Be nimble, be confident, and get a little tougher.
Editor’s note: This article appears in the July-September 2023 edition of HealthLeaders magazine.
Being a hospital or health system CEO in 2023 is all about embracing the current reality and deciding it’s not so bad after all. Operating margins across the industry are still down but investment portfolios are coming back. Nursing labor costs are still high but those discussions around new nursing models that were once off limits are now out in the open.
The middle of 2023 finds many health systems in a year of transition, away from the crisis mode of the pandemic but looking for new strategies that work in a current environment where the popular discussion is more about rich payers and the cool new private equity backed providers.
The 32 invited hospital and health system executive officers at the HealthLeaders CEO Exchange this week emanated a shared confidence that brighter days are ahead.
Challenges remain, but the ideas that are being discussed to solve them have some new wrinkles, including:
Nursing Workforce Disruption Can Be a Good Thing
While nursing shortages have been costly and impacted service delivery, disruption also has brought about necessary changes, many of which have been long overdue. Nurses are gaining a stronger voice. Leaders are providing more communication and greater transparency. New models of care are being introduced, giving rise to increased diversity and clear career paths. Leaders are finding ways to remove labor-intensive, non-nursing tasks from the bedside. AI and virtual care are filling critical gaps while improving quality and efficiency. And CEOs and CFOs are working more closely with CNOs to forge solutions. Much remains to be done, however, such as treating nursing as revenue versus cost, and ensuring a safe environment as workplace violence increases.
Digital is Great, but…
Hospital and health system CEOs see the value of digital health in multiple ways, from improving access, streamlining workflows, and improving quality. The gathered CEOs participated in a workshop lead by CIO and author Ed Marx titled “Finally See the Value of Digital Transformation.” Headwinds to “going all in” on digital transformation remain, including the enormous bandwidth still required for EHR implementation and maintenance, financial constraints exacerbated by significant industrywide operational losses and some uncertainty around which technologies will really engage with customers. In general, many CEOs still view digital as not a single transformative strategy but one of several to grow the business.
Play Harder with Payers
Relationships with national and regional commercial payers remain a challenge, with several CEOs representing health systems that are engaged in somewhat contentious contract negotiations with payers. In these negotiations, payers and providers are often jousting for public support, with payers standing behind the argument that they are keeping costs down, while providers may argue that higher premiums have led to higher payer profits rather than reduced healthcare costs. One of the CEOs encouraged his colleagues that ultimately providers may have more leverage than they are currently using.
Happy Physicians, Happy Healthcare
With such a shortage of physicians in the market, it is more important than ever for health systems to ensure they are working with their physicians to keep them engaged and happy. Efficiency drives providers, as shared by the group, as they pose the question “How can we make their job easier and more meaningful?”
While cash is ultimately king, to keep your docs out of the hands of private equity competitors, consider using tools like different care models, automation, and technology around documentation, and developing physician leaders to be a driver of your system’s mission.
Compete and Grow
As private equity in healthcare continues to knock on the doors of our CEOs, finding ways to not only compete for the same patients but also opportunities for growth is crucial for survival.
Keeping in mind the phrase “no margin, no mission,” making your system the provider of choice in your market with strategies of: an A+ customer experience, retaining an engaged workforce, and understanding the alignment of your strategic plan. However, growth via partnerships is a pathway more CEOs are taking. Though they can be out of necessity, partnerships are critical in helping drive revenue by divesting in service lines that are no longer benefiting the organization while ensuring customers are receiving the care they need.
There are still HealthLeaders Exchange programs in 2023! The next program is the 2023 HealthLeaders CFO Exchange, Aug. 9-11 in Napa Valley. Or plan to join us August 23-25 at the Ojai Valley Inn for the 2023 HealthLeaders Chief Medical Officer Exchange.
To inquire about attending any HealthLeaders Exchange event, email us at email@example.com. Space is limited so reach out immediately. There are no fees and travel is covered for qualified executives.