Becker's Hospital Review Annual CEO Strategy Roundtable: 11 Leaders Discuss the Changing Healthcare Environment
Becker's Hospital Review hosted its Hospital Strategy Roundtable on Nov. 1 at the Ritz-Carlton Hotel in Chicago, bringing together 11 hospital industry leaders from across the country to discuss current challenges and opportunities facing the industry, how hospital strategy will need to change to survive and which strategies will provide a foundation for long-term success.
Larry Anderson. CEO of Tri-City Medical Center (Oceanside, Calif.).
Dave Brooks. CEO of Providence Regional Medical Center Everett (Wash.).
Teri Fontenot. President and CEO of Woman's Hospital (Baton Rouge, La.).
Larry Goldberg. President and CEO of Loyola University Health System (Maywood, Ill.).
Steve Goldstein. President and CEO of Strong Memorial Hospital (Rochester, N.Y.).
Dean Harrison. President and CEO of Northwestern Memorial HealthCare (Chicago).
Bill Leaver. President and CEO of Iowa Health System (Des Moines).
Barbara Martin. President and CEO of Vista Health (Waukegan, Ill.).
Megan Perry. President of Sentara Potomac Hospital (Woodbridge, Va.).
Jim Skogsbergh. President and CEO of Advocate Health Care (Oak Brook, Ill.).
Quint Studer. Founder of Studer Group.
Scott Becker, JD, CPA, Publisher, Becker's Hospital Review, and partner, McGuireWoods
Chuck Lauer, Former Publisher, Modern Healthcare, Career Coach and Public Speaker
The following is an excerpted transcript of the event's discussion.
Chuck Lauer: We're right in the front of a major change possibly — it will either be Barack Obama or Mitt Romney and depending on who you talk to, you're not quite sure what will happen. What impact do you think the election will have in terms of the industry and many of the programs that have been undertaken?
Steve Goldstein: I think this is one of the most important elections that we've seen in decades because it really does differentiate different positions. What will happen with the Affordable Care Act of 2010? What will be the foundation of Medicare and Medicaid? Will abortion be legalized throughout the United States or not? These are all issues that will play out.
I think one of the more important issues is that there are a lot of folks right now standing on the sidelines. If you look at what's happening with exchanges, if you look at what's happening with Medicaid, [it's] not clear yet that the 32 million people that have potential access for health insurance through the [ACA] will be able to achieve that. Many states, six states in particular, have said they will not offer exchanges. Fourteen have started putting them in place. Many are just dipping their toe in and waiting to see what happens with the election.
The same issue occurs in Medicaid. Not all states — in fact a number of states have indicated that they will not expand their Medicaid rolls. So I think who becomes president will make tremendous difference in how our delivery systems are shaped, whether or not sequestration and all of its consequences develop and, frankly, the potential of fee-for-service system over time. I think it's just an enormously important time.
Chuck Lauer: Teri Fontenot, one of the things you didn't mention is that you are the current chairman of the American Hospital Association. How do you react to what Steve has just said? Do you agree with him?
Teri Fontenot: Absolutely, I agree with what Steve says. Steve serves on the board of the AHA with me so we hear a lot of the same things. But if we take it to less macro sense — I certainly agree that the delivery system and what happens with the Affordable Care Act is going to be very critical — but when you take it down to the hospital-level or hospital system-level and what we do every single day, there is not going to be as much of an impact.
We already are working very hard to be held more accountable. There's a lot of transparency. Certainly what Steve referred to as how people will be insured or covered, that has some impact, but what we do day to day operationally, I don't see that it has much of an impact, really, at all. We know that the current cost structure for care in our country is completely unsustainable.
Chuck Lauer: Bill Leaver, you're way up in Iowa. What's your take on where things are headed and what's happening?
Bill Leaver: Well I would agree with Teri. I think that what we're working on in the efforts around gearing up to do population health, care coordination — all those things are going to be meaningful whether or not Republicans gain control of the White House or Democrats retain control. I think delivery and payment reform will be here to stay.
We believe fee-for-service is going to be a thing of the past, and the accountable care organization financing in the current law is transitory to something different, which is most likely a bundled global payment. In our view, the real key is who is going to have control of that global payment. … I do think the issues around the Medicaid expansion and covering the uninsured will be impacted by who wins this election. I think if the balance power shifts, that will be rethought. But I think there is bipartisan support for payment and financing reform.
Larry Anderson: I don't disagree with what anyone said so far. But I do think that we have to look at it from an employer standpoint. All hospitals are huge employers. We've done some analysis for just our hospital — we employ 2,400 people and we're insured using UnitedHealthcare as our platform for that and they're also our capitated partner. I have to say it drives the cost of our healthcare benefits for our employees up $10 million over the next six years. That's our estimate. We're not only talking about the uninsured in America, we're talking about everyone in America is impacted by this.
Chuck Lauer: Dean?
Dean Harrison: The only thing that I would add that hasn't been mentioned is one of the things we hope for, no matter what happens with the election, is to create more access for patients. There are a number of us involved in academic medical centers, and there is a lot being thrown around about future funding for graduate medical education. For those of us training the next generation of physicians, we have a lot of concern over where the money will come from to ensure that we're able to continue providing education to produce the physicians who will be available, especially primary care physicians, to take care of patients.
Chuck Lauer: I went to the National Center for Healthcare Leadership meeting last year. There was a discussion about ACOs. The thing that mystified me most of all was there were five CEOs on the panel and every one had a different definition for what an ACO was, and more importantly, how they were implemented. Do you have an ACO you're working with now [Megan Perry]?
Megan Perry: We do not. We've skipped the ACO and gone to the clinically integrated network.
Barb Martin: We don't have one either, very purposefully. The system we're with [Community Health Systems] — it's kind of a wait-and-see game. We're all competitors, and Advocate has been very aggressive in ACOs. We look at independently integrating with physicians. They really are customers. Employing and working [on] integration with them, so we're looking at it more from a local market opposed to a large system.
David Brooks: We haven't developed an ACO directly. We have a health plan in Oregon, so we licensed a health plan to come up to our community, which is north of Seattle, and bring in a Medicare Advantage product. I think if we were to license that plan for commercial, we would become very threatening to the other commercial plans that we partner with. So we have been very careful about that.
Chuck Lauer: In the for-profit sector, many have said, 'We're not going to [form an ACO].' And I understand because they have stakeholders that say, 'If you do it, it's going to cost a lot of money.' Quint, what are you hearing?
Quint Studer: Inconsistency is what I'm hearing. In healthcare, I think the strategies are normally the right strategies for the region or community that the CEO is in. I think the structures are not where we run into problems. I continue to think the issue is execution.
Larry Anderson: We're a rather small hospital compared to most of the systems represented here. We put together an ACO that is now comprised of 160 doctors, 9,000 Medicare lives. It's a shared savings model. The comment that you have to be concerned about the costs of it is very valid, because we're keeping very close track of that. Not just the cost of starting it up, but the money that we're going to give up from a hospital standpoint to develop a shared savings model.
So, I don't think that's been fully thought out by the government, but we're doing it to gain a competitive advantage against competitors who are not in a position where they can create an ACO. We think it will provide us a drawing point for doctors to come because they can participate in shared savings. We started with 60 doctors. Now we're up to 160.
Scott Becker: How do you see the mix between how much effort is going into ACOs on the commercial side versus on the Medicare side?
Jim Skogsbergh: The genesis of our Advocate ACO was really in the commercial arena with Blue Cross [in 2010]. It's a shared savings arrangement. The short story is this: The old way of doing business just wasn't working, really for either party. We really said, 'Let's just create a new model,' because everything we were doing to improve efficiency hurt us financially because of the nature of the contract we had. All those benefits accrue to the insurer and that doesn't work for us.
We fundamentally believe if we focus on improving outcomes and lowering costs, we're going to survive whatever storm comes our way. Then we had infrastructure that allowed us to participate in the ACO when the legislation was passed. But ours really was born well before the legislation came out.
Scott Becker: How quickly do you transition compensation systems with physicians as you move through these different methods? Do you?
Jim Skogsbergh: I think eventually, you absolutely have to. Most of us would agree that when we talk about physician compensation systems, we all move carefully, very carefully, as we should. We need to be thoughtful about it. But our situation didn't call for drastic, massive changes — it's a shared savings contract, so in a sense, our physicians are billing fee-for-service medicine. We're going to compare our costs with the rest of the marketplace. What's the difference? Then we'll share it among ourselves and Blue Cross. It's worked fairly well for us so far.
Larry Goldberg: I praise everybody for doing a lot of experiments, but the reality is: How do we get from here to there? When I look at our organization, I think we're probably the best positioned to be an ACO except we don't have the scale. We don't know how to manage risk. We're a fully-integrated faculty model. We have 28 ambulatory sites, 4 multi-specialty clinics. It's basically a mini Kaiser [Permanente] model all on one IT system. [It's] really well positioned to do bundled payments … except there are 80 hospitals in [the Chicago] metropolitan area. It's an incredibly fragmented market. Jim has done a wonderful thing to really get the market moving and thinking differently. When we talk to insurers, this is not just a provider game.
When Blue Cross has 70 percent of the marketplace and is really redirecting care, [it's a] conversation about … are we going to get cost-out unless we [get individuals into some sort of] managed care in which you can manage care across the continuum? It makes it difficult when you're running on a 2 to 3 percent margin, particularly when you're academic and have other important things to invest in.
My mantra has been, 'Look, we're really good at this fee-for-service model and as much as all of this is happening, we're still in a fee-for-service market right now.' Everybody in our market is stealing doctors, trying to get market share. My message is...there is an overlap. Let's focus on fundamentals that exist in both markets: access, good quality metrics, getting our costs down and providing patient experience.
Megan Perry: Sentara has been a fully integrated system in the state of Virginia. We started our health plan back in the early 80s. We've been, in theory, managing risk for quite a long time. But [we] had to come to the cold reality to understand that we really haven't [managed risk]. … We've still worked in silos. We've spent the last few years trying to experiment with this, and we've had all the right components, yet we still haven't quite figured it out.
We have to change our whole corporate culture. We're still organized as hospitals. We have to take a good hard look — how are we organized and incentivized as executives? Right now, as a hospital executive, you want to fill your beds. So you have to think about how you're going to [restructure the system to] reward the behaviors you're going to want to see.
Bill Leaver: We also have an ACO. We've been very aggressive. We have shared savings arrangements, both with Medicare and commercial, in seven of our nine markets. We view it as a transition to a different payment model, which really forced us to break down silos, think about how [to] integrate the care and focus attention on what is in the best interest of the patient. [We're] not necessarily focused on filling beds or physician offices….Here's the other point: [If] we don't do this, somebody else will, and we won't like the 'somebody else.' It'll be the insurance companies or someone else we're not even thinking about today.
Chuck Lauer: How have you changed in terms of how you view your day-to-day activities and how you run your hospitals?
Jim Skogsbergh: I think all of our jobs have probably changed in last decade. I've been at Advocate since 2001. Our focus is much more strategic now. We're trying to figure out where the puck is so [we] can skate to it. That notion of where is this industry going and how do you get ahead of it — that's occupied more of our time in the day-to-day. Susan Lopez is in the audience and she runs Advocate Illinois Masonic Medical Center [in Chicago], and we're glad she does. Our role is to support her as best we can and make sure the care delivered at Masonic is outstanding. And Susan does a great job, but I'm not managing Illinois Masonic Medical Center. I'm thinking about the future of our [healthcare system].
Chuck Lauer: Dean, you have one of the largest urban hospitals in the country. How has your life changed since you came in 15 years ago?
Dean Harrison: We've been fortunate in having a really strong patients-first culture, a really strong quality culture and [strong] execution culture. Those are great assets to have inside your organization. No matter what you're dealing with, those things guide the organization and your initiatives. I think a lot of us are spending much more time figuring out the right alignment strategies with physicians, with physicians who don't currently work with us that might want to work with us [and] providers in the marketplace.
We're looking at where we might add value and fundamentally asking questions of, 'If this really isn't adding value, why do I need to own this? Why am I not finding a partner?' We may be competitive in some areas, but in other areas, we should be doing things together. Especially for the academics in Chicago, [we should be] finding ways to say, 'There will be scarce resources for research going forward. Are there any opportunities we can work together for benefit of society? We'll compete on clinical programs, but are there things we can do in the community together?' I think a lot of us are having conversations that five or 10 years ago we might not have had. We're saying, 'What is the right thing to do? What's fair? What will actually improve the overall health status of our community?'
Larry Goldberg: In some sense, I feel like we're incredibly well positioned. We have all our physicians aligned. We're all on the same compensation system. But I think there are four global issues that make all this so difficult, and they're macro issues. One is that everybody is making a lot of money — hospitals, doctors, insurance companies, drug companies, device companies. There is lots of lobbying and everybody is protecting their financial interests. Two: As a country, we can't have an adult conversation about rationing.
Thirdly, if you look at the healthcare industry over the last 15 years, it's the fastest growing sector of jobs. Now we could all get together and come up with some good plans to standardize what we do — a lot of the documentation work, for example. But where are those people going to work? In many communities, we're the biggest provider of jobs.
The last thing we struggle with as academic medical center is that the NIH really funds [clinical research] for the world. All the basic science that becomes goods and services that industries across the world can benefit from are supported through our government and the research that happens in our facilities. These are underlying global questions. We're doing things that set us in right direction, but those are really big social topics and issues that we're all dealing with.
Larry Anderson: For my hospital, right now we're in very reactionary mode. From the moment the ACA was passed…we ran an initial model on the value-based purchasing component and decided we'd lose $800,000. That was a lot of money for us. We just got our first notification last week of what it'll cost us and it is $50,000 because we've gone to work on it.
I think all of us are working hard to understand the law and its ramifications for us, especially financially. But at the same time, we're working on quality because we see the end game: better medicine at a lower cost. We've now become 14th in the nation for heart attack readmission rates. We saw the issue of readmission rates being penalized and said we can't afford that.
David Brooks: I agree with what was said earlier. Jim nailed it in a lot of ways. It's still about internal execution. We have great teams that make it happen reliably. My role in the last couple of years — I spend so much more time on partnerships. I never talked about the "total cost of care" three years ago. But we now are working on it, trying to understand it, profile it and make improvements on that. I think that starts in the CEO role.
We look at overall community utilization now — of hospital beds, emergency room usage, skilled nursing, inpatient rehab and so on. We never focused on those things before. I think, at the leadership level, if we're going to serve the total members of our community, we need to profile at the macro level while ensuring phenomenal execution at the service level.
Barb Martin: I think the key here is we all have different models. At the end of the day, what we have to survive on are relationships. We have to [build] strong relationships with physicians, whether they're employed, acquired or independent partners, and our patients and communities. And [we have to] produce those outcomes. We know CMS has outcomes for us. Our reimbursement is not going to get better — it's reality whoever wins [the presidential election].
I want physicians to only admit at my hospital, but the reality is I have competition, so you try to give as much loyalty and strive for great patient satisfaction and work with elected officials in the community who will support my initiatives and my strategic goals to help me get to next level. I'm in a bit of a smaller system with a lot of competition from big systems, but that's okay. We have to produce outcomes.
Scott Becker: Some large multi-market systems are very closely connected. Then I see other systems where there is complete disconnect from the top of the system. How have you managed to handle that connection at the top to the local level? How do you make that work?
Bill Leaver: We're in our ninth region now in Quincy, Ill., and we try to make that connection by monthly [meetings with] regional CEOs. Their job is changing. They're no longer managing institutions. They're managing an organized system of care in their region. They're responsible for physician alignment in that market to manage population health. We try to create that connection by — in unification around that vision by monthly [meetings].
We spend five to six hours a month just talking about strategy. What are we developing at a system level that you can deploy regionally? Here are the tools around physician alignment but you have to deploy those in a way that makes sense for you and your region. We have same incentive metrics that we're all trying to achieve. I get out to the affiliate or regional boards and management teams twice a year. So four times I'm in the region talking about strategy, what we want to achieve and the success we're having.
David Brooks: One of the advantages of multi-market is the diversity of the markets. Using the for-profit industry speak, "the portfolio." [Providence Health & Services has] hospitals from Alaska to Los Angeles to Oregon, Washington State and Montana. Our Oregon market has been a historical high-performer. It has three or four hospitals, a 20-year old, 400,000 member health plan, 500 to 600 employed physicians. It's done spectacularly well in performance and economically it has been very stable.
Well, this year, Oregon is in big trouble because of some changes in Medicaid at the state level. But other parts of Providence right now are very high-performing. One of the advantages of multi-market [systems] is the diversity it creates. We're all in different states with different state Medicare plans and state commercial plans, and they are going to have different peaks and valleys. That's an advantage of scale more so than economies of scale and purchasing, etc.
Larry Goldberg: We're member of [Novi, Mich.-based] Trinity Health, so we have 47 hospitals and with the merger with Catholic Health East it will be 82. I think there are three real advantages. Most hospitals are second and third in our markets. Most don't have the kind of competition we have in these large cities. You take a place like Loyola, we were a BB-rated organization. You put these assets together and now we're AA-rated. We have access to capital that we never would have. You get the economies of scale.
It's really wonderful to have a system that knows how to step in [for things like] revenue cycle management, supply chain management and corporate compliance — things that distract us as administrators. You get those advantages. The last piece is advocacy. We're with the second largest Catholic health system in the country, and we're at the table [in terms of discussions around policy making].
Barb Martin: I'm part of Community Health Systems. We have 148 hospitals in 28 states. The key is we all have common metrics. We all know what our goals are. We're all in very different markets, and some markets do better by year. Illinois is not a great state for Medicaid reimbursement, but we have to work with it. You have to use the good of whatever you're system you're with. Again, I think to be successful as an independent system within larger system, you have to define your identity and you have to produce those outcomes.
Chuck Lauer: We went through [similar physician integration] 18 years ago, remember? A lot of consolidation that fell apart as time went on. I'm wondering, do you think physicians will continue to want to become employees of hospitals?
Barb Martin: We got away from employing physicians. Now we've all gotten back to the employment model. It's very, very hard for physicians to be independent. They're coming to us to work with us. We all have to be very careful within the employment model, because we can either lose a lot, break even or do well.
Chuck Lauer: Can you make money with physicians as employees? Does it help?
Barb Martin: It certainly helps drive volume and outcomes because you can reward them based on outcomes.
Chuck Lauer: So when you hire physicians, is it for market power?
David Brooks: You need to do that. That's an aspect of it. But we have to change the way our systems perform. We have to reduce total cost of care and create higher performing systems. Whatever happens with the Affordable Care Act, [that's not going away]. We have Boeing in our market as the most dominant employer. We're going to see substantially reduced payments for care. Unless we change the way we organize care, unit cost management is only going to go so far.
Bringing physicians on and other clinicians on and partnerships help us accelerate how we create higher performing care systems. It's not the goal to bring on physicians as employees for control — it's to bring on physicians in more integrated way so we can reorganize the way we deliver care.
Teri Fontenot: I think there are a variety of reasons [for physician employment]. Sometimes it may be for market power or leveraging. When you employ physicians, then you can pay them very differently and also require them to not be on staff of competing hospitals. That's the only way you can do that — when they're employed. I think back in the 1990s, a lot of hospitals were employing physicians because that's what everybody else was doing and they were afraid they were going to be left out.
Your question about do I think physicians will go back to private practice? I do not. Right now, more than half of residents are female. They don't want to run a small business. It's much too complex. It's an economies of scale [challenge], similar to that of standalone, small hospitals. You can't afford the IT support and skill levels and that sort of thing.
What we see in our market is for most physicians, hospitals aren't asking physicians to be employed. [Physicians] are coming to us, asking to be employed. I can't recall the last time a physician joined our staff and set up an independent practice. Most want the quality of life they can get when they're employed by hospital. Then they can only see patients. They don't have to worry about billing and computer systems and the latest regulations.
Megan Perry: We started employing physicians in 1995. I think it is how you treat them — as partners, not as employees. We made the mistake as a health system of saying, 'Ok, well they now have a paycheck. They're all going to do what we want them to do.'" We made those mistakes, and physicians aren't [employees]. They are independent, autonomous well-trained individuals and we have to treat them that way. We put them back into private practice models and started to treat them as partners, not employees. That's very key in how you approach these physician relationships. How do we create relationships so they are meaningful partners with us in all the work we're trying to do here? We've made mistakes and learned from those.
Quint Studer: What I've seen is healthcare organizations getting so much better at analytics and diagnoses. We just did a study with 17,000 leaders on this. We've found is that there is still a challenge because senior leaders see the environment so much better than the rest of the organization. Senior executives see the external environment as very difficult over the next five years, but 37 percent of frontline managers think their organization can stay the same if their processes stay the same. When I tell this to people, they all look at me in shock until we do the survey. I think the bottom line is to communicate to stakeholders. If we don't communicate consistently, we won't get there.
Last point is the reduction of variance. Looking at a place like Virginia Mason that can do a certain procedure for 20 percent less than another organization — it's not because they're smarter, it's because they're more consistent. They've driven variance out of the system. We've been reluctant to drive variance out of leadership. You can't drive it out of other components of your organization if you're too inconsistent in the C-Suite. When we ask the C-Suite, "How consistent is your leadership team," they'll rank it a five or six on a 10-point scale. Then we ask how good is your organization at employing best practices? [Those answers] correlate exactly.
Scott Becker: Going back to Chuck's question about decade ago, it has evolved from the most productive physicians being hired to broad physician groups being hired. How much concern do you have about the carrying costs of your employed physician organizations?
Jim Skogsbergh: We employ about 1,000 physicians, so we made a huge investment in the employment model. Having said that, three quarters of our panel for our shared savings contracts are independent, practicing physicians. We have between 3,000 to 4,000 physicians who are independent, practice physicians and about a thousand who are employed. The message there is I don't think one size fits all. We think different models can work. The trick is how you find that alignment.
We're bullish on employing physicians and that will continue, yet in our market, it's not right for everyone, and we think that's okay as well. Then your question about [the carrying costs of employment] — yeah, we worry about that a lot. The carrying costs of employing 1,000 physicians? Absolutely we're worried about it, but we monitor it all the time.
Scott Becker: In what markets do you see the physician shortage becoming more critical? How big of a concern is it for more rural markets?
Bill Leaver: I think that will be a challenge in our market, but I see that as an opportunity. When you have a shortage, you then, by necessity, have to think about doing things differently. How do you care for people differently? How can I use extenders differently? I think actually that gives us, particularly in our Iowa markets, an advantage because we can drive change much more quickly.
Larry Anderson: In California, we have the ban on corporate practice of medicine. Not everyone employs physicians. Our hospital doesn't employ physicians. In my view, access to care under the Affordable Care Act is the single biggest issue we're facing. I'm very concerned about it. In California, we'll add 6 million [people to health insurance]. If that's accurate, that will flood the system. We don't have physicians capable of handling that. As Medicare and Medicaid are reduced, you'll have more physicians leaving the system. I'm not sure that's true all over the country, but it is true in parts of California and in my community.
Teri Fontenot: I think absolutely there is a shortage of physicians based on the current delivery model. If we can use extenders and forget about traditional role of the physician, when nurse practitioners can do a great job, and [we utilize] the benefits of telemedicine —I see a lot of opportunities.
One of the things in the Affordable Care Act that is the most glaringly absent is there is really no patient accountability. Advanced illness management, advanced directives — some people think that's rationing, but I don't. I think that's individual empowerment. If we can get Americans, whether they have health insurance or not, to manage their health and manage their conditions, they don't necessarily need hospitals and physicians to do that the way we do it currently.
Larry Goldberg: I do want to point out where I want to go. We're an employed model with everybody on RVU compensation. We're talking about doctors and trying to go to integrated programs. The cultural change of medicine, of working in teams, we talk a lot about it but we're trying to change the compensation system so we are incentivizing programs. When you take our transplant program, we're not just doing RVUs. It's [about] outcomes, mortality rates and quality outcomes.
A lot of these shortages — a lot of these areas that don't have access to care [and have telemedicine programs] — it's really thinking programmatically. A lot of that, if we're honest, is marketing. It's not truly an integrated program with allied medical professionals really doing case reviews. This private practice model, it has to evolve until physicians work in systems of care. I do think this next generation [of physicians] will be different. They have to communicate more.
Chuck Lauer: In five years, where do you see this industry? What will change?
Larry Goldberg: I think every market will evolve at different pace, but I'm hoping some of the big things are going to evolve. I really have a lot of hope for HIT. We've lived through this period where we have four or five now with stable platforms. Maybe there is something in that data and ability to manage evidence-based care that will come out and I hope will drive this.
Megan Perry: I think we're going to have new types of competition that will force us to think differently, especially around IT platforms. They'll change our worlds in way we can only imagine. We're starting to see it a bit with virtual visits and telemedicine, but I think we'll see some competition in the IT arena that will change things we can't even think of right now.
Larry Anderson: What healthcare looks like five years out? I think higher quality and lower costs, absolutely. There is no other option. Anyone who can't get there isn't going to exist.
Megan Perry: Right now we get rewarded for market share. When that changes, I don't know if we'll need all the beds we have.
Quint Studer: The thing with the hospital beds is we have to remember our aging population. We'll need those extra beds. That's why flow is so valuable right now. We might need some of those beds with an aging population that some will need hospitalization. I've seen too many futurists look at the baby boomer population and say, '[The need for fewer beds] might not actually be true.'
Teri Fontenot: Consider all the people in hospitals today just because their chronic conditions weren't well managed. It may be we need the same number of beds, but people in the beds will be very different if we teach people about advanced illness management and how to manage their chronic illnesses at home. When we mix it all together, it's really hard to predict what it is going to look like. There are also geographic elements.
David Brooks: And what's the definition of a hospital? [Is it a] 24-hour hospital bed? That's the way we were trained, but I don't know if that will be the definition of a hospital, especially as you move into rural communities or even parts of urban communities. I think we need to broaden what we think of as a hospital.
Dean Harrison: You asked the question how will things be different five years from now, but it's happening right now. It's always amazing how we think trends emerge one day, but then when we look back and go, 'This has been going on for some time.' I think five years from now, the trend that will be very visible to us is we'll be consumer-facing instead of provider-facing. We will be managing our institutions to provide care when, where and how patients want to experience it.
Right now, we deliver care when we want to and where we want to deliver that care. We direct patients to do certain things. Everything we're seeing is the emergence of an empowered consumer making decisions. Five years from now, we'll say, 'Oh yeah, this has been going on for some time.'
Barb Martin: I think there is opportunity for any system. When we joined CHS six and a half years ago, in Lake County, they thought I was crazy. We needed access to capital. Today, [nearly] every independent hospital is becoming part of a larger system. That's opportunity to [join] big systems. Telemedicine, access to primary care — [big systems] can provide that.
Chuck Lauer: Consolidation is going on all over the country. The government is a bit concerned about all the consolidation because they think it's not fair and that systems may drive out other hospitals. Is it a good thing? Should it change?
Teri Fontenot: I think consolidations are good if they're done for the right reasons. It's not just about having market power and trying to control pricing. That's what the government doesn't like. But it you're coming together for economies of scale, to have a broader network and better coverage for care and access, that's the reason why consolidations are appropriate.
Scott Becker: I've heard a good deal from David and Larry about markets expanding. Dean, Jim and Steve — can you survive as big system or do you have to be diversified?
Steve Goldstein: It depends who you are. In our case we're an academic medical center. In our case, we have to extend ourselves to about 2 million people at about 120 different sites. And we have to align ourselves with institutions [that offer] high-quality care at low cost. We offer population management products. We can do it by admitting those patients to other places from high cost center. It's really about creating alliances to achieve what you want to achieve, and in our case it's around population management. It's really about how you want to organize for the challenges you have.
Dean Harrison: For us, it's thinking about the system of care — the right care in the right place. Also, for serving our missions and thinking about those distinctive destination programs that might only be available in academic medical center with the type infrastructure we have. Increasingly, it's not just serving the community around us in the region. We're playing on national stage and, increasingly in cities like Chicago, we're playing on a global stage. Chicago is a pretty great platform and we have great healthcare in Chicago.
Scott Becker: Do you see more development of marketing like Cleveland Clinic has done for University of Chicago?
Dean Harrison: absolutely. Whether in larger systems or based out of academic medical centers, absolutely. People are going to shop and have the information and go to where they think they'll have the best care.
Steve Goldstein: It's not just national. I do think international is really — we're in an aggressive head. A lot of countries are calling on academic medical centers in figuring out how to bring jobs to America. That's one of our goals each year to do that. It's complex, but the world is a smaller place.
Jim Skogsbergh: Our board is studying that question now — do you need to move and diversify beyond the state? We're looking at it very carefully.
Chuck Lauer: Why did you get into healthcare? Give me a very concise reason.
Bill Leaver: Really, two things. One, I was raised to go out and do good things. Healthcare is a great opportunity to do that. And I love politics. And what better industry for those two things?
Dean Harrison: I love it. It was the only job I could find and it paid. [Laughter.]
Steve Goldstein: It's a complex field involving every aspect of society. We're in the heart of our communities and it's a great place to be. I've been at this a while, and it just keeps getting more exciting and more interesting. What more could you want from a career?
Quint Studer: Everybody I know in healthcare — I don't think we pick it, I think it picks us. I think it's a real DNA-calling.
Jim Skogsbergh: Honestly, I stumbled into it. I thought I was going to teach and coach and I ended up in healthcare. Why? My mom's a nurse — tremendous influence there. I'm unbelievable blessed to be working in this industry. It's the greatest industry in the world.
Megan Perry: I have ADD. So it works out great because I'm never bored and [healthcare] keeps me stimulated. It's a blessing to always be excited every day with something new.
Barb Martin: Many of us came from a clinical background, working our way from hospital operations to administration. It's a passion that we have. It has a lot of stress and long hours. I think you have to have that desire and work ethic and passion to produce those outcomes.
Larry Goldberg: Professional basketball didn't work out. [Laughter.] I think it's a mission. I want to make a difference. I've had opportunity of working for three great organizations that are very mission-focused.
Teri Fontenot: I wanted to be a tax attorney. I shifted to healthcare when I was the director of accounting at a local hospital. I've stayed in healthcare for two reasons. It's very mission-focused. The second reason is, personally, I love challenge and change.
David Brooks: What a great combination of personal challenge and community service.
Larry Anderson: It's the challenge and the mission. The challenge is probably equal to the mission. I think it was Warren Buffet who said being a hospital CEO is probably the toughest job in America.
More Articles on Hospital Leadership:
© Copyright ASC COMMUNICATIONS 2015. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.
New from Becker's Hospital Review
100 Great Hospitals in America 2015