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Juggling Act

Carrie Vaughan, for HealthLeaders Media, March 12, 2008
Many community and rural hospitals rely heavily on Medicare and Medicaid reimbursement, so I doubt that any of you were too surprised by President Bush's budget proposal, which seeks to rein in Medicare costs by reducing payments to hospitals. Even if hospitals receive a reprieve from reimbursement cuts this year, the current reimbursement rates likely won't last too much longer. Medicare's projected 75-year shortfall is $34 trillion, and according to a recent article in Fortune, Alan Greenspan cited Medicare as the greatest threat to the U.S. economy.

So you know that one of your largest payers will probably be paying you less in the near future. What are you going to do about it?

If you answered "I don't know," you'd better figure it out soon. But the thing is, focusing on long-range issues is easier said than done for many small hospital leaders. One of the phrases that I hear repeatedly among hospital executives and industry experts is, "Rural hospital leaders wear multiple hats." Yes, that's one of the most overused phrases in healthcare--right behind, "There is no silver bullet." But that doesn't make it any less true. Senior leaders in small community and rural hospitals do in fact juggle multiple responsibilities that can leave them mired in the daily operations of the hospital.

But an effective leader needs to spend more time focusing on the future than solving day-to-day problems, industry experts say--even though breaking free from the daily grind can be a challenge. Last year I spoke with Jill Fuller, chief nursing officer at 70-staffed-bed Prairie Lakes Healthcare System in Watertown, SD, on what is needed for hospitals to be successful. She says that executives have to learn how to give up control and quit viewing the organization as a machine, because the delivery of healthcare is a complex system with many moving parts. "I think that a lot of us are out of the old machine age, and we have to change that," says Fuller.

Experts contend that senior leaders should set the direction of the organization, motivate employees around those goals, and empower managers to figure out the details. This means that hospital executives should be prepared to be surprised every once in a while, notes Fuller, whose hospital is actively involved in the Transforming Care at the Bedside initiative sponsored by The Robert Wood Johnson Foundation and the Institute for Healthcare Improvement. TCAB seeks innovative ways to improve the quality of patient care and increase nursing staff engagement.

Surprises or not, senior leaders have bigger things to focus on than hashing out the details of a new nursing-care delivery model or a plan to reduce inpatient falls--like, how to keep the lights on when your largest payer cuts your reimbursement.

I would like to hear how you plan to diversify your hospital's revenue stream in the face of reduced Medicare payments. Please drop me a line at the e-mail below.


Carrie Vaughan is editor of HealthLeaders Media Community and Rural Hospital Weekly. She can be reached at cvaughan@healthleadersmedia.com

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