Summary: Succeeding in the Brave New/Old World
With his pragmatic outlook and to-the-point style, Kaufman challenged conventional wisdom and shared the pitfalls and strategies the hospital C-suite must know. You’ll hear more from Nate as a keynote speaker at our 2018 Summit, and we’d love to see you there. In the meantime, here are some takeaways from his webinar presentation. You can also download the slides using the form on the right side of this page.
The current state of healthcare is unsustainable and characterized by excess price and utilization. And, unfortunately, external policies and internal trends — both hyped as panaceas — will do little to fix healthcare in the short term. Like the housing bubble, the reality will catch up to the math.
As a result, health systems must evermore focus on creating — and strengthening existing — core competencies and differentiators, providing value, and protecting their capital investments (namely hospitals).
How? By going back to the basics…
Focus on Massive Cost Reduction
The hospital producer price index will likely continue to decline. Additionally, payors are less concerned with going out-of-network with some of the major providers. As a result, in 2016, annual expense growth for nonprofit and public healthcare organizations exceeded annual revenue growth.
Hospitals must cut waste and inappropriate care — and reduce per unit cost (which will eventually reduce cost per episode). Health systems should be very critical of their franchises — not just hope things will improve — and spend capital on their most profitable facilities.
Optimize the Performance and Utilization of Inpatient Services
As many revenue streams have transferred to outpatient facilities, hospitals must retain a critical mass of inpatient services (in particular: emergency/trauma, neurology, obstetrics, high-acuity/critical care, cardiology, and subspecialty surgery) to afford their hospital-based physician infrastructure.
Our world will always need hospitals. Yet, to be among the last ones standing, a provider must be differentiated — and get sick care right at a much lower cost.
Focus on Your Physicians
There is a discontinuity between what policymakers say and what happens in the trenches. Though CMOs and the like are focused on population health, the vast majority of physicians have transactional relationships with their organizations and are focused on their incomes and workloads.
For system initiatives to work, those who actually deliver the care must buy-in. Health system organizations need to win their physicians’ hearts and minds. And through deep, effective engagement with employed, contracted, and faculty physicians, systems will increase the efficiency of their employed medical groups and “find” money.
Begin the Journey of Creating a High-Performance Clinically Integrated Network
Medicare’s value-based purchasing program results have been dismal, and the shift from volume to value is more a shift to fee-for-service with a little “value” thrown in. Payor-health system collaboration and big hospital mergers are failing to deliver promised results.
Popular strategies and policies seem disconnected from current realities.
Nevertheless, health systems need to prepare for performance risk and collect unblinded data, offer connected EMRs, and allow physicians to govern the enterprise. Using the Medicare Shared Savings Program as a model, providers should begin developing the competencies, physician support, and organizational integration that will succeed, even as delivery systems evolve.
In closing, to succeed in the “new” world, specific, realistic plans are better than “shiny objects.” And while trends come and go — appropriateness, outcomes, service, and access will continue to define an organization’s value.
If you’d like to take a deeper dive into Kaufman’s perspective, download the webinar slides at the top of this page.
For more information about The Summit by ReviveHealth, click here.