4 areas of focus for strategic hospital leaders as they prepare for the future

Even during periods of transformation, healthcare leaders are generally optimistic about the future of their field.

At Huron Healthcare's annual CEO Forum this year, 15 CEOs and C-suite executives from hospital systems, academic medical centers and community hospitals across the country convened in New Orleans to share their views and experiences on several critical topics facing the industry.

Top of mind was the need to prepare for new business models, according to the report. Although the shift from volume- to value-based care is occurring at a slower pace than some may have anticipated, many CEOs are still taking action. Hospital leaders are focusing efforts on developing capabilities that deliver benefits under the current fee-for-service model while building the infrastructure to support value-based payments.

Here are four key areas of focus from CEOs and other executives in attendance at the forum.

1. Clinical transformation. It wasn't long ago that healthcare leaders worried they would not be able to react quickly enough when the industry first began discussing the shift from volume- to value-based pay. CEOs at this year's forum said they are already redesigning the care model to support value-based care, while others said they are waiting for the market to catch up.

David Bernd, who formerly served as CEO of Norfolk, Va.-based Sentara Healthcare for 21 years and retired on March 3, described his organization's experience creating a Medicare Advantage plan. An original attempt was designed by the health plan management team, and achieved limited success. The health system then decided to include input from leaders and clinicians from its hospitals, outpatient centers and physician groups to redesign care processes. As a result, Sentara opened health centers dedicated to geriatric care in targeted markets with nutritionists, social workers and behavioral health specialists.

"We now do an analysis of all the MA patients in the program, and we concentrate heavily on the 20 percent that have multiple chronic conditions. And we manage their care very closely," Mr. Bernd said, according to the report. As a result, both patients' health and Sentara's finances have improved significantly.

2. Scale and integration. A major focus for Milwaukee-based Froedtert Health has been building an integrated network to prepare for value-based care, according to President and CEO Catherine Jacobson. The Integrated Health Network of Wisconsin — one of the first multisystem, clinically integrated accountable care networks in the country — includes seven health systems, a medical college, 53 hospitals, 1,180 clinical locations and 8,400 physicians and providers.

"When we started down this path, we were not ready to take on risk, so we moved toward clinical integration," said Ms. Jacobson. "That can be a challenging path in some ways, but it puts you on course to do what is right for patients and for the organization.

3. Operational excellence. While its competitors focus on size and scale, Gary Kaplan, MD, CEO of Virginia Mason Health System in Seattle said, "We are in a strong competitive position because we have focused on operational excellence and clinical integration."

Virginia Mason leads the Seattle market in quality and safety metrics and still provides care at significantly lower costs than its competitors, according to the report. Its care delivery system is based in the Virginia Mason Production System, which includes principles of the Toyota Production System, to optimize quality, safety and patient experience.

Part of operational excellence is improving transparency, according to Dr. Kaplan. To this end, Virginia Mason publishes cost and quality information online. "Overall, we think we have to be much more retail in the way we communicate and market our services," he said.

4. Revenue transition. Mr. Bernd, Ms. Jacobson and Dr. Kaplan agreed the market is moving toward risk-based arrangements at a relatively slow pace. "Our health plan revenue is at risk," Mr. Bernd said, according to the report. "Bur most of our provider payments are fee-for-service based."

The key is to pursue strategies that enable organizations to reap rewards in the near-term while preparing for future payment models, Jeff Jones, Huron Healthcare managing director said.

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