The looming health system 'redesign'

Healthcare C-suites are zeroing in on system "redesigns" to provide more care and services with fewer staff members and tighter margins than ever before.

Traditional healthcare was primed for disruption before the COVID-19 pandemic, and coupled with the burnout, workforce shortages and inflation from the last few years, health system executives are seeing an urgent need to make significant changes. Those who haven't started already are scrambling to catch up.

"We recognize that the challenges the healthcare industry faces provide an opportunity for radical paradigm shifts to increase efficiency, and we understand that many pivots and course corrections are needed to maintain a positive financial outlook," Wendy Horton, PharmD, CEO of UVA Medical Center in Charlottesville, Va., told Becker's. "We are implementing pipeline programs, leveraging technology, and creating flexible workforces to support our teams. We are also modernizing care delivery and patient progression, focusing on essential areas like our emergency department. We’re in the midst of a multi-year initiative that will transform outpatient access and deliver a consistent patient experience while enhancing provider satisfaction."

Earlier this year, Sg2 released a report showing hospital capacity problems are likely to persist through the next decade as the population ages and demand for healthcare increases across all sites of care.

"The reality is access is a challenge for those patient populations and care redesign will be critical to prevent the acute exacerbation of their medical conditions," said Tori Richie, intelligence senior director with Sg2, in a news release for the report. Health systems are tackling the problem in a variety of ways, including:

1. Building outpatient surgery and care networks.
2. Creating remote patient monitoring and hospital at home programs.
3. Developing partnerships for telehealth, virtual care and digital front doors.
4. Standing up virtual nursing programs.
5. Embracing consumerism.

Houston-based Memorial Hermann began its system redesign before the pandemic in 2016, and has already realized significant benefits.

"By taking a measured approach to reduce our average length-of-stay, being mindful of our overall supply costs, finding solutions that will help eliminate patient denials based on capacity issues, and improving labor productivity, we have removed nearly $1 billion in cost over a six-year period," said David Callender, MD, president and CEO of Memorial Hermann. "A portion of that cost savings — approximately $236 million — can be attributed to our Clinical Care Redesign initiative, which has also helped to reduce cost, eliminate care variation and expedite our shift to value-based care. By implementing new clinical pathways, deploying multidisciplinary discharge rounds and standardizing surgical supply packs, for example, our system is improving patient outcomes and driving down the cost of care."

Centura Health, based in Centennial, Colo., hired a chief transformation officer in the last year to lead the change. Peter Banko, Centura's CEO, said CTO Scott Lichtenberger, MD, will help keep the system on track to meet goals amid redesign efforts.

"We are viewing the current healthcare environment like Joanna and Chip Gaines would — a fixer-upper," said Peter Banko, president and CEO of Centura. "It is an opportunity to completely revitalize our entire connected, enabling health system neighborhood."

Technology and generative artificial intelligence enable health systems to rethink healthcare and wellness at a much larger scale for both patients and providers. AI integration can help with more informed decision-making for early discharge, freeing up room capacity, and personalized treatment plans, said David Lubarsky, MD, CEO and vice chancellor of human health sciences at UC Davis Health in Sacramento.

"A pivotal aspect of transformation lies in redesigning care models to embrace patient-centric approaches," he said. "This fundamental shift from reactive and episodic care to proactive and continuous care significantly improves care equity, quality, access and outcomes. By providing comprehensive care at home or in outpatient settings, we minimize the need for having to visit a clinic, providing better patient experiences, care coordination, and stronger patient-provider engagement."

Care redesign and technology can also boost access to rural healthcare settings, which is particularly important for sprawling systems like UNC Health, based in Chapel Hill, N.C. Cristy P. Page, MD, executive dean of the UNC School of Medicine and chief academic officer of UNC Health, noted that while the state includes some of the best healthcare research and education in the nation, those benefits haven't spread to more rural communities.

"Our goal as North Carolina's health system is to better connect our citizens to high-quality care and cutting-edge research close to home. Clinically, we cannot continue to focus on the growth of the old model of care," she said. "We must innovate and fundamentally redesign how care is delivered using tools like artificial intelligence, virtual reality, and strategic home-based technologies. It's essential that we tailor our services to the specific needs of the individual communities we serve and embrace the challenges of doing so under the limitations of our current financial realities."

The health system redesign extends to operations as well. Richard Davis, PhD, CEO of Rochester (N.Y.) Regional Health said critical workforce shortages are forcing the system to think differently about team building and care delivery.

"In many areas, the projected need for qualified staff will continue to outpace supply well into the next decade," he told Becker's. "In response, we're transforming our operating model and focusing on tighter integration and innovation in talent acquisition, workforce development and well-being. We have embarked on a transformation journey to reduce labor costs by eliminating premium contracts, innovating work redesign, and diversifying our talent pipeline strategies."

Rochester Regional is also among the many health systems that created a new in-house staffing agency in the last few years to reduce reliance on travel nurses and better integrate staff within the health system's culture. Chesterfield, Mo.-based Mercy was an early adopter of this model, which has helped nurses perfect a work-life balance while maintaining care standards throughout the system's network.

Jeffrey P. Gold, MD, chancellor of the University of Nebraska Medical Center, is also tackling staffing issues with a new care model focused on reducing the number of labor cost units.

"The best way to address the number of [full time employee] units is through redesigning the care model," he said. "The redesign of the care model will help us analyze the critical tasks performed while a patient is hospitalized and evaluate the labor stack surrounding a patient while keeping in mind the academic mission."

UNMC's care delivery redesign is focused on eliminating unnecessary work and combining roles when possible, while also making sure team members are working at the tops of their licenses. They are also looking at virtual nursing and technologies to leverage skilled nurses with limitations who are aging out of the workforce, and provide more flexibility in the schedule.

The health system redesign is a costly one. It takes significant resources from top executives and large scale culture transformations. It also requires financial investment. What is the risk of hanging on to old ways? Irrelevance, especially as disruptors like Amazon, Walmart and Optum dive deeper into care delivery.

Liz Popwell, chief strategy and transformation officer at Stoney Brook (N.Y.) Medicine said the system's growth strategy had to transform to focus on outpatient care and partnerships to keep up with the changing healthcare space at both the health system and medical school.

"We're not thinking about what's the care model of today," she said. "We're thinking about what's the care model 10 years from now and throughout our strategic planning process, we're going to start to implement different curriculum items related to artificial intelligence, machine learning, you name it. We're thinking about what [healthcare will] look like down the road so we can prepare the workforce for the future."


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