Health systems can’t do it all on their own. What is “it”?
It is making healthcare more affordable, accessible, and equitable; solving the workforce shortage and ameliorating physician burnout; training the next generation of healthcare providers; discovering new drugs and therapies; implementing the latest and greatest technology, be it cutting-edge surgical tools or user-friendly AI; and investing in their communities, whether that comes in the form of improving population health, creating jobs, or simply being a trusted and reliable institution—all on margins hovering around 1%.
That was a common refrain at Becker’s Healthcare’s 12th Annual CEO + CFO Roundtable, which took place November 11–14 in Chicago. The 2024 edition brought together more than 1,200 executive-level attendees for four days of sessions focused on the state of the industry and strategies to shape the future of healthcare.
And what came up time and again in keynote addresses and panel discussions with health system leaders was that communities, patients, and legislators are expecting—if not demanding—that healthcare institutions address a slew of complex issues despite limited resources, competing priorities, and challenges that defy short-term solutions.
That sounds daunting, and it is—if health systems try to do it alone. What will it take? Three fundamental answers emerged throughout the conference: education, collaboration, and innovation.
ECG Management Consultants sponsored this year’s event and led several sessions in which participants raised and expanded on those themes. Here’s what we learned.
Education
The better everyone understands their role in the massive ecosystem that is healthcare, the more effective and efficient that system can be. Nowhere was that notion more apparent than in a CFO panel discussion led by ECG partner Greg Silva titled Doing More with Less: How Academic Medical Centers Are Innovating through Financial Challenges.
Panelists hailed from both sides of the country—California and Vermont—but they all acknowledged the difficulty in helping people recognize the unique needs and attributes of AMCs as they evolve into complex, vertically integrated academic health systems, often with teaching and community hospitals serving different patient populations across multiple geographies.
- States, legislators, and regulators: Regulators tend to compare teaching hospitals to other facilities in the same state, and the results may be unfavorable if they don’t account for the different demands placed on AMCs. Costs at AMCs are higher, and states need to understand the reasons behind that. Otherwise, legislators tend to enact regulations aimed at improving efficiency and financial performance, but without solutions for achieving those goals. Research and education are core missions for AMCs and differentiators for communities, but there must be an understanding of the associated costs.
- Chairs and division chiefs: Faculty drive the tripartite mission of the AMC. As AMCs become larger and more complex, faculty leaders (chairs and chiefs) are being asked to take on an elevated role with a system-level perspective in order to help shape priorities related to patient access, quality, and financial performance—while balancing the sometimes-competing priorities of the clinical and academic enterprise. AMC leaders can help these leaders get better informed about the part they play in the business of healthcare and ensure their goals are aligned with those of the system.
- Patients: With payer site-of-service policies becoming increasingly rigid, treating patients in lower-cost settings is a step toward bringing down costs. It would be a mistake to separate this issue from broader discussions about access and equity, but there are opportunities for providers to help patients understand when and where to seek care.
Policymakers would also benefit from a better understanding of the role that children’s hospitals play in their communities and the challenges they face. In a session led by ECG principal Evan Lynch-Throne titled Navigating the Future: Best Practices for Children’s Hospitals in 2025 and Beyond, a panel of children’s hospital leaders agreed that pediatrics is at a crossroads, with too few providers, ongoing program closures, and persistent questions about reimbursement.
As they noted, pediatric patients don’t vote in elections or speak with community leaders, and what’s required is advocacy on their behalf. There are several issues that pediatric organizations need to emphasize at the policy level:
- Reimbursement: The way we pay for children’s healthcare has to change. Medicaid accounts for 60% to 70% of reimbursement in children’s hospitals, and it’s not keeping up with rising costs.
- Pediatric mental health crisis: The pandemic may be behind us, but the impact of isolation and depression among the pediatric population remains. Panelists talked about kids being boarded in ERs for days or weeks before being admitted to inpatient facilities. We need new approaches to caring for pediatric behavioral health patients, from greater outpatient access to new reimbursement models.
- Investing in children: Improving the way we care for children today is an investment in our future. Today’s kids are tomorrow’s leaders, inventors, and clinicians. The ROI won’t always be financial, and it might not be seen immediately, but a healthy pediatric population is in our nation’s best long-term interest.
Collaboration
Improving our healthcare system requires a collective effort. Conference speakers discussed the need for health systems to break down silos and improve interorganizational communication, seek out opportunities to partner with their communities, and collaborate with any organization—physician groups, ambulatory care networks, nontraditional market players—that can help expand access to care.
But any partnership needs to be designed with sustainability in mind. If the goal is simply to reduce costs and increase revenue, the problem of physician burnout will only worsen.
- Payers: Panelists in Greg Silva’s AMC session said they’d noticed an uptick in denials since the pandemic—some warranted, others not. Every denial results in additional administrative costs, and in extreme cases, litigation. They called for better communication with payers and honest discussions about how they can work together to address the problem.
- Communities: A panelist in Evan Lynch-Throne’s discussion noted that because children’s hospitals can’t be everywhere all the time, they need to focus on building partnerships within their communities. Keeping kids in their communities for care means developing relationships with schools and other local entities with the goal of improving preventive care and population health.
- Other provider organizations:Partnerships are the future of healthcare; this was evident throughout the entire event. More than one speaker emphasized that partnerships take trust and work best when all parties are invested in their success.
- A panelist in Evan’s session stressed that children’s hospitals need a great academic partner, and vice versa. Another panelist expects to see more interstate partnerships for specialty-specific pediatric care.
- In the AMC panel, it was explained that partnerships not only help an organization expand its reach but also better enable care to be delivered in the most appropriate setting.
- In an Executive Roundtable led by ECG’s Dave Willis and Mark Johnston, multiple attendees remarked that smaller organizations were turning to partnerships with larger systems and private entities for survival.
Innovation
You won’t be surprised to learn that health technology was a hot topic all week. There was great enthusiasm about the promise of AI, agreement on the need to invest in IT, and concerns about how to afford it. But it was also noted that technology alone doesn’t solve problems—leaders need to be thoughtful and deliberate about the evolution of their organization’s culture.
A recurring theme in a panel moderated by ECG principal Steve McMillen called Digital Patient Experience: Winning in a Disruptive Market was that the growing multitude of solutions can be overwhelming—for health systems, providers, and patients. No one wants to adopt a solution that’s good for patients but not providers, or vice versa.
The best way to safeguard against user frustration is to understand what users want.
- Bring providers to the table. Be open to the perspectives of multiple stakeholders. If you expect your workforce to use the product you’re investing in, get their feedback and listen to their concerns early in the selection process.
- Understand patients’ needs. Do patients actually want this solution? How often are they asking for it? Be cognizant of how your patients will interact with the product.
- Avoid distraction. There’s no perfect solution, so narrow your priorities and evaluate how a given solution aligns with your access strategy. The more solutions you adopt, the greater the challenge of making them work cohesively. Health systems must ensure these solutions add value without overwhelming patients with notifications and requests.
But there’s more to innovation than technology. Keynote speaker Pete November, CEO of Oschner Health in Louisiana, said that to innovate, organizations need to reverse the top-down dynamic that’s common in most health systems. Empowering the workers on the front lines, who know what works and what doesn’t, can build the trust that’s necessary for innovation and promote a collaborative culture.
And it’s imperative to understand the relationship between culture and innovation. As ECG principal Dave Willis noted in his roundtable with Mark Johnston, employees who buy into your long-term strategy are more likely to remain with your organization.
Conversely, when turnover is high, it suggests that the locus of employee engagement is the job, not the organization. If your annual turnover is 20%—which is the industry average—your workforce may not understand and be committed to your organization’s culture.
And that makes any kind of innovation very difficult.
Published December 3, 2024
