review: http://www.beckershospitalreview.com/hospital-management-administration/5-core-management-mistakes-in-health-systems-key-causes-of-failure-and-business-erosion.html
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Each year PricewaterhouseCoopers (PwC) interviews industry experts and healthcare consumers to produce a list of top issues impacting the industry. This informative report, which was published last month by PwC's Health Research Institute (HRI), devotes one page to each of the Top 10 issues and delves into the implications that each issue will have on the industry. Key data points are clearly presented and the report is a valuable resource for assessing major trends in the industry.

Citing a “profound transformation” occurring in the industry, PwC says “the healthcare sector will begin to look and feel like other industries, catering to audiences expecting one-click service [and] consumers are leading the way, bearing more of the cost of their own care—and making more decisions.”

Healthcare consumers are more price-conscious than ever before, with 82% indicating that price is an important factor when making decisions about healthcare. That trend is coupled with more physicians embracing “do it yourself healthcare,” including mobile health apps that monitor a patient’s vital signs, analyze blood, track medication adherence, etc.

Some of the key trends noted in the report include an unprecedented level of data sharing and transparency; the need for healthcare organizations to revisit regulations that allow non-physicians to provide more services; a requirement to fully integrate data from electronic medical records throughout the enterprise; and the need to pursue strategic partnerships that encourage innovation, lower costs and fill gaps in business operations.

You can access the PwC report at: http://www.pwc.com/en_US/us/health-industries/top-health-industry-issues/assets/pwc-hri-top-healthcare-issues-2015.pdf
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CMS is developing and testing new payment and service delivery models in accordance with the Affordable Care Act and other legislation. Some models are designed to demonstrate whether various approaches are more effective than others at improving care and/or fostering innovation in the healthcare industry. There are seven broad categories used to group the models:

● Accountable Care
● Bundled Payments for Care Improvement
● Primary Care Transformation
● Initiatives Focused on the Medicaid and CHIP Population
● Initiatives Focused on the Medicare-Medicaid Enrollees
● Initiatives to Speed the Adoption of Best Practices
● Ways to Accelerate Testing of New Payment and Service Delivery Models

CMS provides a website (link below) that displays the various models and their current status, for example, whether they are Under Review, Accepting Applications, Ongoing, No Longer Active, etc.

The information available at the website can help you stay informed about changes as they evolve; other resources allow you to identify hospitals and other healthcare providers that are participating in the various programs.

As an example of the type of information that is available, one “demonstration model” tracked patients after they left the hospital to determine whether hospital-physician collaborations prevented complications, avoided duplication of services, improved quality and/or eliminated unnecessary costs. You can access these resources as well as other data and reports at: http://innovation.cms.gov/initiatives/index.html#views=models
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Almost three-quarters (71 percent) of ER doctors who responded to a survey said they treat patients every day who come to the ER after first seeking help at urgent care centers. Over 2,800 members of the American College of Emergency Physicians (ACEP) participated in the survey, which was published this week.

Sixty-five percent of the respondents indicated that patients are redirected to the ER due to the lack of needed equipment at urgent care centers or due to limited staffing. Ninety percent of the ER physicians said the top reason that patients were being redirected was due to the fact that the patient’s medical condition was more serious than could be treated at an urgent care center.

Many urgent care centers are being marketed as substitutes for emergency care, however they are often more suited to address common medical problems, such as sprains or minor cuts that require stitches.

Other results of the survey include the following:

>> 86% of participants said at least one urgent care center operates within 10 miles of their emergency department; 76% said there was more than one.

>> 21% reported a decline in emergency visits while 16% reported an increase in ER visits.

>> 51% said urgent care centers will pull patients from both ER care and primary care, while 22% said that urgent care centers will pull more patients from primary care.

>> 90% reported that patients were unable to determine whether they should seek medical care at a hospital emergency department or an urgent care center.

You can download the 28-page report via the link listed at the bottom of the ACEP news release at: http://newsroom.acep.org/2014-12-08-urgent-care-or-er-for-holiday-injuries-new-poll-says-some-patients-get-it-wrong
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After analyzing trends in healthcare technology, industry analyst firm IDC released its predictions for 2015. The data provides useful insights into the evolving issues that hospitals will face over the coming years, helping senior leaders to identify opportunities for improvement in their organizations as well as plan for future growth. Among those trends listed by IDC are the following:

>> Operational inefficiency will become critical at 25% of hospitals, resulting in the development of a data-driven digital hospital strategy requiring a budget in 2016.

>> 15% of hospitals will create a comprehensive patient profile by 2016 that will allow them to deliver personalized treatment plans.

>> 65% of consumer transactions with healthcare organizations will be mobile by 2018.

>> 70% of healthcare organizations worldwide will invest in consumer-facing mobile applications, wearables, remote health monitoring and virtual care by 2018.

>> By 2015, 50% of healthcare organizations will have experienced one to five cyber-attacks in the previous 12 months with one out of three attacks resulting in a breach.

These factors and other listed by IDC (link below) will help hospital executives refine their road maps for investments in health information technology. The data also helps leaders prepare for the impacts that these trends will have on their organizations.

To learn more, visit the IDC website at: http://www.idc.com/getdoc.jsp?containerId=prUS25262514
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Chief Strategy Officer, Chief Population Health Officer and Chief Experience Officer are some of the titles increasingly emerging within the healthcare industry. In a survey of 323 clinical and human resources leaders from healthcare organizations nationwide, 16% of respondents indicated they were currently recruiting or planning to recruit leadership positions with titles such as VP of Patient Experience and Chief Experience Officer, to be in charge of patient experiences across health systems with the goal of sustaining and improving loyalty.

The survey, conducted by the Center for Professional Advancement at AMN Healthcare, captured responses across 37 quantitative and 15 qualitative areas. Chief Strategy Officers and similar roles are dedicated primarily to understanding and managing the cost/value proposition as well as the risk-to-payoff ratio for each strategy. Chief Population Health Officers and similar positions are focused on identifying disease trends and risk factors, and then ensuring programs are developed to address those factors.

Other roles are still emerging and will continue to develop, including Clinical Transformation Officer, which includes responsibilities for managing a healthcare system’s “transition from volume to value, including care infrastructure, staff management, IT changes, care continuum partner engagement and other duties tied to system reorganization.”

Healthcare firms are at the early stage of rolling out these new positions and responsibilities. According to the report, awareness of the need for these positions continues to build across the healthcare industry.

The 25-page report can be downloaded at: http://www.amnhealthcare.com/uploadedFiles/MainSite/Content/Workforce_Solutions/Survey-Emerging-Roles-in-Healthcare-2014.pdf
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Today’s blog continues our discussion from last week on the changing expectations of healthcare consumers. A report published last month by the management consulting firm Oliver Wyman delves into the ongoing “volume-to-value” revolution and how technology is upending the status quo.

The report discusses how factors such as the increasing deployment of retail clinics in big-box stores, the use of “smart care” teams, and even personal fitness devices are contributing to the development of “a new health market where demand trumps supply.”

According to the authors of the report, this ongoing transformation in the healthcare industry provides great opportunities, showing how “traditional players and new entrants can do more than participate in this value shift, but lead it through innovative business models and partnerships.”

Inflows of venture capital are accelerating in the healthcare industry to take advantage of this “Health Market 2.0.” A market of at least one trillion dollars is in play to address key issues in the industry, including: increasing complexity, persistent lack of transparency, slow-moving processes, and the overall inconveniences that are motivating healthcare consumers to change their behaviors.

For more information and to download the report, visit: http://www.oliverwyman.com/insights/publications/2014/oct/the-patient-to-consumer-revolution.html#.VGPnxvnF9Zs
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PricewaterhouseCoopers (PwC) published a report last month about the changing expectations of healthcare consumers. Based on a survey of more than 2,300 U.S. residents, the report paints a picture that the “winners” in this evolving environment will be those firms that can differentiate their healthcare services in three ways, through:

● Consumer Choice
● Consumer Engagement
● Consumer Experience

Some key data points from the report include the following:

>> Only 49 percent of respondents were satisfied with their overall healthcare consumer experience.

>> Healthcare providers that can tailor their service lines to various segments will be able to “flip today’s unsatisfying consumer experience on its head and win the loyalty of increasingly discerning healthcare consumers.”

>> Although the data shows that price remains a primary consideration overall, consumers, particularly older ones, will pay more for non-price attributes such as brand, service, and network.

>> Growing dissatisfaction about healthcare delivery is creating openings for new entrants to further disrupt the landscape, including retailers like Target and Walmart or digital companies such as Google and Amazon.

>> More than 25% of respondents listed “digital” as their preferred method of engagement in their healthcare, as opposed to office visits or phone consultations.

The report emphasizes that maintaining the status quo is no longer an option for healthcare providers and payers. Additionally, there are great opportunities for organizations that can capitalize on these trends. To access the report, visit the PwC website at: http://www.strategyand.pwc.com/global/home/what-we-think/reports-white-papers/article-display/birth-of-healthcare-consumer
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Becker's Hospital Review recently published a list of “100 Healthcare Statistics to Know.” Reviewing this list is a great way to test your overall awareness of key facts about the industry. All of the data helps put into perspective how wide-ranging the industry is, including how diverse factors come together to shape new trends. Here’s a sampling:

There are 5,723 hospitals in the country, 4,999 community hospitals and 1,326 critical access hospitals.

There are about 5,500 ambulatory surgical centers in the country.

On average, only 71 percent of patients said, yes, they would definitely recommend the hospital they attended to friends and family.

According to Kaiser State Health Facts, non-profit hospitals spend the most on inpatient stays compared to other hospital ownership types: adjusted expenses per inpatient day by ownership type: non-profit hospitals, $2,088; state/local government hospitals, $1,667; for-profit hospitals, $1,628.

Across all specialties, about 21 percent of physicians are employed by a hospital.

As of April 2014, more than two-thirds of Americans live in areas served by an ACO and more than 40 percent live in areas served by two or more ACOs.

The global mobile health (mHealth) market is expected to be worth approximately $49.1 billion by the year 2020.

Medicaid costs were $432 billion in 2012, of which the nonfederal share was $180 billion.

Registered nurses earn an average national estimated wage of $68,910 and nurse practitioners earn an average national estimated wage of $95,070.

To view the entire list, visit Becker's Hospital Review at http://www.beckershospitalreview.com/hospital-management-administration/100-healthcare-statistics-to-know.html
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Earlier this month, U.S. News & World Report held its second annual “Hospital of Tomorrow” conference in Washington DC. In a special report available on their website (link below), you can access conference presentations and other materials.

An executive roundtable discussion, “Navigating a New Era in Health Care,” provides valuable insights. Other topics addressed at the conference include the following:

>> Value-Based Healthcare Delivery
>> Provider and Patient Engagement
>> Data, Information and Transformation
>> The Changing Face of the Healthcare Ecosystem
>> Population Health Management

Across the country, hospitals are experimenting with new ways to deliver healthcare, including sending doctors on house calls and putting nurses in community facilities such as the YMCA. Other experiments include screening patients for mental and behavioral health problems, which often interfere with treatments.

Integrated health systems have an advantage in the new environment because, for example, they can more effectively analyze electronic health records and other data to identify patients that would benefit from home-based visits. Often, patients with heart failure, pneumonia and other conditions can be treated in their own homes more effectively and efficiently. Technology developments, such as telemedicine and telemonitoring, are giving clinicians real-time access to patients as well as the ability to easily check vital signs between visits.

For more information on topics covered at the U.S. News & World Report’s “Hospital of Tomorrow” conference, visit: http://health.usnews.com/health-news/hospital-of-tomorrow
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In a report issued last week, Altarum’s Center for Sustainable Health Spending (CSHS) noted a 50% increase in job growth across the healthcare industry, which added an average 22,600 new jobs per month over the previous six months. The report states that “solid continued growth seems likely” because the recent rate of job openings is the highest seen since before the economic downturn began.

CSHS issues monthly reports (link below) that are “designed to address significant shortcomings in the availability of timely economic data on the health sector, including employment, spending, and prices.”

Charles Roehrig, director of CSHS, stated, “Two months ago, we were seeing no acceleration in healthcare employment. However, with the upward revision to July and strong August and September growth, the picture has transformed into a significant jump in the second quarter that has continued through the third quarter.”

Highlights of the September 2014 report include the following:

>> Hospitals gained 6,200 jobs during September, compared with a 24-month average gain of 1,400.

>> Ambulatory healthcare services added 14,200 jobs last month, which is below the 24-month average gain of 16,000.

>> Ambulatory services accounted for 45% of healthcare employment, hospitals accounted for 33%, and nursing and residential care accounted for 22%.

>> Over the past 12 months, outpatient care centers grew at the fastest rate, 4.8%, while adding 33,000 jobs.

Altarum is a non-profit research organization with clients in the public and private sectors. For more information and to access the CSHS monthly reports, visit: http://altarum.org/our-work/cshs-health-sector-economic-indicators-briefs
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It’s helpful to stay informed on healthcare industry lawsuits because they indicate potential pitfalls in executive management decisions. Becker’s Hospital Review regularly publishes articles on legal actions occurring in the healthcare industry, and last week they provided a roundup of recent court activities, including the following:

In Pennsylvania, a group of hospitals has initiated a lawsuit against insurer Highmark and its subsidiary Keystone Health Plan West over reduced reimbursements for Medicare Advantage patients.

In Massachusetts, nurses have sued Brigham and Women’s Hospital in Boston for a policy that would require nurses to receive flu shots to keep their jobs.

In Alabama, a federal judge refused to dismiss a class-action lawsuit against Flowers Hospital over an employee who stole patient data.

In New Jersey, the State Supreme Court ruled that hospitals aren’t required to release documentation gathered during an internal examination of malpractice cases.

In California, the advocacy group Consumer Watchdog has sued Cigna and Blue Shield of California over narrow networks; the lawsuits allege that hospital and physician networks offered by the insurers are insufficient, and that consumers were provided inaccurate information about in-network providers.

Also in California, 33 Anthem Blue Cross members filed a lawsuit against Anthem Blue Cross of California, saying the company misrepresented the size of its networks and the benefits provided in plans offered under the Affordable Care Act.

You can learn more about these lawsuits and others at Becker’s Hospital Review: http://www.beckershospitalreview.com/legal-regulatory-issues/10-latest-healthcare-industry-lawsuits-settlements-oct-3.html
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