The next decade kicks off with a presidential election year in which healthcare is guaranteed to be one of, if not the, hot-button issue. At the same time, uncertainty about the economy is adding to the financial pressures facing health systems. So, how do leaders reconcile their need to be strategic, focused and decisive in periods of uncertainty when they are also called on to be nimble, flexible and open to disruption? Four CEOs share their insights on how they strategize and stay on mission in view of possible change and continued challenges in the coming decade.
Healthcare Executive: What are the implications for health systems of ongoing uncertainty around the economy? How do you stay on mission?
Powell-Stafford: In addition to threats of disruption, health systems are facing unprecedented financial challenges due to uncertainty around the economy. And as a result of that, health systems need to develop a comprehensive strategy that includes sustainable approaches to both cost control and revenue growth. Hospitals can’t achieve their patient-care mission without that strategy.
Fine: The real issue for the healthcare industry is the deficits, which were created from the Trump tax cut in 2017. Those deficits will have to be dealt with by Congress, probably in increasing, and maybe more aggressive, entitlement cuts. That gets right to Medicare and Medicaid, and if your organization serves a lot of Medicare and Medicaid patients, it is likely going to create greater harm than if your organization has a substantial amount of commercially insured patients. Staying on mission is always tough when your resources and profitability become limited.
Agee: We’re an industry that likes certainty, and perhaps we’ll never get it. But we’ve managed to weather difficult economic times in the past. We’ll continue to be wise and thoughtful about how we spend precious resources and how we stay true to our mission.
As a not-for-profit, our intent isn’t to make a large profit but rather a sufficient profit so we can reinvest in services and our employees and take care of our financial responsibilities. To improve affordability and access to care, we continually implement process improvement projects,
and we are doing everything we can to wring out waste.
Barbee: The answer to that question is within the question. We survive and potentially even thrive in an unstable economy by doing just that: staying on mission. It’s critically important to ensure that the entire organization knows exactly what our core strategy and objectives are and are laser-focused on them every day.
HE: What political issues do you see potentially affecting health systems entering the next decade? And, how will this uncertain political climate affect your strategy?
Fine: In my mind, “Medicare for All” makes no sense, but “Medicare Advantage for All” makes a lot of sense. The only way to control the cost of care is to manage the care, and the only way to manage care in a Medicare environment is through a Medicare Advantage plan. Medicare just doesn’t seem to work today, which means as times get tougher and the financial squeeze comes, it’s clearly not going to work tomorrow.
In this environment, healthcare leaders can’t sit on the sidelines—they have to engage with politicians and have good arguments.
Powell-Stafford: All CEOs strongly support access to affordable health insurance, but the challenge is that a lot of people don’t have all the information or understand the implications of Medicare for All. Medicare for All threatens the viability of the current Medicare program. It also denies patients a choice and control in their decision making.
Agee: I’m not sure the political climate changes our strategy. We work hard to have good relationships
with our government officials, both at the federal and state levels. We invite policymakers into our facilities to see what we’re doing so we can serve as a trusted resource. We also try to present some solutions, especially at the state level, and not just complain about issues that we have.
Barbee: It’s incumbent upon us to constantly drive toward creating a healthcare delivery model that’s evidence-based, outcomes-focused and highly resourceful so we are prepared to thrive in whatever payment model we end up with. It’s not just about being a good steward of our resources—we need to have very intentional and consistent efforts around enterprisewide cost control.
HE: Beyond the economy and politics, what other forces will challenge healthcare CEOs in the next decade?
Barbee: We are going to continue to see pressure to improve transparency in both pricing and quality. We will also continue to see consolidation through mergers and acquisitions, which can materially change the dynamics of the markets in which we serve.
In addition, the way we provide healthcare is changing. The youngest generation of adults is not interested in making an appointment and waiting in an office to see a physician. The era of telemedicine is here. Their smartphones, iPads and laptop computers are the way they interact with the world. We must adapt and provide them healthcare based on how they want to receive it, not the way we want to deliver it.
Agee: We’re all aware of how technology will continue to change healthcare and how new entrants like Google, Amazon, CVS, Walgreens and Walmart are giving us pause. The new entrants may attract lower acuity, less costly patients, leaving the legacy hospitals and health systems to provide only the more costly care for which there is not adequate reimbursement. So, we need to find ways to partner and provide good services.
Also, I spend a lot of time thinking about how we can use technology with our workforce so that we maintain a technologically sophisticated, caring environment, but with strong human involvement as well. This includes using artificial intelligence and robotic equipment where appropriate.
Powell-Stafford: Other forces shaping healthcare include big data and predictive analytics. The availability of data allows us to better manage our portfolio and how we care for patients, such as by sharing best practices.
But still, the No. 1 issue is the future supply of physicians, specifically primary care physicians. Studies suggest there is going to be a shortfall given the demands of our aging population, so there will be a greater need for providers like physician assistants and advanced registered nurse practitioners going forward. HCA Healthcare is working hard in this area. The organization is the largest provider of graduate medical education, and this year welcomed the largest ever class of residents and fellows.
Fine: We’re going to have to get much more consumer-oriented. Our mission statement for years had been “making a difference in people’s lives through excellent patient care.” But today, our mission statement is “making healthcare easier so life can be better.”
We have to recognize that we’re dealing with a different consumer who has an $8,000 copayment per year, not a $300 deductible like they may have had 20 years ago. We have to recognize what they want: simplicity, low cost and high quality.
HE: How should CEOs set their strategies with their team amid this uncertainty and keep their team focused on the top priorities for their organization?
Powell-Stafford: It’s become more difficult to develop sustainable 10-year—even five-year—strategic plans like we used to. And because the healthcare industry is so dynamic, it’s important to have the strategic flexibility necessary to respond to new market disruptors. Strong cultures drive strategy. When we have cultures that keep our patients and communities first, we can thrive under any uncertainty.
Agee: Currently, we’re focused on a five-year plan
that is broad enough to account for uncertainties, yet specific enough to give our team direction. We then make year-to-year changes as appropriate.
With our leaders, we stay up to date with what’s working and what’s not so we can understand the obstacles and try to overcome them. We also let them know that it’s OK to fail. Now, not fail big—but if things don’t work out, we can step back and figure out how we
can go forward. We want an open and thoughtful
environment where everyone understands what our top priorities are, what our values are and how to do the right thing.
Fine: I don’t think it’s hard to keep people focused on the top priorities of an organization because that’s driven by how you run the organization, including your use of strategic initiatives and sound compensation to drive their behavior.
We are a very strategic organization that has a sophisticated process of identifying successful points for us on a short-term, mid-term and long-term basis, and then devising tactics to support those particular strategies.
Barbee: Your strategies need to be tied directly and firmly to your institutional mission. It’s critically important that everyone on the team is committed
to pursuing the “North Star” of your enterprise. Everything we do should, in some way, be tied to supporting the mission. To keep the focus, you need to
set clear performance objectives, resource the team appropriately to achieve those objectives, have clearly defined deliverables and hold people accountable for delivering them.
HE: What advice do you have for other CEOs and healthcare leaders looking to stay nimble and flexible in the decade ahead?
Fine: Learn from other industries like retail or cable that are in the throes of disruption. Disruption creates opportunities for those that are thoughtful enough to take advantage of it.
Barbee: Listen to patients. If we provide the proper forums to open up lines of communication, our communities will tell us what they need. In addition, we need to listen better and more often to our front-line providers. They hold a wealth of knowledge and experience that we need to tap into.
Powell-Stafford: Commit to lifelong learning and networking. ACHE offers an excellent opportunity to do both. Take advantage of professional development courses, the many conferences available and local chapter activities to learn best practices.
Agee: Take risks without being reckless. Be willing to try something new, and if it doesn’t work, move on instead of continuing down that path. But if something works well, scale it to other areas.
A CEO colleague told me last week that this is the hardest—and best—job he’d ever had. I replied that it should be hard and challenging, but it’s also incredibly meaningful. It’s that passion and excitement that will help us stay fresh and nimble in the next decade.
