Community Hospitals across the country face a large degree of uncertainty in 2010. In order to deal with these uncertainties, hospitals must operate efficiently, with patient and physician satisfaction at the top of their list of priorities. David Fox, CEO of Advocate Good Samaritan Hospital in Downers Grove, Ill., and Becker’s Hospital Review's Hospital CEO of the Year for 2009, shares his thoughts on the challenges, opportunities and future for community hospitals.
Challenges
Softening demand for healthcare, increased bad debt. One of the largest and most immediate challenges for all hospitals is financial uncertainty due to the present state of the economy and high levels of unemployment, which threatens both healthcare spending and coverage.
"What we're experiencing in the Midwest is very high levels of unemployment of about 10 percent," says Mr. Fox. "As this extends over time, more and more people will begin losing their COBRA insurance, which will lead to: No. 1, a softening of the demand for healthcare, and No. 2, an increase in bad debt and charity care as people without insurance use the system," says Mr. Fox.
Hospital leaders should anticipate both a softened demand for care and increased bad debt and should take steps to ensure hospital financial stability in light of these conditions.
Mr. Fox says that Advocate Good Samaritan has already instituted a capital freeze, which he expects to continue through the majority of 2010. The hospital also works to continually "manage the enterprise very tightly" by monitoring patient volumes and cost and labor productivity metrics, he says.
Healthcare reform. Healthcare reform is likely to significantly change the structure of healthcare, and community hospitals face uncertainties about how this new vision of healthcare will be structured and its affect on reimbursement, says Mr. Fox.
"The real reform is going to happen at the local level among doctors and hospitals," says Mr. Fox. "The structure of healthcare is going to change, the number of insured is going to improve and how healthcare providers get paid is going to change. At the local level, the question becomes, 'how are we really going to be able to work together to provide better, more integrated care?'"
Current healthcare reform legislation includes provisions that would eliminate reimbursement to hospitals and physicians for patients are readmitted within 30 days of discharge. If such provisions are enacted, hospitals will need to work more closely with physicians to integrate care and reduce avoidable readmissions in order to ensure financial sustainability. Advocate Good Samaritan already works collaboratively with physicians to reduce avoidable readmission through a unique compensation program that rewards physicians for patient outcomes.
Opportunities
Increased focus on the patient. Although community hospitals face a number of challenges in the coming years, a continual focus on the patient while improving efficiency is one of the surest ways to help improve viability in a difficult environment. Advocate Good Samaritan boasts patient satisfaction scores above the 90th percentile for nearly all of its departments and has seen its volume grow in a time when most hospitals' volumes are declining.
"We have a track record of very high patient care and customer experience, and, as a result, patient customers are choosing to come to us," says Mr. Fox. "By focusing on high-level service to both patients and physicians, we have the opportunity to earn more referrals."
In addition, the hospital plans to continue to focus on becoming a leaner organization. "We can continue to provide great clinical care but do it less expensively," says Mr. Fox.
Work collaboratively with physicians. Hospitals must also focus on their relationships with physicians. Hospitals need to keep physicians satisfied and align physicians with their needs in order to be successful.
Advocate Good Samaritan has one of the nation's few programs that reward non-salaried physicians for meeting outcomes and efficiency targets. The "clinical integration program," as the hospital calls it, provides additional reimbursements to physicians who meet certain goals developed by the hospital leadership team.
"No matter what type of healthcare reform we end up with, in the future, it will become critical for healthcare providers to work more powerfully together," says Mr. Fox. "Our clinical integration program is a wonderful way to achieve alignment."
Attract and retain the highest-quality staff. In a challenging environment, attracting and retaining the highest-quality staff is critical for the long-term success of hospitals.
"The key to success for community hospitals today and in the future is being able to attract and retain the highest-quality healthcare workers," says Mr. Fox. "There is a growing shortage of nurses, pharmacists and respiratory therapists, and we are determined to be the destination hospital for people that work in healthcare."
Mr. Fox says that attracting and retaining top staff requires competitive salaries and benefits, a high level of collaboration among healthcare staff and physicians and an environment that allows employees to grow, develop and enhance their skills.
Future of community hospitals
Despite the challenges that community hospitals face, Mr. Fox believes that providing quality care at the local level will allow many of these hospitals to survive. Independent hospitals that are not part of an integrated health system, like Advocate, might find meeting the changes brought on by healthcare reform more difficult due to increased regulation but there will always be successful independent hospitals in America, according to Mr. Fox.
"I think that there will always be independent hospitals that do well in America, but there are some advantages, including increased efficiencies, to being part of a healthcare system," says Mr. Fox.
Mr. Fox has served as CEO of Advocate Good Samaritan since 2003. He earned a graduate degree from the University of Chicago in healthcare management and previously served as president of Central DuPage Hospital in Winfield, Ill.
To receive the latest hospital and health system news and feature stories from Becker's Hospital Review, sign-up for the free Becker's Hospital Review E-weekly by clicking here.