Ideas Into Action: 3 Hospital CEOs Talk Strategy Going Into 2013

A popular quote from the teachings of Buddhism says that, "An idea that is developed and put into action is more important than an idea that exists only as an idea."

Ideas are great to have, especially in today's evolving healthcare environment, but they don't mean a whole lot if they never materialize. Learning from the best practices, and ideas, from other hospitals and health systems could expedite the reform everyone craves, and many CEOs are already trying to change the paradigm.

The year 2012 is surprisingly almost two-thirds behind us, so that means plenty of strategic planning lies ahead for 2013. Here, three CEOs of innovative health systems — Wyatt Decker, MD, CEO of Mayo Clinic in Phoenix, Brian Gibler, MD, president and CEO of UC Health University Hospital in Cincinnati, and Julie Manas, CEO of Sacred Heart Hospital in Eau Claire, Wis., and president of Hospital Sisters Health System Western Wisconsin Division — share some of their biggest strategic ideas going into 2013 and how those ideas are actually being put into action.

Question: If you had to narrow down your hospital or health system's strategy for the rest of this year to one main item, what would it be? Why is that one item so vital to your organization's success for the rest of 2012 and going into 2013?

Dr. Wyatt Decker is CEO of Mayo Clinic in Phoenix.Dr. Wyatt Decker: We have to provide care that is trusted and affordable. That's obviously pretty broad, but what we have to do in healthcare is focus on creating value. That's providing excellent quality at an affordable cost, and of course, that's something that is part of the Mayo Clinic's formula and has been for years. But now we're accelerating that because of the Affordable Care Act, and all providers are starting to figure out what new models of care provide quality care at a low cost.

Dr. Brian Gibler: I would have to say it is developing a 24/7 hospital. It seems counterintuitive. A hospital is, of course, open 24 hours a day, seven days a week. But academic hospitals are going to have a different role in the future than they do now. University Hospital is part of UC Health, which is a $1.3 billion operation that includes UH, UC Physicians, a rehabilitation hospital, West Chester (Ohio) Hospital, an affiliation with the Lindner Center of HOPE — that is UC Health. UH obviously serves as the flagship because of its size, and it is the tertiary and quaternary care institution in the region. UH is the place where patients come that are critically ill or critically injured and come from all over the region, nationally and even internationally.

This concept of 24/7 is pushing toward a new version of the hospital. Hospitals are open 168 hours a week, but most services at hospitals are open during weekday hours. We are expanding out everything: critical care, radiographic imaging — in real time at 4 a.m., you can have a CT scan read within 30 to 40 minutes — OR hours, transplant services.

To make this work, you have to have very strong nursing care. You have to have nurses who can provide critical care, and we have very high-quality nurses here. And that goes along with physicians being available.

We want patients discharged anytime during the day all during the week, and it makes us more efficient. This is all part of strategy to have hospitals demarcated by what they are. These pieces woven together will get us where we want to go in the future — an environment where the academic medical center is the last resort for the critically ill and injured patients.

Julie Manas: For the two hospitals I am responsible for, it's the focus on quality, safety and service. We want to be in the top 10 percent in those areas. This isn't because Sacred Heart Hospital and St. Joseph's Hospital aren't close to that — we are already at the 90th percentile in some measures, but in others, we are in the 50th to 60th percentile, and we know we can do a better job.

Why is this important for me? It's the important thing for our patients. But also, from a strategic standpoint, this marks the evolution from volume to value. If we can get this right for the patient and have our baseline in the top 10 percent, patients can know that we are doing the right thing for them clinically. It's definitely our focus for the next few years, and I don't think we're going to let up on it. It's a wonderful thing for the patients and communities we serve that we're focusing on this.

Q: New payment models are obviously becoming a game changer in the hospital sector. Can you explain what strategies your hospital or health system has in regards to bundled payments, shared savings, innovative payor contracts, etc.?

WD: We'll see an increasing focus on keeping patients and the population healthy as opposed to treating them when they are sick. Academic medical centers are at risk. We'll share in the costs of treatments, so then we're all motivated to keep them well, and to me that's a fundamental shift in the healthcare system.

Dr. Brian Gibler is CEO of UC Health University Hospital.BG: This comes down to a major shift away from procedural-based care to outcomes-based care. Value-based purchasing and these types of things are all ways of saying, "Look, we want to reward great outcomes." And this is not just federal payors but also private payors — United, Anthem, Humana and so forth. They also want to reward you and reward patients for great outcomes.

Where we can go with this: We will do fine from any payment if we take care of patients that no one else can take care of. We're not competing with community hospitals. We have great community hospitals here, but an academic medical center is different. Our competition is Cleveland Clinic, UPMC, Washington University [St. Louis], Mayo Clinic — those are the places patients could leave Cincinnati to go to, which will affect our payments.

JM: Those [models] have been around for a while. They're getting more national play because that really is the future direction. One of the things our health system has done a good job of is we're self-insured for our employees and families, and we offer wellness initiatives to keep colleagues healthier, therefore reducing the total expense of healthcare. We've had tremendous success in that across all 13 hospitals in the [Hospital Sisters Health System] ministry. Taking those lessons learned and offering that expertise to self-insured employers in the community is something else we're developing.

One of the other things we're doing health system-wise is a clinical integration network as a [limited liability company]. Many independent and employed physicians have signed up already, and it allows us in any market to go to insurers for shared savings and bundled savings opportunities. A lot of work goes into building it, and you have to have physician buy-in.

Q: What about your hospital's health IT strategy? How are electronic health records, ICD-10 and other initiatives of the same ilk being prioritized?

WD: It's incumbent upon healthcare providers to leverage technology to make lower-cost, better-quality healthcare. We traditionally think of technology as increasing healthcare costs. A great example is the EHR. Right now, we're at an awkward teenager phase of EHRs. It needs to move fairly quickly where we have an efficient EHR so doctors don't waste time at an EHR terminal, but it also has to allow for population management. We're working with GE and Cerner on developing a new generation of EHRs that will allow providers to leverage technology and improve care.

We also began looking at new models of care a while ago. For example, we partnered with Arizona State University, who cares for more than 70,000 students. We will be working with them to provide smartphone apps that provide students with answers to healthcare questions so they don't have to go to the doctor's office. For example, you could take a picture of a skin lesion you had, send it to a student health center, and they could look at it to see if it is a concern. If they felt it was a concern, they could have a Mayo dermatologist review it. That's a model we're already deploying.

Also, for rural hospitals, we've created a telestroke program. If patient arrives in the emergency department with a stroke, they contact one of our physicians, sort of like Skype but with more security. We've been doing this now for a couple years, but to me it's a great model. It's state-of-the-art care for a population that doesn't have access to it, and it's very economical because [rural hospitals] don't have to employ neurologists.

BG: We are right now in the middle of our $85 million EHR project with Epic. Already, we've introduced our ambulatory EHR portion, and soon, we will be doing the inpatient portion. It's interesting — it's very helpful for greater Cincinnati that all the systems are on Epic. I'm on the board of the Greater Cincinnati Health Council, and we have a group called HealthBridge that is trying to improve communications with all these different hospitals and different providers.

We also have technological pieces to improve — CT scanners, MRI, robotics that you'd expect in an academic medical center. It's all brought together by having a great EHR, and we're very excited about improving everything from the quality of care to the communication among physicians and the community of patients.

Julie Manas is CEO of Sacred Heart Hospital.JM: [Laughs] It's very expensive. We've termed this "e-care" and have put a lot of things under that umbrella. We have our EHR rolled out in all 13 ministries/hospitals. The next evolution of that is computerized physician order entry. We have three hospitals that have gone live. We'll do the rest between now and March 2013.

When meaningful use dollars came into play, it caused a lot of healthcare executives to accelerate their health IT projects, and now it seems like we're all trying to do these projects in an 18-month period. Everybody is trying to find the same health IT people at the same time, with go-lives virtually everywhere across the country  — it's been a challenge nationally. For the right reasons, the execution of this is difficult.

Other things we're working on include telemedicine. For Wisconsin and other places in the Midwest where much of the population is rural, it's important we develop this type of telehealth. It's also important to assist our independent physicians with their EHRs so there is a seamless information flow between them, the hospitals and the outpatient [facilities].

Q: When it comes to physical construction and expansion of the facility and/or other care centers, what is coming down the pike for your organization? When should a hospital consider an expansion strategy with its real estate and plant? How do energy efficiency projects within your hospital fit into your current vision?

WD: This is a really key question. [Mayo Clinic is] growing in our Arizona presence, but we're trying to do it a thoughtful way. We talked about population management and healthcare providers being at risk for the care of that population. If we keep people healthier, it'll be much harder to fill hospital beds. We're building 200,000 square feet of new space, but most of it will be outpatient space or hybrid, inpatient/outpatient space. It has to be a new model of care where patients can get access to infusions and tests 24/7 but not actually sleep in the hospital.

With energy efficiency, we're also being mindful of our energy expenses. There are two sides. One is the imperative for all organizations to think green, whether it's recycling or being energy-efficient, but now there's a legitimate business case. Luckily, those things go hand-in-hand. Utilizing renewable energies and minimizing needs for resources is both right for the environment but also generally is worth it in costs over time.

BG: Bricks and mortar are very important for any hospital. We just built West Chester Hospital, and we brought psychiatry to a local hospital that no longer provides acute care. So we are now leasing space at that hospital for psychiatry, and that freed up our eighth floor, which used to be our psychiatric floor. It has increased the number of beds all through renovations, and ultimately our beds are going to cost $180,000 a piece. If you built a new tower, those could be $2 million per bed. We're doing it in a very proactive fashion, but we're doing it at 10 percent of the cost. Leasing is a cost, but it's less than building new.

For energy efficiency, all windows on our eighth floor — which were installed circa 1969 — are being replaced with high-grade windows that will prevent energy loss. Other areas will now have double- or triple-glazed windows, too, which is what you expect at a modern facility now. West Chester Hospital was also built as a green hospital. Just doing that will save us energy costs.

JM: Generally speaking, we should all be looking at expansion more on an outpatient basis and less hospital-centric. If you're going to undergo hospital construction and it doesn't meet one of three buckets — creating private rooms, meeting some type of code requirements or improved energy efficiencies — then you really should look at it even more carefully. Yes, interest rates are at all-time lows, which makes it financially easier, but I believe with healthcare reform and value-based purchasing that we're going to see utilization of true inpatient beds lessen in the future, even more than what we've already experienced.

Q: What are some of the most innovative and unique projects you have planned for your hospital or health system going into 2013?

WD: Where to start? We're launching an expansion of hybrid centers and cancer services. We're also focusing on the science of healthcare delivery to show the value of healthcare over time instead of just looking at the cost of a single episode of care. Another center is the Center for Individualized Medicine. It focuses on "-omics," like genomics, and how to bring that to the bedside. For example, we just opened a genomic cancer clinic. It's allowed us to find some customized approaches to cases.

Another one is regenerative medicine. This is moving away from transplants to actually growing cells of your own cartilage and implanting them in your joints so you don't have joint replacements. We have a trial right now at Mayo Clinic in Rochester, Minn., that involves heart muscle cells — essentially, it's taking your own skin cells, getting them to grow in a Petri dish, turning them into stem cells and telling them they are muscle cells. Projects like this could be game changers for something like cardiac transplants. It's just a huge ordeal to go through a transplant.

BG: One of the things we're trying to do is expand our research. Patients expect to be in programs that will provide them not just state-of-the-art care but also treatment. What's that next drug? We have a very strong clinical trials program, particularly for cancer, stroke, trauma and emergency care. That's something we're really emphasizing from our hospital's perspective because that defines you as different from a community hospital. Educationally, we're responsible for training future physicians, nurses and allied health professionals — that's also a part of what we do. Trying to improve innovation and education will make this a better place to train. High-quality training that makes you a better hospital attracts better faculty and, quite frankly, attracts patients.

JM: One of the things we have that is relatively unique is we're working with a county hospital [Rusk County Memorial Hospital & Nursing Home in Ladysmith, Wis.] that wants to get out of the hospital business. Through a partnership with Marshfield (Wis.) Clinic, we are working to establish a joint venture to acquire and run this hospital with the Marshfield physician group. We're in the due diligence phase right now. A partnership with a physician group in a joint venture to take over a county hospital — it makes a lot of strategic sense, and it could be a really unique, integrated, all-service campus. It's a win for the community.

Q: If you could advise other hospital CEOs out there to take one calculated risk with their strategy for next year, what would you suggest? How can other hospital CEOs make sure their organizations remain vibrant?

WD: This is an interesting question. I would say take your area of strength — primary care or complex tertiary care — and develop a better model. Do something you think is a more efficient model of care. For example, if you're in primary care, maybe you don't need a doctor seeing every patient. Use a medical home model and have a nurse see some of the patients. Right now, doctors feel threatened by a model like that, but it could be very empowering. We're launching a small primary care clinic, and that's what we're going to do. It'll be a team-oriented approach with the doctor as the quarterback or the CEO. Patients will have access to physicians, but if they need a check-up or something along those lines, they won't always have to go to the physicians.

BG: The strategy of expanding traditional hours is something that is a major difference compared to how medicine is traditionally provided. People are always struck how a hospital parking lot in the middle of the day is full, but at 7 p.m., it's empty. That doesn't make any sense. Try to expand the hours of care. Make the hospital a creature that is 168 hours a week.

JM: First, be bold, and don't be stagnant. If there is anyone within the organization that is interested in doing something unique, consider doing it. Those that are most successful will take the risk. This directly involves a primary care focus and primary care physician alignment. That has served many health systems well in the past, but it's going to be critical going forward to drive the care of patients to the right place. The infrastructure of primary care physicians aligned with a health system will be a very positive strategy. It doesn't mean you have to go out and hire them necessarily — it's more about alignment and having physicians that can work with you in a collaborative model on what's best for the patient.

More Articles on Hospital Strategies:

How Gundersen Lutheran Health System Will Be Energy Independent by 2014

Healthcare CEOs of the Round Table: Organizational Strategies for 2012

Hospital CFO Panel: How Are You Approaching Your Fiscal Strategy Right Now?

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